The Facts

San Francisco's median monthly apartment rent surged 11.5% to $3,040 in August 2025, according to Roland Li at The Chronicle This is the highest level since April 2020, though still below the July 2019 peak of over $3,200. The city once again led the nation in annual rent increases, according to new data from Apartment List.

San Francisco's vacancy rate sits at just 3.8%, far below the national average of 7.1%. While U.S. median rents fell 0.9% to $1,400 in August 2025, San Francisco's explosive growth reflects the AI boom, return-to-office policies, and critically low housing supply.

The Context

The rent surge contradicts national trends, where new construction increased supply and pushed vacancy rates to multi-year highs. San Francisco's median rent crashed from over $3,200 in July 2019 during the pandemic, making current August 2025 levels the highest recovery point since April 2020.

While observers point to the AI boom as a driver, the real culprit is policy-created scarcity. In addition to restrictive zoning, slow processes, and endless appeals by annoyed neighbors, San Francisco also charges impact fees that can account for up to 10% of total development costs, while Seattle charges no impact fees at all. Perhaps that's why Seattle manages to build 10,000 homes per year even under current economic conditions. Despite rent increases approaching pre-pandemic levels, virtually no new apartment construction is underway as builders cite high costs and regulatory barriers.

Renters report bidding wars, crammed open houses, and listings disappearing within days—conditions reminiscent of the 2010s boom.

The GrowSF Take

San Francisco's housing crisis isn't a market failure—it's a policy failure. While other cities built apartments that kept rents stable, SF's red tape and slow approvals created artificial scarcity that now forces residents to pay crushing rents.

The city's 3.8% vacancy rate versus the national 7.1% tells the story: when supply can't meet demand due to bureaucratic barriers, renters pay the price. Streamlined approvals and reduced development barriers remain the only path to housing affordability.