San Francisco tech nonprofit faces 156% rent hike as AI fuels office demand - ABC7 San Francisco

SAN FRANCISCO (KGO) -- San Francisco's artificial intelligence boom is driving increased demand for office space, creating new challenges for some businesses and nonprofits, including a tech training organization that says its proposed rent would increase by more than 100%.

Dev/Mission, a nonprofit in San Francisco's South of Market neighborhood, provides free training in IT jobs and coding fundamentals to low-income students ages 16 to 24.

Founder Leo Sosa said the organization has graduated about 500 students since it started nearly 10 years ago, with almost 400 of them finding jobs in the tech industry.

Among those graduates is Josue, who Sosa said lived about a block away from Dev/Mission.

"He recently started working at OpenAI," Sosa said.

Since 2017, they have also distributed over 5,000 computers to low-income families.

"It's just very fulfilling knowing that I can give back to my community," said Isaac Sosa, Dev/Mission's program coordinator refurbishing center.

Now, Sosa says the nonprofit is facing uncertainty over its own future in the neighborhood.

"About three weeks ago the negotiating for the new lease, they pretty much told us it was going to be 156% increase, about $20,000 a month," Sosa said.

ABC7 Eyewitness News contacted Sosa's landlord but did not hear back.

Cushman & Wakefield, one of the world's largest commercial real estate firms, says office space costs in San Francisco are increasing rapidly.

"There is a flurry of office leasing activity, huge demand for residential pricing increase that we've never seen in this much of it increase in a short period of time," said Kazuko Morgan, executive vice chairman at Cushman & Wakefield.

Asked how much of the activity in the commercial office market is being driven by artificial intelligence, Morgan said, "I mean, a lot. That is the biggest demand in growth. At the moment."

The growth comes as Dev/Mission itself teaches young people about AI and other technology opportunities.

Sosa said he does not blame the industry for the nonprofit's predicament and believes its expansion is good for San Francisco, but hopes they can find a place by November.

"We're resilient, but I don't want to really say that AI is going to really harm and do things like that. No, it's great for the city, it's great for the economy. All these young people are being exposed to that opportunity," Sosa said.