Quick Take
A Wednesday evening meeting focused on a proposed housing development for 525 Water St., at the corner of Market Street in Santa Cruz, brought out a mix of supporters and opponents. Supporters expressed gratitude for the addition of new affordable housing while opponents raised issues with parking and traffic impacts, as well as building aesthetics.
A five-story, 100% affordable housing development planned for the intersection of Water and Market streets in Santa Cruz could begin construction as early as February 2026, the developers said Wednesday, even as some residents continue to voice concerns about the lack of parking at the proposed 90-unit complex.
The project, which would be built at 525 Water St. — the former site of Ginza Japanese Steakhouse and Sushi — includes 90 units of affordable housing across five stories.
Currently, the plans have 33 one-bedroom units, 24 two-bedroom units, 23 three-bedroom units and 10 four-bedroom units. Rents will range from $1,100 to $3,100, according to Jeremy Hoffman, the director of development for Zen Development Consultants, an affordable-housing developer consultant firm based in Marin County. He added that 23 of the units will be reserved for formerly homeless veterans and 10 more will be reserved for people with disabilities. They will both have access to supportive services.
Hoffman added that following community outreach last year, Zen Development reduced the project size from six stories to five, from 95 units to 90, and added more parking and a new landscaping plan. However, the current iteration has only 32 parking spots.
Jan Hochhauser, owner of Hochhauser Blatter Associates, the architecture firm on the project, said there will be a number of amenities for residents. Those include a courtyard, playground and bike storage and laundry facilities.
City of Santa Cruz Senior Planner Tim Maier said the project takes advantage of Assembly Bill 2011, which allows for affordable housing developments to be built on commercially zoned parcels. It also uses Senate Bill 330, which limits local regulations on housing developments. The project also uses the state density bonus, which allows for more residential units than what is typically allowed by the city’s municipal code.
Maier added that the project currently plans for the ground floor to be used for residential amenities, but that city staff continues to “strongly encourage” integrating ground-floor commercial space.
“The lots are located in the city’s community commercial zone and have a prominent, highly walkable site located along a major commercial corridor with a captive market surrounding,” he said.
A virtual community meeting Wednesday for the proposed development saw more than 40 residents tune in to give their thoughts, ranging from support to concern, largely around parking and traffic.
Leslie Wooding said that she lives in the Central Park area just south of the project, and said none of the housing developments in the immediate area has enough parking.
Maier said that state law does not legally allow the city to require parking for a project located within a half-mile of a major transit stop, like 525 Water St.
“We could have had no parking, but the families on this property will have different needs than the other populations,” said Hoffman. “So having some parking was important to us, and we maximized the amount of parking that we could fit into the project.”
Audrey Wingo, who owns a dental office in the complex across the street, also voiced concerns about parking, adding that she is worried that the business complex where she works will have to regulate the lot to prevent overcrowding. She also added that the complex was designed by a student of Frank Lloyd Wright, and the housing development could be at odds with that design.
“I’m just not certain that it will match the architecture and beauty of the area,” she said, suggesting that the neighborhood begin a permitted parking program to preserve spaces.
Maier said the city has a process for residents to request a permit parking program for a neighborhood, but it requires a two-thirds vote of the neighborhood to start the process.
Marshall Keneipp said he believes the project is good for the city and recognizes the need for housing, but raised similar complaints about building height and parking. He said that 32 parking spaces is “woefully inadequate,” and would rather the project be four stories instead of five.
Hochhauser said the truth is that the state views building housing as more important than preserving parking. “It seems like the state has come to the conclusion that the housing crisis overrides the parking crisis, but all of these projects generate parking impacts and I’m hearing from lots of constituents and neighbors that they’re concerned,” he said. “So it’s not a unique concern.”
Others were less bothered. An attendee by the name of Erin A said she is enthused and supportive of the project, and is not particularly concerned about parking. However, she did add that she hopes the developer could introduce commercial space.
“My dream would be to be able to walk more in our neighborhood and to go visit some of the commercial spaces that could be in this building and along Water Street as well,” she said.
Another user by the name M Picard said reducing the height of the building further will only make it harder to replenish the city’s housing stock, and worsen the housing crisis.
“I encourage our community to pair idealistic requests with a real solution to the local housing crisis. This development is one such solution,” she said. “Prioritizing the arbitrary height of a thing over something that will help human lives indicates a short-sighted perspective that will exacerbate our community’s issues.”
Hochhauser said he hopes to begin construction in February 2026, and wrap up by January 2028.
Have something to say? Lookout welcomes letters to the editor, within our policies, from readers. Guidelines here.