Affordable housing coming to state-owned lots, starting with this one in downtown Sacramento

An affordable housing complex will be built at a downtown Sacramento lot – one of the first projects to come to fruition from Gov. Gavin Newsom’s January executive order to encourage affordable housing projects on state-owned land.

The four-story building will be constructed near the corner of 14th and O streets, just one block from Capitol Park, said Tom Kigar of the Capitol Area Development Authority, a group created by the city and state, which is developing the apartment project. The property is along a stretch of O Street CADA has targeted for redevelopment.

Construction is set to start in December 2020, and finish in December 2022, Kigar said. Retail is planned for the first floor, including possibly a coffee shop or cafe, with three floors of studio apartments above it.

The state is leasing the property to CADA, possibly for as low as $1 a year, said Jason Kenney of the state’s Department of General Services, one of two departments Newsom tasked with finding state-owned parcels where affordable housing could be built around the state.

“State government is stepping up and getting creative to address the cost crisis that is devastating working families across the state,” Newsom said in a Tuesday news release. “Sacramento and Stockton’s leadership will set the example for other local governments to follow.”

CADA will fund the development, partly using state and federal low-income tax credits, Kigar said. Tenants must have incomes that are 40, 60 or 80 percent of the area median income, Kigar said. The area median income for one person living in Sacramento County in 2018, the most recent data available, was $56,050, according to a state document.

The “courtyard” building, which CADA has been using as a community meeting place and for renting out events, will be demolished, Kigar said.

“Sacramento’s downtown offers a walkable, full-service neighborhood for our hard-working residents with limited income,” said Sacramento Mayor Darrell Steinberg in a news release from Newsom’s office. “We appreciate the Newsom Administration’s diligent work to make excess, state-owned properties available for their highest and best use in the capital city: affordable housing. We need these new homes and will work with CADA to expedite their development.”

City Councilman Steve Hansen, who represents downtown, said although the project is small, at 32 to 45 units, it is meaningful.

“As the central city grapples with the extreme shortage of affordable housing and rental housing, it’s critical that we see not only the state, but everyone else continue to build,” Hansen said. “The governor deserves credit for prioritizing this issue.”

Hansen is urging state officials to allow housing be built at more state-owned lots in downtown and midtown, including CalPERS-owned parking lots between P and Q streets and 11th and 12th streets.

“The state owns enough land to probably build 1,000 units or more of housing downtown,” Hansen said.

CalPERS lots were not part of the executive order, Kenney said, but the state did identify a property at 16th and N streets – where Simon’s Bar & Cafe, Enterprise Rent-A-Car and a child development center sit – as a possibility for affordable housing down the road.

CADA is interested in building more housing there, but the idea is in the very early stages, Kigar said.

“Our mission is to develop a mix of market rate and affordable housing, so it’s right up our alley to do this kind of project,” Kigar said.

A state map also lists a portion of Woodlake Park in north Sacramento owned by the state’s military department, and a portion of Folsom State Prison as potential affordable housing sites.

Those sites are outside the CADA’s boundary lines, so if similar affordable housing projects were to be built there, the state would issue a request for proposals and seek bids, Kenney said.

That’s what the state is doing for two sites in Stockton, with bids due Nov. 27.

After the Stockton process is farther along, state officials will know whether more Sacramento-area parcels will be selected for the program, Kenney said.

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Theresa Clift covers Sacramento City Hall. Before joining The Bee in 2018, she worked as a local government reporter for the Pittsburgh Tribune-Review, the Daily Press in Virginia and the Wausau Daily Herald in Wisconsin. She grew up in Michigan and graduated from Central Michigan University.