San Francisco's Path Forward: Housing, Permits, and Downtown Revival

This week, I had the opportunity to attend a presentation by Ned Segal, San Francisco's Chief of Housing and Economic Development, at our Compass office. What I heard gave me genuine optimism about where our city is headed—and I wanted to share the key takeaways with you, because these changes are going to directly affect San Francisco real estate for decades to come.

The Bottom Line

After decades of restrictive zoning and bureaucratic hurdles, San Francisco is finally pursuing sweeping reforms across three critical areas: family zoning to meet state housing mandates, permit streamlining to support small businesses, and downtown revitalization to restore the city's economic engine. If you're thinking about buying or selling a condo in San Francisco, understanding these changes will help you make smarter decisions about timing, location, and value.

Family Zoning: What It Means for Your Property

If you own property in San Francisco or are thinking about buying, this is critical to understand. The state has mandated the city build at least 82,069 new homes by 2031. Failure to comply would mean losing hundreds of millions in state funding annually and potentially surrendering local control over zoning decisions to Sacramento.

Ned was clear about the stakes: "Some people looked at this like a political hand grenade. We looked at it as a generational opportunity to shape San Francisco for decades to come."

The city's response is the Family Zoning Plan, which Mayor Daniel Lurie introduced in June 2025. This represents San Francisco's most ambitious zoning reform in over 50 years—the last major overhaul dates back to 1973, when we went down in density, not up.

Here's what this means for you:

• Transit corridor density: If you own property or are looking to buy along major transit lines like Geary, Lincoln, Lombard, or Van Ness, expect to see 6-8 story buildings going up. In some high-volume transit areas, we could see 11-14 stories. This could increase property values in these corridors as density creates more vibrancy and demand.

• Neighborhood flexibility: Single-family homes can become duplexes or more when their useful life ends. This doesn't mean anyone's forcing you to sell or that developers will knock on your door—but when properties do turn over, there will be more flexibility for what can be built. This could actually increase your property's value by expanding what's possible on your lot.

• Predictable development: Here's the big win for buyers and sellers—for the first time in 50+ years, you'll have a clear roadmap of what can be built near your property for decades to come. No more uncertainty about what might go up next door. You can look at the zoning map and know exactly what's allowed in your neighborhood.

The plan received preliminary approval from the California Department of Housing and Community Development in September 2025, marking a significant milestone. The city must adopt final zoning regulations by January 2026 to maintain local control and remain eligible for critical state funding.

As Ned pointed out, quoting former New York Deputy Mayor Dan Doctoroff: "If the city is shrinking, it's dying. If the city isn't growing, it's dying." We can't have debates about what schools to close or what bus lines to stop. We need to be building housing at all income levels.

Urban policy experts note that this reform focuses on northern and western neighborhoods that have seen minimal new housing construction, in part due to exclusionary zoning rules dating back to the 1970s. These areas were historically insulated from demographic changes through restrictive policies that continue to limit housing choice for low-income families and people of color.

Permit Reform: Easier Renovations and Improvements

If you've ever tried to renovate a condo or watched neighbors struggle with city permits, you know how frustrating our system has been. The Permit SF initiative, launched through executive directive in February 2025, is making changes that will directly benefit condo owners.

Here are some reforms that caught my attention:

• Driveway parking: No more $1,500 fines for parking in your own driveway. (Ned joked that he'd just gotten one himself!) This is separate from blocking the sidewalk, which is still prohibited.

• Historic repairs: You can now repair aging structures like back staircases without being forced to bring them fully up to current code. As Ned pointed out, you're more likely to get hurt on a falling-apart stairwell than one that's been repaired but isn't perfectly up to code.

• Plan consolidation: If you've submitted plans to the city once, they'll find them. You don't have to resubmit the same documents over and over.

• Measurement streamlining: Different city departments will use the same measurements instead of each conducting their own. This means fewer appointments, less waiting, and faster approvals for your renovation projects.

• Tables and chairs for ground-floor commercial: As of August 2025, ground-floor restaurants in condo buildings no longer pay $2,500 annually for outdoor seating permits. This makes ground-floor retail more viable, which is good for building values.

The initiative operates on 100-day sprints, with new legislative packages announced in May and September 2025. Ned emphasized they're not stopping—"We're just going to keep going until we run out of ideas. But if you all have ideas, please let me know."

Additional reforms include:

• Restaurant candles treated like other onsite-inspected permits (no more special trips to the permit center)

• Centralized customer service through new software

• Over-the-counter permit processing for certain restaurant remodels

• Expedited solar and battery applications

As advocates note, these changes address longstanding problems that have made opening and operating businesses unnecessarily difficult and expensive in San Francisco.

Downtown Revival: Why Every Neighborhood Benefits

Here's something Ned shared that really stuck with me: Downtown represents approximately 40% of our city's tax base, 40% of our small businesses, and employs 40% of San Francisco workers. Easy to remember, right? Whether you own a condo in the Bayview, the Sunset, or SOMA, you care about downtown—it pays for the city services we all depend on.

When downtown struggles, property values across the entire city feel it. When downtown thrives, everyone benefits.

The good news:

Crime Reduction

This directly affects property values: San Francisco's overall crime rate reached its lowest level in over 20 years in 2024, with property crimes down 31% and violent crimes down 14% from 2023. In the Union Square area specifically, crimes declined 36.4% in 2024.

Ned was candid: "Crime is down 40% around Union Square. That's pretty cool. But it's still 40% of what it was—we definitely still have work to do." Even driving to the meeting, he noticed people who need help on the streets. The work continues, but when you walk around Union Square and it feels safer and cleaner, that changes everything about how buyers perceive the city.

Auto break-ins—the number one concern I hear from condo buyers—fell below 10,000 incidents for the first time in nearly 15 years.

Convention Recovery

The rebound in convention business is creating jobs and economic activity. Moscone Center bookings surged 64-70% in 2025, with 32-34 events generating nearly 670,000 hotel room nights—compared to just 25 events and 400,000 room nights in 2024.

Ned explained why this matters to all of us: "Convention bookings are up 40% year over year. This is the top of the funnel. Convention planners visit to scope out the city. They host their conference. Attendees go home and tell people, 'Hey, that San Francisco I saw on Fox News actually looked pretty good.' Then they bring their families back for spring break. Then they tell their neighbors."

First quarter 2025 convention activity generated an estimated $174 million in economic impact. Major events including NBA All-Star Weekend, the Game Developers Conference, Microsoft Ignite, and Salesforce's Dreamforce (committed through 2027) are driving this recovery.

What this means for property values: More conventions = more jobs = more demand for housing = stronger property values across the city.

Tourism Momentum

Overall, San Francisco is projected to welcome 23.33 million visitors in 2025, up from 23.06 million in 2024, with visitor spending projected to increase to $9.41 billion. Hotel occupancy is expected to reach 64.4%, with revenue per available room increasing 4.8% year-over-year.

Office-to-Residential Conversion

The city has streamlined the process for converting empty office buildings to residential use, addressing both the office vacancy crisis and housing shortage. This could create thousands of new homes downtown, which would increase the residential population and support neighborhood retail.

The Connection: Why This All Matters to Your Property

Ned painted a clear picture of how these initiatives work together: Convention planners visit and see a safer, cleaner city. They book their events. Attendees have positive experiences and return with their families. They tell friends and neighbors. Tourism increases, supporting small businesses and generating tax revenue. That revenue funds better city services. Better services make San Francisco more attractive to residents and businesses. And all of this supports property values throughout the city.

Downtown is both our city's economic engine and the front door to visitors. When downtown thrives, it creates a ripple effect that benefits neighborhoods across San Francisco.

What This Means for Buyers and Sellers

If you're thinking about selling:

• The improving safety and vibrancy downtown is changing buyer perception of the city

• New zoning rules provide clarity about what can be built near your property, which reduces uncertainty for buyers

• Easier permits make your property more attractive to buyers who want to renovate

• Convention and tourism recovery is bringing jobs and economic activity back to the city

If you're thinking about buying:

• You'll have more certainty about future development in your neighborhood with the new zoning map

• Properties along transit corridors may see increased value as density and vibrancy grow

• Permit reforms make it easier and cheaper to customize your new home

• The city's overall trajectory is improving, which supports long-term property values

The challenges that remain: Ned was honest about the work ahead. As he said, "I hope none of what I say comes across as 'we're done, let's move on.' " Crime is down 40% from peak levels, but that still means 60% of the problem persists. Housing production must accelerate dramatically to meet state targets.

The city's population had been shrinking—and as Ned pointed out, "If the city is shrinking, it's dying." The goal is to reverse that trend by making San Francisco more affordable and livable for families at all income levels.

Looking Ahead

What struck me most about Ned's presentation was the shift in mindset. Rather than viewing state mandates and economic challenges as burdens, the city is treating these as opportunities to reshape San Francisco for the better.

The Family Zoning Plan will provide the first comprehensive update to the city's zoning map in over 50 years—giving you clarity about what can be built in your neighborhood for decades to come. Permit reforms are eliminating bureaucratic obstacles that have made renovations and improvements unnecessarily difficult. Downtown revival efforts are restoring the economic engine that funds services across the city.

Having grown up just a few blocks from City Hall and raised his own family here, Ned has seen both sides of city government—as someone who's been on the receiving end of our bureaucracy for years in the private sector, and now as someone working to fix it. His perspective: "I just knew there was so much that we could do so much better than we've done historically."

The goal isn't just recovery—it's transformation. Creating a San Francisco where families can afford to raise children, where small businesses can thrive, where neighborhoods across the city share in growth and opportunity, and where your investment in San Francisco real estate is supported by a thriving, growing city.

I've been selling real estate in San Francisco for years, and I'm more optimistic about our city's future than I've been in a long time. These changes are real, they're happening now, and they're going to shape our market for decades to come.

Have questions about how these changes might affect your specific neighborhood or property? Thinking about buying or selling? I'm here to help you navigate the San Francisco real estate market with up-to-date local knowledge. Feel free to reach out.

For more information on San Francisco's housing and economic development initiatives, visit SF Planning and PermitSF.