Sacramento County to spend $14 million in state funds on 32 apartments for the homeless
Sacramento County is spending nearly $14 million on 32 new apartments for the homeless.
Officials say it’s a worthwhile expense because it will help developer Sutter Capital Group acquire and quickly renovate the units, as well as supplement a decade of rent for the residents.
The development will be located at a former Residence Inn, which closed last month, near the corner of Howe Avenue and Arden Way in Arden Arcade. Slated to be complete in spring 2026, it will also contain 142 units of so-called workforce housing. Those units will be available to those with annual salaries of up to $66,000 for a single person and up to $94,000 for a family of four. That’s calculated based on the average income for the area.
The 32 homeless units at the new project will be for homeless people living on the Parkway with little or no income, officials said.
Some of the people in the 32 units can later move to the 142 units once their income grows, County Supervisor Rich Desmond said.
“This meets the immediate need for getting people off the street, but also provides that throughput,” Desmond said during a news conference at the motel Wednesday. “This is going to make a tangible difference in peoples’ lives who are living out on the American River Parkway.”
Community Housing Opportunities Corp. will provide job training and other services to the 32 residents through a contract with Sutter Capital, county spokeswoman Janna Haynes said.
The county’s cost per door for acquisition and renovation is about $250,000 per unit.
“This project is coming in far below the typical cost of a similar projects — and paying prevailing wage (for construction workers),” Haynes said.
For example the Arden Star affordable housing project across the street, funded by the state’s Project Homekey program, was $326,000 a door, she said.
Burke Fathy of Sacramento-based Sutter Capital Group, the developer, agreed.
“In our view, it’s really efficient relative to what these usually cost, $500,000 to $600,000 (per door),” Fathy said during the news conference.
Sutter Capital bought the property this fall for about $40 million, he said.
The project’s costs will be kept low, in part, due to the fast timeline for completion. This is possible because it’s just private and county funding, not relying on state and federal sources.
The $14 million for the new project comes from a $25 million state grant secured by Assemblyman Kevin McCarty, who is running for Sacramento mayor. The money, which the county received in April, was intended to help the county house hundreds of people living along the American River Parkway. McCarty, who on the campaign trail criticized the county for taking so long to spend the money, did not immediately respond to a request for comment Wednesday.
The rest of the $25 million will be used to help fund Joshua’s House shelter for homeless hospice patients, add 50 shelter beds scattered across the county, and help fund the upcoming large Watt Avenue shelter, Haynes said.
Emily Halcon, director of the county’s department of homeless services and housing, said unhoused people are constantly telling county outreach workers about the “unavailability of safe and affordable housing.”
“I’m really happy the board was willing to go out on a limb and make this investment,” Halcon said at the news conference.
The county currently has 400 units of “permanent supportive housing,” which is set to increase to 660 in the next few years, partly due to the new development, said Tim Lutz, the county’s director of health services.
There are an estimated 6,600 homeless people living in Sacramento, according to the latest census, most of whom are sleeping outdoors or in vehicles.
