Sacramento asks developers to open wallets to keep city streets from clogging

Cyclists join Downtown Railyards Venture LLC principal Larry Kelley and Congresswoman Doris Matsui, right, for a ride on the Fifth Street overcrossing during the grand opening celebration of the roads in the downtown Sacramento railyard on Friday, August 19, 2016 in Sacramento, Calif. The City of Sacramento would like to extend Fifth Street north of the railyard into the River District.
Cyclists join Downtown Railyards Venture LLC principal Larry Kelley and Congresswoman Doris Matsui, right, for a ride on the Fifth Street overcrossing during the grand opening celebration of the roads in the downtown Sacramento railyard on Friday, August 19, 2016 in Sacramento, Calif. The City of Sacramento would like to extend Fifth Street north of the railyard into the River District. rpench@sacbee.com

Sacramento is expecting a housing boomlet in the next two decades, starting slowly, but possibly adding up to 68,000 houses and apartment units, many of them on infill sites in downtown and dotted through other older neighborhoods.

City leaders cheer the potential this growth has to provide the fresh faces and skill sets to push the economy forward. But they fear what it will do to traffic. To avoid clogged streets, city officials say they plan to impose a “transportation impact” fee on most new construction to help fund more and wider streets and improve biking and pedestrian facilities.

The concept, they say, is for developers – and by extension the people who buy or rent new housing units – to help pay to manage the extra traffic they will cause.

“If the growth happens as we believe it will, there has to be more money there,” said city Community Development Director Ryan DeVore. “This provides an opportunity.”

Under the city’s tentative plan, builders may pay from a few hundred dollars per rental unit in some areas, to $700 per apartment unit in downtown, to more than $2,000 for a single family residence in some areas.

Those amounts could produce an estimated $3 million a year. It’s a small sum, but it could provide critical “local match” funds that would allow the city to compete for federal and state transportation grants worth five times that amount.

The city has not nailed down the final amounts, DeVore said, partly because it wants to make sure it doesn’t overburden developers in some areas who have already contributed to citywide transportation infrastructure.

North State Building Industry Association representatives say they understand the need for transportation improvements, but they warn that the housing market recovery post-recession is fragile. If the city raises fees too much, they say, it could wind up making some projects financially unfeasible, especially downtown.

“There really is a renewed excitement for housing in the urban core,” said Rob Smith, building industry association legislative advocate. But, “at the end of the day, a project has to pencil out.”

The proposed fees, similar to transportation impact fees in other cities and counties in the region, are part of an increasingly convoluted and strained transportation financing picture for the city.

A key transportation income source, gas taxes paid by drivers at the pumps, has declined significantly in the last few years as vehicles get better mileage and as more of them run on electric power instead of gas. Other state and federal transportation grants remain available, but political gridlock at the state Legislature and in Congress has kept those amounts from growing as they once did.

City officials had hoped to get a large infusion of annual transportation money from a recent countywide transportation sales tax initiative, Measure B. But that failed to pass. Even if it did, the city had intended to impose the development fee.

Downtown Councilman Steve Hansen, an advocate for a broader sales tax, said the developer fee “will make some intersections better and bring some safety improvements for bike and pedestrians. But this is not a solution for a region’s (transportation) needs.”

The city has drawn up 20 road extensions or widenings it would help fund with the proposed fees based on where new development is expected to take place. The fees would pay for a slice of those projects. The rest would have to come from state and federal funds.

Most notable on the list is a proposed new bridge for cars, transit, pedestrians and bicyclists over the American River from South Natomas to the River District and downtown Sacramento.

Another major project involves extending Fifth and Sixth streets from the downtown railyard north into the River District, connecting to Richards Boulevard. That linkage, which would include knocking down a flood berm, allows the city to expand downtown, with housing, north to the American River.

Downtown, city officials said they will focus transportation fees on improving cycling routes, pedestrian facilities and some transit, to make it an easier place to live and work without using a car.

The fees also will be imposed on most residential and nonresidential development, including stores and offices. Developers who build low-income housing and facilities for the homeless will not be required to pay, however.

The fee amounts would be lower in some areas, such as developments within a half-mile of a light-rail station, as well as in the central city, where officials are trying to encourage more housing, and some areas where housing is difficult to build, such as North Sacramento, Del Paso Heights and south Sacramento.

This selective approach has prompted a complaint from developer Kevin Smith, whose San Diego-based company Ranch Capital LLC, is developing The Mill at Broadway community on the edge of Land Park. City officials have lauded The Mill as the type of infill, core-area project they want. But it is just outside the downtown boundary line drawn by the city for reduced fees.

“I understand the need for the fee,” Smith said, “but it is a bit of a hard pill to swallow for an infill development working to put people close to bus lanes, streetcars, bike lanes. It all ends up: ‘Where is the line?’ 

Several developer groups have persuaded the city to ease some of the financial pain by changing the timing for fee payments. Currently, developers must pay various city fees when they get approval to build. At the builders’ request, the city has agreed to defer the proposed new transportation fee payments – and some other fees – until the houses or apartments are built and ready for sale or rent.

The Sacramento City Council is expected to vote on the transportation fee, and several other fee-related code changes, in late January or February.

Tony Bizjak: 916-321-1059, @TonyBizjak

Sacramento transportation fee projects

City officials plan to use a “transportation development” fee to partially fund construction or expansion of 20 key streets citywide. Some of the funds will go toward improving infrastructure for bicyclists, pedestrians and transit, notably downtown.






Bell Ave.

Norwood Ave./Raley Blvd.

Widen to three lanes


East Commerce Way

Club Center Dr./Del Paso Rd.

Widen to six lanes


East Commerce Way

Arena Blvd./Natomas Crossing Dr.

Widen to six lanes


East Commerce Way

Natomas Crossing Dr./San Juan Rd.

Extend as four-lane road


El Centro Rd.

Del Paso Rd./Bayou Rd.

New overcrossing


Elder Creek Rd.

Florin Perkins Rd./S. Watt Ave.

Widen to four lanes


14th Ave./Jackson Hwy

Power Inn Rd./S. Watt Ave.

Road realignment – four lanes


Lower American River Crossing

Downtown/South Natomas

New all-modal bridge


Main Ave.

Norwood Ave./Rio Linda Blvd.

Widen to four lanes


Main Ave.

Rio Linda Blvd./Marysville Blvd.

Two-lane road extension


Natomas Crossing Dr.

New overcrossing at I-5


Power Inn Rd.

Fruitridge Rd./14th Ave.

Widen to six lanes


Richards Blvd./I-5 Interchange

Reconstruct interchange


W. El Camino Ave./I-80 Interchange

Expand interchange for widening

of West El Camino to six lanes


South Watt Ave.

Elder Creek Rd./Fruitridge Rd.

Widen to six lanes


South Watt Ave.

Fruitridge Rd./Kiefer Blvd.

Widen to six lanes


Meister Way

New overcrossing at Hwy. 99


Hwy. 99/Elkhorn Blvd. Interchange

Expand interchange for widening

of Elkhorn from two to six lanes


5th and 6th streets

Extensions to Richards Blvd.


Riverfront Reconnection Project

New bridge across I-5; reconfigure Capitol Mall to improve access to

Old Sacramento


Grid 3.0

Central city

Pedestrian, bicycle, transit and roadway improvements


Source: Economic & Planning Systems Inc. *millions