How people afford to live in Santa Cruz County’s costly housing market

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After three decades of living in Santa Cruz, Heather Donovan sees a bleak future for her 14-year-old daughter. She has come to accept that although the area was an ideal place to raise a child — with ample public spaces, beaches and good schools — her daughter simply won’t be able to afford living here as an adult.

“It’s very heartbreaking for me because … we want a good future for our daughter, and it’s hard to envision that,” Donovan said.

Donovan, who currently lives in Aptos and works for UC Santa Cruz, has rented in the area for years since graduating from UCSC during an era when students could still find housing on campus for their entire university career. Since then, she’s watched opportunities to be a first-time homeowner slip away. She points to the region’s vacation rental market, which she said “kills our neighborhood,” and wealthy tenants with remote jobs who price out local, middle-class families like her own.

With homeownership being one of the most reliable ways to build wealth in America, Dovovan believes she will be at a constant disadvantage, unable to borrow against the equity in a house to pay for her daughter’s college or to finance retirement.

At this point, she said, it’s hard to picture a Santa Cruz where the middle class survives, much less thrives.

“We’ve been not only priced out of Santa Cruz, but pyramided out of Santa Cruz,” she said.

This month, Santa Cruz County was named the nation’s least affordable rental market for the third consecutive year — with renters now needing to earn $81.21 per hour to afford a typical two-bedroom apartment, up from $77.96 last year.

Interviews with Santa Cruzans paint a grim portrait of what it takes to endure the region’s growing affordability crisis. From sharing spaces with housemates to relying on benevolent landlords or receiving monetary and other support from family members, people are doing what it takes to make ends meet across the county.

Darren Miller is an artist who lives in government-subsidized housing on Mission Street through Section 8, a federal program that awards people housing-choice vouchers to cover any rent that exceeds 30% of their income. He’s been in Santa Cruz since 1999 and benefited from Section 8 since he was laid off from his job roughly 20 years ago. 

He became disabled during that time and has been working on and off since. Miller said his disability made him one of “the fortunate ones” because his social worker connected him with the county’s Section 8 program. 

“I’m in this sort of secure bubble as long as I don’t move,” Miller said. “But God help me if I move.”

Miller worries that the people who contribute the most personality to the town, such as artists, musicians and surfers, are being slowly drained from the area. He fears that an increasingly “homogenized” Santa Cruz could become the next Carmel — a place where wealthy residents buy expensive art from artists who can no longer afford to live here.

He’s had friends recently move to Bakersfield and La Selva Beach, the latter unable to afford rent in Santa Cruz after their house in the mountains burned down. 

Others said they’ve seen friends move away, too, in a drawn-out exodus that Rachael Shelton, a commercial property manager who lives in Aptos, said has taken some of her walking buddies to communities in Petaluma and Oregon. She said most of the people who have left did so to provide a better life for their families. 

“They love being here, but, at the same time, if there’s more security in a place where [the] cost of living is lower and they can do more for their kid, they’re going to move,” Shelton said.

Meanwhile, Shelton’s friends who stay are paying $1,200 to share a room, looking at studio apartments for $3,400 or living with housemates and family. Shelton currently lives with her brother and roommates, but they have a big enough space to cohabitate comfortably, she said. 

At her job as a property manager, she’s seen Santa Cruz become financially inaccessible for anyone looking to rent or buy a commercial space, saying it’s brave to start a brick-and-mortar business these days. With property taxes increasing sometimes as much as seven- or eightfold every time a building changes hands, the costs for small businesses skyrockets quickly, she said.

Downtown resident CMA Medeiros said it was “sheer luck” that she found a landlord who charges just enough rent to meet property tax obligations and who keeps the monthly costs for tenants below market value. “They don’t want to gouge the people of the community,” Medeiros said.

Medeiros still has to work two part-time jobs, along with side hustle working for herself, in order to afford everything, but the lower cost of housing is a tremendous help, she said. Her next door neighbors pay $4,000 for a one-bedroom apartment, while her home costs half as much. 

It’s her hustle that keeps her afloat, making sure that she’s working enough to break even each month. One of her employers is Cabrillo College, and although she’s never had to use services such as the school’s food pantry, she takes comfort in knowing resources like that exist.

Melanie Toms volunteers at Grey Bears, an organization focused on providing healthy meals and groceries for seniors. She moved to Santa Cruz from Australia and lives with her husband, who is retired and primarily lives on Social Security, in a mobile home. He receives weekly grocery deliveries from Grey Bears, which Toms said helps them greatly.

Toms hasn’t been able to work beyond being a caregiver, since she hasn’t been able to get a U.S. green card. The couple rents the land their mobile home sits on, and their landlord requires them to perform maintenance on the property, including trimming their trees and paying for their own repairs. Rent for the space keeps going up, too, she said.

Some people are able to afford their way into the housing market through family members helping them out financially.

Longtime Felton resident Vero Shane-Vasquez said she feels fortunate that she and her wife and son have family support and inherited wealth that allowed them to afford to buy a home. 

She and her wife both work at UCSC, and her mother-in-law watches their 7-year-old son. Shane-Vasquez said offsetting child care costs is what allows them to afford living where they do. 

The couple also try to spend their money on cheaper, local food options such as farmers markets, and try to put dollars back into the community as much as they can.

Donovan said she has watched as vacation rentals price local residents out of her Aptos neighborhood. She said she’s seen it over and over again where bidding wars quickly drive up the price of homes, only to see a property’s new owner open it up as an Airbnb because it’s more profitable than long-term leasing. 

“It’s really changed the dynamic, in my opinion, in Santa Cruz,” she said.

Donovan used to see a pretty even split among locals, university students and visitors, but now, she believes the balance has shifted in the direction of tourists.

“Nowadays I don’t see that even split,” she said. “I’m seeing a situation where it’s very hard for locals from a certain income bracket to be able to stay here and support our community’s economy.”

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