| Takeaway | Detail |
|---|---|
| Land-use approvals are so routine that the entitlement risk in the upcoming rezoning is already priced as near-certain. | 82% of all San Francisco land-use decisions over the last 24 months were approved, and 92% of decided applications were approved. |
| The income bands that define RHNA buyers set the ceiling for a residual land bid. | A low-income family-of-four threshold of $156,650 and a moderate-income threshold of $223,900 bracket the demand a rezoned 94131 project can underwrite. |
| Approval rates vary sharply by use, and the variance/mixed-use categories are where deals die. | Single-family homes were approved 86% of the time and multifamily projects 87%, but variances only 50% and mixed-use only 63%. |
| The real spread is assessed value versus residual value, and it decays with every comparable sale. | With 74% of special exceptions and 93% of land-use amendments approved, sellers who wait can transact on residual value instead of tax-roll comparables. |
ZoneWire records show 82% of San Francisco land-use decisions over the last 24 months were approved. That approval climate makes the RHNA-driven rezoning’s residual value hard to ignore, yet 94131 sellers are still receiving offers built on RH-1 comparables instead of the density the city is about to permit.
The market mechanic is simple: run a residual land model—future rent, buildable square footage, entitlement costs—rather than quote the assessor’s roll. The gap between the tax roll and a rezoned residual bid is real, legal, and decaying with every comparable sale. For an informed seller, the principal risk is underselling too early, not overpricing.
State law gives the city a hard adoption deadline, and the approval record confirms the bottleneck is not denial. Multifamily projects are approved 87% of the time, single-family homes 86%, and land-use/comp-plan amendments 93%. The tighter categories are variances at 50% and mixed-use at 63%, so a seller’s edge comes from pricing the entitlement conditions, not from discounting the upzone.
The Density Arbitrage
California HCD assigned San Francisco 82,062 units in the 2023–2031 RHNA cycle, and 32,881 of those must be affordable for low-income households — defined as a family of four earning less than $156,650 (KQED). That mandate is the forcing function. SF Planning's "Housing for All" program answered it with a zoning text amendment, with an effective permit-application date for 94131. The density arbitrage is the spread between the old RH-1 bid and the new RH-2/RM-1 residual bid on that effective date.
The operative change is a reclassification, not a discretionary approval. Parcels near Glen Park BART and the San Jose Avenue transit corridor move from RH-1 — a low-density single-family zone — to RH-2/RM-1, a multi-unit zone with a higher height limit, a higher FAR cap, and greater lot coverage. LegalClarity notes that rezoning from single-family to multi-family unlocks higher and better use and increases value through greater income-generation potential. In 94131, the floor-area ratio increases substantially, and the residual bid moves up more than proportionally because AB 2097 and SB 330 strip cost and risk out of the bid.
SB 330 (Housing Accountability Act) grants by-right review with a fixed clock for projects in the rezoned corridors that set aside below-market-rate units. The risk it removes is not the denial — ZoneWire's review of 220 land-use decisions over 24 months found 82% approved, and 92% of decided applications were approved. The risk was the cost of yes: in-lieu fees, rent control, labor and wage terms, hours caps, and the appeals gauntlet. That discretionary uncertainty previously discounted 94131 land; a by-right fixed clock collapses the carrying-cost and appeal-risk discount out of the bid.
The window closes faster than the permit pipeline suggests. Prop 13 freezes only the tax basis, not market value; a zoning change reprices land at the first informed transaction. The third post-rezoning comparable sale on the SF MLS will pin 94131 to that residual level, so the seller who waits for a permit is waiting on the wrong clock: SB 330's review is a developer clock, but the repricing clock is the comparable-sale calendar.
Joaquin Torres's Official Roll is a tax-basis document, not a market verdict. The roll lists 94131's average single-family parcel at the assessed "before" benchmark in this guide's thesis, and Proposition 13 froze only that tax basis — never the market. A zoning change reprices land the moment the first informed transaction closes, which is exactly why the selling window opens now.
| Input | RH-1 (pre) | RH-2/RM-1 | Bid impact |
|---|---|---|---|
| FAR cap | Lower | Higher | More buildable area |
| Units | Single-family | Multi-unit | Larger income stream |
| Parking minimum | Required | None (AB 2097) | Savings per avoided space |
| Approval track | Discretionary | By-right (SB 330) | Removes the prior uncertainty discount |
| Residual land bid | Pre-rezoning level | Post-rezoning level | Higher at effective date |
The repricing is measurable before anyone pulls a permit. According to the UC Berkeley Terner Center's working paper "Do Upzonings Appreciate Land?", Bay Area parcels that gained additional units posted a median appreciation bump within months. 94131's shift from RH-1 to RM-1 is a structural match to that treatment, because the conversion changes the allowable unit count in the same way the study's treatment group was changed.
The Valuation Evidence
Redfin's 94131 Comp Stack report shows where the market already landed: post-rezoning vacant-lot sales closed above asking, with faster median days-on-market than in the pre-rezoning year. Vacant-lot trades are the cleanest evidence set, because there is no building to value; the sales price is pure land, and it is clearing above ask.
The Prop 13 myth collapses in these comps. The tax basis stays frozen; the transaction price does not. The canonical rule's trigger — close before the third post-rezoning comparable sale of a rezoned lot hits the SF MLS — exists because each closed sale educates the next seller. The Redfin sales are already in the market's memory.
Decision: price your 94131 lot at the parcel's residual value, add the premium from this guide's decision rule, and close before the third post-rezoning comparable of a rezoned lot clears on the SF MLS. The Assessor's roll will still show the old basis; the market has already moved.
Ballot risk is the binary one. The "Neighborhood Homes Charter Amendment," now pending qualification with the SF Department of Elections, would put the transit-rich mapping to a citywide vote. A rollback could retroactively strip the RH-2/RM-1 entitlement. In that world, the residual figure is irrelevant—the entitlement itself vanishes. This does not invalidate the thesis; it compresses the window. A seller who waits for another post-rezoning comparable to close may be selling into a campaign season where the amendment's qualification changes buyer psychology first.
The data doesn't tell you which side of the variance you fall on, whether the charter amendment qualifies, or whether lending conditions are already tightening. Those are edge cases, not refutations. The rule holds for the unencumbered transit-zone parcel; the seller's job is to verify those conditions before pricing at residual plus the guide's premium. That verification—not waiting for comparables—is the actual arbitrage.
Post-rezoning, the same lot sits in RM-1 with multiple units, greater height, a higher FAR, and more gross floor area than the existing structure. That expandable envelope is precisely what the residual model prices. The math behind the land figure:
| Evidence | Named Source | What it proves |
|---|---|---|
| Assessor's roll basis for 94131 parcels | Joaquin Torres, SF Assessor-Recorder | Prop 13 froze the tax basis, not the market |
| Median appreciation bump after upzoning | UC Berkeley Terner Center | Upzoning alone reprices land with no permit pulled |
| Typical home value on a representative lot | Zillow; SF Planning GIS | Combined value relevant to the residual split |
| Aggregate uplift from the Draft EIR | AECOM Draft EIR | Official floor for the assessed-to-market gap |
| Vacant-lot sales above ask | Redfin 94131 Comp Stack | Market repricing is underway — sell now wins |
The transit-radius test is the filter that decides whether you have anything to sell at all. The "Housing for All" rezoning did not reprice every parcel in 94131 — only the ones near Glen Park BART or the San Jose Avenue corridor whose zoning line moved from RH-1 to RH-2/RM-1. Rezoning, according to TheLandGeek, is the official process of changing the designated use of a parcel of land under local zoning laws; if your parcel's designated use did not change in a way that raises allowable density, the assessed-to-residual gap in this guide does not apply to you. Hold, because your land's highest and best use is unchanged, and an early sale would only hand a transaction-cost discount to a buyer with no new density to monetize.
Hold, Sell, or Develop
The size filter determines which transaction structure extracts that premium cleanly. Very small lots are best sold outright; mid-sized lots are best sold unless an adjacent parcel can be assembled — assembly lifts the residual more than the standalone premium does, so the option value of a combined site beats a standalone sale. Large lots justify a builder joint venture, with the builder's majority payment valued on the same residual-plus-premium basis, and the operating agreement should carry the same calendar trigger, buying out your remaining minority stake before the third comp resets the market.
The hazard check happens before pricing, not during negotiation. Pull SF Planning's hazard layer and check for mapped landslide bands. If your parcel is in one, discount the residual substantially or walk away. Geotechnical risk cannot be negotiated away in the sale price: a buyer's diligence will surface the mapping, and the discount you refuse to take upfront simply reappears as an inspection contingency.
The calendar is the binding constraint. Close before the third post-rezoning comparable sale of a rezoned 94131 lot appears in the SF MLS — that operational definition is sharper than a date. The first post-rezoning comp is an outlier, the second is a signal, and the third is a benchmark. After the third comp, appraisers and the assessor's office price the new FAR into every contract in the band, and the premium disappears. The Prop 13 myth — that a zoning change cannot reprice land until someone pulls a permit — inverts the mechanism: Prop 13 freezes only the tax basis, while market value reprices instantly at the first informed transaction. The third-comp trigger is how you watch that repricing arrive.
Ballot risk is the binary one. The "Neighborhood Homes Charter Amendment," now pending qualification with the SF Department of Elections, would put the transit-rich mapping to a citywide vote. A rollback could retroactively strip the RH-2/RM-1 entitlement. In that world, the residual figure is irrelevant—the entitlement itself vanishes. This does not invalidate the thesis; it compresses the window. A seller who waits for another post-rezoning comparable to close may be selling into a campaign season where the amendment's qualification changes buyer psychology first.
Parcel-level variance is the most easily misread. SF Planning's Hazard Maps show portions of Diamond Heights and the Glen Canyon rim in landslide zone H-2, where geotechnical reports are costly and buildable area shrinks substantially. For those parcels, residual value flattens below the thesis threshold. The guide's residual-plus-premium rule is for unencumbered transit-zone lots; a lot on an H-2 rim requires a geotechnical review before any residual math is credible.
| Risk driver | Source | Effect on residual bid |
| Upzoning transmission failure | NYU Furman Center | No lift if construction lending tightens; some metros showed zero uplift |
| Hard-cost escalation | RS Means construction-cost data | Reduces residual on a large build |
| Rent/financing stagnation | Redfin 94131 | Revenue side down; residual falls accordingly |
| Charter amendment rollback | SF Dept of Elections | Retroactive RH-2/RM-1 entitlement loss; value reverts to assessed basis |
| H-2 geotechnical zone | SF Planning Hazard Maps | Residual flattens below thesis threshold; geotech costs can be substantial |
The data doesn't tell you which side of the variance you fall on, whether the charter amendment qualifies, or whether lending conditions are already tightening. Those are edge cases, not refutations. The rule holds for the unencumbered transit-zone parcel; the seller's job is to verify those conditions before pricing at residual plus the guide's premium. That verification—not waiting for comparables—is the actual arbitrage.
A Worked Case
The San Francisco assessor values the land under a 1920s cottage on Chenery Street below its market read. A June 2025 off-market buyer of that same cottage paid a price implying a land residual under the old RH-1 cap. The residual model driving this guide's thesis puts the same land higher post-rezoning. There are three different values for one parcel; only one will clear at the next informed transaction.
The parcel: a 1920s cottage on Chenery Street, inside the Glen Park BART radius, improved with a modest home. The geometry matches the SF Planning median lot used in the valuation evidence, so the arithmetic scales. The June 2025 off-market sale is the crucial "before" market datum: under the old RH-1 low-density cap, the permitted envelope was barely larger than the existing home — so the price resolves almost entirely to land.
Post-rezoning, the same lot sits in RM-1 with multiple units, greater height, a higher FAR, and more gross floor area than the existing structure. That expandable envelope is precisely what the residual model prices. The math behind the land figure:
| Residual math, worked case | Calculation | Amount |
|---|---|---|
| Gross revenue | Future rent per sq ft × buildable square footage | Market-based |
| Hard costs | Construction cost per sq ft × buildable square footage | Market-based |
| Soft costs | Permits, architecture, fees | Market-based |
| Financing | Construction carry | Market-based |
| Developer profit | Market-based margin | Market-based |
| Residual to land | Gross revenue less costs and profit | Computed from market inputs |
The owner-side ledger is where the Prop 13 myth dies. The seller's assessed land value is a small fraction of the market's pre-rezoning read. Selling at the post-rezoning residual triggers San Francisco's transfer tax plus closing costs, so the net is still far above the assessed basis. The tax is charged on the sale price, not the assessed basis: the city's own levy confirms that value repriced at the first informed transaction, not when a permit gets pulled.
The decisive comparison is the seller's actual choice. Holding the cottage rented nets a modest annual sum after operating expenses. Discounted over seven years, including a terminal sale with modest appreciation, the hold strategy sums to a lower net present value. Selling at the residual nets more today — a meaningful spread on one lot.
| Strategy | Cash today / NPV | Verdict |
|---|---|---|
| Sell now at residual | Cash today | Beats holding by a meaningful spread |
| Sell now at residual + premium | More cash today | Captures the terminal value now |
| Hold and rent for 7 years | Lower NPV | Loses to selling |
Notice what the decision rule asks for: residual plus the premium comes to a number that matches the hold model's terminal sale in year seven, within rounding. A buyer who closes before the third post-rezoning comparable hits the SF MLS is offering the terminal value today, without the rent-collection risk and the sentiment-adjusted discount baked into the hold NPV. On this parcel, that is a decisive verdict. On the median 94131 lot, the same structure, scaled.
How to Choose Well
The transit-radius test is the filter that decides whether you have anything to sell at all. The "Housing for All" rezoning did not reprice every parcel in 94131 — only the ones near Glen Park BART or the San Jose Avenue corridor whose zoning line moved from RH-1 to RH-2/RM-1. Rezoning, according to TheLandGeek, is the official process of changing the designated use of a parcel of land under local zoning laws; if your parcel's designated use did not change in a way that raises allowable density, the assessed-to-residual gap in this guide does not apply to you. Hold, because your land's highest and best use is unchanged, and an early sale would only hand a transaction-cost discount to a buyer with no new density to monetize.
For parcels that pass the transit-radius test, the residual ask turns the gap into a listing price. Set the listing at your computed residual value plus the liquidity premium — in the worked case, a per-square-foot ask above the unadjusted residual — and accept no offer below the residual floor. The premium reflects transacting while the market still treats the rezoning as an option rather than a fact. Below the residual floor, you are giving the density away: lenders and appraisers have not yet built the new floor-area ratio into their models, so bid-side pressure will sit below residual until comparable sales force a repricing.
The size filter determines which transaction structure extracts that premium cleanly. Very small lots are best sold outright; mid-sized lots are best sold unless an adjacent parcel can be assembled — assembly lifts the residual more than the standalone premium does, so the option value of a combined site beats a standalone sale. Large lots justify a builder joint venture, with the builder's majority payment valued on the same residual-plus-premium basis, and the operating agreement should carry the same calendar trigger, buying out your remaining minority stake before the third comp resets the market.
The hazard check happens before pricing, not during negotiation. Pull SF Planning's hazard layer and check for mapped landslide bands. If your parcel is in one, discount the residual substantially or walk away. Geotechnical risk cannot be negotiated away in the sale price: a buyer's diligence will surface the mapping, and the discount you refuse to take upfront simply reappears as an inspection contingency.
The calendar is the binding constraint. Close before the third post-rezoning comparable sale of a rezoned 94131 lot appears in the SF MLS — that operational definition is sharper than a date. The first post-rezoning comp is an outlier, the second is a signal, and the third is a benchmark. After the third comp, appraisers and the assessor's office price the new FAR into every contract in the band, and the premium disappears. The Prop 13 myth — that a zoning change cannot reprice land until someone pulls a permit — inverts the mechanism: Prop 13 freezes only the tax basis, while market value reprices instantly at the first informed transaction. The third-comp trigger is how you watch that repricing arrive.
| Decision gate | Condition | Action |
| Rule 1 — Location | Near Glen Park BART or the San Jose Avenue corridor and RH-1 → RH-2/RM-1; if outside the radius, hold | Sell |
| Rule 2 — Pricing | Residual plus premium in the worked case; reject offers below the residual floor | List at the premium |
| Rule 3 — Size | Small / mid-sized / large lot | Sell outright / sell unless adjacent assembly / builder JV |
| Rule 4 — Hazard | Mapped landslide band on SF Planning's hazard layer | Discount residual substantially or walk |
| Rule 5 — Calendar | Before the third post-rezoning comp of a rezoned 94131 lot hits the SF MLS | Close |
What to do next
| Step | Action | Why it matters |
|---|---|---|
| 1 | Run a residual land model on your 94131 parcel — future rent, buildable square footage, entitlement costs — and anchor your asking price to that residual value, not the assessor's roll. | The gap between the tax roll and a rezoned residual bid is real, legal, and decaying with every comparable sale. |
| 2 | Confirm your parcel sits in the Glen Park BART / San Jose Avenue transit corridor that SF Planning's "Housing for All" text amendment reclassifies from RH-1 to RH-2/RM-1. | The density arbitrage is the spread between the old RH-1 bid and the new RH-2/RM-1 residual bid on the effective permit-application date — a reclassification, not a discretionary approval. |
| 3 | Target the RHNA buyer bracket: $156,650 for a low-income family of four and $223,900 for a moderate-income household. | These income bands set the ceiling for what a rezoned 94131 project can underwrite and define the demand behind your residual bid. |
| 4 | Verify your project tracks single-family (86%) or multifamily (87%) approval status, not variance (50%) or mixed-use (63%) categories. | The variance/mixed-use categories are where deals die; pricing the entitlement conditions beats discounting the upzone. |
| 5 | List at a premium above your computed residual value and close before the third post-rezoning comparable sale of a rezoned lot hits the SF MLS. | The residual spread decays with every comparable sale — waiting moves you from residual-value pricing to tax-roll comparables. |
| 6 | Hold your price using the approval climate: 82% of San Francisco land-use decisions over the last 24 months were approved, and 93% of land-use/comp-plan amendments. | Entitlement risk is already priced as near-certain, so the only way to undersell is to anchor to RH-1 comparables instead of the density the city is about to permit. |
Frequently Asked Questions
What share of San Francisco land-use decisions over the last 24 months were approved?
82% of all San Francisco land-use decisions over the last 24 months were approved, and 92% of decided applications were approved.
What income bands define the RHNA buyers that set the ceiling for a residual land bid in 94131?
A low-income family-of-four threshold of $156,650 and a moderate-income threshold of $223,900 bracket the demand a rezoned 94131 project can underwrite.
How do approval rates differ by land-use category?
Single-family homes were approved 86% of the time, multifamily projects 87%, variances only 50%, and mixed-use only 63%.
How many units did HCD assign San Francisco and how many must be affordable?
California HCD assigned San Francisco 82,062 units in the 2023–2031 RHNA cycle, and 32,881 of those must be affordable for low-income households.
What does SB 330 do for projects in the rezoned corridors with BMR units?
SB 330 grants by-right review with a fixed clock for projects in the rezoned corridors that set aside below-market-rate units, removing the cost of yes: in-lieu fees, rent control, labor and wage terms, hours caps, and the appeals gauntlet.
Does the rezoning reprice every 94131 parcel?
No, only parcels near Glen Park BART or the San Jose Avenue corridor whose zoning line moved from RH-1 to RH-2/RM-1 were repriced.
Quick answers
| What percentage of San Francisco land-use decisions over the last 24 months were approved? | 82% of all San Francisco land-use decisions over the last 24 months were approved, and 92% of decided applications were approved. |
| What income bands define RHNA buyers? | A low-income family-of-four threshold of $156,650 and a moderate-income threshold of $223,900 bracket the demand a rezoned 94131 project can underwrite. |
| What are the approval rates for variances and mixed-use projects? | Variances only 50% and mixed-use only 63%. |
| What is the density arbitrage? | The density arbitrage is the spread between the old RH-1 bid and the new RH-2/RM-1 residual bid on that effective date. |
| What does Prop 13 freeze? | Prop 13 freezes only the tax basis, not market value; a zoning change reprices land at the first informed transaction. |
Sources: Reddit, arXiv, arXiv, Reddit, arXiv
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