SAN FRANCISCO — Three housing advocacy organizations have sued San Francisco, alleging the city unlawfully exempted large portions of SoMa, Bayview and Bayshore from a new state law intended to increase housing development near major transit stops.
YIMBY Law, the California Housing Defense Fund and Californians for Homeownership filed a petition for writ of mandate challenging San Francisco’s implementation of Senate Bill 79, the Transit-Oriented Development Law authored by state Sen. Scott Wiener, D-San Francisco.
The lawsuit names the City and County of San Francisco and the California Department of Housing and Community Development as respondents and asks the San Francisco Superior Court to invalidate portions of the city’s ordinance and its transit-oriented development alternative plan.
The petition argues San Francisco improperly designated areas as industrial employment hubs to shield them from SB 79 and unlawfully restricted housing projects from using California’s Density Bonus Law. The housing groups are seeking a court order requiring the city to implement SB 79 directly as though no alternative plan were in effect.
SB 79, signed into law in October 2025 and effective July 1, allows greater residential density around qualifying transit stops. The law applies to residential, mixed-use and commercial sites near high-volume transit and establishes minimum and maximum development standards based on proximity and type of transit service.
The law also provides an exemption for qualifying “industrial employment hubs,” but the requirements are narrow. Such an area must contain at least 250 contiguous acres, must have been designated in the jurisdiction’s general plan as an employment lands area on or before Jan. 1, 2025, must be primarily dedicated to industrial use and cannot permit housing on any of the excluded sites.
The lawsuit alleges San Francisco’s designated industrial employment hubs in Bayshore, Bayview and SoMa do not meet those requirements. According to the petition, several zoning districts included within the exemptions already allow some forms of housing, including accessory dwelling units, affordable housing and educator housing.
The petition further alleges that once state-owned parcels and parcels where housing is permitted are removed, the SoMa and Bayview areas fall below SB 79’s required 250 contiguous acres. The plaintiffs also contend San Francisco’s general plan had not designated any part of the city as an “employment lands” area by the law’s Jan. 1, 2025, deadline, which they argue makes none of the three areas eligible for the exemption.
The housing organizations contend the SoMa designation is particularly inconsistent with the city’s treatment of the neighborhood because San Francisco has long allowed and supported housing development there, including affordable and supportive housing.
“San Francisco can’t have it both ways,” said Sonja Trauss, executive director of YIMBY Law. “The city funds and builds housing in SoMa, and then says it’s off limits. This is a naked attempt to prevent new housing from getting built in San Francisco at a time where one bedroom apartments are renting for $4,000. It’s illegal, and this type of obstructionism is what keeps San Francisco’s housing costs so astonishingly high.”
The lawsuit raises a second challenge involving the State Density Bonus Law, which allows qualifying housing developments that provide affordable units to obtain additional density and other zoning concessions.
SB 79 expressly provides that qualifying transit-oriented housing developments remain eligible for density bonuses, incentives, concessions, waivers and reductions under the Density Bonus Law, with the density permitted by SB 79 serving as the base density.
San Francisco’s ordinance, however, created Planning Code Section 207.11, which provides additional density for certain projects in the city’s alternative plan while excluding projects seeking a density bonus under another section of the Planning Code.
HCD identified that conflict in a July 1 review of the city’s ordinance and alternative plan. Although the agency found the ordinance and plan substantially complied with SB 79 subject to a condition, it concluded Section 207.11(b)(5) “impermissibly prohibits the use of the State Density Bonus Law” for qualifying projects.
HCD conditioned its finding on San Francisco not enforcing that provision when reviewing, approving or conditioning qualifying housing developments. The department also reserved the right to seek additional information and update or revoke its findings if new information becomes available.
The lawsuit goes further, arguing the Density Bonus Law restriction undermines the alternative plan itself because San Francisco is relying on capacity generated by Planning Code provisions that cannot lawfully prevent qualifying projects from invoking state housing laws.
The petition alleges San Francisco is also relying on its “Housing Choice — San Francisco” program to provide some of the residential capacity needed for the alternative plan even though that program similarly restricts projects receiving density or development bonuses under state law. The plaintiffs contend that without capacity attributed to those provisions, San Francisco lacks a legally compliant alternative plan and SB 79 must apply directly.
“San Francisco is twisting the meaning of state housing law beyond recognition, all with the goal of minimizing the housing and affordability impacts of the law,” said Dylan Casey, executive director of the California Housing Defense Fund. “The City cannot say it cares about housing affordability while doing everything in its power to stop it.”
The dispute also places HCD’s approval of the city’s plan at issue. The petition argues the state housing agency failed to comply with SB 79 to the extent it approved exemptions and an alternative plan that the plaintiffs contend violate the statute.
HCD’s July 1 letter said its determination depended on the documentation and assertions submitted by San Francisco being complete and accurate and on the city complying with the conditions imposed by the department.
The housing organizations say they raised their concerns before filing suit. According to the petition, the California Housing Defense Fund and Californians for Homeownership submitted letters to the Board of Supervisors and city attorney in April and May challenging the proposed alternative plan’s restrictions on the Density Bonus Law.
The groups, joined by YIMBY and Trauss, sent another letter June 4 to HCD, the Board of Supervisors and the city attorney challenging both the Density Bonus Law provisions and the proposed use of the industrial employment hub exemption.
“It is crucial that no city use its compliance with one state housing law as an excuse not to comply with another one,” said Matthew Gelfand, a litigation attorney with Californians for Homeownership. “This lawsuit will help ensure that San Francisco complies with all of its obligations under state law.”
The petition seeks a writ invalidating San Francisco’s industrial employment hub exemptions, invalidating the city’s alternative plan and requiring the city to implement SB 79 directly. It also asks the court to order HCD to revoke its approval until San Francisco’s ordinance substantially complies with state law.
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Categories: Breaking News Housing San Francisco Tags: California housing law Housing Crisis San Francisco SB 79 transit-oriented development YIMBY Law