San Francisco is a city of beauty, innovation, and opportunity, but it faces a severe housing crisis. Skyrocketing rents and home prices have made it nearly impossible for many residents, especially low- and middle-income workers, to afford living here. Despite a clear need for more homes, the city struggles to build enough to meet demand.
San Francisco’s housing shortage is a pressing issue. The city’s high cost of living has pushed many residents out, with median home prices reaching $1.6 million in 2020 and one-bedroom apartment rents averaging $3,300 a month Curbed SF: Yes, building more housing will drive down SF home prices. The state has set a goal for San Francisco to build 82,000 new housing units by 2031, but in 2024, only 1,735 new homes were built—the lowest in a dozen years The Frisc: SF Is Building Few New Homes Despite Looser Rules. Below, we explore the key barriers preventing more housing construction and what can be done about it.
Zoning Regulations and Restrictions
San Francisco’s zoning laws are a major hurdle to building more housing. Since the 1960s, the city has enforced strict regulations that limit building heights and types. Most areas do not allow buildings taller than 40 feet, which restricts the number of homes that can fit on a single lot. Zoning also separates residential and commercial areas, limiting mixed-use developments that could increase housing density.
These restrictions have significant consequences. A 2021 study by economists Joseph Gyourko and Jacob Krimmel estimated that zoning laws create a “zoning tax” of over $400,000 per home, inflating land prices and making development costly Wikipedia: San Francisco Housing Shortage. From 2007 to 2014, Bay Area cities issued permits for only half the homes needed to match population growth. Historical zoning policies, some rooted in racist practices, have also shaped today’s housing patterns, limiting options in wealthier neighborhoods and perpetuating segregation Reddit: Why are San Franciscans so opposed to new construction.
Recent efforts to reform zoning include Mayor London Breed’s 2024 proposal to rezone areas for more housing, particularly in downtown areas with high office space requirements. State bills, like Senate Bill 423, also aim to loosen zoning near transit hubs to encourage development CalMatters: Why San Francisco and San Jose struggle to build housing.
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The Permitting Process: A Bureaucratic Nightmare
San Francisco’s permitting process is one of the slowest in the U.S. In 2022, the first stage of permitting took 450 days, while the second stage took 630 days for multi-family housing and 860 days for single-family homes. This delays projects and increases costs, often making development unfeasible. Environmental reviews under the California Environmental Quality Act (CEQA) and other studies, like shadow or wind impact assessments, can further prolong the process SF Chronicle: Obscure rule is one reason San Francisco can’t build more housing.
In July 2024, California intervened to streamline San Francisco’s permitting process after the city failed to meet state housing targets. This has potentially made approvals faster, but challenges remain. Non-profits, unions, and community groups can still delay projects through negotiations or legal challenges, as seen in cases where projects were stalled by CEQA reviews or neighborhood objections SF Standard: How San Francisco Makes It Insanely Hard to Build Housing.
NIMBYism and Community Opposition
Community opposition, often called NIMBYism (Not In My Backyard), is a significant barrier. Many residents resist new housing projects, particularly high-rise or dense developments, citing concerns about neighborhood character, views, or property values. This opposition is often stronger in wealthier areas, where residents have more resources to influence local decisions.
For example, in 2019, a proposed 75-unit, eight-story housing project was delayed and eventually denied by the Board of Supervisors due to community pushback. Such opposition increases costs and risks for developers, discouraging new projects. While some residents support more housing, the vocal minority often sways decisions, slowing progress SF Standard: How San Francisco Makes It Insanely Hard to Build Housing.
Economic Challenges in Housing Development
Building in San Francisco is expensive. In 2023, construction costs reached $473 per square foot, the second-highest globally. High labor and material costs, combined with policies requiring affordable units, make development challenging. San Francisco’s inclusionary zoning mandates that 12-15% of new units be affordable, which developers offset by charging higher rents for market-rate units ABC7: San Francisco loosens permitting process for new housing but construction is slow.
Rent control, in place since 1979, has also reduced the rental supply by 15%, according to a 2019 study, driving up long-term rents. High interest rates and post-pandemic economic uncertainty have further slowed construction, with only 1,074 units approved in 2024, the lowest since the 2009-10 housing slump The Frisc: SF Is Building Few New Homes Despite Looser Rules.
Political and Policy Hurdles
Political resistance and bureaucratic inertia hinder housing reforms. Mayor Breed’s 2024 legislation removed conditional use permits and public hearings for many housing types, cutting fees by $100,000-$150,000 per affordable unit. However, the Board of Supervisors has been slow to adopt broader reforms, balancing development with other priorities like preserving historic districts SPUR: It’s About to Get a Whole Lot Easier to Build Housing in San Francisco.
State interventions, like Senate Bill 423 in 2023, pressure San Francisco to approve more housing, but local politics often resist change. The city’s 2023 Housing Element plan to build 82,000 units by 2031 is already behind schedule, with only 9% of the goal met by late 2024 The San Francisco Standard: SF’s progress on building housing is even worse than you thought.
Physical and Geographical Constraints
San Francisco’s geography limits development. Surrounded by water on three sides, the city has little room to expand. Much of the land is already built up, and regional planning complicates development in nearby areas. While densification and rezoning could help, these face regulatory and community resistance Vox: The case for making New York and San Francisco much, much bigger.
Historical and Social Factors
Historical policies have shaped today’s crisis. The 1978 downzoning made multifamily apartment buildings illegal in much of the city, a decision that still limits housing supply. Many existing buildings would be illegal to build today under current zoning laws. Some policies have roots in discriminatory practices that segregated neighborhoods, contributing to ongoing inequality Reddit: Why are San Franciscans so opposed to new construction.
Potential Solutions and Future Outlook
To address the housing shortage, San Francisco could consider:
- Reforming Zoning Laws: Allow denser, mixed-use developments in single-family zones to increase housing supply.
- Streamlining Permitting: Further reduce approval times and simplify environmental reviews to lower costs.
- Incentivizing Affordable Housing: Offer financial incentives, like fee reductions, to developers building affordable units.
- Community Engagement: Educate residents on the benefits of new housing to reduce opposition.
Recent reforms, like those in 2024, show promise, but meeting the 82,000-unit goal by 2031 will require sustained effort. Collaboration between city officials, developers, and residents is key to creating a more affordable San Francisco.
Conclusion
San Francisco’s housing crisis stems from a complex mix of zoning restrictions, slow permitting, community opposition, high costs, political challenges, geographical limits, and historical policies. While reforms are underway, progress is slow, and the city remains far from its housing goals. By addressing these barriers, San Francisco can work toward a future where all residents have access to affordable homes.
Key Data on San Francisco’s Housing Challenges
| Cause | Key Details | Relevant Numbers |
|---|---|---|
| Zoning | Limits buildings over 40 feet; separates residential/commercial areas; historical racist roots. | $400,000 per home (zoning tax, 2021) |
| Permit Process | Slowest in U.S. in 2022; first stage 450 days, second stage 630-860 days; streamlined in 2024. | 450 days (first stage, 2022) |
| Increased Demand | Tech job growth (373,000 jobs, 2012-2016) outpaces housing permits (58,000 units). | 373,000 jobs vs. 58,000 units (2012-2016) |
| Construction Costs | Second-most expensive globally at $473/sq. ft. in 2023. | $473/sq. ft. (2023) |
| Rent Control | Reduces rental supply by 15% since 1979, increasing long-run rents. | 15% reduction (2019 study) |