Tags: san francisco | silicon valley | rents | tect

San Francisco, Silicon Valley Rents Drop as Tech Braces for Mass Exodus

San Francisco, Silicon Valley Rents Drop as Tech Braces for Mass Exodus
(Mathieu-Le-Mauff/Dreamstime)

By    |   Tuesday, 02 June 2020 08:34 AM

The cost of rent in the San Francisco Bay area and Silicon Valley reportedly has dropped at a dramatic pace, as layoffs and the increased flexibility of working from home drove a double-digit drop in some of the nation’s most expensive housing markets amid the ongoing coronavirus pandemic.

In San Francisco, for example, rent has dipped 9.2% year-over-year, the San Francisco Chronicle explained.

While municipalities across the U.S. are grappling with economic fallout from the virus, San Francisco stands to take a deeper hit given its high concentration of office jobs that make remote working easier, a tech industry battered by layoffs and a pricey real estate market that has already driven out some residents.

Rentail-site Zumper found that rent costs for one-bedroom apartments dropped the most in the Bay Area cities with the highest-paying tech salaries. In Google's Mountain View base, rent has fallen 15.9% since May 2019, according to Zumper data, which was cited by Business Insider but isn’t yet published on the company's website.

In Facebook's home of Menlo Park, rent dropped 14.3%. In San Bruno, where YouTube is based, rent costs dropped 14.9%.

In San Francisco, a one-bedroom apartment now averages $3,360, according to Zumper. That's a 9.2% drop from this time last year and is the lowest rent has been since early 2017, according to the company.

Meanwhile, San Francisco leaders predict a $3.6 billion budget shortfall over the next four years, with the unemployment rate -- as low as 2.2% a few months ago -- to be around 15% through September. If business taxes, the second-biggest source of revenue, continue to decline and the property-tax base erodes, “all city services would suffer,” Controller Ben Rosenfield recently told Bloomberg.

It’s a marked turn from the years of growth that made San Francisco a symbol of massive wealth -- while also fueling gaping inequality and a homelessness crisis that’s led to people sleeping on streets alongside swank office towers. The pain wreaked by the pandemic is only accelerating negative trends for the city, such as the departure of companies, conventions and residents to less-expensive areas, said Ken Rosen, chairman of the Berkeley Haas Fisher Center for Real Estate and Urban Economics.

“The boom is over, and the question is how deep will the bust be,” said Rosen, who warned the city may have diminished appeal to the tech industry. “We are going to need dramatic changes if we’re going to keep our golden goose here.”

© 2020 Newsmax Finance. All rights reserved.


   
1Like our page
2Share
StreetTalk
The cost of rent in the San Francisco Bay area and Silicon Valley reportedly has dropped at a dramatic pace, as layoffs and the increased flexibility of working from home drove a double-digit drop in some of the nation’s most expensive housing markets amid the ongoing coronavirus pandemic.
san francisco, silicon valley, rents, tect
409
2020-34-02
Tuesday, 02 June 2020 08:34 AM
Newsmax Media, Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved