JPMorgan Chase has agreed to provide roughly $200 million in financing for a 342-flat apartment building at San Francisco’s Power Station redevelopment, signalling renewed confidence in a housing market that had largely stalled after interest-rate rises. The move matters because a major Wall Street lender is backing a large new project despite difficult construction costs and uncertain development returns, potentially encouraging other investors to return to the city.

Chief executive Jamie Dimon said San Francisco was “back on track”, citing its growing economy and improved public safety. Construction at the former Potrero Power Station site on the Central Waterfront is expected to begin in the autumn; the wider 29-acre scheme is planned to include up to 2,600 homes, commercial space, shops, parks and a hotel. The investment follows reported declines in crime in parts of downtown, although the city continues to face high office vacancies, housing costs and homelessness.