The Outer Richmond Got Upzoned. Why Hasn't the Math Changed for Its Rent-Controlled Apartment Buildings?

Every parcel in the Outer Richmond now sits inside San Francisco's rezoned area. That has created a pricing problem for a rent-controlled apartment building with three or more units. A buyer can argue the building is worth more because the zoning map now allows something taller on the lot. A seller can expect a buyer to pay for that taller building. For most of these properties, neither argument holds up. The Family Zoning Plan added capacity across District 1, but the local program that delivers the extra height excludes the demolition these buildings would need. In the Outer Richmond, the large projects actually moving forward used state law on sites that are not existing apartment buildings.

The Board of Supervisors adopted the plan on December 9, 2025, and Mayor Lurie signed it on December 12, 2025. It took effect in mid-January 2026. SF Planning's own map shows the rezoning covering all of District 1. That coverage is the headline that shows up in underwriting conversations. What follows is how the capacity is actually allocated.

Where the Outer Richmond's Big Filings Actually Went

The three most visible Outer Richmond proposals of the past year have one thing in common. None of them uses the city's new Housing Choice-SF program, known as HC-SF, and none of them would demolish an apartment building.

The Safeway block is the largest. The formal application, reported in May 2026, describes a building of about 85 feet with roughly 79,750 square feet of retail and a replacement grocery store. The 562-unit count is not final. At a September 24, 2026 town hall held by the Planning Association for the Richmond, the group's land use chair described a September letter from the city indicating the developer may need to cut more than 100 units, which could also reduce the height. Mission Local reported that because Align is using state streamlining laws, the project requires no public hearing or discretionary approval. That is why roughly 60 neighbors held their own meeting at St. John's Presbyterian Church.

All three projects replace a grocery store, a theater, or two houses. None of them clears an occupied apartment building, and the program rules explain why.

Why the Two Height Numbers Force a Choice

Under the plan, rezoned parcels carry a two-part height designation. SF Planning's example is "50//85-R-4." The number before the double slash is the base height, which is the limit for ordinary projects and the starting point for any other bonus program, including the State Density Bonus. The number after the slash applies only to projects that use HC-SF.

A developer can't stack the two. A project that uses the State Density Bonus, HOME-SF, or any similar local or state program is ineligible for HC-SF. Each site therefore comes down to one decision. One option is to take the state bonus, which builds on the lower base height. The other is to take HC-SF, which offers the higher mapped height, form-based density with no units-per-lot-area ratio, and no requirement to put affordable units on-site to unlock the added capacity. Inclusionary requirements still apply under HC-SF. Projects can meet them through fees, on-site units, off-site units, or land dedication, with off-site locations limited to the R-4 Height and Bulk District or to within half a mile of the project site.

So far, few developers have chosen the local route. As of May 31, 2026, Bisnow reported that only two projects citywide had been approved and were moving forward under the new height and density rules: a nine-unit building at 2 Crestline Drive and an eight-unit building at 230 Anza Street. Other HC-SF proposals have also been reported, including 49 homes at 2800 Geary Boulevard in Presidio Heights in February 2026 and 15 homes at 2629 Lombard Street in Cow Hollow in July 2026. We found no reported HC-SF proposal on the Outer Richmond stretches of Geary, Balboa, Clement, or Fulton. Bisnow also reported that lawsuits from opposite directions are challenging the plan. One argues it restricts housing too much, and the other argues it allows too much density.

The Line Drawn at Three Rent-Controlled Units

The provision that matters most to an apartment owner is a single line in SF Planning's Bulletin No. 11. Projects that demolish any residential unit on a site with three or more existing rent-controlled units are ineligible for HC-SF. Demolishing a listed historic building also disqualifies a project.

For a typical older Outer Richmond walk-up with three or more controlled units, the higher number after the double slash isn't available if the plan is to tear down and rebuild. Only the state routes remain, and they build from the lower base height. Any demolition route also falls under the companion tenant protection ordinance. The Board finally passed it on January 6, 2026, it became Ordinance 3-26, and it took effect February 9, 2026. A buyer modeling a teardown would need to account for these terms:

1. No net loss. The new project must include at least as many units as were demolished or as existed on the site in the prior five years, whichever is greater.
2. Comparable replacement. Demolished protected units generally must be replaced with units that have the same number of bedrooms and full bathrooms and at least 90% of the original floor area. A separate definition applies to protected single-family homes replaced as part of a multi-unit project.
3. Relocation costs. Every displaced household receives relocation payments equivalent to Ellis Act payments. Lower-income households can receive more, for up to 42 months after displacement or until a comparable permanent unit is offered, whichever comes first.
4. Occupancy runway. Lower-income occupants can stay until three months before construction begins, and other occupants until six months before. Demolition projects must provide a relocation plan.
5. Return rights. Occupants of protected units get a right of first refusal on a comparable replacement unit. Lower-income households must be offered an affordable rent or their prior rent, whichever is lower. A separate right to return at the prior rent applies if the demolition doesn't go forward and the property goes back on the rental market.

Taken together, a teardown of an occupied rent-controlled building starts out owing its current tenants comparable units, relocation payments, and a return path, and it gets the lower height. The Safeway lot and the Alexandria Theater owe none of that. The added capacity therefore lands on those sites first.

What the Upzoning Still Offers an Apartment Owner

The exclusion covers demolition. HC-SF remains open to additions and conversions that produce a net increase in units, as long as the finished project has at least two residential units and meets the program's other rules. SF Planning's example is a single-family house that adds one non-ADU unit, which qualifies. For a corner lot or a lot of 8,000 square feet or more, HC-SF allows 65 feet even where the mapped height is lower. A February 2026 analysis by Sheppard Mullin notes that the program also allows modifications of up to 15% to many objective standards.

There are limits on these additions too. HC-SF applies the city's unit-mix rules to projects as small as four units. A four-unit project needs at least one two-bedroom, and projects of five to nine units need at least 25% two-bedroom units, including at least one three-bedroom. Building new units on top of or behind an occupied building is a construction project carried out around existing tenants. SF Planning told Bisnow in May 2026 that interest rates, labor, materials, and insurance costs have in many cases risen faster than rents, and that many projects remain on hold.

For a three-plus-unit rent-controlled building, any development option is a possible future project that depends on construction costs, unit mix, and lot shape. It is not current value. Pricing still comes from the rent roll, operating expenses, and the condition of the building. A building with only one or two controlled units is in a different position under the HC-SF eligibility rule. Each sale should start by confirming the unit count, the rent-control status of each unit, and the parcel's actual dual height designation.

Frequently Asked Questions

Does the upzoning make my rent-controlled Outer Richmond building a teardown candidate? If the site has three or more rent-controlled units, demolition can't use HC-SF. Any demolition route remains subject to Ordinance 3-26's replacement, relocation, and return requirements.

Can I add units without demolishing? Additions and conversions that add units to a project with at least two residential units can be eligible for HC-SF, subject to its standards and unit-mix rules.

Will the Safeway project change the comparables nearby? It's still under review. The 562-unit figure may drop by more than 100 units based on the city's September letter, so its final size and timing are open.

If you own a rent-controlled building in the Outer Richmond and want a price based on what the rezoning actually allows on your parcel, Mirella Webb and the Bonn Webb Team will review your unit count, controlled-unit status, and height designation, then underwrite the building on its income. Request a complimentary, confidential property valuation.

This article is general information, not legal, tax or financial advice. Consult a qualified professional about your situation.