By Aarthi Swaminathan
America’s housing crisis has hit the 1%, as even the superrich can’t find places to rent in some big cities.
Alexander Lurie wanted to find a place to rent in San Francisco for his billionaire client. The client, a company founder, was looking for a five- or six-bedroom house to live in while their primary home was being renovated.
But the real-estate agent, who also happens to be San Francisco Mayor Daniel Lurie’s brother, ran into a problem. It wasn’t about money – the client could easily afford the steep price tag that comes with such homes, which can be tens of thousands of dollars a month. Rather, it was about supply. It was hard to find a suitable rental, even for a client who was willing and able to pay.
“San Francisco has a mansion deficit when it comes to buying – and an even greater one when it comes to renting,” Lurie told MarketWatch. When a large, well-maintained, top-tier rental does surface, “it’s gone in a flash,” he said, because “competition is fierce.” San Francisco is a relatively small city of only 47 square miles while New York City encompasses 302 square miles. But it has a high concentration of superrich residents, creating even more competition. Worldwide, there were an estimated 2,769 billionaires as of 2024, up from 2,565 in 2023, according to Oxfam.
Unlike two- or three-bedroom houses, bigger rental homes starting at 6,000 square feet are hard to find anywhere in San Francisco, Lurie said. Homes of this size are typically found only in expensive neighborhoods like Pacific Heights, Presidio Heights and Sea Cliff. “There’s just a real paucity of that type of home on the rental market,” he said. One five-bedroom house renting for $30,000 a month in the Marina neighborhood was snapped up within 48 hours after it received multiple offers (Lurie’s client won).
Across the country, New York City-based real-estate experts Jason Schuchman and Jacques Foussard say they’ve been coping with similar deficits in the high-end rental market.
The ultra-rich renting in New York have different demands than Lurie’s Bay Area billionaires. They want private garages that allow them to enter and exit their residences out of view, sweeping city views, great light and hotel-style amenities, such as concierge services that can book cleaners, pet groomers or even private travel.
But Schuchman’s and Foussard’s uber-wealthy clients also want those features at what they consider a fair price. “[E]ven when you’re super rich, you’re not going to throw money out of the window,” Foussard said.
America’s housing crisis has finally come for the 1%. The superrich in some big cities are finding it hard to snag a rental. Similar to how aspiring home buyers have struggled amid high home prices and elevated mortgage rates – a problem that’s been exacerbated by a lack of housing inventory – the superrich are dealing with their own, highly specific inventory shortage on the rental side.
To be clear, though, it’s one of a different flavor. The challenge they are facing is less about price and affordability, but more about availability.
Demand for rentals has gotten a lot hotter among the very rich. More millionaires are renting these days. Between 2019 and 2023, the latest year for which there is publicly available data, the number of households that make $1 million or more in income who also rent skyrocketed by 204%, according to an analysis by RentCafe. The cities with the most millionaire renters that year were New York City, San Francisco, Los Angeles, San Jose, Calif., and Boston, Mass.
The supply of rentals has not kept up to meet the demand from these well-resourced renters, agents said. That’s in part because there are more luxury homes for sale than for rent, Jonathan Miller, author of the Elliman Report and president and chief executive of Miller Samuel Real Estate Appraisers, told MarketWatch. “The purchase market is very strong,” he added, “and so perhaps that is the reason that [the superrich] are not finding the right fit, because there isn’t high-quality product available.”
In Miami, amenities that would make a home billionaire bait include a sauna in the house, a steam room and a cold-plunge tub. In condo buildings, they seek out spa-like amenities, in-house restaurants and well-equipped business centers, said Mendell Fellig, a Compass real-estate agent in Miami Beach.
But those can be hard to find, he said. “Our inventory levels for single-family homes is still about half of what it was pre-COVID,” he said. With an influx of migration into Miami since 2020, a lot of homes that may have been available for rent were sold, pushing inventory lower both for for-sale listings and rentals, he said.
In Pinecrest, one of the most expensive cities in Florida, one home that Fellig listed for sale ended up being rented for $60,000 a month, one of the highest rental prices recorded in Pinecrest.
Why are so many wealthier people interested in renting these days? The rich may be choosing to rent for a slew of reasons: uncertainty over the direction of the U.S. economy, uncertainty over whether they want to live in a particular city long term, or a reluctance to pay the property taxes associated with homeownership, real-estate agents said. Or they simply prefer the flexibility of renting due to remote work becoming more common, RentCafe said in a June report or they like the amenities that come with a luxury rental.
Ultimately, it can come down to just a lifestyle choice. Some wealthy clients have their permanent residence in another city, or country, and are not in town very often, Foussard said, so the rental home serves as a pied-a-terre, or simply a place to rest while they’re on a business trip.
Real-estate agents posited various reasons for the lack of supply for superrich renters. With 70% of the apartments in New York City being co-op buildings, it “drastically reduces the availability of rental units,” Foussard said. Some co-ops don’t take renters at all. And some have such a long application process that renting an apartment seems as burdensome as buying. That application also typically includes approval by the co-op’s board, which sometimes can be a sticking point for well-known renters. “In general, when it’s a high-profile person, they say no, because they don’t want to be bothered by the security,” Foussard said.
Lurie, in San Francisco, pointed to a lack of available land for residential development. “When developers are building in San Francisco, … there’s very limited land, and you need to build up,” Lurie said. “You can’t build out.”
His brother, the mayor, has proposed allowing taller buildings in some parts of the city and updating zoning laws with the goal of creating more affordable housing so families of all income levels can afford to raise children in San Francisco.
To be sure, the full extent of the plight of the billionaire renter isn’t known, because many high-end rental deals are made out of the public’s view. Lurie said most of the ultra-luxury rentals he’s worked on in San Francisco were off-market.
In some cases in New York City, when a wealthy client wants to live in a specific building, the brokers might call up other brokers, including those who had listed a home for sale in the building, to see if there was any chance that they would rent it to their client for six months.
One wealthy client wanted to rent a place in Manhattan for $35,000 a month in the fall and winter – typically a slow season for the regular rental market in the city – because they wanted to spend Thanksgiving and Christmas in New York, Schuchman said. So the lease was built around that.
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-Aarthi Swaminathan
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