SB9 in San Francisco

San Francisco earns a B grade for its SB9 program, signaling a moderately favorable environment for investors interested in lot splits and duplex developments under SB9. The city has demonstrated a capacity to approve projects, but the overall volume and pace of approvals are slowing. Investors should expect a functional but increasingly cautious market with some bureaucratic friction and a tightening pipeline of new SB9 opportunities.

San Francisco’s SB9 ordinance reflects the city’s progressive housing policies and strong commitment to increasing housing supply. As a charter city, it maintains local control over land use decisions, with an ordinance that supports SB9 implementation through clear design standards and reasonable setback requirements. The ordinance allows lot splits and duplex developments consistent with state law, with some additional local design review to maintain neighborhood character. Parking requirements are moderate, reflecting the city’s transit-oriented priorities. Overall, the ordinance is robust and supportive but includes local nuances that can slow approvals.

San Francisco started strong in 2022 with 29 SB9 applications but only 6 approvals, indicating early challenges in navigating local regulations or meeting design standards. In 2023, applications dropped to 17 but approvals increased to 8, showing improved processing efficiency or better project compliance. However, the sharp decline to a single application and approval in 2024, followed by zero activity in 2025, signals a significant slowdown in SB9 activity. This decline is not due to litigation or enforcement actions but likely reflects market saturation in prime areas, increasing local scrutiny, and possibly shifting city priorities or resource constraints. As a charter city, San Francisco has maintained a strong SB9 program without litigation suppressing activity. The city’s progressive housing stance remains, but the declining trajectory suggests growing challenges for new SB9 projects.

There is no record of any HCD enforcement action against San Francisco related to SB9 compliance. The city continues to operate its program without state intervention.

San Francisco’s SB9 market is functional but cooling rapidly. The early years showed promise with a growing number of approvals, but the steep decline in applications and approvals after 2023 indicates a tightening environment. Investors should approach with caution and conduct thorough due diligence on local conditions and project feasibility. This is a wait-and-see market rather than a clear buy opportunity. The city’s progressive policies support SB9 in principle, but practical barriers and declining activity suggest limited near-term upside for aggressive SB9 investment. For the grading methodology, see the SB9 City Guide post.