Quick Take
In a 2½-hour forum hosted by Lookout, panelists offered lively takes on the question of the evening: "Can Santa Cruz County control its housing destiny?" With the in-person crowd clearly mixed on the prospects of high-density development, Workbench developer Sibley Simon seemed to dismiss the likelihood of the 18-story Clocktower proposal in downtown Santa Cruz ever being built. In the first hour, local officials Manu Koenig and Sandy Brown debated the value – and difficulties– of the state’s housing mandates with state Sen. Scott Wiener.
A capacity in-person audience of 200, with about 450 more online via Lookout’s Facebook Live feed, gathered at Santa Cruz’s Hotel Paradox on Wednesday evening to address certainly the most urgent and exasperating community issue of our time: housing — its affordability, its density, and who should decide how and where it should be built.
The housing forum, organized by Lookout and co-hosted by local nonprofit Housing Santa Cruz County and sponsored by KAZU, attracted three prominent elected officials — state Sen. Scott Wiener of San Francisco, a leading voice in the state’s controversial efforts to push local communities to build more housing, alongside First District Santa Cruz County Supervisor Manu Koenig and Santa Cruz City Councilmember Sandy Brown. After the three elected officials debated government’s role in housing policy, moderated by Lookout politics and policy correspondent Christopher Neely, the second half of the event featured housing developer Sibley Simon in conversation with Neely highlighting the often-frustrating realities of building new housing in Santa Cruz County.
The hot-button issue of the evening for many: the 18-story Clocktower development proposed in March by Workbench, where Simon is a partner. Simon surprised the crowd by saying he thought the controversial project would have a very hard time getting to the finish line, “I don’t see anyone figuring how to do a 16-story building in Santa Cruz for a good long while,” he said, citing bureaucratic hurdles and difficulty on such a project making financial sense to developers.
As outlined at the outset by moderator Neely, the theme of the evening was straightforward: Can Santa Cruz County control its housing destiny? The state of California has issued mandates to municipalities based on Regional Housing Needs Assessment (RHNA) calculations, and Wiener articulated the case for the state’s mandates forcing local jurisdictions to build large volumes of new housing units.
“The changes that we’ve made have not been about taking cities out of the equation,” he said, “it’s to make sure all cities and communities are playing their role.”
Drawing a broad historical perspective, Wiener said that cities and communities have been regularly building housing according to need from the beginning of human civilization “to about 50 years ago.” At that point, he said, no-growth policies interrupted the natural cycles of population growth and housing construction.
“This is what happens when you don’t build a lot of housing for 50 years,” he said. “You have a massive shortage. It took us 50 years to get in this hole. I get it. The politics are hard. I hope it doesn’t take us 50 years to get out.”
Both Koenig and Brown took an adversarial tone to Wiener’s comments. “It feels like we’re being micromanaged by the state right now,” said Koenig. “The process is overly bureaucratic,” he added of the county’s efforts to conform to the state’s RHNA demands. “There’s a ton of our staff time just devoted to trying to interpret these state laws.”
Koenig also sought to illustrate what he sees as the frustrating costs and incentives of building new housing.
“It’s frightening the point we’ve gotten to,” he said. “It’s so expensive to build and it takes so long, and we are so constrained that [in some cases], even if we give away the land, we’re not going to be able to build anything.”
For her part, Brown flatly challenged the idea that the laws of supply and demand make any rational sense in the situation that Santa Cruz finds itself in. “The market is not going to create [a solution to the problem],” she said. “I reject the idea that more supply is going to increase affordability in our community. This supply side logic just doesn’t work for local communities.”
The evening featured its share of housing jargon, most notably the term “penciling out,” which refers to the real-estate developer’s financial incentives to build and turn a profit. Brown singled out the idea of “penciling out” for criticism. “I’m not demonizing developers,” she said. But she suggested that an expected rate of return of 20 to 25% on development projects was at the root of much of the problem.
In the second half of the evening, Sibley Simon offered a different perspective, that of a housing developer whose first and only priority, he said, is to build as much housing as possible. He claimed that other states and other regions don’t have the burdensome regulations and high fees that are required for rebuilding in Santa Cruz.
“The rules are incredibly byzantine,” he said. “We are spending so much of our time dealing with rules put onto rules, put onto more rules. You have to spend hours with this stuff.”
Responding to a question about how increased housing inventory might influence Santa Cruz’s character, he said, “The No. 1 thing I value about the city who gets to live there,” adding that the city’s proximity to the mighty job engines of Silicon Valley and the continuing enrollment of more and more students at UC Santa Cruz are going to continue to exert pressure on the local housing market.
Still, Simon said, he wants to see more and more housing, even if it means high rises in downtown Santa Cruz. “The tallest building downtown is 95 years old,” he said in reference to the El Palomar building on Pacific Avenue. “I don’t want to go an entire century without Santa Cruz going just a little bit taller than that. But that’s just me.”
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