The AI increase is bringing a wave of startups to San Francisco, and workers are receiving beneficiant advantages in one of many nation’s priciest housing markets.
Roy Lee, CEO of AI tech startup Cluely, which makes software program for job interviews and work calls, instructed The New York Occasions that he leased eight residences for workers in a recently-built luxurious advanced located only a one-minute stroll away from the workplace. The rents within the 16-story constructing vary from $3,000 to $12,000 a month.
“Going to the workplace ought to really feel such as you’re strolling to your lounge, so we actually, actually need individuals shut,” Lee instructed The Occasions on Thursday.
Flo Crivello, CEO of Lindy, one other AI startup, stated he affords his roughly 40 workers a $1,000 lease stipend each month in the event that they reside inside a 10-minute stroll of the corporate’s workplace.
“Persons are a lot happier and more healthy once they reside near work,” he instructed The Occasions. “This makes them stick round for longer, carry out higher and work longer hours.”
The AI increase has drawn a flood of cash and expertise to San Francisco, inflating lease within the course of. The Bay Space has attracted 70% of AI enterprise capital funding nationwide since 2019, in accordance with information from Pitchbook.
Throughout the U.S. and Canada, the pool of tech employees with AI expertise jumped greater than 50% to 517,000 from mid-2024 to mid-2025, in accordance with a September CBRE report. The San Francisco Bay Space, New York metro and Seattle are the highest U.S. markets for AI-specialty expertise, accounting for 35% of the nationwide complete, the report stated.
In the meantime, absolutely distant working preparations for open positions have declined, and extra employers are adopting hybrid preparations requiring tech expertise to spend three or extra days within the workplace. In San Francisco alone, 1 out of each 4 sq. toes of workplace house was leased by an AI firm over the past two and a half years, in accordance with CBRE.
Tightness within the workplace market can also be seen within the residential sector. Over the previous 12 months, house costs in San Francisco rose 6%, on common, greater than twice the two.5% enhance skilled in New York Metropolis and the best charge within the nation, in accordance with actual property tracker CoStar information cited by The Occasions. In sizzling spots like Mission Bay, close to OpenAI’s headquarters, rents climbed 13% lately.
Common lease for a San Francisco house is now $3,315 a month, just under New York Metropolis’s, the nation’s highest at $3,360.
A September report from actual property tech firm Zumper stated San Francisco’s housing market bucked the nationwide development of flat or falling costs and as an alternative noticed the strongest annual development throughout the nation for two-bedroom lease, which surged 17.1%. One-bedroom lease climbed 10.7%, the third-highest enhance within the nation, the report stated.
The report factors to a “good storm” of tech-sector hiring and stricter return-to-office mandates driving extra renters into the town in addition to supply-chain constraints. The town’s emptiness charge has fallen again to pre-pandemic ranges, and new housing development is at its weakest tempo in a decade, the report added.
Will Goodman, a principal at Strada Funding Group, which developed the posh advanced the place Cluely leased its eight residences, instructed The Occasions that half of the 501 models within the advanced have been leased inside two months of its Could opening.
“Truthfully, I’ve by no means seen something prefer it earlier than,” he stated
Keep forward of the curve with NextBusiness 24. Discover extra tales, subscribe to our publication, and be a part of our rising group at nextbusiness24.com
