San Francisco Lags LA, San Jose in State Housing Permit Targets

California Senate Bill 512 requires cities to meet yearly housing production targets or lose portions of state transportation and parks funding beginning in fiscal year 2027. San Francisco must approve 7,850 units annually under the measure, or the city risks losing up to 15 percent of its Regional Housing Needs Allocation grants.

The bill emerged from the 2025 legislative session after the state Department of Housing and Community Development reported a shortfall of 1.2 million units statewide. San Francisco officials have tracked similar requirements since 2018 through the Association of Bay Area Governments allocations, yet compliance rates have varied across the nine-county region.

Effects on San Francisco residents and project costs

Residents seeking rental units in the Mission District or South of Market face longer wait times for new buildings because the city processes permits at a slower rate than Los Angeles. Under the new targets, developers in San Francisco pay an average of $45,000 per unit in impact fees, compared with $32,000 per unit in San Jose where streamlined review processes cut approval times by four months on average.

Local households also see changes in service costs. The legislation states that cities meeting targets can access additional transit funding, which in San Francisco could support Muni route expansions on the 14-Mission and 38-Geary lines. Those who live in rent-controlled units may encounter more conversion projects if builders shift toward larger multifamily sites to hit the numerical goals.

Permit data and next steps for compliance

The most recent state housing report lists San Francisco at 4,210 units permitted in 2025, trailing Los Angeles at 11,450 units and San Jose at 6,890 units for the same period. City planning staff have stated they will add two full-time reviewers and update the online permitting portal by December to close the gap.

The governor is scheduled to sign the bill by the end of July. City agencies must submit their first compliance report to the state by March 2027, after which funding adjustments take effect for the following budget cycle.