SF Rents Grew Faster Than Any Major U.S. Market. Three Neighborhoods Are Doing Most of the Work

San Francisco apartment rents are climbing faster than in any other major U.S. metro area, but the jump is far from even across the city. A new analysis from real estate data firm Altus Group finds that a few neighborhoods near the city's biggest AI employers account for most of the increase.

The numbers

Comparing the same properties over time, Altus found market rents rose 8.6% in San Francisco and 6.0% in Oakland in the year ending in the second quarter of 2026. Altus says those were the strongest year-over-year gains of any major U.S. metro area in that period.

Other trackers point the same direction. Brokerage Cushman & Wakefield reported that the average effective rent in San Francisco County reached $3,650 a unit in the second quarter, up 15.7% from a year earlier, with vacancy at 3.4%, which it called the lowest since the dot-com era. Bay Area-wide, it put the average at a record $2,921.

Where the increases are

Altus grouped 17 local submarkets into seven areas. Three of them, South of Market, Civic Center/Downtown and Haight Ashbury/Western Addition, account for 72.3% of the measured rent acceleration. Altus ties that to a narrow slice of hiring in AI software and computing infrastructure, clustered near the San Francisco offices of companies such as OpenAI and Anthropic, along with very little new housing being finished in those same areas.

In other words, Altus says this is not a broad rehiring wave lifting every neighborhood. It is concentrated demand meeting tight supply in specific places.

What it means for renters

The report is written for investors and appraisers, and its main advice is not to assume a single citywide rent trend. For renters, the takeaway is similar: a lease renewal in SoMa or near Civic Center is likely to look very different from one in neighborhoods outside the three leading areas.

Altus also cautions that it does not have data on where employees actually live, so its analysis links jobs, supply and rents by area rather than by household. Separately, the San Francisco Business Times reported Friday that rent growth is cooling in some suburban markets such as Concord and San Rafael, even as San Francisco hits record highs.