The race for artificial intelligence (AI) is driving property prices to historically high levels. The middle class in San Francisco can no longer keep up.
The middle class is competing with tech engineers who are recruited at sky-high salaries by companies such as OpenAI, Anthropic, Google or Meta. While the AI industry creates colossal fortunes, San Francisco is struggling to house those who keep the city running from day to day, writes Le Figaro.
Nearly three out of four homes are sold for more than the asking price. In the first half of 2026, 144 transactions were completed after a bid of over 1 million dollars, compared with only eight the previous year.
In San Francisco the housing crisis is no longer just a property crisis. It has become a middle-class crisis. The real fault line is no longer the San Andreas Fault; it now separates those who can still afford to live there from those whom the city is pushing ever further out.
The middle class is being replaced by the homeless and illegal migrants in San Francisco. Large sums are spent on providing shelter for the homeless, who almost exclusively consist of drug addicts and/or people with serious mental health problems.
In addition, the city is still a «sanctuary city» for illegal migrants. But it is difficult to find political measures that make it possible for the middle class to remain in the city.
The city’s employees and police authorities are prohibited from using the city’s funds or resources to assist the United States Immigration and Customs Enforcement (ICE). This entails strict restrictions on complying with federal ICE requests for detention or notification when a person is released from the local prison.
The city has also recently expanded these protective measures by adopting legislation that establishes «ICE-free zones», which prohibit ICE operations on city property.
Ray earns 300,000 dollars a year, yet he struggles to find a place to live.
«We are in the world’s technological centre, and there is a serious bug when it comes to buying property. Some buyers pay cash, waive inspections or contingencies, and immediately add several hundred thousand dollars to the asking price. We have no chance against them.»
Estate agent Dave Cunningham believes that AI engineers are merely reinforcing a trend that has persisted for a long time.
«When a seller receives a cash offer, without obligations and with a large bonus, the choice is simple. The other candidates are eliminated before negotiations even begin.»
This reveals a long-standing weakness in the overheated housing market.
«For decades California has not built enough housing. With zoning regulations, environmental studies, public hearings and appeals, it sometimes takes years before projects get started. The arrival of buyers with exceptional incomes thus hits an already strained market.»
The AI wave is recreating a phenomenon previously created by fortunes built by companies such as SpaceX, Tesla and other tech giants. Middle-class households are not moving out because of a lack of jobs, but because they can no longer afford to live in the city. There is no «sanctuary city» for them.
One can also go further back in history and point to the famous gold rush of 1849, which in many ways created San Francisco. But a major difference separates these two epochs.
In 1849 San Francisco was open to newcomers who wanted to create a future for themselves. In 2026 it is relentlessly pushing out people the city depends on, who no longer see a future in the city.
Healthcare workers, teachers and firefighters can no longer afford to live in the city where they work. Something similar is happening in many European major cities too, including Oslo. Many have to commute, but even with up to two hours’ drive many still cannot muster enough funds to buy their own home.
Thus the city is experiencing that the economic growth from AI absolutely does not benefit everyone.
«San Francisco knows how to build the future, but not enough housing for those who build it», summarises Dr. Daryl Fairweather, chief economist at Redfin, one of the largest estate agents in the USA.
Political leaders are aware that this shortage now threatens California’s economic attractiveness, and have begun to react. The state legislature has just passed the «21st Century Road to Housing Act», to encourage the construction of new homes.
Experts believe these measures are a step in the right direction, but that they will not be enough to compensate for several decades of underproduction.
«As long as housing production remains far below the creation of well-paid jobs, San Francisco will continue to lose the households that maintain its social balance», says Carol Galante.
She is the founder of the Terner Center for Housing Innovation at the University of Berkeley and former federal housing representative under Barack Obama.
All these problems are exacerbated by the fact that crime in San Francisco is high, and makes the cheapest residential areas unsafe. This is something that applies to most cities in the USA controlled by the Democrats, including major cities in Texas, a state controlled by the Republicans.
US President Donald Trump and his administration are trying to restore law and order in American cities, but encounter fierce resistance from the Democrats, who appear to prefer lawless conditions.
Demokratene ønsker ikke bare å avskaffe ICE, de planlegger også å avvikle DHS