Data Shows Severe Housing Shortage in San Francisco

The city's ambitious goal to build 82,000 new housing units by 2031 is off to a slow start, with only 4.4% of that target achieved a quarter of the way through the eight-year cycle. To meet this state-mandated goal, San Francisco would need to average 13,000 new units annually for the next six years, a significant increase from the 1,205 units completed in 2024. Restrictive zoning has historically been a primary driver of the housing shortage, with large multifamily developments prohibited in most neighborhoods. For years, new housing construction has been concentrated in the eastern parts of the city, while the northern and western neighborhoods, which comprise over half the city's land, have seen little growth. The approval process for new housing in San Francisco is notoriously slow, with the longest timelines in the state for a project to move from submittal to construction. This lengthy process, which can take several years for environmental and community reviews, discourages investment in large-scale housing projects. High construction costs further constrain supply, with the average cost to build a single apartment unit exceeding $800,000. This, combined with a complex and lengthy permitting process, creates significant barriers for developers looking to build new housing. The recent boom in artificial intelligence is intensifying the demand for housing, with AI firms now occupying 5.7 million square feet of office space, up from 2 million in 2020. This influx of high-income tech workers is putting additional pressure on an already strained housing market, causing apartment rents to shoot up 5.1% in the past year, the largest increase in the nation. In response to these challenges, the city passed the "Family Zoning Plan" in December 2025, a measure intended to create zoning capacity for 36,000 new housing units. The plan aims to allow for more housing options along public transit corridors, particularly in the city's northern and western neighborhoods. The economic consequences of this imbalance are stark, contributing to the displacement of middle and lower-income residents and a shortage of essential workers who can no longer afford to live in the city. Between 2020 and 2023, San Francisco's population declined by over 50,000 as residents sought more affordable cities. The housing crisis has also led to a significant rise in homelessness, with the city reporting over 8,000 homeless individuals in 2023, a nearly 20% increase from 2019. This has created public health concerns and increased tensions over how to address the crisis.