Nearly 6.7-acre East Bidwell Street property next to Folsom Lake College gives city control of site identified for lower-income housing
The City of Folsom is moving forward with the purchase of nearly 6.7 acres of vacant land near Lakeside Church for $7.1 million, acquiring a property already identified in the city’s Housing Element for future lower-income housing development.
The Folsom City Council approved the purchase Tuesday night, authorizing the city manager to execute a purchase and sale agreement with Lakeside Church for approximately 6.69 acres at the northeast corner of East Bidwell Street and Oak Avenue Parkway. The council action also authorizes the appropriation of $7.1 million from the Folsom Housing Fund, Fund 238, to complete the acquisition.
The undeveloped site is adjacent to the existing Lakeside Church campus and immediately next to the Los Rios Community College District’s Folsom Lake College campus. It is approximately one-half mile north of Highway 50 along East Bidwell Street.
Lakeside Church owns several parcels surrounding its existing facility and recently completed lot-line adjustments and a parcel merger to create the approximately 6.7-acre development site. Community Development Director Pam Johns told the council the church created the parcel with the intent of selling it to help fund future improvements and expansion of the church campus.
The property was subsequently listed for sale as a commercial or multifamily residential infill opportunity.
Tuesday’s action approves the purchase of the property but does not approve a housing development. No developer, site plan, grading plan or specific project was approved as part of the acquisition. Any future development proposal will remain subject to applicable public review processes, city development standards, environmental review and discretionary approvals.
Mayor Justin Raithel asked Johns to confirm during the meeting that purchasing the property does not commit the city to a grading plan, site plan or near-term development proposal. Johns confirmed that it does not.
The property is designated Professional/Office/East Bidwell Mixed Use Overlay in Folsom’s General Plan and is zoned Business Professional-Planned Development. Those designations allow commercial or multifamily residential development, with the planned development overlay requiring a future master-planning process for the site.
The property is also included in Folsom’s Housing Element inventory as one of the sites available to help the city meet its Regional Housing Needs Allocation, or RHNA, for lower-income housing. The Housing Element assumes development capacity of approximately 200 multifamily units at the site.
The 200-unit figure is a planning assumption contained in the Housing Element and is not an approved project or final unit count. Johns told the council that using housing funds to acquire the property does mean affordable housing will ultimately be part of the site, but the amount, form and density remain to be determined.
“By purchasing this site with housing funds, we are guaranteeing that there will be some type of affordable housing on this site in the future, but how much and what type and what density? There is some flexibility in that regard,” Johns said.
She said a future project could potentially include a mix of uses or densities and that the council will have the ability to consider those options before a development partner or project is selected.
The property was listed for sale in early June, with prospective buyers asked to submit offers by July 15. At its July 14 closed-session meeting, the City Council directed staff to submit an offer and negotiate the purchase using Housing Fund resources.
According to city documents, the council’s direction was based on the property’s importance from an infrastructure-planning standpoint and its potential as a student housing location adjacent to the community college campus.
Johns said the property was originally listed at approximately $6.83 million, slightly more than $1 million per acre. The city initially submitted an offer at the asking price.
The seller received 12 offers during the process, including the city’s. Johns told the council that 10 of those offers came from affordable multifamily housing developers.
Rather than reopen bidding and ask all interested buyers to submit their highest and best offers, Johns said Lakeside Church approached the city and offered it the opportunity to match a $7.1 million offer.
The city agreed to proceed at that amount, contingent upon an independent appraisal and final approval by the City Council.
The report similarly notes that the seller received 12 offers, primarily from affordable multifamily housing developers, and that the city’s negotiated offer was accepted subject to the appraisal and formal council approval.
An independent appraisal prepared for the city by Colliers Valuation & Advisory Services provides additional information about the property’s marketing and competing offers.
The appraisal states that the property was marketed at an asking price of $6.835 million, or approximately $23.45 per square foot. The listing broker told the appraiser the property had been on the market for about six weeks and received 11 offers. Six were full-price offers at $6.835 million, several were below asking and two offers were for $7.1 million.
The appraisal states the offers came from affordable housing developers and that Folsom initially submitted an offer at the asking price before increasing its offer to $7.1 million.
Colliers concluded that the property had an as-is market value of $7 million as of July 31.
The appraisal identifies approximately 6.69 usable acres, or 291,416 square feet, along with approximately 0.62 acre considered unusable, producing a gross site area of approximately 7.31 acres, or 318,249 square feet. The property is generally level at street grade and is currently zoned Business Professional-Planned Development.
The appraisal concluded a land value of $7 million, or approximately $24 per square foot.
The city’s negotiated $7.1 million purchase price is $100,000 above the appraised value and $265,000 above the original asking price.
Johns told the council staff considers the additional amount above the appraisal justified by the city’s ability to control the future of the property rather than allowing the site to move immediately into private development.
According to Johns, the negotiated price reflects the public benefit of controlling the timing and type of future affordable housing development. Staff also cited the property’s location and its access to employment, transit, schools, commercial services and Highway 50.
The Colliers appraisal analyzed comparable land transactions throughout the Sacramento region.
Those included a 3.5-acre property at 7007 South Land Park Drive in Sacramento that sold in April for $29.27 per square foot; an 8.2-acre property at 851 Sacramento Avenue in West Sacramento listed at $25.02 per square foot; a 1.6-acre property at 1726 Freedom Way in Roseville that sold in January for $24.84 per square foot; a 2.2-acre property at 2270 Del Paso Road in Sacramento that sold in July 2025 for $23.33 per square foot; a 4.7-acre property at 2720 Kilgore Road in Rancho Cordova that sold in April 2025 for $25 per square foot; and a 10.7-acre property at 14533 Alder Creek Parkway in Folsom that sold in July 2025 for $23.67 per square foot.
Colliers used price per square foot as its primary unit of comparison and examined sales based on proximity, size, location, development potential and date of sale. The appraisal states the market showed value stability from the oldest comparable sale through the July 2026 valuation date and therefore did not apply a market-conditions adjustment.
A central issue during Tuesday’s discussion was why the city should purchase the property when private affordable housing developers were already interested in it.
Johns said city ownership changes how much control Folsom has over what happens next.
“This council gets to decide when we are the landowners, and you don’t get to decide when we are not the landowners,” Johns said. “You don’t get to control the timing. You don’t get to control the type and necessarily the design.”
Johns said the city’s ownership would allow the council to consider infrastructure conditions, other housing priorities and community input before deciding when the property should move toward development.
“If the city owns the land, we control the timing of development,” Johns said. “That’s infrastructure readiness, timeliness relative to the city’s other housing priorities, the type of affordable housing that we’re going to do to meet the city’s needs.”
She cited student housing, special-needs housing, senior housing and ownership opportunities as examples that could be considered in the future.
Johns also pointed specifically to traffic and infrastructure conditions in the East Bidwell Street corridor. She said there are already traffic impacts and other issues in the area and that city ownership would allow Folsom to consider whether development should wait for future transportation or infrastructure improvements before proceeding.
She told the council that a project could potentially move forward after completion of an interchange or other improvements, depending on future council priorities.
According to the staff report, acquiring the property will allow Folsom to control development timing as infrastructure improvements are completed and to select an appropriate development partner.
Johns said state housing laws also factor into the city’s interest in controlling key properties. She told the council that California laws have increasingly limited local discretion over certain housing projects, particularly those near transit and services.
The acquisition also advances policies and programs contained in Folsom’s Housing Element.
According to the staff report, city ownership helps ensure that a property already identified in the Housing Element inventory is ultimately developed with lower-income housing. Housing Element programs encourage the use of Housing Trust Fund resources to acquire property for affordable housing and facilitate affordable housing development on city-owned sites.
The site’s location adjacent to Folsom Lake College is also identified as a possible opportunity for student, faculty or staff housing.
Johns said the General Plan includes a College District policy covering areas surrounding the Los Rios Community College property. The policy does not establish a separate zoning overlay or mandate specific uses, she explained, but encourages consideration of uses that support the college and surrounding district.
The staff report cites General Plan Land Use Policy 3.1.8, which calls for a walkable district centered around Folsom Lake College and East Bidwell Street and includes higher-density residential, retail and daily service uses serving residents, employees, students, faculty and staff.
Los Rios is not currently pursuing on-campus student housing, according to the staff report. City staff said future partnerships involving private developers and off-campus student housing remain possible.
Because the property is close to the campus and could potentially provide direct pedestrian and vehicle connections, staff plans to continue exploring affordable student housing and potentially faculty and staff housing as possible future uses.
Johns told the council there is no need to immediately decide what should be built.
The city is scheduled to return to the council in September for a broader housing workshop as Folsom moves through the final years of the current eight-year Housing Element cycle and begins looking toward the next planning period.
Johns said that discussion will allow council members to establish near-term housing priorities and determine where city staff and available housing funds should be focused. The Lakeside property could be identified for more immediate planning, she said, or the council could decide other sites should take priority and hold the property for a later housing cycle.
If the council eventually identifies the property as a priority, Johns said staff could research housing needs, consult more extensively with Los Rios and bring development options back for consideration.
The acquisition comes as Folsom continues implementing its Housing Element for the 2021-2029 planning period.
State Housing Element law requires local governments to plan for housing needs across income levels. The Sacramento Area Council of Governments assigned Folsom a RHNA of 6,363 housing units during the current cycle.
That allocation includes 2,226 very low-income units, 1,341 low-income units, 829 moderate-income units and 1,967 above-moderate-income units. The Housing Element anticipates that a substantial portion of the lower-income need will be met through multifamily rental housing.
City staff presented a mid-cycle Housing Element implementation update to the council in August 2025 that included Folsom’s progress toward those targets.
At that time, the city reported progress of 225 units toward its 2,226-unit very low-income allocation, leaving 2,001 units. Folsom reported 347 units toward its 1,341-unit low-income allocation, leaving 994 units.
For moderate-income housing, the city had recorded 817 units toward its 829-unit allocation, leaving 12. The city reported 3,473 above-moderate-income units compared with an allocation of 1,967.
The $7.1 million acquisition will be paid for through the Folsom Housing Fund rather than the city’s General Fund.
Folsom established an inclusionary housing in-lieu fee in 2013 to support affordable housing. As originally adopted, the fee equaled 1% of the sales price of the lowest-priced home within a subdivision multiplied by the total number of units.
In 2025, following completion of a nexus study, the City Council changed the methodology to a square-footage-based fee while maintaining what the staff report describes as a generally comparable level of revenue.
Johns explained that developers of qualifying single-family projects can either provide required affordable housing within their development or pay an in-lieu fee that the city can then use for affordable housing programs and partnerships elsewhere.
Under a legal agreement with the Sacramento Housing Alliance, at least 50% of fees collected must be used to fund construction or substantial rehabilitation of multifamily rental housing affordable to low- and very low-income households. Acquisition and disposition of land for affordable housing development are eligible uses of Fund 238.
According to the staff report, the Housing Fund has approximately $22 million in unencumbered funds. The $7.1 million land purchase qualifies as an expenditure from that fund.
The city has also used housing funds for programs and direct financial assistance to affordable housing projects.
Johns cited the Seniors Helping Seniors program, which assists lower-income seniors with improvements that allow them to remain in their homes, as one example.
Since 2019, the City Council has approved approximately $13.7 million in long-term, low-interest loans to address financing gaps for more than 550 deed-restricted affordable units across six multifamily affordable housing developments. Housing Fund 238 can also be used for Housing Element implementation, housing programs and acquisition or disposition of land for affordable housing.
The council discussed using the fund more directly for property acquisition during an August 2025 meeting. At that time, council members expressed interest in acquiring appropriately zoned multifamily sites and partnering with affordable housing developers on city-owned property.
According to the report, the Lakeside Church property represents the third acquisition involving housing funds for future affordable housing.
One previous example involves property at 300 Persifer Street, which had been owned by the city since the 1960s and used for various municipal purposes over several decades. The property was transferred to Habitat for Humanity using Housing Trust Fund resources for development of 10 for-sale homes affordable to lower-income households.
Johns told the council those homes are now occupied.
Folsom also recently acquired the approximately 1.92-acre Leidesdorff site for future affordable housing as part of the long-term redevelopment plan for the Corporation Yard area.
Johns said the city recently completed that purchase and does not anticipate immediate development there. Instead, the property can be held and considered as part of future master planning once the Corporation Yard is relocated.
The Lakeside Church purchase agreement also establishes several conditions that must be completed before the transaction closes.
The agreement calls for a deposit equal to 1% of the $7.1 million purchase price and provides the city with a 45-day inspection and due diligence period. Closing is scheduled for 15 days after the inspection period expires.
The agreement addresses an existing Lakeside Church monument sign near the intersection. The church has expressed a desire to relocate the sign along the edge of the parcel. The agreement allows for an easement at an agreed-upon location, contingent upon the church receiving required city approvals.
Lakeside Church will pay broker fees and the cost of the title policy. The city and church will split escrow costs, while the city will pay for any title endorsements.
The city also reviewed the purchase under the California Environmental Quality Act and determined the acquisition itself qualifies for the Common Sense Exemption because it is a transfer of property ownership and does not authorize a physical change to the site.
The property is currently vacant. Its General Plan designation and zoning will remain unchanged, and Tuesday’s action does not authorize grading, construction or other development activity.
Any future development will require separate environmental review and compliance with city zoning requirements as applicable.
The council subsequently approved the purchase unanimously. The vote allows the city to proceed with the due diligence period and complete the transaction if the conditions of the agreement are satisfied. Once the purchase closes, Folsom will own the nearly 6.7-acre site along East Bidwell Street and will determine the timing, housing type, development partner and specific project through future public discussions and separate council actions.
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