Rents for housing in San Francisco still haven’t caught up with overall rents before the pandemic, a symptom of the city’s Downtown office slump.
The median apartment rent in San Francisco was $2,238 last month, a 10.9 percent drop from March 2020, the San Francisco Business Times reported, citing Apartment List.
Many neighborhoods where rents have declined the most since the pandemic dovetail with rental markets once dominated by office workers commuting into Downtown, Ted Egan, the city’s chief economist, told the newspaper.
Rental units east of Van Ness Avenue and north of Cesar Chavez Street are generally seeing larger drops in rents than counterparts in neighborhoods to the west and south, he added.
That trend suggests the city’s residential market remains stymied by office workers staying at home elsewhere and working remotely, which has left a quarter of the city’s offices empty and office attendance hovering at 40 percent of pre-pandemic levels.
Egan forecast tough times ahead, with years until there’s pre-pandemic level demand for housing in areas next to Downtown. A recession — and more tech sector layoffs — could further extend San Francisco’s return to pre-pandemic rents, he said.
Rental rates in zip code 94012, which covers portions of Civic Center, Mid-Market and Hayes Valley, have declined 10 percent from October of 2019 to October of this year, according to Zillow.
Rents in zip code 94103, which touches the Duboce Triangle, Hayes Valley and SoMa, saw an 8 percent drop over the same period.
Meanwhile, rents on the city’s south and west sides have risen by up to a third, according to the Business Times.
Rents in zip code 94112, which spans Balboa Park, the Excelsior and Outer Mission, have seen the most rent growth, with rates rising 33 percent between October 2019 and last October.
Those in postal codes 94116, which covers much of Sunset, and 94121, which spans the Outer Richmond, are up 9 percent and 5 percent, respectively, over the same period.
San Francisco, among mature, coastal markets hit hardest by the pandemic, is among the few markets in the U.S. that had not recovered to pre-pandemic rental rates.
The city has a high concentration of tech workers given the option to work remotely — many of them permanently — who left town for cheaper housing in Bay Area suburbs and beyond.
In greater San Francisco and San Jose, housing rents fell 2 percent last month from their high in August, double the nationwide drop during the same period. Boston has also leapfrogged over San Francisco to take the title of second-most-expensive rental market in the country.
— Dana Bartholomew
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