Sacramento is back in a building boom, and City Hall can barely keep up.
The City Council on Tuesday unanimously approved hiring 24 new employees in the city’s community development department and other city agencies to help process building permits and plan reviews. The cost of the new hires – estimated at $2.3 million in the current fiscal year – would be mostly offset by an increase in revenues from new development, according to a city staff report.
With construction citywide heading towards an all-time record, Council members Angelique Ashby of North Natomas and Steve Hansen of the central city have asked city staff to investigate how to speed up the building process. Their districts are home to some of the biggest spikes in new development.
The city estimates there will be more than $1.5 billion worth of new development in the current fiscal year that ends in June. That number would be a record, adjusted for inflation. The city also expects a record number of building permits to be issued this year.
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That’s more than triple the amount of construction in the city just three years ago during the later stages of the recession, when the city had just $390 million worth of new development, much of it in downtown, midtown, North Natomas and the Delta Shores area of south Sacramento.
“This confirms what we all know and are feeling in this city – that Sacramento is hot, and there is a lot interest in growing jobs, and building a robust economy,” Mayor Darrell Steinberg said in a recent interview. “It is a signpost and a signal that Sacramento is seen in a different light.”
By adding staff, the city will be equipped to process housing permits more quickly. While housing costs are rapidly increasing in Sacramento, more development will help keep costs from going up even faster and will serve as “a very important tool to reduce homelessness,” according to a city staff report.
Unlike previous building booms that focused largely on single-family housing, the current explosion is spreading out to retail and commercial developments, said city development director Ryan DeVore. He said the city has caught the attention of investors from New York and Los Angeles banks and that he believes the growth is sustainable.
“The next two years, we feel pretty comfortable,” he said. “We’ve had this lack of supply for so long, we are going to have to catch up.”
DeVore said there are several projects “pushing the limits,” from a new grocery store on downtown’s R Street to 19J, an apartment building in midtown that “is the first high-rise residential product in decades.”
Nikky Mohanna, the 19J developer, said she moved back home from London a few years ago because she wanted to be part of what she saw as an emerging new era in Sacramento, with increased focus on making downtown a worker-based livable place again.
“I think we can grow in a unique way to ourselves,” she said. “A sense of community can still exist here. We have a unique opportunity to deal with the housing crisis.”
Editor’s note (Dec. 12): This story was updated after the City Council met Tuesday with the results of the vote.