Gov. Newsom plans to convert Sacramento office buildings into housing

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California Gov. Gavin Newsom on Tuesday announced a plan to convert three adjoining office buildings along the Capitol Mall in downtown Sacramento, including the Employment Development Department headquarters, into housing. At least 20% of the housing would be set aside as affordable, Assemblymember Kevin McCarty said in a press conference later with Sacramento Mayor Darrell Steinberg and city councilmember Katie Valenzuela. That would include at least 10% for very low-income households, according to the requirements spelled out for would-be developers. “This should not be the first nor the last one of these projects,” McCarty said. California’s Department of Housing and Community Development and the Department of General Services will seek out developers to redevelop these three sites: EDD’s headquarters at 800 Capitol Mall, the EDD Solar Building at 751 North St. and the State Personnel Board Building at 801 Capitol Mall. Newsom characterized the plan as “affordable transit-oriented housing.” He said it was in keeping with a 2019 excess land executive order as part of a “multipronged approach to tackle the housing crisis in California, which includes greater accountability, streamlining the building process and providing incentives along with unprecedented resources to communities willing to step up and meet their housing commitments.”The plan to convert the buildings would take place after the current tenants relocate to new facilities in 2025. In a statement, Department of General Services Director Ana Lasso said the state’s hybrid work model means that converting the buildings will “breathe new life into state office buildings and the Sacramento downtown in particular.” A department-commissioned study said EDD’s headquarters could be converted to nearly 400 one-, two-, and three-bedroom homes for lower-income households.About 1,000 units could be expected across all three buildings from affordable to market rate, Steinberg said. Steinberg, who last year repeatedly called for the return of state workers to downtown because of their impact on local businesses, on Tuesday said that he’s focused now on trying to get workers back “at least a couple of days a week.” “The world changed in 2020 with COVID, and one of the realities that we have to face is that people are choosing to work from home more than not now,” Steinberg said. He said part of the answer to transforming Sacramento was to focus on housing, food and entertainment. Valenzuela compared downtown Sacramento to midtown, saying that more housing could help make downtown more vibrant as a “24/7 community.” Developers who are eventually chosen for the project would get a long-term ground lease to build, own and manage the housing they develop.KCRA 3 spoke with Bob Erlenbusch, the executive director of the Sacramento Regional Coalition to End Homelessness, who said he is optimistic about the preliminary plan.“This is the perfect example of adaptive reuse,” Erlenbusch said. “Taking an existing structure and then turning it, in this case, into or adapting it from being an office building to affordable housing.”He also has questions about how “affordable” this affordable housing project will be. He hopes there will be some units for those in the 30 to 40 percent range of Sacramento’s area median income (also known as AMI). “We need it all,” Erlenbusch said. “We need housing for people experiencing homelessness, we need housing for people on fixed incomes like veterans benefits or disability, and workforce development housing as well.”

California Gov. Gavin Newsom on Tuesday announced a plan to convert three adjoining office buildings along the Capitol Mall in downtown Sacramento, including the Employment Development Department headquarters, into housing.

At least 20% of the housing would be set aside as affordable, Assemblymember Kevin McCarty said in a press conference later with Sacramento Mayor Darrell Steinberg and city councilmember Katie Valenzuela. That would include at least 10% for very low-income households, according to the requirements spelled out for would-be developers.

“This should not be the first nor the last one of these projects,” McCarty said.

California’s Department of Housing and Community Development and the Department of General Services will seek out developers to redevelop these three sites: EDD’s headquarters at 800 Capitol Mall, the EDD Solar Building at 751 North St. and the State Personnel Board Building at 801 Capitol Mall.

Newsom characterized the plan as “affordable transit-oriented housing.” He said it was in keeping with a 2019 excess land executive order as part of a “multipronged approach to tackle the housing crisis in California, which includes greater accountability, streamlining the building process and providing incentives along with unprecedented resources to communities willing to step up and meet their housing commitments.”

The plan to convert the buildings would take place after the current tenants relocate to new facilities in 2025.

In a statement, Department of General Services Director Ana Lasso said the state’s hybrid work model means that converting the buildings will “breathe new life into state office buildings and the Sacramento downtown in particular.”

A department-commissioned study said EDD’s headquarters could be converted to nearly 400 one-, two-, and three-bedroom homes for lower-income households.

About 1,000 units could be expected across all three buildings from affordable to market rate, Steinberg said.

Steinberg, who last year repeatedly called for the return of state workers to downtown because of their impact on local businesses, on Tuesday said that he’s focused now on trying to get workers back “at least a couple of days a week.”

“The world changed in 2020 with COVID, and one of the realities that we have to face is that people are choosing to work from home more than not now,” Steinberg said.

He said part of the answer to transforming Sacramento was to focus on housing, food and entertainment.

Valenzuela compared downtown Sacramento to midtown, saying that more housing could help make downtown more vibrant as a “24/7 community.”

Developers who are eventually chosen for the project would get a long-term ground lease to build, own and manage the housing they develop.

KCRA 3 spoke with Bob Erlenbusch, the executive director of the Sacramento Regional Coalition to End Homelessness, who said he is optimistic about the preliminary plan.

“This is the perfect example of adaptive reuse,” Erlenbusch said. “Taking an existing structure and then turning it, in this case, into or adapting it from being an office building to affordable housing.”

He also has questions about how “affordable” this affordable housing project will be. He hopes there will be some units for those in the 30 to 40 percent range of Sacramento’s area median income (also known as AMI).

“We need it all,” Erlenbusch said. “We need housing for people experiencing homelessness, we need housing for people on fixed incomes like veterans benefits or disability, and workforce development housing as well.”

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