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Housing Development Incentives

Help Me Reduce the Cost of Development

Housing Development Incentives

Help Me Reduce the Cost of Development

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The City offers many ways to reduce the cost of housing development projects through waiving or reducing fees. See the list below to understand what each incentive offers.

Housing development incentives

Development impact fees offset the financial impact a new development places on public infrastructure. However, the City wants to encourage housing of all types and is willing to significantly reduce or waive fees to encourage the specific types of housing the City most wants to see. In this section we will highlight the various ways you can reduce costs.

Zero-dollar rate program for affordable dwelling units

In late 2018, City Council approved the Reduced Residential Development Impact Fee for Affordable Dwelling Program Units. This program charges a $0 rate for City-controlled impact fees for any regulated/deed-restricted affordable housing unit. These units must be income-restricted up to 120% Area Median Income (AMI) for at least 30 years. This program was developed to incentivize construction of affordable and workforce housing citywide. Learn More.

Housing impact fee

The City typically charges a Housing Impact Fee (HIF) of over $3 per square foot for housing development projects. However, the HIF can be reduced and even eliminated by providing at least 10% of the units as affordable, building in a Housing Incentive Zone, making your project high-density, converting an existing non-residential building into housing, or building accessory dwelling units. Learn more.

Development impact fee deferral program

The City of Sacramento Fee Deferral Program (see application here) allows you to wait to pay impact fees until final inspections from the Building Division. This is especially useful if your project has multiple phases and/or has multiple buildings that will be constructed over time instead of all at once.

Building permit and development impact fee estimates

The City of Sacramento offers a low-cost application to request an estimate of what building permit fees and impact fees would cost for a proposed project. This is useful for early knowledge of how much a proposed development project would cost. Learn more.

Ministerial approval of infill housing

A development project that meets objective standards for review is granted administrative approval. This can save time and money by not subjecting the development project to discretionary reviews, public hearings, and additional environmental review. Additionally, the inclusion of affordable housing allows for deviations in development and design standards through the State's Density Bonus Law process. Learn more.

Other incentives, tax credits, financial assistance

There are multiple other incentives that may be useful. Information provided below may be of interest to applicants to explore on their own. Please contact planning@cityofsacramento.org for additional assistance for City of Sacramento programs as part of your project.

City of Sacramento programs

Below are the City of Sacramento programs

Opportunity zones

Opportunity Zones provide a federal tax incentive for investors who invest in real estate projects and operating businesses located in designated low-income communities. Learn more.

Brownfields program

The City’s Brownfields Program provides financial and technical assistance for Brownfields revitalization, including grants for environmental assessment, cleanup, and job training. Learn more.

Enhanced Infrastructure Financing Districts (EIFDs)

An EIFD is a type of special financing district that utilizes a portion of tax increment revenue from a specific area to finance capital facilities or other specified projects of communitywide significance that provide significant benefits to the area within the EIFD or the surrounding community. 20% of all new EIFD funds are set-aside for affordable housing projects. The City has adopted this policy and is committed to creating additional EIFDs. See the 2021-2029 Housing Element Program H3.

Non-City of Sacramento programs

Below are programs not from the City of Sacramento

Promise zones

The Sacramento Promise Zone encompasses 22 square miles of the economically hardest-hit neighborhoods in the city. The zone includes over 150 partners and improves access to grants and funding opportunities. Learn more.

California competes

The California Competes Tax Credit (CCTC) and Grant Program (CCGP) are available to businesses that want to locate in California or stay and grow in California. Businesses of any industry, size, or location compete for over $180 million available in tax credits by applying in one of the three application periods each year. Learn more.

Zero-emission vehicles funding opportunities

The State of California's Governor's Office offers a system of incentives for zero emission vehicles to be integrated into development. Learn more.

Greenhouse Gas Reduction Fund (GGRF)

Multiple State of California funding sources to support a wide range of programs and projects that facilitate the reduction of greenhouse gas emissions while delivering major economic, environmental, and public health benefits for Californians. Learn more.

Statewide Community Infrastructure Program (SCIP)

The Statewide Community Infrastructure Program (SCIP) is sponsored by California Statewide Community Development Agency (CSCDA) designed to allow developers an alternative to finance development impact fees. Development impact fees are required at the time a building permit is issued and used for making infrastructure improvements. SCIP can fund fee programs for most infrastructure improvements, such as street, sewers, water, park and drainage facilities.

Visit the City of Sacramento's Statewide Community Infrastructure Program webpage to view a list of eligible fees covered under the program.

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