Forbes contributor Vincent Deluard notes the “vertiginous rise in rents” in San Francisco, with rent even in unpopular areas going for US$3,000 a month, making downtown San Francisco more expensive than Manhattan, New York.
The report suggests that the “renting bubble” in San Francisco is due to the high ownership of Apple stock in the city. “Every US$1 dollar rise in the share price creates US$1 billion in new wealth and the stock is up US$272 this year alone,” Deluard writes. He also notes: “The company has a relatively generous employee stock ownership plan.”
However, ownership of Apple stock doesn’t mean that the rental market has ready money, especially not US$3,000 a month. Delaurd suggests that Apple investors are so confident that their investment is savvy that they are happy to “spend like there is no tomorrow – and that includes overpriced rents in not-so-desirable parts of the city.”
Alternative options for the high rents are the influx of start-ups in the San Francisco area.