S
an Francisco’s rent war has shifted into a new, tech‑driven phase. AI firms flood the city, turning the apartment market into a high‑stakes arena that now sees rents higher than almost anywhere else in the U.S. Roy Lee, 22‑year‑old CEO of Cluely, drew headlines by leasing eight luxury units near his South of Market office. The apartments, with rooftop access, concierge service and prices up to $12,000 a month, illustrate the trend of turning workspaces into living‑room‑like environments. “Going to the office should feel like you’re walking into your living room,” Lee told the New York Times, explaining his desire to keep staff close for collaboration.

    Within weeks, half the building’s units were snapped up. Will Goodman of Strada Investment Group, the developer, noted the unprecedented demand. CoStar data cited by the Times shows San Francisco rents rose 6% last year—more than double New York’s increase—bringing the city’s average rent to $3,315, just shy of New York’s $3,360. Applicants now arrive with cash envelopes and job offers, eager to outbid rivals. Ted Egan, the city’s chief economist, said tech is setting the price bar.

    The surge also raises questions about AI’s environmental cost. Large language‑model training centers consume vast electricity and water, generating heat and pollution. As the sector expands, San Francisco faces rising energy demands and soaring rents, a trade‑off that feels intensely personal for many residents.