The mayor and City Council are pushing for 10,000 new housing units downtown in the next decade. Chris Crewell Sacramento Bee file
The mayor and City Council are pushing for 10,000 new housing units downtown in the next decade. Chris Crewell Sacramento Bee file

Real Estate News

Sacramento launches 10,000-unit downtown housing initiative

By Tony Bizjak and Ryan Lillis

tbizjak@sacbee.com

August 26, 2015 07:47 AM

Downtown Sacramento’s big arena project is well underway. Next up, city officials say: Bring housing back downtown.

By unanimous vote Tuesday night, the Sacramento City Council approved a framework to help get 10,000 new housing units of all types built in the central city in the next 10 years.

The “In Downtown” initiative, launched by Mayor Kevin Johnson, aims to re-energize downtown as a live-work, urban neighborhood with activity days, nights and weekends. Speaking to a supportive council Tuesday night, Johnson said a healthy downtown helps the neighborhoods as well. “As downtown goes, the rest of our city will go.””

“We have so much momentum, and if we do this right ... it gets at all our issues in a very smart way,” the mayor said.

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Of the 10,000 units the city seeks to add to the central city, 6,000 would be “market rate,” meaning they would cost what the housing market at the time demands. Another 2,500 would be workforce – or affordable – housing units, and 1,500 would be rapid re-housing units for homeless individuals.

One key question the city faces is how to achieve that balance, which will range from upscale apartments and townhouses with plush amenities for people with higher paying jobs, to the transitional housing that will help get homeless off the streets.

Advocates for the homeless expressed hope Tuesday that the initiative will make a difference. Among them was Joan Burke of Loaves & Fishes, a longtime service provider for the homeless in the central city, whose group has often disagreed with city policies.

“I am so impressed with this plan,” Burke said. “It will address homelessness very substantially. ‘Workforce housing’ is homelessness prevention.”

But Darryl Rutherford, director of the Sacramento Housing Alliance, said the plan needs further development, including more specific strategies to come up with funding for low-income housing. “The devil will be in the details.”

Central city resident William Burg, a historian, warned the city not to make the mistake of losing Sacramento heritage by tearing down usable existing structures.

Wendy Saunders, head of the Capitol Area Development Authority, said the city needs more housing as well for higher-wage earners. City and state officials celebrated one such upscale project – 16 Powerhouse – Wednesday. The 50-unit apartment project at 16th and P streets, built by D&S Development across from Fremont Park, has ground-floor restaurants, cafes and a juice bar, an elevator that generates electricity, a bike tool shop, a dog-wash station in its courtyard, and apartments and penthouses with ample storage.

“You live here, you don’t even need a car,” Sacramento Assemblyman Kevin McCarty said at the opening ceremony.

The focus on downtown housing represents a pivot by the mayor and city away from their focus in the last few years on financing and construction of a new arena for the Sacramento Kings at Downtown Plaza.

The arena, now underway and expected to open in October 2016, will serve as a catalyst for downtown renewal, city officials say, but is only a slice of the picture. Johnson and others say downtown needs to be populated 24/7, with schools, grocery stores and other amenities. That in turn could attract more outside investment to boost the Sacramento economy.

While many housing units are already in the planning stages or are under construction, the mayor’s office has said the housing initiative Johnson is organizing is aimed at helping major projects come to fruition by simplifying the development process, encouraging more housing builders to do business downtown, and helping to market the area to new residents as a good place to live.

According to a city staff report, roughly 58,000 people lived in the central city in 1950. Today, the population is roughly half that, and much of the old housing stock has been destroyed. The initiative, announced by the mayor earlier this year during his State of the City speech, is led by a coalition of business groups, building industry leaders, homeless service organizations and land use policy experts. It also involves a visible marketing campaign.

Johnson’s initiative seeks to capitalize from a wave of investment downtown. A list of major projects compiled by the mayor’s office shows nearly $3 billion worth of work is either underway or in the planning stages downtown. That includes the $507million arena, another $300 million the Kings plan to spend building a hotel tower and shops near the arena, an estimated $1 billion for housing in the downtown railyard and $348 million at the Township 9 development north of Richards Boulevard.

Among the policy changes under consideration are an umbrella environmental review of the central city. New major projects would still be required to comply with the California Environmental Quality Act and conduct environmental impact reports. But the central city study could help streamline that process by, for example, providing upfront information on noise or traffic impacts to developers planning new projects.

The initiative will also explore whether changes need to be made to the city’s historical guidelines for existing buildings and whether incentives are available for developments that seek to preserve part or all of historic structures.

City officials will also seek to encourage development in areas with immediate access to mass transit, such as the R Street corridor or the downtown railyard. A heavy emphasis will also be placed on encouraging energy-efficient projects.

A new form of project financing will also likely play a role in the work. Last year, Gov. Jerry Brown signed a bill allowing the creation of Enhanced Infrastructure Financing Districts. Similar to the former redevelopment agencies, these districts allow local governments to fund infrastructure and affordable housing projects through property tax proceeds.