After Monthly Rents Hit KRW 8 Million, 'Housing Emergency' Declared... AI Boom Draws Wealthy to 'This City'

San Francisco rents soar amid AI boom
Monthly rents reach KRW 8 million... Middle class under pressure
City covers half of childcare costs for households earning KRW 400 million a year too

In San Francisco, where wealth is concentrating amid the artificial intelligence (AI) boom in Silicon Valley, even households earning more than KRW 400 million a year are receiving public assistance with childcare costs, an unusual situation. High-paying jobs at AI companies and expectations of initial public offerings (IPOs) have driven up home prices, rents and the cost of living, leaving even high-income households struggling with the costs of raising children and everyday expenses. The city’s economic prosperity is creating the paradox of putting pressure on the lives of the middle class.

Silicon Valley, U.S. Getty Images

"Even households earning KRW 430 million a year qualify for assistance"...Easing the burden of childcare costs

According to The New York Times (NYT) on October 26, the City and County of San Francisco covers 50% of childcare costs for four-person households with annual incomes of $325,000 (about KRW 431 million) or less. Households earning $235,000 (about KRW 311 million) or less a year receive full coverage of their childcare costs. The cost-of-living burden in the area has become so severe that households earning more than 3.5 times the U.S. median household income are eligible for assistance.

A city-employed psychotherapist and her husband, a part-time pediatric nurse, receive assistance. Their combined annual income is less than $235,000, but they spend $6,400 (about KRW 8.48 million) a month on mortgage payments and $2,200 (about KRW 2.92 million) on car-related costs. They say they have to cut back even on groceries, and that "without childcare assistance, we would have had to leave the city." They also say a four-person household needs an annual income of $500,000 to maintain a middle-class lifestyle. Another couple, one of whom works as a policy adviser at City Hall and the other at an AI startup, also receive assistance covering half their childcare costs despite earning a combined annual salary of more than $300,000.

A view of San Francisco, United States. Getty Images

San Francisco spends $238 million (about KRW 315 billion) a year to support more than 550 childcare facilities and more than 9,300 children. Funding includes unused budget allocations from the commercial gross receipts tax introduced following a 2018 popular vote. The assistance can reduce childcare costs by up to $36,000 (about KRW 47.7 million) per child annually. Mayor Daniel Lurie emphasized that the measure is intended to prevent teachers, nurses, police officers, firefighters, drivers and other workers essential to running the city from leaving because of the cost of living.

Monthly rents of KRW 6-8 million...Rent emergency declared

Behind the expansion of childcare assistance is a sharp rise in housing costs driven by the growth of the AI industry. According to figures compiled by local real estate platforms, the median monthly rent for a one-bedroom apartment in San Francisco is $4,060-$4,495 (about KRW 6-6.3 million), 2.4 times the U.S. average of $1,900. Rents for two-bedroom apartments have climbed to as much as $5,700 (about KRW 8.8 million), a record high. Annual rent increases were 21.9% for one-bedroom apartments and 22.6% for two-bedroom apartments. This contrasts with the U.S. overall, where the median rent for a one-bedroom apartment rose just 0.4% over the same period.

While the influx of high-income workers at AI companies and increased investment have driven up housing demand, supply has failed to keep pace. San Francisco takes an average of 280 days to process permits for new housing construction, longer than San Diego's 134 days and Austin's 91 days. As the imbalance between supply and demand has worsened, Mayor Lurie declared a rent emergency in September 2026. City officials are pursuing tenant-protection measures, including capping annual rent increases for rent-controlled units at 10% and allocating $27 million (about KRW 36.3 billion) to fill the funding gap created by the expiration of federal housing voucher assistance.

A view of San Francisco, U.S. Getty Images

South Korea has no income limits...Housing costs drive the burden of raising children

San Francisco's childcare assistance contrasts with South Korea's child and childcare support policies. South Korea provides parental benefits and child allowances regardless of income. As of 2026, the parental benefit is KRW 1 million per month for children under 1 and KRW 500,000 per month for 1-year-olds. Children under 9 also receive a separate monthly child allowance of KRW 100,000. Families using childcare centers receive childcare vouchers, and the government has allocated KRW 470.3 billion this year for additional education and childcare support for children aged 4-5. About 503,000 children are eligible, and the government plans to expand support to include 3-year-olds in 2027.

However, high housing costs are a major factor increasing the burden on families raising children in both countries. According to the Korea Real Estate Board, the median sale price of apartments in Seoul last September was KRW 1.086 billion, while the average sale price was KRW 1.37 billion. The median monthly rent was also around KRW 1.4 million, with a deposit of KRW 120 million. The price-to-income ratio (PIR) for Seoul, compiled by KB Real Estate, is 10.43, meaning a median-income household would have to save for more than 10 years without spending any of its income to afford a home in the mid-price range. Seoul also has the country's highest rent-to-income ratio (RIR), at 22.7%.

This content was produced with the assistance of AI translation services.