Start The Press
Construction begins on 277 Housing Units at R and 21st streets
Midtown Sacramento’s long static housing stock is getting juiced by several new projects, many of them by local developer Sotiris Kolokotronis, or SKK. Ground broke August 21 at SKK’s latest development, complete with local dignitaries holding 10 golden shovels that spelled S-A-C-R-A-M-E-N-T-O.
For some, it spelled a missed opportunity to provide affordable housing.
“The Press” will be loaded with amenities—a resort-style pool, outdoor kitchens, a state-of-the-art fitness center, a bike lounge and a pet spa. The high-end apartments will range in size from 450 to 1,300 square feet. The developers and local officials described the project as “market-driven” multi-family housing designed to meet Midtown’s shortage of residential rentals. Proposed rental rates have not yet been disclosed.
The Press name refers to the former owners of the property, McClatchy Corp., of Sacramento Bee fame. The land, which was used as a former parking garage for Bee employees, was sold to SKK in December 2016 when McClatchy performed a major restructuring, selling off most of its holdings and leasing them back in a move designed to generate cash. McClatchy, as with many newspaper companies, is experiencing declining revenues and print circulation.
Over the past decade, SKK has built several mixed-use projects downtown. The company was temporarily halted by bankruptcy, but now has multiple properties moving forward. For this one, SKK partnered with DeBartolo Development, former owners of the San Francisco 49ers. The major Bay Area real estate investor will be a co-equity owner of the new building, prompting a hearty “Go Niners!” from Sacramento Mayor Darrell Steinberg during the groundbreaking.
“Conventional wisdom used to be that people don’t want to live in the downtown. This project turns that idea on its head,” Steinberg said. “People do want to live next to their work. This is a great day for Sacramento. The old Sacramento was car-dominated. The new Sacramento will be people-oriented, led by the new visionaries like Sotiris and SKK.”
Other speakers included Midtown Association Executive Director Emily Baime Michaels and Councilman Steve Hansen, who applauded staff efforts to streamline the planning process.
“We want to restore the downtown to a place where people want to live,” he said.
According to Colliers International, Sacramento rental rates have risen quickly since 2016. Average rents for an 870 square-foot apartment in the area have increased from $1,487 per month to $1,723 per month. The vacancy rate is low at 2.4 percent.
Assistant City Manager Michael A. Jasso thinks The Press can help indirectly.
“The construction of any rental housing helps with the overall supply of needed rental housing,” he said. “All new housing construction helps ease affordability issues by easing economic conditions that have driven rents higher. The more housing we can provide, the more affordable it will become.”
Housing advocates feel this supply-side approach falls short.
“This is a missed opportunity,” said Cathy Creswell, president of the Sacramento Housing Alliance. “The housing needs of Sacramento, particularly of the downtown, are urgent. People are living in substandard housing, face rents that are an economic hardship and are vulnerable to unjust eviction laws. New housing is a positive trend, but we need projects to provide affordable units at each location.”
SHA estimates 62,000 below-market-rate units are needed to accommodate existing needs.
As for long-term solutions, Creswell suggested residents support a local push to create a rent-control ordinance and support a ballot initiative now slated for 2020. One of the purposes of the “Sacramento Community Stabilization and Fair Rent Charter Amendment” would be requiring just-cause protections against predatory evictions.