Mar 16, 2023 - Real Estate

San Francisco's newer apartments are some of the smallest in U.S.

Average size of new apartments
Data: RentCafe analysis of Yardi Matrix data; Note: Analysis includes U.S. metro areas (defined by Yardi Matrix market boundaries) with the most apartments located in multi-family buildings of 50 units or more; Map: Kavya Beheraj/Axios

Apartments in and around San Francisco rank among the smallest in the country, despite being one of the most expensive places to rent.

Why it matters: Apartment sizes are shrinking nationally, despite a trend that saw rental units get bigger during the early part of the work-from-home era.

By the numbers: The average size of newer San Francisco Bay Area apartments is 741 square feet, about 16.5% smaller than the national average size of 887 square feet, according to a new report from listing service RentCafe.

  • Among 100 metro areas analyzed, the Bay Area was near the bottom of the list for spacious apartments, coming in at No. 94.

The big picture: Nationwide, newly built apartments shed 30 square feet on average compared to 2021, per the report.

  • That sharp decrease was fueled in part by more studios and one-bedroom apartments entering the market, researchers found as they studied the metro areas with the most high-density buildings.

Flashback: In 2020 and 2021, demand for more space resulted in larger unit configurations, RentCafe analyst Adina Dragos tells Axios.

  • "Fast forward to 2022, the demand for more apartments prompted developers to accommodate more units in their projects," Dragos says.
  • Case in point: 57% of apartments completed last year were small units across the U.S.

Meanwhile, rent prices are still high in the Bay Area.

  • The average rent in San Francisco's metro area was $3,224 at the end of last year, according to economic research firm Moody's Analytics.
  • San Francisco's metro area is the ninth-highest rent-to-income area, with its residents forced to spend nearly 30% of their income on rent, according to Moody's.

Between the lines: San Francisco Mayor London Breed on Tuesday proposed improvements to the building permitting process that is designed to reduce housing development timelines by months, or even years, according to a press release.

  • As part of the city's latest housing plan, San Francisco must create more than 82,000 new housing units over the next eight years. It also mandates that nearly 46,600 of those units be for low- and moderate-income households.
  • Breed's proposal would standardize site permit review processes and eliminate redundant stages, according to the press release. Her proposal, however, requires legislative approval that her office has yet to draft.

What we're watching: Apartments under construction.

  • As the market keeps fluctuating post-pandemic, their size could signal whether the trend of smaller rentals will stick.

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