Here's the reality check. A homeowner in a solid SF-adjacent neighborhood ran the numbers on converting their single-family home into a multi-unit building. Starting value: roughly $2.2 million for a 2,000-square-foot home at $1,100 per square foot. Cost to expand and add units: somewhere between $900K and $1.2 million in cash. New cost basis: north of $3 million.

The punchline? Multi-family buildings in the same neighborhood trade at $600–$700 per square foot. Even expanded to 4,000 square feet, the converted property is worth maybe $2.6 million. Spend $1.2 million, gain $300K in value. That's not an investment — that's a donation to your contractor.

As one Bay Area resident put it bluntly: "Multifamily is a great way to crash your property value."

The rental income side isn't much prettier. After reassessed property taxes, commercial water rates, increased maintenance, and San Francisco's beloved rent control regime, the net operating income yields maybe 5–6% on the new capital — and a pathetic 2–3% on total asset cost. You could park that money in an index fund and nearly double your returns without ever talking to a building inspector about ADA-compliant doorways.

Another local pointed to a deeper structural problem: Prop 13 actively punishes property improvements by triggering reassessment, while a land value tax would do the opposite — incentivizing owners to build more without penalizing them for it. It's a compelling argument, and one Sacramento will probably ignore for another forty years.

The uncomfortable truth is that SB79, like so many housing bills before it, addresses the permission to build without touching the actual barriers: construction costs that run $600K per unit before land, building codes that jack up expenses the moment you leave single-family territory, and rent control laws that cap your upside while your costs stay uncapped.

If California is serious about the housing crisis, it needs to stop congratulating itself for removing one lock while leaving six others bolted shut. Until construction costs come down, tax policy stops punishing improvement, and rent regulation allows actual returns on investment, the missing middle will stay missing — no matter how many bills Sacramento passes.