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An professional on why San Francisco is now not the most costly metropolis for renters

New York City has dethroned San Francisco as the most expensive city for renters, according to a report by real estate portal Zumper. SFGATE spoke to Zumper data journalist Jeff Andrews to understand why the City by the Bay is leaving New York behind, albeit slightly. He believes it has something to do with the high cost of living in San Francisco.

The average price for a one-bedroom apartment in New York is currently $ 2,950, only $ 150 more than San Francisco, according to Zumper’s monthly rental report.

New York has only declined 3% since March 2020, when the US was locked down due to the ongoing COVID-19 pandemic, which sees tenants fleeing major coastal cities to suburbs in search of more space and lower costs. By comparison, rents in San Francisco have fallen 20% since March 2020.

While researchers debunked the myth of statewide emigration in California, data shows that people left San Francisco during the pandemic and rents had to drop to meet lower demand.

Andrews suspects that San Francisco was first above New York between 2005 and 2008. During the financial crisis, its rents rose steadily above those of New York. Andrews said early pandemic migration consists mostly of “rich people” who could “pack on a dime” and leave. The middle and lower classes followed, with many leaving San Francisco and New York in the summer and fall of 2020.

One theory is that the predominance of the tech sector, which generally allows people to work remotely, is responsible for lower rents in San Francisco. However, Andrews found that the difference in office occupancy between New York and San Francisco was “negligibly higher,” debunking this theory.

“It’s not that the San Francisco and New York offices didn’t reopen, and that’s what made everyone come back,” he said. “Personally, I don’t think that’s the reason.”

New York, Andrews said, has generally recovered from the peak of the pandemic, which has allowed people living in cheaper areas like Brooklyn to rent their “dream homes” in more expensive neighborhoods at lower prices.

In San Francisco, rents were already so high that the 20% decline leveled rents and brought them back down, Andrews said.

“In New York there was a price incentive to come back. In San Francisco it really wasn’t just because it was so much more expensive even at the start of the pandemic,” said Andrews. “I mean, it’s still very expensive.”

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