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State seeks developers for Capitol Mall office buildings turned into low-income housing

State-owned properties will soon be redeveloped into housing to stay in accordance with Gov. Gavin Newsom's 2019 order.

SACRAMENTO, Calif. — Three downtown state-owned properties will soon be redeveloped into housing to stay in accordance with Gov. Gavin Newsom's 2019 Affordable Housing Development order. Newsom announced a call for qualified developers to execute the project, Tuesday.

The California Department of Housing and Community Development (HCD) and the California Department of General Services (DGS) issued a Request for Qualifications to redevelop three state office buildings along Capitol Mall in downtown Sacramento.

The affected buildings are the headquarters of the Employment Development Department at 800 Capitol Mall, the EDD Solar Building at 751 N St., and the State Personnel Board Building at 801 Capitol Mall.

Tenants at the these downtown state office buildings are expected to relocate to new facilities in 2025. Once empty, transit light rail lines may be developed ahead of the new housing.

A DGS-commissioned study of the EDD headquarters in 2020 found 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," said Mayor Darrell Steinberg in a statement.

California needs to plan for 2.5 million homes over the next eight years, with no fewer than 1 million meeting low-income household needs, according to a press release. 

"Opening up excess state properties for conversion to housing can help spark the production of sustainable, innovative and cost-effective housing," said the governor's office in a press release.

The 2019 order has resulted in more than 5,000 new rental units in various stages of development, along with 16 public-private partnerships between the state, affordable housing developers and communities.

“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 Gov. Newsom in a statement. 

Developers chosen for the project 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, according to a press release.

Under the order, HCD and DGS will continue to identify state-owned excess sites for sustainable, innovative and low-income housing.

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