City to study "missing middle" housing and consider a revolving‑loan pilot for infill

City staff said it has secured a grant to study whether the city’s code and economics support “missing middle” housing — small multifamily types between single‑family homes and larger apartment buildings — and to model whether a revolving loan program could support those infill projects. Stephen Heisler, housing manager, described the planned multifamily housing study as a 6‑ to 8‑month effort that will include code review, hypothetical renderings and economic feasibility analysis by a consultant. Heisler said staff expects to return to council with findings and recommendations in 2026. Heisler said the study will focus on whether code changes and a potential revolving loan fund could make projects such as fourplexes, sixplexes or detached single‑family units‑for‑rent feasible on small city‑owned lots, particularly in transit‑oriented and Folsom Boulevard redevelopment areas. He cited an example of single‑family detached rental units adjacent to a Raley’s as a concept that might allow households who cannot afford a down payment to live in detached units with yards while remaining close to services. Heisler emphasized that the missing‑middle study would target market‑rate or moderate‑income projects with small or no subsidy gaps, not the city’s subsidized affordable‑housing pipeline. The study’s economic consultant will test whether projects are in the “ballpark of feasibility” and will advise whether staff should pursue a revolving loan fund to incentivize small‑scale infill redevelopment. Heisler said staff will return with the study results and possible program proposals after the consultant work is complete.