The collision of a various factors have created a surge in rent prices in the Bay Area not seen since the Dot Com gold rush. Some factors include growth in Silicon Valley companies who's employees want to or do live in San Francisco (truck loads of Googlers buying up property near the city), TICs, schools, cycle of young people, and others listed below.
The biggest reason rents are up, the economy is still strong in San Francisco and the city is just a desirable place to live, and will stay that way:
A strong economy, uncertainty in the mortgage business, a flood of apartment conversions to tenancies-in-common and the start of the school year have joined to create one of the most competitive rental markets in years. It doesn't rival the near-zero vacancy rates or overbids of the Internet frenzy. But rent givebacks, security deposit reductions and negotiable pets are long gone.
- Apartments converted to TICs limiting the number of available units to rent
- Trouble in the mortgage industry and credit crunch
- Growth of industries in the Bay Area
- Schools starting in the Fall increasing demand
- Economy is still strong in San Francisco and still one of the most desirable areas to live in
- Cycle of young students, teachers, city seekers moving to San Francisco and the Bay Area
- Rent control keeps people in their apartments longer, and when there's no new apartments being built in the city then those that are available increas in price
- Property owners trying to recoup some of the money they've lost in speculative purchases
- Buyouts of rent controlled properties buy larger companies and raising rents affects the whole neighborhood--increasing rents
Fact: 65 percent of households rent in San Francisco