Main Menu Close Menu

mail Contact

Search Close

Translate

Department

Community Development

Department

Community Response

Department

Convention and Cultural Services

Department

Finance

Department

Fire Department

Department

Human Resources

Department

Information Technology

Department

Mayor and Council

Department

Office of Public Safety Accountability

Department

Office of the City Attorney

Department

Office of the City Auditor

Department

Office of the City Clerk

Department

Office of the City Manager

Department

Office of the City Treasurer

Department

Police Department

Department

Public Works

Department

Utilities

Department

Youth, Parks, & Community Enrichment

Category

hiking Activities

Arts & Culture

Camps

Classes & Group Activities

Community Centers

Events & Entertainment

Sports

Swimming

Category

pets Animals & Pets

Animals & Pets

Category

domain_add Building & Planning

Construction

Inspections

Planning

Property Lines & Surveying

Zoning

Category

store Business

Business

Cannabis

Economic Development

Innovation

Suppliers & Vendors

Category

account_tree City Administration

Accountability & Oversight

Boards & Commissions

City Attorney

City Manager

City Structure & Policies

Customer Service

Elections

Mayor & City Council

Transparency

Category

category City Assets & Data

City Buildings & Property

City Vehicles

Records

Transparency

Category

explore City Regions

Council Districts

Neighborhoods

Property Lines & Surveying

Zoning

Category

diversity_4 Community Support

Accessibility

Community Centers

Community Engagement

Diversity, Equity & Inclusion

Homelessness

Housing

Older Adults

Volunteering

Youth

Category

theater_comedy Culture & History

Arts & Culture

Events & Entertainment

Sacramento History

Category

business_center Employment

Diversity, Equity & Inclusion

Employees & Retirees

Employment

Volunteering

Workforce Development

Category

directions Infrastructure

Bridges

Drinking Water

Information Technology

Infrastructure Finance

Stormwater & Flooding

Streets & Roads

Trails

Wastewater & Sewer

Category

gavel Law, Code & Compliance

Code Enforcement

Inspections

Law & Code

Permits

Category

payments Money

Accounting

City Budget

Claims, Rebates & Discounts

Debt Management

Economic Development

Grants

Infrastructure Finance

Investment & Cash Management

Payments & Fees

Taxes

Category

park Outdoors & Sustainability

Bicycles

Boating

Camps

Climate & Sustainability

Parks

Scooters

Sports

Swimming

Trails

Trees

Weather

Category

local_police Safety

Alternative Response

Crime

Emergency Management

Emergency Response

Fire

Inspections

Police Department

Prevention & Personal Safety

Stormwater & Flooding

Weather

Category

directions_car Transportation

Bicycles

Boating

Driving

Electric Vehicles

Parking

Public Transportation

Scooters

Traffic

Walking

Category

delete_sweep Utility Services

Drinking Water

Recycling

Trash

Wastewater & Sewer

Back to categories Back to Departments

Search for content

SITE NAVIGATION

Sacramento for All: Housing Education Resource Center

1. Sacramento's Housing History

Sacramento for All: Housing Education Resource Center

1. Sacramento's Housing History

Since Sacramento’s establishment as a frontier outpost in the middle of the 18th century to the present-day, the complexities of housing affordability and gentrification have revealed the ups and downs of economic forces, government policies, and community advocacy that have made Sacramento the place that it is today. This timeline provides a historical overview of the forces that have affected housing outcomes in Sacramento over many decades. The majority of the historical accounts below aim to summarize key sections of Race & Place in Sacramento (Report), a report conducted by Dr. Jesus Hernandez as part of the City’s Environmental Justice Element for the 2040 General Plan. JCH Research, the sole originator of the Report, assumes all responsibility for any errors and omissions as well as the content of the Report.

open_in_full

Bird's eye view of the City of Sacramento in 1870. Get a closer look here

1840-1899 The Early Years

For centuries, Sacramento was and remains the ancestral homelands to the Nisenan people, the Southern Maidu, Valley and Plains Miwok, Patwin Wintun people, and the people of the Wilton Rancheria. In 1841, Sacramento was settled by John A. Sutter and became a stable frontier outpost a few years later. Sutter had an official plan for the city prepared and the citizens of Sacramento adopted a City charter in 1849. In 1850, Sacramento became the first incorporated city in California.

The city became the valley’s major transportation hub and the official state capital by 1860. During this time, Sacramento’s population grew rapidly from 9,087 in 1850 to 45,915 in 1900. This rapid growth led to overcrowded housing followed by public health and sanitation problems due to a lack of infrastructure. Additionally, the State Constitution at this time restricted Chinese immigrants from owning land and property, which marked the first legal effort to directly intervene on where people could live solely based on race (Chinese Exclusion Act of 1882).

1900-1945: Housing Boom, Great Depression, and Beginnings of Redlining

In 1911, Sacramento had eight streetcar lines and the city annexed 9.4 square miles of land, which included the neighborhoods now known as Land Park, Curtis Park, Tahoe Park, and East Sacramento. At this time, the California Alien Land Law of 1913 was passed and marked the beginning of the widespread use of racial restrictions on land and property ownership, preventing many people from being able to reside in these neighborhoods. Access to mortgages came through local realtors who were committed to the National Association of Real Estate Boards’ race-based guidelines that excluded people of color (POC) from owning property.

Bird eye view of Sacramento, with a directory of classified businesses.

open_in_full

Sacramento from the sky, the Heart of California Get a closer look here

The Federal Housing Administation, created in 1934, made federally insured long-term, low-interest loans available to local lending institutions to stimulate the housing industry.

open_in_full

At the end of the Sacramento housing boom from 1925 to 1929, the Great Depression triggered a wave of foreclosures which left many new homeowners needing to refinance. The rollout of federal refinance programs in 1934 helped many avoid foreclosures through assistance such as the federal Home Owners Loan Corporation (HOLC), which gave homeowners long-term loans that replaced the short-term, high interest rate financing previously offered by local realtors. The abundant supply of mortgage credit led to increases in housing prices and speculation on the part of real estate investors with a surge in construction between 1936 and 1940. At this time, the use of race covenants (legal deeds which prohibited the sale of property to POC) as a condition of approval was mandated by the Federal Housing Administration (FHA). This led to a sustainable home lending financing network that was solely available to white home buyers, as POC were ruled categorically ineligible for financing.

Redlining, a practice in which the federal Home Owner's Loan Corporation ranked the loan worthiness of neighborhoods based on their racial and ethnic characteristics, effectively excluding "risky" neighborhoods from receiving mortgage loans.

open_in_full

During the post-Depression suburban housing boom, federal housing credit eligibility guidelines prevented the flow of housing capital to racially integrated neighborhoods. HOLC Residential Security Maps identified the location of residents by race and ethnicity and ranked each neighborhood according to the perceived risk for mortgage default. The West End (known as downtown today) was rated the most unsuitable for mortgage lending in Sacramento. The redlining of the West End restricted existing POC property owners from participating in conventional real estate market exchanges and led to a drastic decline in the value of redlined real estate. Due to property owners’ inability to finance repairs, owners resorted to converting homes into multiple units to earn more rent to compensate for lost value.

These strategically enforced racial restrictions on residency allowed landlords to capitalize on market constraints by renting converted units at a much higher cost to POC who were unable to leave the neighborhood. Converting properties to higher density, coupled with the lack of repairs by absentee landlords, accelerated the deterioration of the area’s residential quality.

In 1945, California passed the Community Redevelopment Act, which called for the rebuilding of central business districts through the formation of local redevelopment agencies (RDA). The Act authorized RDAs to acquire blighted properties by means of governmental powers and clear them of existing buildings and residents. The land would be offered to private enterprise for redevelopment to rebuild the area for industry or housing in accordance with the local RDA’s general plan.

1949-1974: Urban Renewal and Gentrification

The Federal Housing Act of 1949 focused on eliminating substandard living conditions through the clearance of central-city slums and provided federal subsidies for cities attempting to remedy housing shortages. The Act aimed to improve the housing stock in “blighted” communities and required that redevelopment projects be predominantly residential. Revisions to the Act in 1954 weakened the requirement of predominantly residential redevelopment projects, allowing federal funds to be used towards commercial projects. As a result, neighborhoods that had primarily low-income housing before redevelopment were converted into areas of commercial office space.

A color coded map of the West End of Sacramento differentiating the type of use. (Heavy commercial, historic area, Chinatown, residential, office/retail/parking, special commercial/office building, art & culture center, park areas, state historic park)

open_in_full

A project map for the urban renewal plans of the Redevelopment Agency of the City of Sacramento from 1968. Get a closer look here.

In Sacramento, as highlighted in the Race & Place in Sacramento report, a partnership between the city redevelopment agency and Sacramento’s commercial real estate industry functioned to reclaim segregated central-city space, which remained devalued through previous market practices of mortgage redlining and racially restrictive covenants. While covenants and redlining provided the foundation for segregation and divestment, federally funded central city redevelopment programs provided the means to shift possession of racially segregated space to private development, leading to the subsequent gentrification of neighborhoods and displacement of ethnic enclaves from 1950 to 1970. The Report cites research that more than an estimated 8,500 people were displaced from the West End as a result of urban renewal projects in Sacramento.

Despite changes to FHA guidelines in 1950, which no longer permitted the use of race covenants in considering loan approvals, POC borrowers were not afforded the opportunity to meet the qualifications of the lender or FHA because builders refused to accept their credit applications. In 1965, the Sacramento Committee for Fair Housing conducted a survey focused on the rental market in the communities of Citrus Heights, Fair Oaks, Carmichael, Arden, Rancho Cordova, Orangevale and Folsom, which showed that nine out of ten landlords refused to accept Black renters. In 1968, the federal Fair Housing Act was signed into law, prohibiting discrimination concerning the sale, rental, and financing of housing based on race, religion, national origin, sex, handicap and family status.

1975-2015: Segregation and Foreclosure Waves

As highlighted in the Report, by 1975, the combination of public housing policy, urban planning and realtor gatekeeping shifted the bulk of Downtown’s lower income POC residents to Oak Park, Fruitridge Manor, Meadowview, and Glen Elder to the south and Del Paso Heights, Gardenland, Northgate, and North Highlands to the north.

Although the Supreme Court effectively invalidated the use of race covenants in 1948 (Shelley v. Kraemer, 1948), the use of race in determining property values for bank appraisals continued until 1977. Congress passed the Equal Credit Opportunity Act in 1974 to make it illegal for creditors to discriminate based on race. However, redlining continued in low- to moderate-income neighborhoods, and in 1977, the Community Reinvestment Act of 1977 was enacted to prevent redlining and encourage banks to help meet the credit needs of all communities, including low- and moderate-income neighborhoods.

A 1977 report by the Department of Savings and Loan (DSL) identified Sacramento County as one of the metropolitan areas in the state where large-scale redlining was taking place. As highlighted in the Report, the DSL data helped uncover how two distinct housing geographies emerged in the Sacramento area during the 1970s. One area consisted of race covenants, census tracts with unrestricted access to housing credit and race-based realtor gatekeeping. And the other, a new area where people of color displaced by Downtown redevelopment and pushed by realtor gatekeeping, experienced a new episode of mortgage redlining where they were kept from obtaining mortgage credit.

Additionally, a wave of FHA foreclosures during the late 1980s and early 1990s along with the subprime foreclosure wave of the 2000’s, kept home prices depressed. This created a Rent Gap (the difference between the rent obtained and the potential rent possible if it were developed to its best use) that led to the rise in speculative real estate investment. The Subprime Loan Crisis during 2003-2007 triggered a wave of foreclosures and property loss for many Sacramento homeowners. Between 2007 and 2011, following the rapid rise in subprime lending, one-fourth of American families lost at least 75 percent of their wealth. More than half of all families lost at least 25 percent of their wealth with these large losses disproportionally concentrated among vulnerable populations, including communities of color and lower-income communities.

Subprime loans are alternative home mortgage products with interest rates substantially higher than conventional financing. These products encourage periodic refinancing of debt.

open_in_full

Present: Housing Crisis and the Lingering Effects of Redlining

(The Race & Place in Sacramento Report is no longer referenced after this point.)

In 2017, the California Fair Housing Task Force formed and developed an opportunity mapping tool intended to demonstrate the spatial dynamics of opportunity in every census tract.

The mapping tool identifies “Opportunity Areas” to promote private investment in affordable rental housing for low-income Californians. It also identifies which areas have the highest and lowest levels of private and public resources linked to childhood development and economic mobility. Additionally, Assembly Bill 686 was signed into law the following year, which mandates that all public agencies must affirmatively further fair housing through deliberate action to address, combat, and relieve disparities resulting from past and current patterns of segregation. In Sacramento, as shown on the TCAC/HCD Opportunity Area Map, the majority of the City is categorized as either low resource or high segregation and poverty, largely aligning with the areas of the City that were historically segregated by covenants and redlining practices.

open_in_full

In 2020, the COVID-19 pandemic spread worldwide. The resulting economic fallout magnified existing challenges faced by many including access to healthcare, open spaces, affordable housing, and more. In the weeks following the issuance of social distancing guidelines, millions of people lost their jobs, leaving many without the means to afford basic amenities and secure adequate housing. This crisis highlighted the importance of affordable housing to the well-being of all our community members.

Even though race covenants and race-based lending are no longer in practice, the effects of past practices allowed white families to more easily build intergenerational wealth, while restricting communities of color from accessing opportunity and meaningful fair housing choice.

Today, Sacramento’s neighborhoods reflect the results of decades of systemic redlining, restrictive covenants in land sales, and residential segregation. Neighborhoods such as Land Park and East Sacramento remain high opportunity areas while some of the neighborhoods that had received Downtown’s displaced residents such as Oak Park, Fruitridge Manor, Del Paso Heights, and North Highlands remain highly segregated and in poverty. This economic and racial stratification, found in cities across the nation, has been further perpetuated through the use of single-family zoning. An analysis by the Othering & Belonging Institute states that single-family zoned areas have been shown to increase racial segregation and income inequality. In Sacramento, over sixty percent of residential areas are zoned for single-family housing.

Exclusionary zoning is a type of land use regulation that restricts the types and sizes and buildings that can be built in certain areas, effectively preventing certain types of lower-cost housing from being built in a neighborhood, which can lead to and/or perpetuate economic and racial segregation.

open_in_full

One of the reasons why many of Sacramento’s higher-resourced residential neighborhoods remain largely racially segregated is because many of the “desirable” neighborhoods remain zoned exclusively for single-unit homes, a more expensive product type. The exclusion of lower-cost housing types prevent lower-income residents from moving to neighborhoods with the best parks, schools, and other desirable amenities .

Adding to the lingering social effects of redlining practices in Sacramento is the current lack of housing supply. Sacramento, like much of the rest of the State, is racing to address the current housing crisis that is making it harder for residents, especially low- and middle-income families and individuals, to afford housing. A variety of factors have contributed to the constraint on housing production over the past 50 years, including but not limited to zoning, limited governmental funding, community resistance to new development, environmental laws, , and increased construction costs.

More and more over the past couple of decades, the City of Sacramento has been focused on creating a policy environment that is leading to more housing production and is creating greater housing choice for all. In 2022, the City of Sacramento was the first city in California to earn the State’s Prohousing Designation due to the City’s commitment to housing development. The City has implemented many policies over the years to address housing constraints and continues to lay the groundwork for addressing exclusionary zoning practices. Much of this work can be found in the City’s 2021-2029 Housing Element, the City’s 8-year housing strategy and commitment for how it will meet the housing needs of everyone in the community.

Additional Resources

Please see below for additional resources:

ON THIS PAGE