Sacramento council votes to allow development in Natomas

North Natomas, once the region’s boomtown, is about to starting growing again.

The Sacramento City Council Tuesday ended a six-year building moratorium in Natomas, allowing 1,500 new residential units per calendar year, starting this summer.

The Natomas area has been closed to new development since December, 2008, when the federal government determined that the local levees were susceptible to failure from seepage. After years of debate, the federal government has authorized a major levee improvement program for the Natomas area, essentially lifting the de facto moratorium.

Natomas sits in a basin surrounded by the Sacramento and American rivers, and various canals. The developed portion of the basin in the city limits straddles Interstate 5 and Interstate 80.

City officials say they want to take a cautious approach to reopening the area for development, allowing only a limited amount of new residential starts per year until the five- to seven-year levee upgrade project is done.

The council voted allow 1,000 single family homes to be built per year and 500 apartment units. That is far less than was being built in that area during the boom construction years of the early 2000s, but would represent a major ramping up of housing construction in the city in the post-recession era. Last year, only 500 new housing units were built in the entire city.

The federal moratorium officially will be lifted June 16. City officials say the plan to allow builders to apply for construction permits beginning Wednesday, the morning after tonight’s vote, on a first-come, first-served basis. The city is proposing no restrictions on the number of commercial projects that can be built in Natomas, and no restrictions on improvements to existing buildings.

Both residential and commercial builders say they are eager to see Natomas reopen for development. But city and industry officials say they do not expect to see the flood gates to new development open. Many home builders likely will request only a few permits to start. Building industry representatives say builders plan to take it slow because they are uncertain how strong the housing market will be in Natomas, and what types of products buyers will want.

“Most builders will want to get their product out there and get a few models built,” city planner Scot Mende said. “They want their product to be seen, but are not (ready to) pull a lot of permits yet.”

“Our members have been waiting for quite some time to resume their work in Natomas,” said Ioannis Kazanis of the North State Building Industry Association. “It is going to be exciting, but there is a sense of caution. Our industry is still in a recovery state of mind. we don’t want to get ahead of ourselves. We want to see what the market is going to dictate out there.”

A city assessment has determined there currently are 40,000 housing units in the incorporated North and South Natomas areas, with room for about 14,000 more.

This story was originally published March 31, 2015 at 11:24 AM with the headline "Sacramento council votes to allow development in Natomas."