ELK GROVE, CA (MPG) - The Elk Grove City Council unanimously approved a $3.3 million loan to Abode Housing to support the first phase of Sheldon Farms North, a 240-unit affordable housing project aimed in part at families and adults with developmental disabilities.

The project, located near Bruceville and Sheldon roads and adjacent to a proposed light rail corridor, is set to be built in two phases. Phase 1 includes 122 units, with 25% designated for individuals with intellectual or developmental disabilities. The remaining 118 units will be constructed in Phase 2, which will also likely include similar supportive housing.

“This looks market rate, and that is wonderful,” said Mayor Bobbie Singh-Allen. “I have seen something comparable on the East Coast, where you have the different sizes and the colors: This looks good. I think you have done a good job here.”

City staff say Sheldon Farms North is a high-demand project with a unique design and ample outdoor space that sets it apart from other developments in Elk Grove. Bontrager pointed to the overwhelming interest in the city’s recent Pardes Project affordable housing lottery as evidence of that demand. That lottery closed on March 31. 

“We think that this is a really strong project, and there is a lot of demand for it,” said Sarah Bontrager, the city’s housing and public services manager. “We have had a ton of interest in affordable housing.”

The loan approved by the council includes $1.3 million in land value and $2 million in cash from the city’s Affordable Housing Fund, which is funded through developer fees. The loan carries a 4% interest rate and a 55-year term. The units will be deed-restricted as affordable housing for the full term of the loan.

Payments are expected to be minimal, with Bontrager noting, “We are not likely to receive a ton of repayment for this loan, so making that choice to give the discount on it doesn’t impact the city’s near-term financial situation.”

The project remains contingent on Abode Communities entering into a disposition and development agreement (DDA) with the city by December and securing full funding by April 2027. The DDA will outline the rights and responsibilities of the developer and will be finalized after project entitlements are approved by the Planning Commission and City Council.

The initial agreement grants Abode exclusive rights to pursue development of the site and sets a pathway for the developers to apply for state funding. Construction on Phase 1 is anticipated to begin in May 2026, with Phase 2 to follow in 2027. However, Bontrager warned that both phases must independently compete for funding, and there is a risk that Phase 2 may never be realized if Phase 1 is not under construction.

Phase 1 will include 35 units for extremely low-income households, 26 units for very low-income residents, and 50 units for low-income households earning between 60–70% of the area median income.

Vice Mayor Sergio Robles praised the project’s design. 

“The aesthetics are a lot different, but it is something that we have not seen in Elk Grove,” he said.

Councilmember Darren Suen also supported the project but raised concerns over affordability in construction. 

“That is just a broader issue about affordable housing when we are building these units,” Suen said, citing the project’s estimated per-unit cost of $662,000. “But nonetheless, it is going to provide a great use for our residents and address the housing crisis.”