San Francisco just approved Mercy Housing's Laguna Honda Senior Housing project: 159 affordable apartments on a 1.5 acre hilltop site inside the Laguna Honda Hospital campus in Twin Peaks. The construction cost pencils out to roughly $70 million for about 120,000 square feet, with Cahill and Guzman Construction Group named as joint general contractors. The real story isn't the unit count, it's the clock. The planning approval letter went out less than a year after the city received the initial notice of intent, because SB 423 and the state density bonus law stacked on top of each other to cut straight through San Francisco's usual review grind.
Dodge Construction Network's September data, reported by Construction Dive on October 22, shows exactly where the work is moving. Commercial starts (retail, hotels, warehouses) fell 18.4% month over month, with hotels down 46.3% and manufacturing down 21%. Institutional starts jumped 16.3%, led by a 38.4% spike in education projects, and highway and bridge work climbed 20.8%. Nationally, total starts are still up 14.3% year to date, but the mix has shifted hard: public, institutional, and infrastructure work are carrying the market while private commercial cools off.
That shift is already visible on Bay Area dirt. Valley Water's $1.88 billion Anderson Dam rebuild, Shimmick's $124 million Coyote Creek flood protection contract, and Caltrans' SR-37 bridge program are all moving forward on schedule while office towers and retail pads sit stalled. Add in projects like Laguna Honda getting entitled in under a year, and the pipeline for 2027 is starting to look a lot different from the one contractors bid in 2024.
If your backlog still leans on private commercial and retail work, expect it to keep thinning out. The volume is moving toward SB 423 affordable housing, school and institutional jobs, and public infrastructure (water, flood control, highways and bridges). Those contracts come with prevailing wage rules, tighter public bid windows, and GCs like Cahill, Guzman, Shimmick, and Flatiron who need subs that can turn around clean grading and earthwork numbers fast, especially once a project can clear entitlement in months instead of years. Get your public works paperwork and bonding current now. The next fast-tracked approval could be the one your crew needs to be ready to bid before the plans even hit the street.
Sources: San Francisco YIMBY and Construction Dive