Housing Is Economic Policy. The Family Zoning Plan Gets That Right.
David Harrison, Public Policy Director at San Francisco Chamber of Commerce
After years of population loss, declining foot traffic, and a weakened customer base for neighborhood businesses, San Francisco is in a pivotal moment. The city has needed a policy shift rooted in economic reality rather than nostalgia or fear. The Family Zoning Plan represents our best direction forward.
For the business community, the case to build housing at all levels is straightforward. Good housing policy is good economic policy. When workers cannot afford to live in the city, businesses struggle to hire and retain talent, our commercial corridors lose activity, and entire sectors employing thousands, from hospitality to retail, can crumble.
The Family Zoning Plan begins to correct this by allowing more homes near transit and commercial corridors while expanding housing opportunities for families of all sizes. These investments create the conditions for a stronger, more resilient local economy.
The Chamber’s position is set by more than just data, but from our direct conversations with the employers powering San Francisco’s economy. Over the past several months, the Chamber has held listening sessions with many of our city’s largest corporate and nonprofit employers. Their message was consistent: housing costs are now a defining barrier to recruitment and retention in San Francisco. We heard of candidates turning down competitive job offers because they could not afford to live anywhere near the city and of frontline workers waking up before dawn to cross two bridges to reach their jobs. That is not a sustainable workforce model.
The Chamber heard these concerns alongside those voiced by small businesses, who understandably had questions about how zoning reform would affect them. Those concerns were real, and together measurable alterations to the legislation were made in response.
Our primary concern was that upzoning would cause widespread displacement of neighborhood businesses. The data simply does not support this. The Planning Department estimates roughly 10 displaced businesses per year, a deliberately conservative figure. Ted Egan, the city’s Chief Economist, found that the economic benefits of increased housing supply far outweigh the displacement costs by a 22:1 ratio.
Of course, displacement risk must still be taken seriously. The Chamber supported Supervisor Myrna Melgar’s legislation, which has now passed first reading, creating targeted relief for businesses affected by redevelopment. This waives permit fees, streamlines approvals for relocation, creates grants, and incentivizes developers to incorporate displaced or legacy businesses into new projects. These are real protections. They ensure that small businesses across the neighborhoods receive support rather than uncertainty.
Predictability came up as well. Business owners needed to know they would not be surprised by sudden redevelopment activity. In response, the plan now requires early notification to commercial tenants immediately, as a permit is pulled. This gives businesses time to plan and the ability to make informed decisions.
The last concern was rooted in vacancy. The fear was that too many new buildings included cost-prohibitive commercial spaces that sat empty. Working with the San Francisco Planning Department, we helped design new incentives that make ground-floor spaces more viable. These include flexibility in permitted uses, bonuses for incorporating legacy and community-serving businesses, and support for tenant improvements.
All together these improvements reflect a broader principle: good policy is iterative. It evolves through engagement and data. The Family Zoning Plan is stronger today because small businesses, employers of all sizes, and community stakeholders spoke up, and because policymakers listened.
The economic upside of increased housing supply is clear. Analysis shows that meeting our housing needs could generate more than $5.6 billion in new local spending. More residents living near neighborhood corridors means more customers for cafés, bookstores, grocers, and restaurants. It means more transit riders, more vibrancy, and more economic stability across the board.
The plan is not perfect, but it is balanced, economically grounded, and far preferable to the alternative. A loss of local zoning control and a state-mandated free for all. The approved plan reflects thoughtful tradeoffs and a commitment to protecting both housing production and San Francisco’s neighborhood small business ecosystem.
For the Chamber, this is not about ideology. It is about competitiveness. It is about economic vitality. It is about ensuring San Francisco remains a place where employers want to invest, where workers want to live, and where small businesses have the customer base they need to thrive.
The Family Zoning Plan takes a meaningful step toward that future. Now the real work begins to make continued progress toward a more functional housing system. San Francisco’s economy depends on it.