San Francisco’s high rental market is not a surprise. As an affluent city with a booming tech industry, the area is in demand, directly affecting rental prices. In a recent study by Nested, the housing company reports San Francisco not only holds first place for its high rental market in the United States, but it also bypasses even the most expensive and elite cities abroad. This makes San Francisco the highest rental market in the world.
Nested looked at eighty-seven cities, San Francisco to Dubai to Zurich, examining their current market listings. The company calculated the average rent per square foot and determined the rent cost for a 420-square-foot room and an 800-square-foot room. The Golden City averaged $4.95 per square foot, resulting in rent prices of $2,077 per month for a 420-feet-room and $3,942 per month for an 800-feet-room.
Why the highest rental market in the US?
At a closer look, what is the real reason behind San Francisco’s high rental market? According to Eric Fischer, a developer at Mapbox, he mentions rent prices have continually spiked since the 1950s at an annual rate of 6.6 percent. He examined the housing cost and gentrification over the years, the source of housing cost, housing construction, and the economy. Based on his data analysis, he found that there are a couple of reasons for this high rental market. The first one being the most obvious: San Francisco’s high rental prices result from it being an affluent city. With the rise in the tech industry, this attracts more techies and transplants. And second, in correlation to the latter, the city does not have available land for the growing population. With high demand for housing, rent prices continue to increase.
Sonja Trauss from SFBARF believes a solution to this stems from more housing, which would reduce overall rent prices. However, without the space for development, the scenario isn’t likely to change. For now, San Francisco holds its place as United State’s highest rental market.
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