SAN FRANCISCO—An ordinance to protect this city’s housing stock may present a rare opportunity for student housing developers to do business in one of the country’s hardest markets to enter. Last month, the San Francisco Planning Commission overwhelmingly passed an ordinance proposed by the City and County Board of Supervisors that would both ban the conversion of residential housing into student dwellings and provide incentives for educational institutions and developers to build more student housing. It has a few more rounds to go before being signed into law by the mayor, but its final passage is likely, say insiders.

“We have a lot of educational institutions in San Francisco, and our housing market is a bit out of whack and expensive,” Scott Wiener, a supervisor and author of the ordinance, tells Student Housing Alert. “We’re really not meeting the housing needs of our residents and the educational institutions have struggled to provide good housing for their students. Our goal has been to try and provide incentives for educational institutions to create their own housing so we’re not cannibalizing the existing housing.”

With 14 postsecondary schools, San Francisco has an aggregate student population of over 120,000. The educational institutions provide housing for only a portion of those enrolled, leaving over a third of those students to find their own housing. Currently, students must either find accommodations through websites such as Craigslist or lease apartments owned by private landlords. Multifamily rents in San Francisco are already one of the highest in the country; the average studio apartment in the city can lease for around $2,000 per month. Further, officials report that students pay as much as 20% more for units than traditional residents. Many universities have also entered into master leases on all or portions of existing apartment buildings or residential hotels—an inexpensive form of housing in the city—and converted the units for students.