Governor Newsom Announces Three State Sites Identified for Affordable Transit-Oriented Housing in Sacramento

Excess, state-owned property includes over 700,000 square feet of prime real estate in the heart of downtown Sacramento on Capitol Mall

SACRAMENTO – Governor Gavin Newsom today announced that the California Department of Housing and Community Development (HCD) and the California Department of General Services (DGS) are seeking qualified developers to transform state-owned properties into housing. In keeping with Governor Newsom’s 2019 Excess State Land Executive Order (N-06-19), three state office buildings along Capitol Mall in downtown Sacramento will be made available for housing.

Together, HCD and DGS, today, issued a Request for Qualifications to redevelop the headquarters of the Employment Development Department (EDD) at 800 Capitol Mall, the EDD Solar Building at 751 N Street, and the State Personnel Board Building at 801 Capitol Mall.

“In California, we are taking every opportunity and using every tool available to build more housing, faster – including reviewing our own portfolio of excess land to transform state property into housing,” said Governor Gavin Newsom. “Our excess land strategy is 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.”

California needs to plan for 2.5 million homes over the next eight-year planning cycle, no fewer than one million of which must meet the needs of lower-income households. Opening up excess state properties for conversion to housing can help spark the production of sustainable, innovative and cost-effective housing. So far, the Governor’s Executive Order has resulted in 16 public-private partnerships between the state, affordable housing developers and local communities and amassed a pipeline of more than 5,000 new rental units in various stages of development.

“California continues to seize every opportunity to make more state-owned sites available for affordable housing, making it faster and cheaper to increase supply near jobs, transit, and other necessities that help California families increase quality of life and get us closer to the goal of over one million affordable homes by 2030,” HCD Director Gustavo Velasquez said.

Tenants at the three downtown Sacramento state office buildings are expected to relocate to new facilities in 2025. Once vacant, the properties along the Blue and Green Sacramento Regional Transit light rail lines will be unlocked for potential development into new transit-oriented affordable housing.

“In the fall of 2020, with the state workforce largely transitioned into emergency telework, the Department of General Services had the foresight to study the adaptive reuse potential of these buildings. With the state implementation  of hybrid work, that foresight has paid dividends with the issuance of this solicitation,” said DGS Director Ana Lasso. “We hope these projects will prove successful, leading the way in providing an option to breathe new life into state office buildings and the Sacramento downtown in particular.”

A DGS-commissioned study of the EDD headquarters in 2020 found that adaptive reuse—modernizing and converting the existing office buildings into housing—could potentially produce nearly 400 climate-smart one-, two-, and three-bedroom homes for lower-income households.

“The size and location of these three Capitol Mall buildings give us the opportunity to create a transit-friendly village with hundreds of new housing units – a project that will speed the evolution of our downtown away from reliance on office workers,” Sacramento Mayor Darrell Steinberg said. “We will work with the state, our development partners, and the community around Capitol Mall to create something that truly enhances our city’s front door.”

“This is exciting news for the downtown area,” said Assemblymember Kevin McCarty. “Transitioning the EDD buildings into housing will help residents find an affordable place to live and repopulate the area. This is just the beginning. I look forward to seeing more buildings turn into housing and help downtown Sacramento once again become a vibrant hub.”

For the Capitol Mall properties, HCD and DGS are interested in receiving statements of qualification for adaptive reuse of the existing office buildings but will consider alternative development visions should they better address the Executive Order’s guiding principles of affordability, construction cost efficiency, innovation, sustainability, and racial equity.

Developers selected by HCD and DGS would receive a long-term ground lease from the state to build, own, and manage the housing they develop, subject to oversight from the state. Under the order, the two departments will continue to identify and prioritize state-owned excess sites for sustainable, innovative, and cost-effective housing.

The Request for Qualifications can be found here.

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