San Francisco rental market rockets back, with Gen Z leading demand
San Francisco is second-most-active rental market, after NYC
After a much-publicized exodus, young people are returning to San Francisco in droves, according to a recent survey of 2.5 million rental applications from listing site RENTCafé.
Rental applications in San Francisco in the first half of 2021 were up 79 percent compared with the first half of 2020. Only New York had a more active rental market, with rental applications up 95 percent during the same period.
San Francisco was especially attractive to Gen Z applicants, the oldest of whom were born in 1997. Interest in the city from this group was almost triple a year ago. National trends show that 34 percent of incoming renters make more than $100,000 a year, compared with only 11 percent who make between $25,000 and $50,000 a year.
In San Francisco, the most active income groups were renters earning between $25,000 to $75,000 a year, said Florentina Sarac, a research analyst for RENTCafé who contributed to the study.
“Even though high-income renters continue to boast the biggest share of the number of applications (41%), we noticed that they moved less compared to last year,’’ Sarac said.
Sarac said these lower-income renters are taking advantage of the rental downturn in the city to move to a better neighborhood or a larger apartment.
San Francisco is attracting younger, less-affluent renters from around the Bay who don’t want to miss out on their opportunity to lock in rents that are still around 20 percent below pre-pandemic rates. Those coming from San Jose, Oakland, Daly City and Berkeley made up more than half of the total applications of people moving into the city, according to the survey.
San Jose saw a similar trend. Its rental activity was up 54 percent compared with last year and, out of the 30 largest U.S. cities, San Jose had the most significant increase in the number of rental applications coming from current residents.
“The demand was driven mostly by renters looking for a better apartment,” Sarac said.
While the rise in demand in Bay Area cities began to pick up in the spring as the vaccination rollout was moving full-steam ahead, Sarac couldn’t determine how the surging delta variant might impact the desire to return.
“It’s difficult to predict what will happen considering that this pandemic continues to take us by surprise a year after it started,” she said.