San Francisco carved nearly 1,900 parcels across SoMa, Bayview and Bayshore out of a sweeping new state housing law, and now a coalition of pro-housing legal groups is suing to reverse it. YIMBY Law, the California Housing Defense Fund and Californians for Homeownership filed suit against the city and the state, arguing the exemptions illegally shrink the housing capacity that Senate Bill 79 was designed to unlock near transit stops.
The lawsuit, first reported by San Francisco Chronicle reporter Laura Waxmann, targets San Francisco's local alternative plan under Ordinance 082-26, which designated three roughly 250-acre zones as primarily industrial and therefore off-limits to the law's height and density rules. Senate Bill 79, formally the Abundant and Affordable Homes Near Transit Act, was authored by state Sen. Scott Wiener and signed into law by Governor Gavin Newsom on October 10, 2025, with its statewide zoning standards taking effect July 1, according to the Wikipedia. The law sets a statewide baseline requiring cities to allow buildings of at least 65 to 75 feet and densities of 100 to 120 units per acre within a quarter-mile of Tier 1 transit stops served by heavy rail or high-frequency commuter rail, per state housing regulators.
SB 79 does allow cities to adopt local alternative plans if they can demonstrate equivalent housing capacity, or to exempt land already zoned to prohibit housing, and San Francisco leaned on that provision to justify its industrial carve-outs. The city has said the exempted areas are primarily industrial, and California housing officials agreed with that characterization when the state Department of Housing and Community Development conditionally approved the city's plan on July 1. But the department's approval letter reportedly stated that compliance was contingent on San Francisco not enforcing a provision in its local plan that would restrict access to the State Density Bonus Law, which lets developers add density and request waivers of local rules in exchange for building deed-restricted affordable units.
Advocates Say the Exemptions Undercut the Law's Purpose
Sonja Trauss, a plaintiff voice in the case, argued the city is having it both ways. “The city funds and builds housing in SoMa, and then says it’s off limits,” Trauss said, according to the San Francisco Chronicle, adding that one-bedroom apartments in the city are renting for $4,000 a month. Housing groups argued that SoMa in particular should not be exempt because it already contains parcels where housing is permitted, and the neighborhood has long absorbed a disproportionate share of the city's recent housing growth while including much of San Francisco's supportive and affordable housing stock.
Attorney Matthew Gelfand, representing the plaintiffs, framed the legal theory more broadly: a city's compliance with one state housing law cannot excuse noncompliance with another. The lawsuit asks the court to invalidate San Francisco's alternative plan altogether, and it names the California Department of Housing and Community Development as a co-defendant alongside the city, since the department signed off on the exemptions despite its own reservations about the density bonus restriction.
San Francisco's alternative ordinance states that SB 79 still covers more than 65% of the city, and officials point to Mayor Daniel Lurie's Family Zoning Plan as evidence the city is expanding residential capacity elsewhere to make up the difference. Lurie signed that plan into law on December 12, 2025, eliminating single-family-only zoning citywide and increasing multi-family capacity in western and northern neighborhoods, effective this past January. The San Francisco Planning Department has deferred comment on the new lawsuit to the city attorney's office, which has said it will review the complaint and respond in court.
Part of a Wider Fight Over San Francisco's Housing Math
This is not the first time San Francisco's housing strategy has landed in court. In February, the same YIMBY Law and California Housing Defense Fund alliance sued the city separately, alleging the Family Zoning Plan itself fails to demonstrate realistic legal capacity to meet the state's mandate requiring San Francisco to plan for 82,069 new housing units through 2031, more than 46,000 of them for low- and moderate-income households — a target that nearly tripled from the prior planning cycle, as Hoodline previously reported.
City leaders themselves have been divided over how far to push back on the state. In July 2025, the Board of Supervisors rejected a resolution from Supervisors Connie Chan, Chyanne Chen, Jackie Fielder and Shamann Walton that urged state lawmakers to amend SB 79 to preserve local control over housing planning, including provisions on affordability requirements and tenant protections. That resolution failed when it came before the full board, leaving the city instead to pursue the industrial-parcel exemption strategy now being challenged in court.
Wiener has argued that California's housing shortage requires cities to allow substantially more homes near high-quality transit, and the YIMBY movement broadly contends that San Francisco's slow, discretionary permitting process has driven up costs and limited construction for years. SB 79 applies across major transit counties statewide, including San Francisco, Alameda, San Mateo, Santa Clara, Sacramento, San Diego, Los Angeles and Orange counties, and its backers project it could unlock capacity for 1.5 million new homes across California, according to the Davis Vanguard's coverage of the law's rollout.
Some neighborhood preservationists have taken a different tack to blunt the upzoning wave. Following passage of the Family Zoning Plan, city supervisors and preservationists nominated more than 30 historic structures for official landmark status specifically to shield them from demolition under the new densified rules, according to the Richmond Review / Sunset Beacon. Whichever side prevails in the new lawsuit, San Francisco's housing fights are shaping up as a test case for how far state mandates can reach into local zoning decisions — a dynamic already playing out in other Bay Area cities such as San Carlos as they brace for their own SB 79 towers.
