San Francisco is on the verge of significant changes aimed at addressing its housing crisis, with plans in place to increase building heights and allow denser residential construction along key neighborhood streets.
This initiative aims to stimulate a population increase in areas that have remained low-rise since the 1970s when an anti-development movement capped building heights.
Proponents of the plan assert that increasing housing supply will make the city more affordable, a notion that is supported by a growing body of evidence.
However, there are critics who argue that the principles of supply and demand do not apply to rents and housing prices in San Francisco.
Others raise concerns about potential widespread demolition and displacement of current residents, as well as fears that taller buildings may obstruct views and cast shadows on surrounding areas.
The Board of Supervisors must make a decision on this contentious plan by the end of January, facing a requirement to comply with state and local regulations.
If not approved, the city could risk heavier-handed interventions from state regulators this summer, though supervisors have the option to request modifications to the proposed zoning map and implement enhanced tenant protections.
As public hearings unfold throughout the fall, a whirlwind of debate is expected about the fate of neighborhoods and the buildings rising within them.
The Road to Change: How Did We Reach This Point?
The journey towards the proposed changes began with a pivotal vote in January 2023, where San Francisco lawmakers, albeit sometimes reluctantly, approved a far-reaching housing blueprint known as the Housing Element.
This blueprint has called for new zoning regulations, which will be enforced block by block in “well-resourced neighborhoods,” where new home construction is scant.
The objective is to ensure that wealthier neighborhoods, boasting better schools, amenities, and transit access, contribute their fair share to alleviate the housing shortage that has long plagued the city.
Zoning codes dictate what can be built on each lot, encompassing limits on the number of residential or commercial units, height restrictions, and other regulations.
Meeting these codes typically necessitates special permissions accompanied by extensive public hearings.
California mandates that every city develop a new Housing Element every eight years.
Before the cycle that began in 2023, cities faced minimal accountability for failing to adhere to their plans; however, this landscape shifted significantly following legislation passed in 2017, led by state Sen. Scott Wiener.
Under the 2023 Housing Element plan, San Francisco has until January 31, 2026, to implement zoning changes across neighborhoods such as Haight, Upper Market, Fisherman’s Wharf, Marina, Richmond, Sunset, and others.
Among the proposed changes, the current plan suggests allowing tower heights of up to 160 feet at select intersections in the Castro and doubling height limits from four to eight stories along commercial blocks in the Sunset.
State regulators will need to approve the final zoning changes; otherwise, the city could be compelled to accept more drastic adjustments directly from Sacramento.
In conjunction with the city’s zoning proposal, Senator Wiener is also advocating for a bill that would enable increased density near public transit, allowing for seven-story buildings within a quarter mile of BART stations, and six-story buildings close to Muni rail and bus lines.
While these adjustments might not drastically alter the landscape, they could facilitate the addition of a few stories on bustling streets in neighborhoods currently overlooked, such as Crocker-Amazon.
Why Not Just Focus on Affordable Housing?
Skeptics of increased zoning argue that what the city truly needs is a focus on affordable housing rather than the construction of market-rate homes.
According to the state’s objectives, nearly 47,000 of the 82,000 new housing units planned are to be designated as below-market rates.
Despite promising statistics indicating that nearly two-thirds of all new housing production in 2024 was affordable, the actual number was dismally low, at just 1,114 units, amid overall abysmal housing production driven by economic challenges, rising costs, and waning investor confidence.
Building an affordable housing unit in San Francisco can approach a staggering cost of nearly $1 million.
Cost-effective modular construction approaches could require significant political support from city officials.
Some funding may come from San Francisco’s inclusionary housing program, which mandates that developers either include a certain percentage of affordable units in market-rate projects or pay into a city fund.
Yet, a downturn in market-rate construction directly undermines the availability of affordable homes.
As the city teeters on the edge of financial uncertainty, the November election dashed hopes for funding initiatives on several fronts, from a proposed $20 billion Bay Area bond to making state bonds easier to approve.
The election of President Donald Trump has also diminished expectations for federal financial support.
Moreover, San Francisco’s affordable housing budget threatens to suffer, potentially losing up to $90 million, as Mayor Daniel Lurie considers reallocating some funds to support additional temporary shelter solutions.
In recent years, the city has utilized state grants to convert hotels into low-income housing, which is more cost-effective than new builds, but the availability of vacant hotels is limited.
Additionally, while converting empty office spaces into housing has been promoted as a viable option, the reality remains complex due to various design and financial dilemmas.
Unless local and state voters opt to approve new taxation measures or bonds, the most viable approach to a surge in affordable housing within the next few years may rely on revitalizing market-rate construction.
Understanding the Request for 82,000 New Homes by 2031
It is often misreported that the state is mandating that San Francisco build over 82,000 homes by 2031, but this portrayal is somewhat misleading.
State regulators have actually stipulated that San Francisco must create capacity for 82,000 new homes, which emphasizes the potential for growth over an actual requirement to construct a specific number of units.
San Francisco can enhance housing supply by loosening restrictions and perhaps offering financial incentives, such as grants for affordable housing; however, ultimately, it is private developers who will build the homes.
As UC Davis land use professor Chris Elmendorf states, “The rezoning plan must be designed to achieve the overall housing target. The key ingredient here is the city’s commitment.”
In reality, though, there is a concrete quota that the city must achieve: if San Francisco does not issue permits for at least 29,049 new units by January 31, 2027, all rezoning efforts will need to restart with potentially looser regulations.
This requirement, known as the “circuit breaker”—coined the “dirty bomb” by its critics—was insisted upon by state regulators without explicit instructions on enforcement.
Nonetheless, it is likely to result in more lenient regulations bolstering increased heights across more neighborhoods.
While some argue that San Francisco has ample housing in the pipeline, containing nearly 70,000 homes in various stages of production, critics question why there is a need for zoning reform.
It is crucial to note that this pipeline does not guarantee successful completion, particularly when larger projects are involved, as evidenced by complications surrounding the Parkmerced project featuring 5,700 proposed new homes that remain in limbo.
In fact, the state rebuffed an earlier version of San Francisco’s 2023 Housing Element for overly relying on these pipeline figures, highlighting that state regulations dictate how many units from megaprojects can count toward long-term housing goals.
Dissecting the Count of Vacant Homes
Another argument made against increased zoning is that it would free up tens of thousands of vacant homes.
The U.S. Census reports approximately 61,500 vacant units in San Francisco as of 2021.
However, this statistic demands closer scrutiny, as about two-thirds of these homes are either on the market for sale or rent, in the process of being rented or sold without yet being occupied, or classified as “occasional use,” which includes vacation homes and short-term rentals.
While some view this situation as wasteful, there is no law preventing individuals from owning more than one home.
Within San Francisco, local laws mandate that short-term rental owners must reside in their units, adding another layer of complication to housing accessibility.
The remaining third of the census count falls into the ambiguous “other vacant” category, which could signify various conditions such as being in probate, undergoing renovation, or being condemned.
Critics claim that homes that are listed for sale or rent but not yet occupied signify a frail housing market; however, the true number of properties held empty in bad faith appears to be far less than the often-quoted figures of 61,500 or 40,000.
The recently implemented empty homes tax of 2022 has faced legal challenges, preventing any meaningful collection of information to clarify the situation.
Concerns About Displacement and Eviction
An organization explicitly opposing the new housing initiative, Neighborhoods United, argues that upzoning fosters speculation, demolition, and displacement.
They assert that fulfilling the demand for tens of thousands of new homes inherently entails demolishing smaller residences and apartments to erect larger structures, particularly since San Francisco lacks a sufficient number of empty or underdeveloped sites.
As cofounder Lori Brooke articulated, “Upzoning without meaningful affordability requirements is not progress; it’s displacement in disguise.”
Historically, fears surrounding mass demolitions are rooted in detrimental mid-20th-century urban renewal initiatives that ravaged neighborhoods like the Fillmore and Manilatown.
While San Francisco has some of the most robust renter protections in the nation, including free defense against eviction, tenant unions and advocates for anti-eviction measures highlight a loophole that developers may exploit through the practice of “renovictions.”
This tactic often involves prolonged renovations aimed at displacing tenants.
In San Francisco, developers are required to replace any rent-controlled units demolished with an equivalent number in the new building.
Displaced tenants usually receive first priority for the available rent-controlled units, yet many ultimately secure alternative long-term housing during the waiting period.
Furthermore, if developers plan to displace current tenants during redevelopment, those impacted receive relocation fees starting at $8,000, or more than $13,000 for elderly, disabled, or families with minor children.
These costs can escalate significantly for owner-move-in evictions.
Unfortunately for small businesses, such protections are notably absent, exposing them to heightened risk of displacement due to redevelopment.
Last autumn, supervisors put in place a temporary shielding mechanism for “legacy businesses,” and planners have pledged to formulate a more comprehensive protective framework alongside the final proposal.
Upcoming regulations, particularly regarding tenant protections and the design of future developments, remain under discussion in the coming weeks or months.
Public Sentiment: Concerns Over Aesthetics
Opponents of new development often express concerns regarding how new structures will impact the character of existing neighborhoods.
Discontent arises from perceptions that new buildings clash with the established aesthetic of the surroundings.
As Castro business owner Alvin Orloff articulated, “People would be less anxious about a lot of this new construction if the buildings just looked a little nicer.”
However, recent state legislation has curtailed the ability of agencies to raise objections based on perceived neighborhood character.
This means that city planners are now required to establish objective standards to govern design elements, such as facade details and setbacks from the street.
Local aesthetic preferences will no longer serve as flexible criteria for development.
Nevertheless, city planners remain acutely aware that San Francisco possesses a distinctive character that varies between neighborhoods as one rotates the corner or climbs a hill.
Neighborhood character is not merely a tool utilized by NIMBY activists but an element that deserves consideration in development plans.
To address these concerns, the Planning Department is focusing on incentivizing design rather than imposing restrictions.
Through the “local zoning” initiative—currently undergoing development—streamlined project approval processes and opportunities for increased height will be made available to developers who adhere to designated design standards.
As SF planner Tanner noted, “Right now through the state, you can get exemptions from design standards. We want to offer an alternative of our own.”
This design incentive initiative allows a trade-off: developers receive additional height allowances, while the city retains some degree of control over aesthetic outcomes.
Though details regarding these design incentives remain in discussion, upcoming debates are expected in the months ahead, positioning San Francisco at the intersection of growth and preservation.
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