Commercial Real Estate in Santa Rosa: Downtown Mixed-Use Zones, Industrial Districts and the City Transfer Tax

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

Santa Rosa is the county seat and the largest commercial market in Sonoma County, my home market. Its commercial property ranges from storefronts around Old Courthouse Square and Railroad Square to Santa Rosa Avenue and Highway 12 retail, auto row, shopping centers, and business parks and industrial yards along Highway 101 and the SMART line. Zoning and tax rules here are the city’s own, so confirm each parcel with the City of Santa Rosa before relying on this page.

Who controls the parcel

Inside city limits, the Santa Rosa Zoning Code (Title 20) governs use, and the city’s Planning and Economic Development department administers it. Downtown is also shaped by the Downtown Station Area Specific Plan. County islands and fringe parcels outside city limits fall under Permit Sonoma and County Chapter 26 instead; our Sonoma County commercial guide covers those rules. A Santa Rosa mailing address does not prove a parcel is in the city, so check the assessor’s tax rate area or the city’s zoning map.

Santa Rosa zoning for commercial, industrial and mixed use

Chapter 20-23 holds the commercial and mixed-use districts, last amended in the published code by Ordinance 2025-014 in November 2025. Chapter 20-24 holds the industrial districts.

District	Intended uses	Notes
CO Office Commercial	Business, medical, professional and public offices	Drive-through retail not allowed; housing in mixed use; duplex and apartments by CUP
CN Neighborhood Commercial	Small-scale convenience retail and services	Sized to avoid drawing outside traffic; bars and drive-throughs need a CUP
CG General Commercial	Citywide retail, services, restaurants	Retail over 50,000 sq ft and warehouse retail need a CUP; auto sales need an MUP
CV Motor Vehicle Sales	New and used vehicle dealers and support uses	Most housing not allowed
CSC Community Shopping Center	Grocery-anchored centers	Big additions or rebuilds must include housing
CMU Core Mixed Use	Downtown core around Old Courthouse Square	Housing broadly permitted
SMU Station Mixed Use	Hotels, dining, entertainment near the downtown SMART station	Apartments allowed
MMU Maker Mixed Use	Studios, light manufacturing, media production, live/work	Small cannabis cultivation and distribution by MUP
NMU Neighborhood Mixed Use	Apartments with neighborhood office and retail	Transitional housing permitted
TV-M Transit Village-Mixed	Housing, office and retail near transit outside downtown	Minimum 40 units per acre, no maximum
BP Business Park	Campus offices, R&D, light manufacturing	Retail, hotels, warehousing only as ancillary uses; no outdoor storage
IL Light Industrial	Light industry and service commercial	Work/live housing possible
IG General Industrial	Manufacturing, warehousing, wholesale, distribution	Retail that fits better elsewhere not permitted

Table 2-10 in Chapter 20-24 sets permit levels for each industrial use; we did not reproduce it here.

Downtown: four mixed-use zones and the station area plan

Downtown Santa Rosa does not have a single "downtown commercial" zone. It is split among CMU, SMU, MMU and NMU, each with a different emphasis:

CMU is the core, aimed at significant new housing mixed with shops and offices around the square and main transit corridors.
SMU targets the blocks near the downtown SMART station for visitors: retail, restaurants, entertainment and hotels, with apartments allowed.
MMU protects room for makers, including small-scale manufacturing and media production next to housing and live/work units.
NMU is the quieter edge, mostly apartments with neighborhood-serving businesses.

These zones implement the Downtown Station Area Specific Plan. State filings on CEQAnet show the city filed its notice of determination for the updated plan on October 16, 2020. The update replaced the 2007 plan in every element and plans out to 2040. Read the plan’s standards for the specific block before pricing a downtown site.

Historic districts, gateways, cannabis and short-term rentals

Historic combining district. Under Chapter 20-28, the -H overlay covers local landmarks and every parcel in a preservation district, contributing or not. Railroad Square and St. Rose were designated in November 1990 and West End in August 1996. Height in -H areas is capped at 35 feet and two stories unless the review authority allows more. A storefront or warehouse conversion in Railroad Square should plan for historic review.

Gateways. The -G overlay marks entries such as Highways 101 and 12 and Bennett Valley, Santa Rosa Avenue and Petaluma Hill roads. New buildings along Highway 101 must set back 100 feet from the freeway right-of-way, which can shrink a frontage site’s buildable area.

Cannabis and other uses. Cannabis businesses follow Chapter 20-46 and the zone’s use table; MMU lists small cultivation and distribution by minor use permit. Adult entertainment and massage have their own chapters.

Short-term rentals. Chapter 20-48 says it exists to protect neighbors and the city’s limited housing stock and to collect transient occupancy tax and business improvement area assessments. The Council was to review it around August 2024. We did not verify the current permit caps, so check them with the city.

Transfer tax, business tax and property tax

County tax. The County Recorder charges $0.55 per $500, less assumed loans.

City transfer tax. Santa Rosa adds its own tax. Chapter 3-20, from Ordinance 2862 of 1990, charges $2.00 per $1,000 of value. Unlike the County tax, the city counts debt that stays on the property. The parties are jointly liable, a 10% penalty applies when it goes unpaid at recording, and another 10% follows if it is still unpaid later. Who pays is a contract term.

Business tax. Chapter 6-04, as rewritten by Ordinance 2024-016 in October 2024, taxes most businesses on gross receipts in four groups. Tiers run from $200 for the smallest firms, the maximum tax is $10,000, and flat amounts adjust with CPI each December. Landlords renting more than three units in the city are in the business of residential rental.

Property tax. A change of ownership generally triggers Proposition 13 reassessment.

Due diligence that matters in Santa Rosa

Start with our commercial due diligence checklist, then add:

Confirm the parcel is inside city limits; county islands follow different zoning and skip the city transfer tax.
Budget the city’s $2.00 per $1,000, calculated including assumed debt.
Downtown, identify which of CMU, SMU, MMU or NMU applies and read the specific plan standards.
Check for an -H or -G suffix before planning exterior work or new frontage buildings.
In CSC, find out whether your planned expansion would trigger the housing requirement.
For industrial users, confirm your use in Table 2-10 for BP, IL or IG.
Ask the seller for business tax registration and any use permits on the site.

Questions people ask

Does Santa Rosa have a city transfer tax?

Yes. $2.00 per $1,000 of value under Chapter 3-20, on top of the County’s $0.55 per $500, and it includes debt the buyer takes subject to.

Which zone covers downtown Santa Rosa?

Four mixed-use zones: CMU at the core, SMU near the SMART station, MMU for makers and NMU at the edges.

Can I build a large-format store in CG?

General retail over 50,000 square feet needs a conditional use permit in CG, as does warehouse retail.

Can a business park building hold retail?

Only on an ancillary basis. BP is meant for campus offices, R&D and light manufacturing, and outdoor storage is not permitted.

Is Railroad Square a historic district?

Yes. It is one of three preservation districts in the -H overlay, with a 35-foot, two-story height cap unless approved otherwise.

How is the Santa Rosa business tax figured?

Mostly on gross receipts by business group, with a $10,000 maximum and CPI adjustments each December.

Does Diamond handle commercial property in Santa Rosa?

Contact Matthew Martinez to discuss buying, selling or leasing commercial property in Santa Rosa.

Sources & notes

Note: We read the code through GoCodebook’s published editions (2026). We did not read the Downtown Station Area Specific Plan document, the North Santa Rosa Station Area plan, Table 2-10, the cannabis chapter or the short-term rental permit sections, or verify transient occupancy tax rates. See also our Sonoma County multifamily guide.

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

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