In December, San Francisco Chronicle Housing Reporter JK Dineen wrote an article titled “S.F. has the same housing goals as New York City — which is 10 times its size.” The piece covers how New York recently passed a plan to encourage the construction of 82,000 new housing units over the next 15 years. Coincidentally, 82,000 is the same number of homes state officials mandated San Francisco to plan for in its current eight-year housing element, from 2023-2031.
Dineen notes that the twin targets of 82,000 units either underscore how ambitious California is about tackling a housing shortage 40 years in the making, or the absurdity of the state’s expectations.
While there’s a kernel of truth to both, I agree more with the former. No doubt, planning to build 82,000 new homes is a lofty goal considering the history of San Francisco’s housing production rate. SF has averaged roughly 3,000 new housing units a year in the past two decades. Matching the state-mandated target would require a 300% increase in housing production.
That’s no small measure, but neither is the housing shortage and affordability crisis facing San Francisco and the rest of California. We should have ambitious housing production goals because we’ve spent the past few decades severely underproducing new homes. Restrictive zoning laws, bureaucratic processes, and an anti-growth sentiment have led to San Francisco becoming one of the most inaccessible cities in the country and California being one of the most expensive states in the country.
Of course, setting an ambitious goal is the easy part, the hard part is actually accomplishing it. And through the first two years of the latest RHNA cycle, San Francisco builders have only produced about 3,600 new units, less than 5% of the 82,000 goal. But before we write off the future of housing in San Francisco as hopeless, there are a couple of factors that we need to unpack to explain the city’s situation:
- It’s important to remember that the 82,000 figure is a planning requirement, not a guarantee. The city can’t singlehandedly develop all that housing—it can only incentivize and streamline private-market construction through policy changes, zoning reforms, and financial levers.
- San Francisco’s economy is still grappling with residual effects from the pandemic. Sky-high interest rates and construction costs have stunted production as poor economic conditions have made it too expensive to build new projects. Homebuilders are only going to build if their projects are financially feasible and in the past two years, it’s been difficult to get new projects in San Francisco to pencil.
With that being said, the state of the economy isn’t the only factor that affects the financing of projects. There are fees and requirements cities impose on new development and for years San Francisco wasn’t doing itself any favors as the layered on fees that made building in SF uniquely expensive.
Mayor Breed, however, has led efforts to pass policy solutions that create more economically friendly conditions for building. From making it faster and cheaper to convert office buildings into affordable housing to reducing and eliminating development fees, there have been tangible steps taken to jumpstart housing production.
And once the economic conditions become more favorable for building, there should be real optimism that San Francisco is about to enter a new wave of building. I should know as HAC has been at the forefront of advocacy campaigns to push large projects through the pipeline. In the past two years, we’ve celebrated approvals for tens of thousands of new units—developments like India Basin, Candlestick, Stonestown, and the Balboa Reservoir project, each of which promises to reshape San Francisco’s housing landscape, creating more housing for current and future residents alike.
The abundance of large-scale housing projects we’ve seen enter the pipeline in recent years is largely thanks to aggressive policy reform at the state and local levels. Transformative pieces of legislation like Scott Wiener’s SB 423 and Buffy Wick’s AB 2243 (which HAC sponsored), in addition to the bold zoning and process changes led by former Mayor London Breed, have set the stage for a housing boom.
The numbers may not look good now but don’t be surprised if the 82,000 goal looks much more realistic in a couple of years.
