San Francisco Apartment Vacancy Falls to 20-Year Low

San Francisco's apartment vacancy has now fallen to a 20-year low, as a scarce amount of product breaks ground and demand remains high.

According to data from CoStar, the market's vacancy rate stands at just 3.8% while asking rents shot up 11% year-over-year in June, reflecting one of the strongest apartment recoveries among major US markets.

In fact, San Francisco's market rents now sit more than double the national average of $1,800, clocking in at $3,690 per month in June, up 1.8% from May rents, according to CoStar.

This has led to San Francisco regaining its position as the nation's most expensive apartment market, a position New York has held for the past six years.

"In just a couple of years, San Francisco has gone from one of the hardest-hit apartment markets during the pandemic to the nation's most expensive rental market once again. The pace of the recovery has been remarkable," Nigel Hughes, senior director of market analytics for CoStar Group and Apartments.com, told GlobeSt.com.

Strong AI-driven hiring and limited apartment construction have created a perfect recipe for rent growth in San Francisco.

Plus, the 1.8% rent growth in June was the highest posted during the recent growth cycle. And it is spreading throughout the Bay Area, with San Francisco, San Jose and the East Bay now ranked first, second and third in the nation, respectively, for annual rent growth.

Slower Delivery Times Shape

San Francisco's apartment construction activity in 2026 reflects a market where development remains significant even as delivery volumes slow.

According to CoStar data reported by Kidder Mathews, the city had 18,460 multifamily units under construction in the second quarter of 2026, which represents a 43.9 percent increase from the 12,829 units underway a year earlier, showing that developers continue to advance projects even in a high‑cost, high‑regulation environment.

Kidder Mathews also notes that only 632 units were delivered in Q2 2026 and 2,400 units year‑to‑date, which is more than 70 percent lower than the same period in 2025, indicating that construction timelines have lengthened and completions are occurring more slowly.

The City and County of San Francisco's 2026 Q1 Housing Development Pipeline further documents that 3,301 units were actively under construction, along with thousands more in pre‑construction phases such as building permits issued or approved.

The same pipeline report identifies major long‑term redevelopment projects that continue to shape construction activity, including Candlestick Point/Hunters Point Shipyard with 9,637 units, Treasure Island with 6,273 units, Parkmerced with 5,314 units, Potrero Power Plant with 2,228 units and Pier 70 with 1,634 units, all of which have portions currently moving through construction or early building‑permit stages.

These projects anchor the city's future supply and ensure that construction remains concentrated in large master‑planned districts.

Recent deliveries illustrate the type of product entering the market. Kidder Mathews reports that Lark Landing in the Transbay district delivered 184 units in April 2026, adding new inventory to the city's urban core.

The city's monthly building‑permit data also shows continued ground‑up activity, with nine new‑construction permits issued in April 2026, demonstrating that although permitting is modest, it remains consistent.

Overall, San Francisco's apartment construction landscape is defined by a large and expanding pipeline, slower delivery timing and steady progress on major redevelopment zones that will drive long‑term housing growth.