San Francisco’s Marina Safeway Could Become 848 Homes: What the Proposal Says About California Housing

What if your neighborhood grocery store became an 848-home residential development?

That is essentially the conversation happening around San Francisco’s Marina Safeway.

A proposed redevelopment of the site would replace the existing low-rise grocery property with a much larger mixed-use project containing 848 homes, including 86 affordable units, with buildings reaching up to 22 stories. A grocery store would remain part of the new development.

Those numbers are attention-grabbing.

But the more interesting story may be what this proposal represents for California housing generally.

This isn't really about Safeway.

It's about what happens when California looks at commercially zoned land, large parking lots and low-density development in some of the state's most expensive communities and asks:

Could we put housing there instead?

## What Is Proposed at the Marina Safeway Site?

The Marina Safeway property occupies a significant piece of San Francisco real estate.

Instead of maintaining the site primarily as a grocery store surrounded by low-density commercial space and parking, the redevelopment proposal would dramatically increase the amount of housing on the property while retaining grocery use.

The current proposal includes:

*848 residential units**

*86 affordable units**

Buildings reaching *up to 22 stories**

* A replacement grocery store as part of the development

It is a proposal — not a completed development — and projects of this size naturally generate debate.

But regardless of what ultimately happens at this particular site, the concept behind it is becoming increasingly important throughout California.

## Why Would California Put Housing on Commercial Property?

California has a basic real estate problem.

Housing is scarce in many of the places people most want to live, while developable land can be extraordinarily expensive.

At the same time, cities contain enormous amounts of land devoted to commercial buildings, shopping centers and parking lots.

That creates an obvious question:

Why not build housing there?

California lawmakers have increasingly tried to make that possible.

One important example is AB 2011, which created a streamlined approval pathway for certain qualifying housing developments on commercially zoned properties.

That doesn't mean every grocery store or shopping center can automatically become an apartment building.

Projects still have to satisfy applicable requirements.

But the broader policy direction is clear: California increasingly views underutilized commercial land as one possible answer to its housing shortage.

## The Parking Lot Is Becoming Valuable Housing Land

For decades, California development was built around the automobile.

Shopping centers needed parking.

Grocery stores needed parking.

Office buildings needed parking.

Restaurants needed parking.

The result was enormous amounts of valuable urban land dedicated primarily to storing cars.

That calculation looks very different when the surrounding homes sell for seven figures and housing supply remains constrained.

A large parking lot in San Francisco isn't just pavement anymore.

It's potentially some of the most valuable undeveloped residential land in the city.

That doesn't automatically mean it should become a 22-story building.

But it explains why developers and policymakers are looking at these properties differently.

## Why Is the Marina Safeway Proposal Controversial?

Because housing policy isn't just a numbers problem.

It's also a neighborhood problem.

Supporters of projects like this can make a straightforward argument: San Francisco needs substantially more housing, and adding hundreds of homes to already-developed land can make more sense than continuing to push development farther outward.

Opponents can make a different argument: a project reaching as high as 22 stories represents a dramatic change in scale for the surrounding neighborhood.

Questions around environmental conditions, seismic issues, infrastructure and neighborhood character have also become part of the discussion surrounding the Marina proposal.

Those concerns shouldn't simply be dismissed as "anti-housing."

Likewise, the need for additional housing shouldn't be dismissed because a proposed project is large.

Both issues can exist at the same time.

## 848 Homes Sounds Huge — Because It Is

One reason this proposal gets attention is the sheer scale.

We're not talking about replacing a single-family house with a duplex or adding an ADU behind an existing home.

We're talking about potentially creating 848 residences on a property currently dominated by commercial use and parking.

That's effectively the population of a small neighborhood being added to one site.

And that gets to the core question California cities are increasingly going to face:

If we need significantly more housing, where exactly should it go?

Existing neighborhoods?

Commercial corridors?

Shopping centers?

Transit-oriented locations?

Former office properties?

Parking lots?

There is no answer that avoids trade-offs entirely.

## This Is Bigger Than San Francisco

The Marina Safeway proposal is a particularly visible example, but the underlying issue extends far beyond San Francisco.

California has spent decades building communities where housing and commercial uses were frequently separated.

Now the state is trying to find places to accommodate additional housing without creating entirely new cities.

That makes existing commercial corridors increasingly important.

The grocery store of the future may not necessarily sit next to a giant parking lot.

It may sit underneath apartments.

The neighborhood shopping center may become a mixed-use neighborhood.

An aging office property may eventually become residential.

California's housing shortage is gradually changing what constitutes "buildable land."

## What Could More Housing Mean for California Homebuyers?

More housing supply doesn't automatically make California inexpensive.

There are too many variables involved — land costs, construction expenses, interest rates, local demand, taxes, insurance and regulation among them.

But housing supply matters.

When an area consistently creates fewer homes than the number of households that want to live there, competition becomes difficult to escape.

Adding housing — whether through large developments, condominiums, ADUs, lot splits or commercial redevelopment — gives buyers and renters additional options.

It also changes the types of properties that may eventually come to market.

California housing won't be solved by one 848-unit development.

But hundreds of projects collectively can change supply over time.

## California Real Estate Is Becoming More Creative

One of the most interesting changes happening in California real estate is that the definition of a housing opportunity is expanding.

A backyard can become an ADU.

A commercial corridor can become mixed-use housing.

An underused property can potentially support considerably more residences.

And a grocery-store parking lot can become the center of a debate about 848 new homes.

Whether the Marina Safeway proposal is ultimately the right project for that particular location is something San Francisco will continue debating.

But the larger trend isn't going away.

California needs housing.

Land is extraordinarily valuable.

And increasingly, the state is looking at property we've already developed and asking whether we could use it differently.

The next generation of California housing may not always come from building farther out.

It may come from building differently on the land we already have.

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## Thinking About Buying or Financing Property in California?

California real estate is changing quickly, from ADUs and mixed-use developments to TIC properties, condos and other less-traditional housing.

Understanding the property is only one part of the equation. Understanding how the financing works can be just as important.

If you're considering buying, refinancing or evaluating an unusual California property, our team can help you understand the financing options before you make a decision.

Michael Belfor

Branch Manager – Loan Originator

American Pacific Mortgage

SF: 415.233.4235 | OC: 949.577.6449

NMLS: 1850 | MLO: 264700 | DRE: 01878769

Information is provided for educational purposes and is not a commitment to lend. Development proposals, legislation, zoning requirements and project details can change. Verify current project and regulatory information with the appropriate authorities.