In order to get Rails to reload when you change a sql file in development, you need to add the query directory to the watchable_dirs hash.
# watchable_dirs is keyed by path with an array of extensions as the value
config.watchable_dirs['db/queries'] = [:sql]
Rails automatically adds the autoload paths to watchable dirs with an extension of [:rb]. This includes all the directories in app/. This will override any matching paths you add to watchable_dirs.