When Zach Dive completed his stint at the startup accelerator Y Combinator last summer, he began thinking about where to put his company’s first office. Dive, a London native, liked the idea of placing his startup in a garage — a nod to Silicon Valley tech giants like Google and Hewlett-Packard that famously started that way.

He toured an old photography studio in Dogpatch, not far from Y Combinator headquarters. But instead he chose something more glitzy: a $5.5 million Spanish-style villa overlooking the Palace of Fine Arts.

“We came to this realization that we’re doing our life’s work,” said Dive, 26, whose company, Adam, has raised more than $4 million to build AI-generated 3D models. “So why not live in the best place possible so we feel inspired everyday?”

The house is part Silicon Valley hacker house, part Mediterranean retreat. The living room has been converted into an office (with desks, monitors, and a whiteboard), with a view of the Corinthian columns of the Palace of Fine Arts. The backyard features a fountain and cherub sculptures.

Adam’s five employees live in the five-bedroom home, which is filled with references to the company’s ambitions and namesake. A bust of a Roman emperor sits in one corner. A print of Michelangelo’s “The Creation of Adam” from the ceiling of the Sistine Chapel hangs above the dining table, and a rug in the living room depicts the famous hands of Adam and God.

In an earlier era, Adam’s headquarters might have seemed extravagant, if not imprudent, for a seed-stage startup. But during the AI boom, it’s increasingly common for founders to lease multimillion-dollar homes in wealthy neighborhoods to serve as corporate HQ. Some investors are even buying mansions as quarters to house their portfolio companies. 

It’s a sign of the times. Startups are raising larger rounds with relatively few employees, thanks to AI coding agents. Dive, for example, doesn’t plan to make more hires anytime soon and believes his Adam team could remain in the house for the foreseeable future. 

Startup origin stories have mythical status in Silicon Valley. The 1990s gave us the proverbial garage, as Google and others transformed suburban spaces into icons of scrappy tech ambition. In the 2000s, the setting shifted to the hacker house. Facebook famously operated out of a nondescript rented home in Palo Alto, with Mark Zuckerberg and early employees living and coding together. Airbnb was hatched in 2007 out of a modest apartment in SoMa.

Now, companies are turning the hacker house into something far more lavish: the startup mansion. 

Artisan, which moved into a swanky Russian Hill headquarters in 2024, pays $27,000 per month for a six-bedroom house with panoramic views. Last year, Cluely took over a nearly $4 million house in SoMa to make viral content and build its “cheat on everything” app. Cognition, which moved into a San Francisco office this year after acquiring Windsurf, built the first AI software engineer out of a $10 million neoclassical mansion in Atherton.

Even startups that cannot afford their own space are finding themselves in sweet digs. The new thing among incubators is a live-in or “residency” model. Often located in large houses, these programs put up founders for months while they get a startup off the ground. Meals and laundry are typically included, so teams can focus all their cycles on building. 

“Founders are now treated like royalty,” said Paul Sawaya, who moved to the Valley in 2011 and lived in a “smelly and gross” Atherton pool house with eight other techies. 

More than a decade later, Sawaya found himself in a very different setting: In 2024, he went through Hacker Fellowship Zero, or HF0, a live-in program for entrepreneurs in a 13-bedroom, $15 million mansion overlooking Alamo Square. “Everyone gets their own private room,” said Sawaya. “Some of the rooms have jacuzzis in them. There are daily yoga classes. It’s on a whole other level.” 

The move to mansions comes as San Francisco’s office vacancy rate remains at a record high: 33% in the fourth quarter of 2025, according to Cushman & Wakefield. But traditional office space, many founders say, lacks the inspiration and intensity of a live-work setup that helps teams stay immersed in the 996 grind (working 9 a.m. to 9 p.m., six days a week). 

The trend is putting pressure on residential real estate in San Francisco, where there was already an egregious shortage of inventory. Real estate agents say they have been inundated with requests for large rentals that have eight-plus bedrooms, with startups willing to pay top dollar to make their nontraditional usage more attractive to landlords. Compass agents Dunja Green and Milan Jezdimirovic recently got an email from one startup founder specifically asking for a “hacker house” with eight to 12 bedrooms and office space. The founder was willing to pay $30,000 a month. When the rental market was slow a few years ago, the agents might have been able to find something. But today, they said, owners have their pick of purely residential renters and generally prefer to go that route.

Some agents listing large homes for sale have reported calls from VCs or CEOs inquiring if the sellers would consider renting out the property instead. They have offered rent of up to $75,000 a month, but even at that price, the answer is usually no. 

Some VCs are going even further, looking at buying a megamansion outright to house early-stage portfolio companies. When Compass agents Dave Costello and Andy Ardila listed an eight-bedroom/eight-bath mansion at 2500 Divisadero in Pacific Heights, they heard from several tech investors considering the purchase. One liked the listing because he imagined entertaining upstairs, with workers on the lower level, which has its own side entrance. Another shopper was looking to upgrade from a two-floor condo in the neighborhood; he also envisioned an upstairs/downstairs setup. 

“We’re seeing this trend of people that are not just wanting to buy a house of that magnitude for their own personal use, but it’s involving office workers as well,” Costello said. “Basically, ‘I’m going to get this big house. I’d like some of my key employees to work here.’” 

A group based in Palo Alto, with Saudi investors, asked the agents to be on the hunt for a live-work-play building that would allow them to cut down on hotel costs, which were reportedly running upward of $600,000 a year. They described their ideal complex as having offices downstairs, event space and perhaps a gym on the second floor, and lodging above. They’re still looking. In the meantime, the agents say, they helped a different international group find an entire hotel in Lower Nob Hill for a group of 30 to rent out for three-month stints.

Other listing agents have been courting the startup crowd directly. Howard Epstein of City Real Estate has a Duboce Park home with seven bedrooms and six bathrooms in nearly 20,000 square feet, listed for $7 million, that he is pitching as a perfect programmer palace.

“Attention AI startups, car collectors, and visionaries!” he wrote in marketing notes for the property, which he co-owns. While Epstein waits for a buyer, seven software engineer roommates are renting the place, which has a basketball court, a hot tub, and 20-foot-high ceilings.

Epstein says several established VCs are circling the house, with the idea of tricking the place out, then cycling startups through it. Considering the house would need significant work to transform it from its “mid-’80s vibe” to today’s high standards, the total investment would approach $10 million. But Epstein believes that’s not too much for a successful investor to bite off.

“They’re sick of renting from somebody else, and they want to have a little show place,” he said. “A few years ago, they weren’t out there, but with this new wave of AI, they’re out there, and this will sell.” 

To be sure, most people touring San Francisco luxury homes are the typical wealthy families that have always bought them. And most local startups are still grinding toward becoming “ramen profitable (opens in new tab)” in dingy coworking spaces and shared bedrooms. 

But a growing number of founders feel there’s no shame in living well in the early days of building their companies. And some incubators are helping them get a taste of the good life early. There’s AGI House — named for artificial general intelligence — a palatial hacker house in Hillsborough with its own venture fund. In 2023, one of its leaders launched a second hacker house in San Francisco, also called AGI House, perched atop Twin Peaks. (The leaders of the two houses have since sued each other over the rights to the name.)

Another example is The Residency, a live-in incubator that houses early-stage founders for three-to-six-month cohorts. Participants receive housing, meals, and compute credits for AI models, along with therapy, executive coaching, and conflict-resolution sessions. Venture capitalists are invited in for a demo day at the end of each cohort.

The accelerator leases five San Francisco mansions — four in Pacific Heights and one in the Mission — each housing between 10 and 25 founders working on early-stage companies.

Nick Linck, founder of The Residency, invokes Maslow’s hierarchy of needs as he describes freeing founders from having to worry about basics like shelter, food, and community so they can focus single-mindedly on their startups. “That time and energy gets reinvested into building,” Linck said. “It’s a win-win for founders and investors.”

Since launching The Residency in 2023, Linck has been constantly scouting for homes in San Francisco that are large enough to house founders and double as coworking spaces. His ambition is to build a parallel version of higher education — but without the bureaucracy and hierarchy of traditional institutions.

“What if the future of advanced research doesn’t live in a university — but in a beautiful 20-bedroom hacker house?” reads the application for one Residency program near Lafayette Park.

The program has a waitlist of more than 100 people, and Linck is looking to expand to additional properties with at least five bedrooms and large common areas. The largest house in the program is a 22-bedroom mansion in Pacific Heights that houses 22 founders. Linck said he hasn’t encountered complaints from neighbors of his properties.

But not every area has been welcoming. One startup that occupies a five-story North Beach house with four bedrooms, rooftop jacuzzi, and a state-of-the-art DJ setup said neighbors haven’t taken kindly to having the company there.

The founder, who spoke to The Standard on the condition of anonymity to avoid further trouble, said the company moved to San Francisco from abroad last year. The founder wanted a space where employees could live, work, and host events, and the North Beach house fit the bill. The startup pays $30,000 a month in rent — a price he considers well worth it.

“It’s very reasonable, given that we don’t have to pay for hotels when remote employees are in town, and we have a nice space to host sponsored events,” the founder said. He said the company recently hosted an event at the home for about 70 guests with a Grammy Award–winning performer.

City 311 records show that neighbors have filed noise and parking complaints on the property. The startup recently soundproofed its basement, which it uses as a hackathon space, in an attempt to reduce the disturbance. But the founder said he is looking to move to another neighborhood.

Zoning issues, too, have complicated the startup mansion trend. Cluely went viral over the summer for renting a three-floor, six-bedroom live-work-party space in SoMa. But the company moved out last year after learning that the property was zoned for commercial use, not live/work. 

A Standard profile of Cluely from last summer — which included photos of six employees living in the house — was submitted to the San Francisco Planning Commission as evidence in a complaint alleging that employees were illegally residing in the building. A few months later, Cluely said it was moving to New York because of zoning issues. 

Under city law, up to one-third of a residentially zoned property can be used as workspace by residents who live there for more than a month, along with up to two nonresident employees. As long as entrepreneurs follow those rules, San Francisco Planning Chief of Staff Daniel Sider said, the government isn’t interested in policing their living arrangements. 

“Beyond enforcing the basic rules, we have no desire to start regulating the nuances of what people do with — or in — their bedrooms,” Sider said. “Godspeed.”