The Sacramento City Council on Nov. 10 approved an updated financing plan for the Railyards that could generate approximately $180 million for affordable housing while supporting major infrastructure improvements and continued development of the area north of downtown. 

The plan would expand an existing Enhanced Infrastructure Financing District (EIFD), allowing a portion of future property tax growth generated within the district to help pay for streets, utilities and other public improvements needed to support development. 

Under the 2026 plan, 25% of district revenues would be dedicated to affordable housing after eligible infrastructure and City land acquisition costs are reimbursed. The allocation represents a five-percentage-point increase from an earlier proposal and is projected to provide approximately $36 million more for affordable housing over the life of the district. 

“This is about continuing to move Sacramento forward while making sure we are planning for the infrastructure, housing and economic opportunities our city needs,” City Manager Maraskeshia Smith said. “The Railyards represents a significant opportunity for Sacramento, and this financing plan helps establish a path for continued investment while providing dedicated funding for affordable housing.” 

“Tonight, Council voted on the expansion of the EIFD for the Railyards, the largest urban infill development in the United States,” said Mayor Kevin McCarty. “The Railyards are central to Sacramento’s continued growth and economic development, representing a transformative opportunity to expand the heart of our city. This financing tool will help support the critical infrastructure needed to bring this transformative neighborhood to life, while increasing the affordable housing commitment to 25%. I am excited to see this project continue to move forward.” 

Supporting development in the Railyards 

The Railyards is one of Sacramento’s largest redevelopment areas, transforming a former railroad industrial site into a new neighborhood with housing, employment, entertainment and transportation connections. 

Major projects include the Sacramento Republic FC stadium, Kaiser Permanente medical campus and rehabilitation of the historic Central Shops. The area is also home to the new Tani Cantil-Sakauye Sacramento County Courthouse and completed residential developments. 

The updated financing plan would help reimburse eligible public infrastructure investments associated with these projects, including: 

• Approximately $45 million in infrastructure improvements funded by stadium developer Indomitable Ventures. 

• Up to $50 million in eligible public improvements by Downtown Railyard Venture, the Railyards’ master developer. 

• Approximately $14 million in City costs, primarily related to land acquisitions supporting the future expansion of Sacramento Valley Station. 

An EIFD uses a portion of future property tax growth within a designated area to fund eligible improvements. It does not create a new tax, increase property tax rates or redirect school funding. 

Reimbursements would depend on property tax revenue generated within the district. The financing would not pay for construction of the stadium itself. 

Increasing funding for affordable housing 

The 2026 plan establishes a dedicated funding source for affordable housing as development continues. 

After eligible infrastructure and City costs are reimbursed, 25% of the remaining district revenue would be allocated to affordable housing construction. 

City projections estimate the allocation could generate approximately $180 million over the life of the district. The actual amount will depend on future development and property tax growth, and the funding would become available over time. 

The Railyards currently includes 495 completed housing units, including 219 affordable units. More than 730 additional housing units are in development. 

Additional agreements and next steps 

As part of the approval, Council also directed City staff to develop a local investment strategy, identify key stakeholders and report back to Council with recommendations.  

Council also approved related agreements for digital billboards that would generate revenue to support development of catalytic Railyards economic development projects. The agreements include three additional billboard locations in the Railyards and five locations elsewhere in Sacramento associated with the stadium project. 

The actions build on development and financing agreements approved by Council in June 2025. 

A previous effort to expand the financing district ended in July 2025 following a majority protest before the Railyards Public Financing Authority. The City initiated a new expansion process in August 2026 with new district boundaries and an increased affordable housing allocation. 

The proposed district would cover approximately 238 acres across two project areas, Railyards East and Railyards West. 

The financing district expansion is not yet final. The Railyards Public Financing Authority, a separate governing body, is scheduled to hold a public hearing Dec. 1 to consider the proposed expansion and receive public input. 

More information about the Railyards and ongoing development projects is available on the City’s website. 

Explore Railyards, Sacramento Valley Station projects at July 22 open house