In the rental market a big driver of the landlord decision cycle is needing, at a minimum, to have a reputable tenant and to cover the cost of carry of the asset (mortgage, etc). In many cases if their cost of carry is met (and that's often a low bar....many landlords in both NYC and SF own their apartments outright, or are paying tiny monthlies on a refinanced mortgage that was originated in the 90's), then the priority is getting a reputable tenant who won't destroy the place or create drama.
If the above paragraph is confusing, basically what I am trying to say is that a landlord often prefers, for example, $3000/month from a tenant who they think is 98% likely to be an "easy tenant" to $3500/month from one who they think is 80% likely to be the same. In other words, there's a market premium on reliable tenants, especially in places like SF that have aggressive tenant-protection laws which make landlords even more antsy.
As layoffs start happening (as they did in the nine months before we signed our lease back in '09) landlords of reliably-paying, drama-free tenants start getting antsy about keeping their current tenant or finding a suitable replacement.
As such, what drives prices in markets like NY/SF isn't just supply-demand equilibrium; there's also a significant behavioral economics angle aspect to it as well, as landlords are willing to pay a premium for peace of mind.
Therefore, I would expect a significant drop in SF rents if layoffs start coming.
I would much rather have someone who pays less, but is financially and mentally stable. So yeah, rents will drop pretty fast once the market softens.
SF in particular is a unique market because you have one population that is hell bent on staying here, and another that is primarily here for work opportunities. The latter population will clear out pretty quick once the work starts to dry up.
So yeah ask. And be prepared to move. If you aren't prepared to move, you're not ready to save.
It also depends on the kind of property taxes prevalent in the states. e.g. in California, property taxes are set at the time of purchase, while in Texas they are reassessed every year. So, my landlord (in Texas) basically increases the rent to cover for the increase in property taxes.
I was able to do the same thing when re-signing the lease for my NYC (East Village) apartment in June 2009. My roommates and I drafted a letter requesting a 10% reduction, citing decreased rents 1) in the neighborhood and 2) in the rest of the city - specifically in the financial district where "luxury" buildings were giving away multiple months of free rent as a signing bonus - and the management company accepted it without a word.
Landlords are scared to death of deadbeat tenants like this, it costs a lot of legal fees to get rid of them, and they're freeloading while you're walking through the necessary legal processes.
Every time the apartment goes onto the market they're rolling the dice again - so the value of an existing pleasant tenant is substantial vs. the risk of a tenant of unknown quality.
Which isn't to say you can just get your rent slashed whenever you want, but it's part of the negotiation, and coupled with a recession it can be a powerful argument.
Vast majority of rentals in NYC if you asked the super for a discount in rent you'd be requested not to let the door hit your ass on the way out.
Maybe I'm being irrational, but I suspect that the drops won't be proportional and the housing isse in SF will just get worse.