New Towers, Old Problem: What SF's Development Surge Actually Means for Buyers and Renters

More than 4,200 residential units are currently permitted or under active construction across San Francisco, according to figures from the Planning Department's June 2026 pipeline report — the highest single-year count since 2019. The projects stretch from a 28-story mixed-use tower proposed at 10th and Market to a 340-unit complex moving forward on Illinois Street in Dogpatch. City Hall is calling it a turning point. Housing advocates are not so sure.

The timing matters. San Francisco's median home price sits at $1.3 million as of the second quarter of 2026, essentially flat from a year ago but stubbornly out of reach for anyone earning under six figures. Tech-sector hiring has picked back up in SoMa and Mission Bay, which is pushing rental demand north again after two years of softness. Landlords on Valencia Street and in the Inner Sunset reported sub-3% vacancy rates in May for the first time since 2022. New supply, in theory, should loosen that grip. Whether this particular supply will is a different question.

What's Actually Getting Built — and Where

The Dogpatch and Mission Bay corridor is absorbing the largest share of new construction. The Illinois Street project, developed by Related California and expected to deliver its first units by late 2027, will include 68 below-market-rate apartments under the city's 16% inclusionary requirement. That sounds significant until you run the numbers: 68 affordable units against a neighborhood where two-bedroom rents have climbed past $3,800 a month. The project is not going to move the needle on its own.

Further north, the Planning Commission approved a 190-unit project on Lombard Street in the Marina district in May, attracting the predictable neighborhood opposition over height and shadow impacts. Marina and Pacific Heights remain the city's premium zones, with condo listings routinely exceeding $1,500 per square foot. The Lombard project's market-rate units are expected to list somewhere in that range when they hit in 2028. None of the 190 units will be designated affordable under state density bonus law as applied here — a gap critics flagged repeatedly during public comment.

The Mission District has its own calculus. The Affordable Housing Bonus Program has unlocked three additional projects along 24th Street since January, totaling roughly 210 units with affordability requirements tied to 80% of Area Median Income. The San Francisco AMI for a family of four stands at $145,000 as of 2026 — meaning "affordable" in city parlance still puts rents at roughly $2,900 a month for a two-bedroom. For the median renter household in the Mission, earning closer to $78,000 annually, that remains out of reach.

What Buyers and Renters Should Watch

The condo market is the one segment where new development is producing measurable downward pressure. The Salesforce Tower-adjacent district and Rincon Hill both saw average condo prices dip roughly 4% year-over-year through June, partly because supply in that building type has genuinely grown. A two-bedroom condo on Beale Street that would have fetched $1.1 million in early 2024 is now closing in the $980,000 to $1.02 million range. Not cheap, but a real shift.

For renters priced out of new construction, the practical move remains targeting buildings that completed lease-up in 2023 and 2024 and are still offering concessions — some buildings in Central SoMa are currently offering one to two months free on 12-month leases to maintain occupancy. The non-profit Mission Economic Development Agency has also expanded its renter counseling program through the end of 2026, helping tenants navigate the city's rent ordinance protections and identify below-market units in the pipeline.

The next 18 months will determine whether this development wave translates into genuine relief or simply reshuffles who can afford to live here. Three projects face final Board of Supervisors votes before October, including a contentious 450-unit proposal at Potrero Avenue and 25th Street that has split neighborhood groups and housing advocates alike. The outcome of those votes will say more about San Francisco's affordability future than any single pipeline report.