Commercial Real Estate in Folsom: Commercial Zones, Sutter Street and the Plan Area South of Highway 50

By Matthew Martinez, Founder, CEO & Managing Broker, Diamond Real Estate Group. California DRE #01869679.

Folsom’s commercial property falls into three very different settings: the Gold Rush-era storefronts of Sutter Street and the surrounding historic district, the shopping centers and office parks along the city’s arterials north of Highway 50, and the newer commercial land planned south of the freeway. Each runs on its own rulebook. Confirm the zone, any overlay and any specific plan for a parcel with the City of Folsom before relying on this page.

Who controls the parcel

Folsom is an incorporated city, so Title 17 of the Folsom Municipal Code governs zoning inside city limits. Parcels just outside, such as in neighboring Orangevale or the El Dorado Hills side of the county line, follow Sacramento County or El Dorado County rules instead. Inside the city, three layers can apply: the base district, a combining or overlay district (historic, mixed-use, highway frontage, height or airport), and, for the area south of Highway 50, a specific plan.

Folsom zoning for commercial, industrial and mixed use

Sutter Street and the Historic District

Chapter 17.52 splits the historic district into primary areas and subareas, each with its own use list, heights and parking ratios. A seven-member Historic District Commission, appointed by the mayor with council consent, reviews design, conditional use permits, variances and signs.

• Sutter Street subarea. Uses must suit a small downtown. Large discount stores and supermarkets are barred, as are uses that clash with the district’s 1850–1950 theme. Height is 35 feet next to the Sutter or Leidesdorff sidewalks and 50 feet elsewhere in the subarea, with towers allowed 15 feet more. Retail, office and restaurant space needs one parking space per 350 square feet, and hotels one per room plus one per 350 square feet of other space.
• River Way. Artist and craftsperson studios are preferred, and projects over 5,000 square feet need a conditional use permit.
• Natoma-Riley-Bidwell. Retail and office follow the C-1 list, with limits on scale. Parking is one space per 200 square feet and may not sit in front or street-side yards.
• Railroad Wye. Every use needs a conditional use permit, with a general limit of 2.5 stories or 35 feet.
• Demolition. Buildings 50 or more years old need approval before demolition, and the Commission decides cases involving historic resources.

Use rules in the commercial zones

Drive-throughs. Drive-in and fast food is permitted outright only in C-3; it needs a minor CUP in C-1 and C-2 and is not allowed in BP. Banks in C-1 may not have drive-up tellers.

Auto uses. Minor auto repair is permitted in C-2 and C-3 and barred in C-1 and BP. Auto sales and major repair need a minor CUP in C-2 and C-3. Service stations need a major-use CUP in C-1 and C-2 and a minor CUP in C-3, with an exception noted for Highway 50 sites.

Alcohol. Off-sale alcohol needs a major-use CUP in C-1, a distance-based permit in C-2 and is permitted in C-3; it is not allowed in BP. Bars need some form of conditional approval in every commercial zone.

Mixed-use overlays. In the MU zones, ground-floor commercial is required on buildings fronting a major commercial corridor, and horizontal mixed use is discouraged there. Hotels are permitted in MU and MU-EDOZ; bars and sports and entertainment venues are permitted outright only in the entertainment district overlay. Single-family homes, duplexes and vehicle sales and repair are not allowed in any MU zone.

The use table in Chapter 17.22 was last amended by Ordinance 1294 in 2019, per the code’s history notes.

South of Highway 50

The state CEQA record for the Folsom South of U.S. Highway 50 Specific Plan describes a 3,510-acre plan area bounded by Highway 50, Prairie City Road, White Rock Road and Empire Ranch Road, with up to 10,045 homes, 377 acres of commercial land, 113 acres of office and a regional shopping center. That record also lists annexation of about 3,584 acres as a local action. This is where most of Folsom’s new commercial land sits, and parcels there follow the specific plan’s land use designations and design standards rather than only the base Title 17 tables. Confirm current plan amendments and development agreements with the city before underwriting a site.

Transfer tax, business tax and property tax

The County Clerk-Recorder collects the County documentary transfer tax of $0.55 per $500 of value, less assumed loans, and its FAQ says only the City of Sacramento levies an added city tax, so Folsom sales pay the County rate alone. The County’s General Business License is for businesses in the unincorporated area, so confirm Folsom’s own business license requirements and any lodging tax directly with the city. A sale generally triggers Proposition 13 reassessment, and parcels south of Highway 50 may carry special district or community facilities district assessments worth checking on the tax bill.

Due diligence that matters in Folsom

Start with our commercial due diligence checklist, then add:

• Confirm the base zone and any H-D, MU, F highway frontage, H height or AV airport combining district.
• For drive-through, auto or alcohol tenants, check whether the use is permitted or needs a minor or major CUP in that zone.
• In the historic district, confirm the subarea, height line and parking ratio, and whether the building’s age triggers demolition review.
• South of Highway 50, pull the specific plan designation, design guidelines and any assessment district.
• Check inclusionary obligations if a mixed-use project will include ten or more for-sale homes.

Questions people ask

Sources & notes

1. Folsom Municipal Code, Title 17 (Code Publishing)
2. Folsom Chapter 17.22, Commercial Land Use Zones
3. Folsom Chapter 17.23, Mixed-Use Zones
4. Folsom Chapter 17.52, Historic District
5. CEQAnet, Folsom South of U.S. Highway 50 Specific Plan
6. County Clerk-Recorder, documentary transfer tax

Note: We did not review the industrial chapters (17.28–17.34), the specific plan document itself, or the city’s business license and lodging tax chapters. The code was current through Ordinance 1346 (July 23, 2024) when reviewed; confirm later amendments with the city.

This page is general information, not legal or tax advice. Last reviewed October 2026 by Matthew Martinez.

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