According to official metrics, inflation in the Bay Area is cooling. The Bureau of Labor Statistics reports that San Francisco's Consumer Price Index increased just 2.5% year-over-year, well below the post-pandemic peaks. The Federal Reserve has declared victory. But is the inflation crisis really over?

There's a reason the national numbers look good. It’s true that many goods are cheaper than they were last year. For example, TVs cost less. And the price of clothing went down. This is great news if you are in the market for a new TV or wardrobe. But we don’t buy new TVs or new clothes every day. We do, however, pay bills every month. We need insurance. We get our electricity from PG&E. We go out to eat. And in these areas, inflation is surging.

We looked at the receipts (literally), and found that for the specific things San Franciscans buy, the inflation rate isn't 2.5%. For some components, it’s double digits. Your PG&E bill has more than doubled over the last decade, and the cost of heating your apartment increased 14% last year alone. A burrito that cost $5.50 in 2014 is now $13.95. And your Uber rides cost nearly three times what they did in the days of VC subsidies. And if you're looking for official government data on SF electricity prices? You won't find it anymore. The BLS stopped publishing it.

The gap between measured inflation and lived inflation reveals a number of flaws in how we measure the cost of living, especially in a city like San Francisco. And as the Bay Area enters 2026 facing the pressures of AI-fueled housing demand, historic IPOs, and expired healthcare subsidies, that gap is about to get much wider.

Let’s take the cost of dining out. The CPI’s Food Away From Home component shows modest increases, but tracking actual menu prices at San Francisco institutions paints a different picture.

While Yelp is past its prime for reviews, it turns out it is an excellent archive of San Francisco's food pricing history. The menu price photos preserve the evidence of when prices jumped and by how much. Users have been uploading menu photos for over a decade. We downloaded these images from local institutions and charted price hikes over time. We found that they are increasing much faster than the official CPI print indicates.

At Taqueria Cancun in the Mission District, the regular burrito cost $5.50 in 2014. By 2025, that same burrito costs $13.95, a 153% increase over eleven years. That's an average annual increase of about 9%, far outpacing the official CPI component.

Devil's Teeth Baking Company in the Outer Sunset has served its signature breakfast sandwich for over a decade. The cost of a basic breakfast sandwich has gone up from $5.50 to $11.50 since 2015, a 110% increase. But, you say, the inflation report is all about what happened year over year. Well, the price of this item went up from $10 to $11.50 this year alone, a hike of 15%! And this comes just after a price hike of 25% between 2022 and 2023.

At Ritual Coffee Roasters, that latte that cost $3.50 in 2014 now costs $7.00, a 100% increase.

And for San Franciscans, the price on the menu is rarely the price you pay. Add in sales tax, a default 18-20% tip on the tablet screen, an SF Mandate or Cost of Living Fee, and 8.625% sales tax. Soon that seemingly cheap $15 lunch might be $20.

Why are prices going up so much? These are just local businesses, not greedy corporations. Ricardo Lopez, owner of La Vaca Birria in the Mission, explained to NBC Bay Area why his signature burrito went from $11 to $22. Onions that cost $9 a sack before COVID now run $80. Beef is up more than $2 a pound, adding $6,000 to his monthly costs. Labor adds another $3,000. "It's either that or keep the price the same, don't make any money and we close our doors at one point." The businesses we love are experiencing the same inflation we are, and it is reflected in the cost.

Perhaps no category better illustrates the gap between official inflation and lived experience than electricity costs.

The official number from the California Public Utilities Commission says rates increased 104% between 2015 and 2025. But that figure blends full-price payers with subsidized low-income customers on the CARE program.

The most dramatic increases came recently. Rates jumped nearly 40% between 2022 and 2025 alone. In 2024, state regulators approved five separate PG&E rate increases.

The BLS combines electricity, gas, and gasoline into a single 'energy index', so when gas prices fall, it masks electricity spikes in the official numbers.

What do the BLS numbers say about 2025? We don’t know. As of January 2025, BLS discontinued publishing local electricity prices entirely. After a decade showing dramatic price increases, the data source disappears. Only national averages continue. Metro-level electricity tracking is gone.

It seems a bit suspicious that the government stopped publishing San Francisco's electricity prices exactly as they hit record highs. What happened?

In early 2025, the Bureau of Labor Statistics announced it was discontinuing the "Average Price" data series for metropolitan areas, citing resource constraints after a wave of federal budget cuts.

Then, on August 1, 2025, the Trump administration fired BLS Commissioner Erika McEntarfer, a non-partisan statistician confirmed by the Senate in 2024, hours after her agency released a jobs report the White House disliked. Then came the October shutdown, which forced the cancellation of that month's entire CPI release.

You might expect that doubling your rates would result in better reliability, but it hasn’t. In December 2025, a fire at a PG&E substation at 8th and Mission left one third of San Francisco without power. The Richmond and Sunset districts lost power for nearly 72 hours. Traffic signals went dark. Muni service was disrupted and Waymo robotaxis stalled at intersections.

But that wasn’t the end of it. Richmond residents lost power three separate times in eleven days over the holidays. PG&E's solution was to run diesel generators 24/7 in residential neighborhoods while they repaired the substation.

One bright spot in the data is public transit. Muni and BART fares have actually tracked close to or below official inflation.

Muni fares didn’t increase from 2019 to 2024 while the city dealt with the pandemic. When increases finally came in 2025, a Clipper single ride went from $2.50 to $2.85, only a 14% increase over a decade. BART uses an "inflation minus 0.5%" formula, which keeps fare increases below CPI. The average BART fare rose from about $3.85 in 2015 to $4.72 in 2025, or roughly 22%.

BART faces a $376 million deficit starting in 2027 when emergency pandemic funding runs out. The agency warns that without new revenue, they'd have to close nine stations, eliminate two lines entirely, and reduce frequency to one train per hour.

So while public transit remains affordable, you are getting less for your money every year.

Remember back in 2015 when an Uber ride across town was $6? When you could UberPool for $3? Those days are gone. As we all know, those rates were VC-subsidized, and Uber lost tens of billions of dollars.

Self-Driving Cars Aren’t the Answer

For years, the tech industry promised that autonomous vehicles would make transportation cheaper. No driver to pay means lower costs, right? Turns out no.

According to data from Obi, which tracked a month of real-time pricing across San Francisco, Waymo rides cost an average of $20.43 compared to Uber's $15.58 and Lyft's $14.44. That's a 31% premium over Uber to ride in a car with no human driver.

Waymo now accounts for over 27% of San Francisco rideshares, and is rapidly taking market share away from Uber. But the tech dream where self-driving cars make transportation affordable still hasn't arrived.

Whether you choose affordability or convenience, you're getting less for your money than you did a decade ago.

San Francisco's entertainment costs have also increased dramatically. One example is the cost of Outside Lands, our flagship music festival:

That's an 89% increase over a decade, and a 32% jump in just two years. San Francisco has the highest indexed concert ticket prices in the nation, roughly 29% above the norm, according to analysis from Tickethold.

Meanwhile, the places where you could see live music affordably are disappearing. Bottom of the Hill announced it will close at the end of 2026 after 35 years as the city's premier small venue. The owners cited rising insurance costs ($34,000 annually), post-pandemic attendance shifts, and the simple economics of running a small club in an expensive city. As independent venues vanish, Live Nation and Ticketmaster's near-monopoly on the remaining larger spaces means more service charges, facility fees, and dynamic pricing that can double face value.

Want to take your family to see the Warriors? Chase Center is the most expensive arena in the NBA. Even nosebleed seats for some games can be hundreds of dollars a person, and don’t get me started on the price of a beer. If you are a longtime fan of the Warriors, you probably can’t afford to go see a game any more.

Healthcare inflation has consistently outpaced overall CPI, but in 2026 premiums are spiking much higher.

Kaiser Permanente's average commercial rate increase for 2024 was between 13.5% and 16.5% in Northern California, far above the ~5% increases customers had grown accustomed to. San Francisco specifically saw a 12.5% increase for the 2024 plan year.

The BLS claims healthcare inflation is much lower than what you're actually experiencing. They apply "hedonic adjustments" for quality improvements. If healthcare technology gets better, they reduce measured inflation even though you paid more. Your premiums doubled, but the BLS argues you're getting "more healthcare" for your money. You paid 78% more over the decade, but official statistics show roughly half that.

The End of Enhanced ACA Subsidies

And it’s about to get worse. The COVID-era "enhanced" premium subsidies expired December 31, 2025. Because Congress chose not to extend them in the "One Big Beautiful Bill" Act, subsidies reverted to pre-pandemic ACA levels.

According to analysis, average premiums could rise 114% for those affected and up to 400,000 Californians could become uninsured. For some enrollees this could be over one thousand dollars in premium costs per month.

For the past decade, San Francisco's rent prices have actually not increased much. Median rents actually fell during the pandemic and recovered slowly. Home prices remained below 2019 peaks due to weak demand for downtown condos.

Unfortunately, that’s about to change. According to Zumper, median rent in San Francisco hit $3,040 in August 2025, up 11.5% year-over-year, the steepest increase of any major U.S. city. One-bedroom rents reached $3,415, approaching the pre-pandemic peak of $3,500. In the luxury segment, median rents hit $5,595/month, up nearly 10% year-over-year. Two-bedroom rates jumped 14.2%.

Meanwhile, the BLS reports SF rental inflation at roughly 2%. How can both be true? Zumper tracks what new renters actually pay when they sign a lease today. BLS averages everyone, including the rent-controlled tenant who's been in the same unit since 2019. In a city where supply is tight and most renters stay put, the "average" rises slowly even as the market explodes. If you're apartment hunting right now, the BLS number doesn’t help you.

And recent reports show that bidding wars have returned. A two-bedroom Alamo Square apartment listed at $5,000/month had so many applicants that management asked prospective tenants to "reply with their best offer." Relocation consultants report making offers $2,000 over asking just to compete.

As AI talent concentrates in San Francisco, young workers with huge equity grants, signing bonuses, and pre-IPO secondary sales are entering the $2M-$5M home market. These buyers don’t care about mortgage rates. They can make an all cash offer.

According to venture analysts, 2026 may see the greatest liquidity event in venture history. Massive private companies, including OpenAI, Anthropic, Databricks, Stripe, and SpaceX are preparing to go public in the 2026-27 window. These companies will lead a multi-trillion dollar IPO wave.

The CPI tells us inflation is under control. The data shows year-over-year increases of 2-3%.

And we're entering 2026 with:

The asset class has equity in the AI boom. Engineers at OpenAI and Anthropic cashing out shares in tender offers. Early employees at Stripe and Databricks waiting for IPOs. Startup investors. Homeowners who bought before 2020 and locked in low rates. For this group, asset appreciation outpaces any cost increase. For this group, a $19 lunch is insignificant.

W-2 workers have wages that track the official CPI. These are renters facing 11.5% annual increases. People enrolled in Covered California and facing huge premium hikes. These are teachers, healthcare workers, and retail and restaurant workers.

San Francisco has had wealth inequality throughout its history. The gap between these two groups grows wider each year. And in 2026, it's about to get much wider.