Ambitious Sacramento Financing District Hits Snag
- Melanie Curry
- Sep 9, 2025
- 5 min read
Eight years ago, the legislature adopted legislation to permit “Enhanced Infrastructure Financing Districts,” which would have used tax-increment financing to facilitate tricky developments that jurisdictions considered important. Arguably, few infill projects in the state are more important than the Sacramento Railyards, a 220-acre expanse adjacent to the city’s downtown.
And yet, when the Sacramento City Council recently tried to expand the boundaries of an existing EIFD it had planned to help finance development of the Sacramento Railyards, it was rejected.
State law requires that if more than half of existing local residents object, the EIFD must be abandoned. Frustrating as the vote might be for the project’s boosters, that sort of stakeholder input is an inherent part of EIFD law. The regulations were intended, in part, to counter the opacity of the state’s former redevelopment system.
“If anything, this demonstrates that the process works,” said consultant Larry Kosmont, who works on EIFDs and infrastructure financing. “We want full disclosure. This validates that the notification process will result in community input, which is the intent of it.”
The main sticking point for current residents seems to be how much affordable housing will be included when the project is completed. The developers plan to have about 6 percent of the total number of units be affordable; residents and a local service workers’ union asked for at least 25 percent.
The city’s Housing Element, filed with the state in 2021, states that “the City shall require a 20 percent set-aside for affordable housing in all new enhanced infrastructure financing districts to the extent permissible by State law.”
Currently, there are only two housing developments completed within the proposed expanded EIFD boundaries, with a total of about 500 units, but they are not all rented out. The Wong Center specifically offers affordable housing for seniors. The AJ is a mixed-income development that counts 20 percent of its units as affordable. That means that about 45 percent of the housing built so far is affordable.
"That's a great ratio," said Unite Here Local 49 representative Sonya Karabel. "But the final plan is that more than 94 percent of the rest will be market rate."
"Our members work in the service industry in downtown Sacramento," said Karabel. "They are the low-income workers who need affordable housing near downtown. Six percent affordable housing isn't enough."
Sacramento City Councilmember Phil Pluckebaum, who is head of the Railyards Authority, did not respond to requests for interviews from CP&DR.
First envisioned two decades ago, and formalized in a 2007 environemntal impact report, the original Sacramento Railyards development plan had focused on renovating the vintage brick warehouses for big-box retail, and on adding housing as well as a new stadium or arena. State grants allowed that first developer to begin work on some of the extensive environmental mitigation that was needed due to the industrial nature of the area, as well as new roads and bridges and improved stormwater and sewer facilities.
