The AI boom is bringing a wave of startups to San Francisco and employees enjoying generous benefits in one of the nation’s most expensive real estate markets.
Roy Lee, CEO of AI tech startup Cluely, which creates software for job interviews and professional calls, said The New York Times that he had rented eight apartments for his employees in a newly built luxury complex located just a minute’s walk from the office. Rents for this 16-story building range from $3,000 to $12,000 per month.
“Going to the office should feel like walking to your living room, so we really, really want people to be close,” Lee said. The times THURSDAY.
Flo Crivello, CEO of Lindy, another AI startup, said he offers his roughly 40 employees a $1,000 rent stipend each month if they live within a 10-minute walk of the company’s offices.
“People are much happier and healthier when they live close to their work,” he said. The times. “This allows them to stay longer, perform better and work longer. »
The AI boom has attracted a flood of money and talent to San Francisco, driving up rents. The Bay Area has attracted 70% of AI venture funding nationwide since 2019, according to Pitchbook data.
In the United States and Canada, the pool of tech workers with AI skills jumped more than 50% to 517,000 between mid-2024 and mid-2025, according to a September CBRE study. report. The San Francisco Bay Area, the New York metropolitan area and Seattle are the top U.S. markets for AI talent, accounting for 35% of the national total, according to the report.
At the same time, fully remote working arrangements for vacant positions have been implemented. deniedand more and more employers are adopting hybrid arrangements forcing tech talent to spend three or more days in the office. In San Francisco alone, 1 in 4 square feet of office space has been leased by an AI company in the past two and a half years, according to CBRE.
Tensions in the office market are also evident in the residential sector. Over the past year, apartment prices in San Francisco have increased 6%, on average, more than twice the 2.5% increase in New York and the highest rate in the country, according to data from real estate tracker CoStar cited by The times. In hot spots like Mission Bay, near OpenAI headquarters, rents recently increased by 13%.
The average rent for an apartment in San Francisco is now $3,315 a month, just below New York’s, the highest in the country, at $3,360.
A month of September report of real estate technology company Zumper, said San Francisco’s real estate market bucked the national trend of flat or falling prices and instead saw the nation’s strongest annual growth for two-bedroom rents, which jumped 17.1 percent. One-bedroom rent increased 10.7%, the third largest increase in the country, according to the report.
The report points to a “perfect storm” of tech hiring and stricter return-to-office mandates that are pushing more renters to the city as well as supply chain constraints. The city’s vacancy rate has fallen to pre-pandemic levelsand new housing construction is at its slowest pace in a decade, the report adds.
Will Goodman, director of Strada Investment Group, which developed the luxury complex where Cluely rented his eight apartments, said: The times that half of the complex’s 501 units were rented within two months of its opening in May.
“Honestly, I’ve never seen anything like this before,” he said.
