Quick Take
Santa Cruz County is falling far behind its housing goals, with most jurisdictions on pace to meet barely half their targets – or less, write housing advocates Rafa Sonnenfeld and Janine Roeth. The problem, they write, isn’t a lack of planning; it’s that high costs, fees and delays make building financially unworkable. Proven solutions such as faster approvals and lower barriers are already on the table, but action keeps getting pushed years into the future. Every delay deepens the shortage, drives up prices and pushes more residents out, they write.
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Every year, by April 1, cities and counties across California are required to report their progress toward state housing goals. These annual reports track how many homes have actually been permitted or built.
This year’s results across Santa Cruz County felt like an April Fool’s joke. Our current housing cycle runs from mid-2023 through 2031, with a countywide goal of 12,979 homes. We’re on pace to build only about half of what’s needed.
The gaps show up everywhere. Capitola is on pace for just 21% of its goal. Watsonville: 28%. Scotts Valley: 54%. The unincorporated county – covering Live Oak, Aptos, Soquel and beyond, and carrying the largest share of the obligation – is at just 24%. These aren’t small misses.
Taken together, they spell out a countywide pattern: We’re not building enough housing anywhere.
There is one relative bright spot. The City of Santa Cruz has permitted or built hundreds of affordable homes over the past 2½ years, helped by the city’s investments in housing through land dedications and financing, and more flexible housing policies. But even that success comes with a caveat. Roughly half of all households earn above the median income, and when homes priced for them don’t get built, demand doesn’t disappear – it shifts.
People compete for older, more affordable homes, and prices rise across the board. Yet countywide, no jurisdiction is on track to meet even 40% of its goal for homes affordable to people earning above the median income.
At this point, the explanation isn’t complicated. In much of the county, building simply isn’t financially viable: Construction costs, impact fees and permitting delays make it impossible for most projects to pencil out. Even subsidized housing, which depends on limited public funding, can’t move forward without layering in loans, grants and tax credits to close the gap.
Both problems point to the same root cause: The baseline cost of building is too high. Local governments have more control over this than they sometimes acknowledge.
One of the most immediate opportunities is in Santa Cruz, where the city is considering making housing approvals ministerial – “by-right” – for projects that meet objective standards. That change would cut delays, reduce uncertainty and make more projects financially viable. The city has already committed to doing this for 100% affordable housing, but hasn’t implemented it yet.
It should — and soon. There’s also a strong case for extending the same approach to all housing that meets objective standards. Much of the country already works this way. It’s not radical; it’s catching up.
The other steps are equally important: Impact fees alone exceed $30,000 per home and are passed on to buyers and renters. Speeding up permit reviews and inspections, rethinking parking requirements and zoning for more housing in more areas would bring down costs and make building homes more viable.
None of this is new.
In many cases, our local governments have already identified these issues and proposed solutions. What’s missing is urgency. Too many of the most meaningful changes are still years away, with timelines pushed to 2027 or even 2029. Meanwhile, the housing shortage continues to deepen.
We don’t need more time to study the problem. The constraints are well understood, and so are the solutions. What we need now is follow-through. Each year of delay makes housing more expensive and pushes more people out of the community. It means longer commutes, fewer options, and rising prices for everyone who stays.
Until our local governments start implementing the fixes we already know are needed, we’ll keep falling behind.
Until that changes, our annual housing progress reports will keep reading like an April Fool’s joke – only it won’t be funny.
Rafa Sonnenfeld and Janine Roeth are Santa Cruz residents and housing advocates.