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NYC Unseats San Francisco as Nation’s Most Expensive Rental Market
The nation’s two most expensive markets for apartment renters have traded places. Zumper reported that after 18 months of disruption caused by the COVID-19 pandemic, New York has passed San Francisco as the most expensive market in the country with a median one-bedroom rent of $2,810. San Francisco’s median is $2,800.
It’s the first time New York has been ahead of San Francisco since Zumper started tracking rental data in 2014. The two markets are neck-and-neck for pricing, and no other market comes close. Third-place Boston is $500 behind San Francisco for median rents.
Tech industry success has long made San Francisco the most expensive city in the country in which to rent. But the gap between San Francisco and New York rents was narrowing even before the pandemic.
In early 2019, median one-bedroom rent in San Francisco was more than $800 more than New York’s, but a combination of rising rent in the Big Apple and falling rent in the Bay Area caused the spread between rent in the two cities to slowly dwindle. By January 2020, the spread had fallen to $520.
Then the pandemic hit. San Francisco and New York were the two most affected cities at the outset.
“Renters in both cities left in droves, as work-from-home policies allowed residents to escape strict lockdowns,” reported Zumper. “Apartment vacancies piled up, and rent went into free fall.”
By January 2021, median one-bedroom rent had fallen 23.4% in San Francisco relative to March 2020, while New York’s was down 17.5%. Still, median one-bedroom rent in San Francisco was $330 more than in New York.
However, Zumper notes that rents in the two cities have been on different trajectories since January, when the vaccine rollout began. “People returned to New York as indoor dining and other urban amenities that make the city popular became available again. Rent began to rise as a result.”
Since January, the New York median has risen by 19.6% and is now down only 1.4% relative to March 2020. In other words, rent in the city has rebounded to roughly pre-pandemic levels.
“That hasn’t happened in San Francisco,” Zumper reports. “Tech workers make up a disproportionate share of residents in the city, and tech companies are more likely to have adopted broad or permanent work-from-home policies. This allows those workers to live anywhere they want, and many of them have decided they don’t want to live in San Francisco.
While median one-bedroom rent has risen in San Francisco during 2021, the growth has been considerably slower than New York’s. Since January, rent has gone up 4.5% in San Francisco and remains down by 20% relative to March 2020. By contrast, New York median one-bedroom rents were up 4.9% for the month of August alone.
- ◦Lease
