The Facts

San Francisco’s median asking rent for a one-bedroom hit $4,180 in July, up 22.9% in a year, according to Zumper’s latest report. Developers now predict that another 15% to 20% increase could make many stalled apartment buildings financially viable and trigger construction within 12 to 24 months, reports Max Harrison-Caldwell at The San Francisco Standard.

The Context

San Francisco’s Family Zoning Plan legalized capacity for 36,200 additional homes, but zoning is permission, not financing. The city completed only 405 homes in the first half of 2026.

To spur new homebuilding, the Supervisors reduced most development impact fees by 67% and lowered the on-site "inclusionary zoning" subsidized-housing requirement to 5% for buildings with at least 25 homes. The Board passed it 9-2: Supervisors Chan, Dorsey, Fielder, Mahmood, Mandelman, Melgar, Sauter, Sherrill, and Wong voted yes; Chyanne Chen and Shamann Walton voted no. New UC Irvine research found that "inclusionary zoning" taxation schemes cut new home construction by nearly a third.

The GrowSF Take

A 23% rent increase is the bill for years of blocking supply. San Francisco could have built 100,000 new homes over the past twenty years to absorb the reignited demand to live in the city, but the dominant political forces blocked that growth.

Tenant advocates are wrong to treat construction as a threat. A San Francisco study found that new market-rate housing lowered nearby rents about 2% and reduced incumbent renters’ risk of moving to a lower-income area. Mayor Lurie and the Supervisors were right to cut costs.

Now builders should build. If construction does not rise over the next year, the Board should follow the Controller’s math and cut the inclusionary requirement to zero.