Downtown Santa Rosa, Sonoma Valley designated Trump 'opportunity zones'
Two areas in Santa Rosa and one in the Sonoma Valley have been designated “opportunity zones” by the state, making them eligible for Trump administration tax breaks designed to encourage development in low-income neighborhoods.
Santa Rosa and county officials hope the tax incentives will draw investors and spur new housing in three neighborhoods — Roseland, downtown Santa Rosa and the Springs area on the northwest edge of Sonoma — that have been targeted for development.
Last week, President Donald Trump held a press conference to promote the program and its ability to revitalize “distressed areas.”
“Our tax cuts have kicked off a race to invest in opportunity zones beyond anything that anybody in this room even thought,” Trump said.
The impact on construction of new or higher-density housing has yet to be seen locally, said Sonoma County Supervisor David Rabbitt, one of four members on a new joint redevelopment venture formed by the county and Santa Rosa.
“I don’t think there’s been a flurry of overwhelming response to it,” said Rabbitt. “But I do think it could help the right person build the right project sooner than later, which is really what it’s all about. It’s one of many tools required, but it alone won’t make or break someone’s decision to do something.”
To be designated an opportunity zone, at least 20 percent of residents in the area must live at or below the poverty level, or with median family incomes below 80 percent of the regional median income.
Based on that criteria, California officials selected nearly 900 census tracts for the new program, including three in Sonoma County.
Santa Rosa has long craved high-rise buildings in its downtown core to increase the supply of housing and reduce residents’ reliance on automobiles, helping the city meet its greenhouse gas reduction goals. In September, the City Council approved a plan to cut development fees and accelerate the permitting process as part of a larger plan to attract builders.
The results so far have fallen short of expectations.
Last month, the city helped organize a bus tour of its opportunity zones for some 60 Bay Area real estate developers and investors.
David Guhin, Santa Rosa’s assistant city manager, said the March 15 tour generated “really strong response.”
“We have had a lot of follow-up meetings since the tour,” Guhin said of the two Santa Rosa zones. “The interest has primarily been housing and we are urging developers to go up not out, with eight- to 10-story buildings.”
Development in Roseland will be different than the type sought in the city’s downtown, he added, with a greater emphasis on community enhancements that won’t displace existing residents from the neighborhood.
And in the downtown area, Guhin and his planning and economic development team have put “a lot of measures in place” to encourage housing near public transit, including SMART passenger rail and the city’s bus system.
“We’ve developed a multi-pronged approach, of which the opportunity zone designation is one prong to encourage infill building downtown at multiple levels of affordability,” he said.
Tours of opportunity zones are invaluable, said Matt Regan, senior vice president of public policy at the Bay Area Council and co-host of the March 15 tour.