Commercial Real Estate in Sacramento: Title 17 Zones, Downtown C-3 and the City Transfer Tax

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

Sacramento’s commercial property runs from downtown office towers and Midtown storefronts to suburban shopping centers, auto rows along the major arterials and industrial land in the city’s rail and freeway districts. Inside city limits, the City’s Planning and Development Code, Title 17 of the City Code, controls, and a sale pays a city transfer tax that unincorporated parcels do not. Confirm the zone, any overlay or specific plan, and the city limits for every parcel before relying on this page.

Who controls the parcel

The City of Sacramento writes its own zoning in Title 17, the Planning and Development Code. Many addresses that read "Sacramento" are actually in unincorporated Sacramento County, including much of Arden Arcade, Carmichael and North Highlands, and follow the County Zoning Code instead; see our Sacramento County commercial guide. The difference changes the transfer tax, the business license and the permit desk, so start with the parcel number.

The base zones carry most of the rules, but Title 17 also has overlay zones (Division III) and special planning districts and planned unit developments (Division IV). Downtown and Midtown add the Central City Specific Plan. The specific plan covers about 2,900 acres between the Sacramento River, the American River, Interstate 80 and Highway 50, and it was adopted in 2018. The city says it is updating the plan to match the 2040 General Plan, with completion expected in winter 2027. The River District, Railyards and West Broadway areas have their own specific plans.

Sacramento zoning for commercial, industrial and mixed use

Title 17’s Chapter 17.216 holds the commercial and office zones, Chapter 17.212 the residential mixed-use zones and Chapter 17.220 the industrial zones.

Downtown C-3 and the general commercial corridors

C-3 downtown. The C-3 article (Sections 17.216.800 and following) sets the city’s highest intensity:

• Height and density. There is no height limit except inside the Capitol view protection area. Residential density can reach 450 units per net acre, and floor area ratios come from the General Plan.
• Street wall. Front setbacks are capped at 10 feet. Towers above a 65-foot base must sit at least 80 feet apart, and residential towers need 40-foot rear and side setbacks.
• Ground-floor retail. On designated retail blocks, 50% to 75% of street-frontage floor area must be retail, pedestrian-oriented or personal service uses.
• Use permits. Retail stores up to 125,000 square feet are permitted. Bars, nightclubs and off-sale alcohol need a Planning and Design Commission use permit. Auto uses depend on distance from light rail stations.
• Review. Most projects need site plan and design review, with extra steps in historic districts.

C-2 corridors. The C-2 article is the workhorse for arterial retail:

• Permitted. Restaurants, offices and retail up to 40,000 square feet are permitted. So are small wholesale, manufacturing and repair uses up to 6,400 square feet, and housing.
• Use permits. Bars, off-sale alcohol, auto sales and repair, gas stations, card rooms, check cashing and cannabis dispensaries need a conditional use permit.
• Auto repair. It must be fully indoors, and work within 300 feet of housing is limited to 6 a.m. to 10 p.m.
• Drive-throughs. They need a use permit and are barred in the Central City unless within 500 feet of a freeway.
• Height. The limit is 65 feet, stepping down to 45 feet within 39 feet of R-1, R-1B or R-2 zoning and 55 feet from 40 to 79 feet.

Housing protection, levees and other Sacramento rules

Housing protection. In both C-2 and C-3, hotels and motels are permitted only if they do not demolish or convert existing or under-construction apartments. A project that does needs a conditional use permit. Check this before buying an older apartment building to redevelop as lodging.

Levee setbacks. C-2 and many other zones require buildings to sit 20 feet from the landside toe of a levee on sites under 5 acres and 50 feet on larger sites. That matters along the Sacramento and American Rivers and in Natomas.

Cannabis. Title 17 has a cannabis article (17.228 Article IX). In C-2, dispensaries, consumption lounges and non-volatile production require use permits, while testing labs are permitted.

Recent amendments. The use tables in C-2 and C-3 were amended by several 2026 ordinances (2026-0001, 2026-0010 and 2026-0011), so a use table printed before 2026 may be out of date.

Transfer tax, business tax and property tax

A Sacramento city sale pays two transfer taxes. The County documentary transfer tax is $0.55 per $500 of value, per the Clerk-Recorder. On top of it is the city’s additional real property transfer tax of 0.275% of consideration, or $2.75 per $1,000, under City Code Section 3.16.020, in effect since September 1, 2013. It is payable at recording, the County Recorder can collect it, and the assessed value is used if no price is available. The city also levies its own business tax; confirm the current rate and registration with the city’s Revenue Division. A change of ownership generally triggers Proposition 13 reassessment.

Due diligence that matters in Sacramento

Start with our commercial due diligence checklist, then add:

• Confirm the parcel is inside city limits; budget both transfer taxes if it is.
• Read the base zone article plus any overlay, special planning district or specific plan (Central City, River District, Railyards).
• Downtown, check the Capitol view protection exhibits and designated retail block frontage rules.
• For auto, alcohol, cannabis or drive-through tenants, pull the conditional use permit and its conditions.
• If the site has apartments, check the conversion and demolition limits before planning a change of use.
• Near a levee, confirm the 20- or 50-foot setback and flood requirements.

Questions people ask

Sources & notes

1. Sacramento City Code Title 17, Division II zoning districts (GoCodebook)
2. Title 17, C-2 General Commercial Zone
3. Title 17, C-3 Central Business District Zone
4. City of Sacramento, Central City Specific Plan
5. County Clerk-Recorder, City of Sacramento additional transfer tax
6. County Clerk-Recorder, documentary transfer tax

Note: We did not review the C-1, C-4, OB, EC, SC or industrial articles in detail, the overlay zones, the 2040 General Plan FAR tables, or the city’s business operations tax chapter.

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

Related: Sacramento real estate guide · Multifamily property in Sacramento · Commercial real estate services