The generative AI boom in San Francisco is driving a revival of co-living spaces and 100-square-foot rentals with shared kitchens and bathrooms that are being offered for $1,000 per month.
The pandemic nearly crushed what had been a growing co-living industry of “tech dorms” in San Francisco as tech workers fled the city and few people wanted to share kitchens or bathrooms during the outbreak. Several leading companies in the sector filed for bankruptcy, including San Francisco-based Starcity.
Now, meanwhile, the Gen AI boom has several international companies launching co-living services in the city while players who survived the pandemic are scooping up discounted properties for a rapid expansion.
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Equipped with a sink and a mini-fridge and available for less than half the average rent for a one-bedroom apartment in the city, the spaces are attracting foreign-born grad students with AI degrees who are flocking to San Francisco, many of them with plans to form a Gen AI startup, according to a report in the San Francisco Chronicle.
San Francisco-based co-living company Urbanest operates a portfolio of 440 rooms in several SoMa buildings, catering to a tight-knit community of mostly foreign-born engineers.
At an Urbanest building at 1080 Folsom Street, the building’s ground-floor co-working room is filled with young entrepreneurs from around the world. The bike racks on the wall are full, as are plastic bins in the kitchen that residents use as their pantry.
Co-living spaces have become workforce housing for a growing community of global Gen AI pioneers arriving in San Francisco. This brain rush is accompanying a gold rush of VC billions flowing into the Bay Area, the world’s leading Gen AI hub, which drew 82% of global venture capital in 2024.
Giving up perks like your own kitchen and bathroom and paying less than half of the average $2,200 apartment rate in the city is a lifestyle of choice for the influx of experts joining the Gen AI talent pool.
“These kids are not looking for luxury,” Urbanest CEO Tony Brettkelly told the Chronicle. “They want things to be really functional and be stimulated by the people around them. That is what we are trying to achieve.”
South Africa-based Neighbourgood has opened three co-living buildings encompassing 53 rooms, including two properties previously managed by Scarcity. The company is planning to undertake a rapid expansion in San Francisco, aiming for 1,000 rooms in the next 24 to 38 months and 2,500 in five years.
Barcelona-based Enso Co-Living, which operates 690 rooms in Spain and Mexico, is planning to open co-living locations in San Francisco by the end of the year.
The AI-driven revival of the co-living market is allowing Urbanest to expand its portfolio by acquiring buildings available at discounts. The company recently took over an empty Inn at Market tourist hotel at 1412 Market Street for conversion into what it calls an AI-specific “hacker house.”
A report last month from Cushman & Wakefield projects that the Gen AI boom in the Bay Area will continue its exponential growth over the next 24 months, expanding Gen AI's CRE office footprint in the nine-county region by 200%.
The Bay Area is by far the leading global Gen AI hub, now home to the headquarters of 825 AI companies, nearly four times as many as second-place NYC’s 237, C&W said. There are 466 Gen AI companies based in San Francisco, more than half of the total accounting for the entire Bay Area. AI clusters are also growing in Silicon Valley at locations near Stanford, along the Caltrain rail line and in proximity to the headquarters of several tech giants.
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