Affordable Housing Sites Analysis and Strategies
Introduction
The Affordable Housing Sites Analysis and Strategies (AHSAS) report, prepared by the San Francisco Planning Department in collaboration with the Mayor’s Office of Housing and Community Development (MOHCD), delivers a critical, research-driven roadmap for advancing the city’s affordable housing goals. Released in draft form in October 2025, the document directly confronts a central paradox: San Francisco has no shortage of viable land for affordable housing, but faces a severe, persistent shortage of funding and rising construction costs.
With a state-mandated Regional Housing Needs Allocation (RHNA) target of facilitating 32,800 additional homes affordable at lower incomes by 2031, the city must move beyond simply identifying sites. The AHSAS focuses on three core objectives: 1) effective management of the existing affordable housing development pipeline; 2) boosting overall production while ensuring equitable geographic distribution; and 3) identifying and acquiring new sites for future development. The report’s findings are unambiguous: land supply is not the bottleneck. Over 3,400 viable sites capable of accommodating roughly 247,000 affordable units exist citywide. The true constraints are insufficient, inconsistent funding and construction costs now approaching $1 million per two-bedroom unit.
The Central Challenge: Funding and the Existing Pipeline
The report opens with a sobering assessment of the current affordable housing pipeline. As of 2025, over 12,600 affordable units across 59 projects are in pre-construction stages, awaiting full funding. At the current production rate of approximately 650 new 100% affordable units annually, simply building out the existing pipeline would take over a decade. Construction costs have risen 31% in the last four years, now accounting for over 60% of total development expenses, while land costs remain relatively stable at just 10-14% of per-unit costs.
To address this, the report references the 2024 Affordable Housing Leadership Council (AHLC) report, which called for expanding funding, lowering costs, and pursuing innovative financing. While some progress has been made including voter-approved bonds and state-level expansion of Low-Income Housing Tax Credits (LIHTC) significant challenges persist. State funding programs face cuts, a regional affordable housing bond failed to advance, and local inclusionary housing fees have collapsed from over 3 million in 2025 due to slowed private development.
Geographic Distribution and Equity Goals
A key theme of the Analysis and Strategies is the need to correct historical geographic inequity. Like market-rate housing, affordable housing production is heavily concentrated in four of 11 supervisorial districts (Districts 5, 6, 9, and 10—primarily eastern neighborhoods). Meanwhile, Districts 1, 2, 4, 7, 8, and 11 which include many of the city’s higher-resource areas, have few or no 100% affordable projects in the pipeline. This pattern contradicts the state’s Affirmatively Furthering Fair Housing (AFFH) requirements and the Housing Element’s goal that at least 25% of new affordable homes be located in well-resourced Housing Opportunity Areas (HOAs) .
The report emphasizes that the proposed Family Zoning Plan (rezoning to meet state deadlines by January 2026) will create new capacity for multifamily housing in historically exclusionary areas, opening pathways for both 100% affordable developments and inclusionary units in mixed-income projects. However, the document stresses that rezoning alone is insufficient; it must be paired with a credible funding strategy and active site acquisition in western and northern neighborhoods.
Parcel Suitability Analysis: Land is Not the Limit
One of the most significant contributions of the AHSAS is its detailed parcel suitability analysis. Using GIS methodology, the study identified 3,410 total viable sites citywide suitable for 100% affordable housing projects. This includes 1,204 individual parcels of at least 8,000 square feet (the minimum size for typical subsidized development) and another 2,206 contiguous parcels that could be assembled for larger projects. District 6 shows the greatest capacity, followed by Districts 2, 3, and 9.
The analysis applied “softness” criteria sites where existing development is less than 30% of potential gross floor area, and excluded parcels with existing housing, entitled projects, parks, protected historic resources, or active public facilities. The findings clearly demonstrate that land supply does not constrain affordable housing production. However, the report cautions that suitability does not guarantee availability; property owners may be unwilling to sell due to profitable current uses, low property tax bases (under Proposition 13), or complex ownership structures.
Financial and Policy Research Findings
The report incorporates extensive financial research by Century Urban and policy research by Enterprise Community Partners. Key insights include:
Land costs vs. construction costs: Over the past decade, average land cost per affordable unit has been $121,000, but this represents only 10% of total development costs. Construction costs (hard costs) are the primary driver, making up over 60% of expenses.
Impact of rezoning on land values: Analysis of the Eastern Neighborhoods rezoning (2009) showed that per-unit land costs actually dropped by 9% after rezoning, even as per-acre costs increased. This indicates that allowing more density reduces per-unit land costs, a critical finding for affordable housing feasibility.
Holding costs: The city currently holds multiple land-banked sites awaiting development, with annual holding costs ranging from 453,000 per site. Over a typical 5-7 year pre-construction period, these costs can add 1-17% to acquisition costs, further straining limited funding. Interim uses (e.g., pop-ups, community leases) can offset some costs but often require additional subsidies.
Competitiveness for state funds: California’s LIHTC scoring now prioritizes projects in High Resource and Highest Resource areas to AFFH. This means San Francisco must acquire sites in well-resourced neighborhoods to remain competitive for state and federal tax credits.
Recommended Strategies: A Five-Pronged Approach
Based on the research, stakeholder engagement with affordable housing practitioners, and input from the Planning Commission, the report offers five integrated recommended strategies.
1. Scale Acquisitions to Funding and Pipeline Capacity
The city must balance advancing the existing 12,600-unit pipeline with selective new acquisitions. Site acquisition should be proportional to available funding, not aspirational goals. The report recommends:
Continuing to fund existing pipeline projects while pacing new acquisitions.
Exploring new local funding tools, including Enhanced Infrastructure Finance Districts (EIFDs) as called for by the Board of Supervisors in September 2025, potential future bonds, and consistent budget allocations.
Factoring holding costs and interim use costs into all land acquisition decisions.
Issuing Notices of Funding Availability (NOFAs) for site acquisition only when local funding is available to supplement state and federal cycles.
2. Expand Geographic Distribution
To meet Housing Element and AFFH goals, the report recommends specific geographic targets:
Work toward having at least one affordable housing project in the development pipeline in all 11 supervisorial districts, as funding allows.
Aggressively acquire sites in western and northern neighborhoods (Housing Opportunity Areas) to reach the 25% minimum goal for new affordable homes in well-resourced areas.
Continue investing in equity communities while expanding citywide production.
Track pipeline gaps by district based on existing affordable stock, cost-burdened renters, and suitable parcels (including public and nonprofit-owned land).
3. Develop Public and Nonprofit-Owned Land
Public agencies (SFMTA, SFUSD, SFPUC), faith-based organizations, and nonprofits collectively own significant land, approximately 280 acres by faith-based and nonprofit owners alone. Strategies include:
Continuing collaboration with SFMTA’s Joint Development Program and SFUSD on projects like Shirley Chisholm Village and Balboa Reservoir.
Offering technical assistance and capacity-building programs for faith-based organizations, including predevelopment funding through philanthropic partners.
Leveraging state laws such as SB 4 (Yes in God’s Backyard) to streamline approvals on religious and nonprofit-owned land.
Developing agency-specific approaches, recognizing that not all public land can be designated “surplus” due to operational and financial needs.
4. Implement Strategic Market Acquisition Tools
To compete in the private market for affordable housing sites, the city should deploy targeted incentives:
Transfer tax exemption for sales of private land to affordable housing developers (with guardrails against price inflation).
Expand the Community Opportunity to Purchase Act (COPA) to cover commercial and development sites, not just existing multifamily buildings.
Partner with the Housing Accelerator Fund, Community Development Financial Institutions (CDFIs), and philanthropy for rapid, nimble acquisitions.
Act opportunistically to acquire distressed properties, foreclosures, and below-market opportunities in targeted geographies.
Streamline parcel assembly and subdivision through ministerial review processes.
5. Enable "Missing Middle" Affordable Housing
Not all affordable housing needs to be large-scale subsidized projects. The report calls for supporting small (2-20 units) and mid-size (21-49 units) developments through:
Form-based density standards in residential districts (as proposed in the Family Zoning Plan).
Single-stair building code reform and reforms to elevator requirements to reduce costs on small sites.
Pre-approved design templates to expedite permitting and lower soft costs.
Exploration of innovative models like the Greek antiparochi (flats-for-land exchanges), where landowners contribute land in exchange for units in the new development.
Issuing RFPs for private, philanthropic, and nonprofit partners to pilot these missing-middle strategies.
Implementation and Accountability
The report acknowledges that strategies alone are insufficient without accountability. The Planning Commission and public commenters have emphasized that funding strategies must be paired with concrete timelines. The document calls for:
Continued advocacy for state and regional housing bonds (potential 2026 state bond).
Re-engaging in regional bond efforts through the Bay Area Housing Finance Authority (BAHFA).
Reducing local cost premiums tied to regulatory requirements and supporting state-level insurance and construction cost reforms.
Monitoring the pipeline regularly and updating the parcel suitability analysis as the Family Zoning Plan is codified.
Conclusion: A Sustainable and Equitable Path Forward
In conclusion, the Affordable Housing Sites Analysis and Strategies report provides a clear-eyed, evidence-based assessment: San Francisco has the tools, the sites, and the expertise to meet its affordable housing goals, but only with sufficient, consistent financial resources. The city currently holds over 12,600 affordable units in its pre-construction pipeline and has identified over 3,400 suitable sites with capacity for nearly 250,000 units. The bottleneck is not land it is funding.
By aligning site acquisition with funding availability, continuing cross-sector partnerships with public agencies, faith-based organizations, and nonprofit developers, and pursuing policy reforms that enable diverse housing types across all neighborhoods, San Francisco can build a more sustainable and equitable affordable housing future. The recommended strategies scaling acquisitions to funding, expanding geographic distribution, developing public/nonprofit land, deploying market tools, and enabling missing-middle housing offer a coherent roadmap. However, the report’s ultimate message is one of urgency: without a parallel, credible, and stable funding strategy, the city’s ambitious RHNA targets will remain out of reach, and the existing pipeline will take a decade or more to deliver homes to those who need them most.
Also Read: 5 Green Building Techniques to Reduce Costs in Affordable Housing