“The Press” Luxury Apartments Bring Revitalization to Mid-Town But Lack Affordability Solutions

Sacramento News and Review 2018

Sacramento has struggled to bring new housing to the Mid-Town District for many years. Now an urban renaissance is occurring with several projects being completed in the area, many of them developed by local Sotiris Kolokotronis (SKK). Over the past decade, SKK has built several mixed use projects in downtown Sacramento. Their success was temporarily halted by a bankruptcy, but SKK has rebounded and now has multiple properties moving forward. SKK has formed a partnership with major Bay Area real estate investors, DeBartolo Development, former owners of the San Francisco 49ers. Their involvement in the project has local officials excited and Mayor Steinberg welcomed them with a hearty “Go Niners!” The Bay Area real estate giant will be a co equity owner of the new building. They held a groundbreaking ceremony for the project on August 21^st, complete with local dignitaries and officials holding ten gold 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” housing development will be loaded with amenities—a resort style pool, outdoor kitchens, state-of-the-art fitness center, a bike lounge, and a pet spa. The high end apartments will range in size from 450 to a generous 1300 square feet. The Developers and local officials described the project as “market driven” multi-family housing designed to meet Mid-Town’s shortage of residential rentals. Proposed rental rates for the property have not yet been disclosed.

The Press name refers to former owners of the property, McClatchy Corporation, of Sacramento Bee fame. The land was a former parking garage for the Bee employees. The parking structure was sold to SKK in December 2016 when McClatchy performed a major real estate restructuring, selling off most of its holdings and leasing them back in a move to generate cash and stabilize the company from a financial decline. McClatchy, as with many newspapers, is experiencing declining revenues and print media circulation.

Speakers at the ceremony included Mayor Darrell Steinberg, Councilmember Steve Hansen, and Mid-Town Association Executive Director, Emily Michaels. Local officials praised the project and its development team. Mayor Steinberg reflected: “Conventional wisdom used to be that people don’t want to live in the downtown. This project turns that idea on its head. 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. A vacant lot can be transformed into an attraction for new residents to live downtown.”

The over-all picture for housing needs in the City is grim. According to Colliers International, Sacramento rental rates are rising quickly since 2016. Average rents for an 870 square foot apartment in the Sacramento area have increased from $1,487 per month to $1,723 per month. The vacancy factor is very low at 2.4% of the rental housing stock. Homelessness is on the rise, increasing at 15% per year. The Sacramento Housing Alliance, a leading think tank on housing policy, estimates a need for 62,000 housing units to meet the needs of low income households. The average low income person spends 50% of their gross income on housing, a figure that was 25% ten years ago. SACOG, the regional agency that studies housing needs has allocated a goal of 24,000 units for the City. Over 8,000 of those units are needed for low and very low income households. Unfortunately, the development of “The Press” will not directly mitigate or address any of these urgent affordable housing needs.

Assistant City Manager, Michael A. Jasso stated The Press would help address housing problems and the needs of low income residents. “The construction of any rental housing helps with the overall supply of needed rental housing. 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.”

Many housing advocates feel this supply side approach will fall short of addressing our ongoing housing crisis. Cathy Creswell, President of the Sacramento Housing Alliance, assessed the project: “This is a missed opportunity. 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. Supply side housing economics is not sufficient to address the huge backlog of affordable housing needs.”

As for long term and lasting solutions, Cathy recommend community support of upcoming housing ballot measures in November. These measures would provide more funding for subsiding affordable housing and reform current predatory eviction procedures.

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