Massive UCSC student housing project delayed at least one year as campus grapples with housing shortage

Editor’s note: This story has been updated to reflect an error in information provided to Lookout by UC Santa Cruz. Further explanation of that error can be found here.

The construction of a major housing project that will provide more than 2,900 mostly undergraduate beds on the west side of the UC Santa Cruz campus is delayed at least one year, Lookout has learned.

In an email to UCSC residents in family student housing last month, UCSC Associate Vice Chancellor of Housing Laura Arroyo informed families of the delay for the project, known as the Heller Drive development. 

“As you may be aware, we recently became aware that the Heller construction project has experienced a one-year delay,” she wrote on July 12. “While unexpected, this change has created an opportunity for us to revisit our plans to provide greater flexibility and care.” 

Arroyo had written to the families because their current living space will be demolished as construction of the Heller Drive project begins. Arroyo’s email notified families that they can remain in the current facility longer because the construction is delayed. 

Lookout reached out to UCSC for more information on the nature and duration of and reasons for the delay in construction. 

UCSC spokesperson Scott Hernandez-Jason told Lookout on Friday that construction would begin in 2027, and be completed during the 2029-30 school year – a significant delay to the university’s previously announced plans to have construction completed on the project by 2028.

On Thursday afternoon, Arroyo was unavailable to be reached.  

The Heller Drive project is the second phase of the heavily litigated and controversial Student Housing West. Located on two sites, Student Housing West includes the much larger undergraduate housing project proposed for Heller Drive and a smaller 120-unit family student housing complex located at the base of campus on the southern corner of the East Meadow. Construction for the first phase – the new family student housing complex – began last summer and is expected to be completed later this year. 

The delay comes as UCSC faces growing pressures to build more on-campus student housing to reduce impacts of a worsening housing crisis for residents. For three consecutive years, Santa Cruz has been ranked the least affordable rental market in the country. Given both the campus’ housing squeeze and local housing costs, the project has been pointed to as a pivotal one in addressing the campus’ and the community’s housing shortage.

Multiple groups had filed lawsuits against Student Housing West, which had delayed the project for years, arguing against the university’s environmental and cost analyses for the development. The East Meadow Action Committee fought to prevent any development on the East Meadow, while other groups such as Habitat & Watershed Caretakers argued that the university didn’t have the financing for the project and wouldn’t be able to offer it at affordable rates. 

Despite ongoing legal challenges, the university announced in spring 2023 – after the University of California Board of Regents approved its budget – that it was moving forward with construction, with a projected completion date of 2028. 

Housing has been a major point of contention between UCSC and local government. 

The university has faced lawsuits from the city and county of Santa Cruz as both municipalities have sought further commitments from the university to provide more on-campus housing for its students. In December, UCSC appealed a judge’s ruling against the university’s plans to grow its enrollment by 8,500 students by 2040 – saying the school didn’t adequately address the affordability and environmental impacts the growth would have on the city. 

Santa Cruz Mayor Fred Keeley and state Sen. John Laird, who chairs the California Senate Budget Subcommittee on Education, were not immediately available for comment about the project’s delay. 

Hernandez-Jason also declined to provide Lookout with the current costs of both phases of Student Housing West and how it’s being financed. The board of regents approved a nearly $146 million budget for the family student housing project in 2023. Hernandez-Jason previously told Lookout that campus funds are paying for the child care center while “external financing and auxiliary reserves from colleges, housing and educational services are covering the costs of the family student housing.”

“We are planning to finance [the Heller] project in the way that we’ve financed other housing projects, and expect to have an updated project budget when we bring the project to the UC Regents for review,” he wrote Thursday via email. 

Family Student Housing residents fighting rent increase

Given the delay in construction and the consequent ability for families to stay in current housing longer, UCSC administrator Arroyo also told families, in the July 12 letter, that they could stay in their housing at their current rental rates through the end of June 2026.

Residents living in the existing family student housing complex have been advocating against a $600 monthly rent increase once they’re moved into the new facility. They argue that the nearly $1,900 per month rate they pay currently is already unaffordable for many families. 

Resident Nate Edenhofer said the proposed rate of $2,500 per month in the new facility “is unacceptable.” A politics doctoral student, Edenhofer lives with his wife, Sierra, a UCSC lecturer, and 10½-month-old daughter in family student housing. 

In Arroyo’s email to families last month, she said families will start paying that rate in July 2026. She told families that because the Heller Drive project is delayed, the university can allow families to remain in the existing facility longer than initially planned. 

Many current residents who are graduating over the next year requested to stay in the existing housing while they finish their programs, rather than move to the new facility and then have to move out just a couple of months later. Now, they can stay in the current facility through the end of June 2026. 

In the same email, Arroyo said that by July 2026, when all will have completed moving into the new facility, the new rate will still go into place. She added that once all have moved out of the current facility, it “will then be closed with accelerated movement towards demolition.”

While Student Housing West is the first new major student housing project since 2002, the university has added about 3,300 beds since then by increasing the density of existing housing and adding floors to residential buildings. For example, it has converted numerous two-bed units into three-bed ones, and lounges into bedrooms. UCSC offers housing to about 9,300 students, or more than half of its undergraduate population, a leading percentage among UC campuses.

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