Project would convert 176-unit multi-family supportive and workforce apartment community
Sacramento County is investing funds into solving homelessness in a brand new way. For the first time, Sacramento County is asking the Board to invest in the capital cost development of affordable housing through the Department of Homeless Services and Housing (DHSH). The Board will vote on the project at its September 10th meeting.
In April 2022, Sacramento County received $25,000,000 in funding from the State of California to support efforts to address homelessness on the American River Parkway. With the State funding, the Board sought to expand shelter and/or housing options to help transition people living unsheltered on the Parkway. Parkway funding was initially planned to pay for the land acquisition, construction, and operations for a new Safe Stay homeless shelter program.
While the State allocated the funds in April of 2022, the funds were not transferred to the County until April 2023. County staff initially identified land for a Safe Stay community in early 2023; but after months of negotiation, the owner sold the land to another buyer. After an effort to secure land through the private market also failed to produce viable land for Safe Stay community that was proximate to the Parkway, the County decided to do something new – housing, as well as use some of the money to stand up additional shelter units quickly – through scattered site shelter.
Housing – How We Got Here
The Sutter Capital Group approached Sacramento County with a proposal to purchase and convert the 176 room Residence Inn, located at 1530 Howe Avenue into a 176-unit multi-family supportive and workforce apartment community. The project presents a unique opportunity to expand the stock of affordable and workforce housing in Sacramento County – with an emphasis on persons exiting homelessness and supporting availability of rental units for moderate income, working-class.
DHSH is seeking Board approval of:
- One-time payment of $8 million to support the acquisition of the 176-unit Residence Inn site. After rehab, the site will include 32 units of supportive housing for folks exiting homelessness off the parkway, 142 units of housing to serve moderate income, workforce households, and 2 exempt manager units.
- Capitalize $5.9 million in Parkway funding in the form of a Capitalized Operating Subsidy Reserve (COSR) to fund a 10-year rental subsidy account to support the rent of 32 rental units at 30% of area median income (AMI).
What This Means for Sacramento
Sacramento is experiencing a drastic crisis in the housing market. There is not enough affordable housing to meet the needs of the market. By adding units to the market, particularly units that do not have to be developed from scratch, the County is expediting results to one of the prongs of a multi-pronged solution to homelessness.
The Residence Inn will be different than traditional permanent supportive housing in that residents will be prioritized based on ‘housing readiness’ through their stay at the scattered site program and connectivity to client based supportive services through existing programs, such as Behavioral Health Services (BHS) and the California Advancing and Innovating Medi-Cal (CalAIM).
Sutter Capital Group, the project developer for 1530 Howe Ave. is a Sacramento-based real estate investment and development firm focused on infill development, adaptive reuse, and workforce/affordable housing. Sutter Capital’s work has focused on developing underutilized and outdated properties, transforming them into vibrant spaces that contribute to the region’s growth and sustainability, while addressing the growing housing crisis. Sutter Capital strives to develop workforce housing that is attainable for middle-income households, while also recognizing the value of integrating a mix of very low-income units within these communities. This blended approach not only fosters economic diversity but also enhances long-term stability for all tenants. By utilizing innovative financing models, Sutter Capital successfully creates sustainable, well-structured communities that balance affordability and quality living, ensuring stability both for the properties and the residents.
Community Housing Opportunities Corporation (CHOC) will serve as the resident service provider at 1530 Howe Ave, providing tenant case management and services to the 32 very low-income units. CHOC’s property management arm, Sterling Asset Management, will provide property management services at the site. CHOC Housing has a long history of providing affordable housing in the Sacramento region, as a developer, property manager, and resident service provider, CHOC has 40 years of experience building communities for those in the most need of housing affordability. CHOC and Sutter Capital have partnered on Southgate Terrace, a property in South Sacramento that is a mixed-income affordable housing development.
The revamped units will take about 18 months to completion.
Expanding Scattered Site Shelter
Sacramento County already successfully operates nearly 150 beds through a scattered site shelter model. This unique sheltering approach master leases single family homes and places people experiencing homelessness there, transitioning them off the streets into a more traditional housing setting with roommates, the responsibility of cooking, cleaning and maintaining positive roommate relationships, with oversite from the shelter provider. The houses accept partners, pets and possessions and has a higher rate of successful transitions out of homelessness than other shelter models.
DHSH is seeking Board approval to:
- Utilize $5.5 million in Parkway funding to operate a 50-bed scattered site interim shelter program for three years.
- This program will provide 24-hour shelter, meals, case management, supportive services and rehousing services for individuals exiting the Parkway who are seeking shelter.
- The County anticipates the funds will support the lease and operations of up to 10 sites to accommodate 50 individuals at any given time, serving approximately 100 individuals annually.
- It’s anticipated a Request for Proposals (RFP) will be released in September 2024, allowing contracting and program launch in early 2025.
The additional 50 beds will add to the nearly 1000 beds the County already funds which are currently in operation and will join the additional 400 beds that are planned to open in the next few years.
“Both of these projects are incredibly exciting for the County.” Said Rich Desmond District 3 Supervisor “The County has been looking for the right housing project for many years and we’re thrilled to help transform the Residence Inn for this purpose.”
“Not only are we excited to bring more affordable housing to the Sacramento region,” said Phil Serna District 1 Supervisor “But it’s also equally important to expand our shelter beds that can be brought online quickly and efficiently. We appreciate the Assembly granting us the funds to help with both these projects.”
DHSH staff will return to the Board in the near future with recommendations in services and programing for the remaining $5.6 million in funding.
For more information about what the County of Sacramento is doing to address homelessness, visit the Department of Homeless Services and Housing website.
