Bay Area Construction Jobs Lag Despite Zoning, Permitting Reforms

Bay Area leaders may be cutting red tape, but new jobs data shows the cranes still aren’t coming back.

Construction hiring across the Bay Area stayed sluggish over the past year, belying local officials’ pushing for zoning, permitting and environmental reforms to jump-start development, the San Francisco Business Times reported, citing an analysis of federal labor data by the Associated General Contractors of America. It’s a clearer signal of how far the region still sits from a full construction rebound despite the mounting political momentum to build.

From September 2024 to September 2025, the San Francisco–San Mateo–Redwood City metro added roughly 1,200 construction jobs, a gain of about 3 percent. That increase lagged many large US metros, while other parts of the Bay Area fared worse. Construction employment barely budged in San Jose and declined outright in Oakland, Fremont and Berkeley.

Nationally, construction employment grew, up roughly 33,000 jobs year over year, marking the first year-over-year gain below 100,000 in four years. The national gains were largely concentrated in infrastructure, manufacturing and data-center hubs rather than in coastal housing markets.

Roughly half of US metro areas added construction jobs over the same period, led by markets like Washington, DC, Charlotte and Boise, where those kinds of projects are driving steady work. The Bay Area’s development slowdown, meanwhile, continues to weigh on employment amid acute demand for housing and commercial space.

Some of the reforms Bay Area leaders and Sacramento pushed during that period were significant on paper, including strengthened Builder’s Remedy enforcement, expanded permitting under SB 35 and other laws aimed at speeding approval for housing when cities fail to meet state mandates.

But developers and builders say those changes have yet to translate into enough shovel-ready work to buoy hiring numbers. Contractors, according to the Business Times, say the job numbers mirror reality on the ground.

Hospital projects and public-sector work have provided some stability, including a recently completed $176 million health campus in San Mateo County. But private commercial and market-rate multifamily construction has been scarce. Builders expect San Francisco to lead any rebound, with modest workforce growth potentially picking up in 2026, followed later by Silicon Valley as more projects come off the sidelines.

The timing matters. Construction employment is often a lagging indicator, but it’s also one of the sharpest signals that projects have cleared financing hurdles and regulatory reviews. Still, the numbers won’t show the impacts of Los Angeles’ historic Family Zoning Plan passed three weeks ago, for example, for some time.

Labor market experts, including Federal Reserve Chair Jerome Powell, however, have flagged that the federal government may be overstating job gains further still — by as much as 60,000 a month — after the October government shutdown paused the reports for months. Fed officials have cut rates this year precisely because labor data suggest hiring has slowed and downside employment risks have risen, a dynamic that could temper any construction rebound in 2026.The data suggests that while Bay Area policymakers have made it easier to say yes to development, it may still take years (and lower costs, or better capital markets) before those approvals translate into sustained building and jobs.— Judah Duke