Measure M — Santa Cruz’s height limit and affordability measure — is the Measure of Much Debate, Many Questions and Murky Answers

Wanting to encourage rooftop activation on new buildings, city planners asked the Santa Cruz City Council in October to allow an additional 15 feet in height for certain downtown projects that offered rooftop decks, bars, swimming pools and other top-floor amenities. Staff also wanted to change a rule to allow hotels to exceed the 50-foot height limit and build up to 70 feet along Front Street between Soquel Avenue and Laurel Avenue, the current epicenter of the ongoing downtown renaissance. The hotel change was aimed directly at the Cruz Hotel project, but city staff said, broadly, the changes aligned the city policies to have a “mix of uses … as a means to support economic and cultural activities.” 

The city council signed off on these and a handful of other land-use changes in the area. Despite the lack of fanfare, the decision marked a milestone: It could be the last vote the Santa Cruz City Council ever takes on increasing building height within the city. And, in fact, that vote might end up not even counting. Whether that is true will depend not only on how voters treat Measure M this primary election, but how it’s interpreted by the community, lawyers, judges and beyond. 

Measure M asks voters two questions: 1. Whether they support changing City of Santa Cruz law to prohibit increases in allowable building heights for all projects throughout the city without prior voter approval. 2. Whether they support requiring developments with 30 or more housing units to reserve at least 25% of those units (an increase from the existing 20% requirement) as subsidized, affordable housing. 

Measure M began last summer as a petition authored by Housing for People, a group led by retired county planner Frank Barron, retired environmental scientist Susan Monheit and educator Keresha Durham. Housing for People spawned in response to the city’s planned downtown expansion, which first envisioned residential towers as tall as 17 stories and a new, permanent Santa Cruz Warriors basketball arena in the area south of Laurel Street. The idea of relative “skyscrapers” sent some panic through parts of the city, and the city council eventually knocked down its plan to 12 stories. 

Still, Barron, Monheit and Durham felt the city’s elected leaders and planning staff had left the community behind in chasing a vision of a hyper-developed Santa Cruz that seemed unrecognizable from the beach town they knew. They thought residents should get to dictate whether the city welcomes skyscrapers. That message struck a chord with locals. Housing for People’s petition collected nearly 6,000 valid signatures in only a few months — veritable warp speed in petition time — to qualify the initiative for the March 5 primary ballot. 

Although the intended spirit of the measure is clear — direct democracy and greater affordability — Measure M remains the Measure of Much Debate, Many Questions and Murky Answers. Measure Maybe, perhaps. 

As in, maybe its language could be construed to inadvertently require a citywide vote for more minor code adjustments like fence heights or setback changes; or, maybe no judge would reasonably interpret that as the measure’s intent. Maybe its proposed 25% affordability requirement will be a force for low-income housing; or, maybe it will stymie future development and bring fewer affordable units. Maybe Measure M makes the Downtown Plan Expansion infeasible; or, maybe it’s only a small obstacle to a new vision for the city’s center. Maybe the measure will backfire, and its new restrictions on development will attract the wrath of the state’s housing czars, which could turn Santa Cruz into a developer free-for-all. 

“I’m very happy to say, as an attorney, that I didn’t write this thing,” former county supervisor and prominent Measure M endorser Gary Patton told Lookout last week. Yet, Patton is fully behind what he and many others understand as the initiative’s intent: to allow people to vote on tall buildings and require more affordable housing. 

But despite broad support and a fiery opposition, people on both sides, and even those allegedly neutral, admit some uncertainty around exactly what happens if Santa Cruz voters say yes. 

Let’s talk about height

For an urban planner needing to fit many housing units within a small area, tall buildings offer an easy answer. For a longtime resident of Santa Cruz who fell in love with the slow-paced, spaced-out atmosphere of the pre-dot-com-boom beach town, tall buildings, whether 12 stories or 20, might represent something more sinister — an erasure of a way of life, of a city’s identity. 

“These heights are a dramatic departure from the iconic beach town, branded for sun and fun, that makes Santa Cruz renowned,” Susan Monheit wrote in a September op-ed in Lookout’s Community Voices opinion section. 

If Measure M passes, both sides agree, any project proposing a taller building than what existing zoning allows could proceed only if a majority of Santa Cruz voters support it through a citywide election. This rule would apply to any project within the city of Santa Cruz boundaries, from the downtown expansion plan area out to Swift Street, into single-family-housing neighborhoods and out to West Cliff Drive. 

Former city planning commissioner Cyndi Dawson, who has not decided how she will vote, said Measure M is “clearly a symptom of people feeling like they’re not part of the process.” 

“The pendulum of power has been in the hands of staff for a long time [as opposed to elected officials],” Dawson said. “When that happens, people feel like they know less and less about what’s going on because it happens outside of public view. Whether you agree with the measure’s content or not, the fact that nearly 6,000 people signed the petition should be a real wake-up call to the city’s leadership that they are way ahead of the people who pay them.” 

A cap on allowable heights will not necessarily stop tall buildings, such as the nearly completed 207-unit, six-story Anton Pacific apartment development at Laurel Street and Pacific Avenue, from coming into town. Nor will it necessarily stop developers from building taller than current zoning limits. Thanks to what is known as the state’s density bonus law, developers are given the right to add a certain amount of extra units to a project proposal in exchange for certain affordability commitments. The state allows developers to build as tall as they see fit to accommodate those additional units, even if that means exceeding local height restrictions. 

This means that even if Measure M passes, 12-story buildings could still be a reality for the downtown expansion plan; however, the height would have to come as part of a state-granted entitlement instead of a city council vote. 

Santa Cruzans can look at the Food Bin development approved at 1130 Mission St. as a recent example. The five-story, 59-unit project will stand out as an exceptionally tall building among the low-risers of Mission Street, but the developers committed to a certain number of affordable units; state law then granted additional density and thus extra height above what is allowed. 

Even if state law gives developers some padding around height local restrictions, the risk of voters tanking a would-be project weighs heavily on developers who might have projects in the bullpen. Kris Reyes, spokesperson for the Santa Cruz Seaside Company, which owns some prominent lots in the Downtown Plan Expansion area, said Measure M creates too many hurdles for development. 

“Measure M … is a deeply flawed ballot measure that if passed will make building affordable housing even harder,” Reyes said via email, “and burden the city with expensive, unnecessary elections long into the future.”

In an analysis commissioned by the city last year, real estate consultancy firm Keyser Marston Associates found that these elections could cost anywhere from $115,00 to $185,000. However, city attorney Tony Condotti said the city likely wouldn’t be footing the bill. If the city is proposing a height change to accommodate a specific project, he said the city “would expect the developer to fund that cost [of the election].” 

Although tall buildings won’t have an impossible path, Measure M dampens the likelihood of 17-story projects coming before voters any time soon. 

What about the 7-foot fence? 

Somewhere along the monthslong debate over the impacts of Measure M, the fear of skyscrapers turned into a fight over 7-foot fences. 

An op-ed published Nov. 30 in Lookout’s Community Voices opinion section by Measure M opponents Don Lane, Diana Alfaro and Elizabeth Madrigal claimed that the initiative’s clumsy wording would make it so that elections are required for more than just tall buildings. The authors claimed that a property owner who wants to exceed the 6-foot fence height limit by even a foot would trigger a citywide election. 

Under Section 4 of the resolution to codify Measure M if passed, the language reads as follows: “No amendments to the general plan or zoning ordinance that would increase allowable height limits or floor-area ratio for development projects shall be adopted without a prior vote of the people approving the proposed increase.” 

The city’s code defines the term “development projects” as, essentially, anything requiring a construction permit. This extends from “skyscrapers” to fences. On its face, Measure M, by prohibiting increases to “allowable height limits … for development projects” without a vote, includes fences. 

That issue has already come before the city and is now apparently resolved. Individual property owners seeking a 7-foot fence can do so with a waiver, Santa Cruz Assistant Planning Director Eric Marlatt told the city’s planning commission Nov. 30. Smaller individual requests do not require changes to the zoning ordinance or general land-use plan, and that would continue under Measure M.

Yet, even if individual requests won’t trigger an election, if the city wanted to amend its zoning ordinance or general plan to increase allowable fence heights more broadly across a certain residential or commercial zone, this could require an election. The resulting questions – those many and murky questions – can already be outlined. Would the city actually call an election? Would the city actually be challenged or even sued to call an election? Would a judge interpret the measure’s language to actually require an election? Each is a significant and unknowable question that cannot be answered until tested, according to multiple attorneys with whom Lookout spoke.

Condotti said the result is that the city would likely stay away from “adopting any new regulations that deal with the heights of any structure.” 

“Litigation is expensive and a bad way to figure out the meaning of statutes, but, ultimately, statutes can be clarified by litigation,” Condotti said. “I don’t think we can say for certain how things are going to play out with this. We either have the measure and we go forward, or we don’t have the measure and we go forward. We can’t test out both scenarios at the same time. That’s just the reality.” 

Patton admitted that the language is sloppy and could welcome a range of interpretation. However, in his experience as a land-use and environmental attorney, he said he believes the courts will rule based on the true intent of the measure and not unintended consequences and interpretations. 

“Those who are saying it’s unclear and the fence argument could apply, they have a point, they’re not completely off the wall,” Patton said over the phone. “But I think it’s a bogus concern. The public should focus on the real arguments, not get off into a hypothetical maybe. I don’t think that interpretation has any chance of swaying a court.” 

Undevelopable affordable housing?

Seated on the patio of Santa Cruz Coffee Roasting Company on Pacific Avenue downtown, Barron points in the direction of the new six-story, 207-unit Anton Pacific building at Laurel Street and Pacific Avenue, and explains how yet-to-be-listed units in that apartment are rumored to be going for nearly $4,000 monthly for a one-bedroom.

“So, that’s going to be typical — Santa Cruz is in a very unique situation,” Barron said. “The laws of supply and demand don’t really work here because we’re a world-class beach town, we’re in the middle of San Francisco and Big Sur, and we have the world’s largest economic engine in Silicon Valley 45 minutes away.” 

Barron argues that Measure M is “not about capping growth.” Projects like the Anton Pacific building — those that reach in the six-to-eight-story range — are coming to Santa Cruz under existing zoning. 

“There’s going to be a ton of density under existing zoning, and in the [Downtown Plan Expansion] area,” Barron said. “We’re just saying, let’s have a vote before we agree to put up these skyscrapers.”

As Barron spoke, a bespectacled, middle-aged woman led by her miniature dog overheard the conversation. As she slowed down, she held her fist up in the air and meekly announced her support for the initiative. 

“Yes on Measure M,” she said a couple times before continuing on. Only a few minutes later, real estate consultant John Swift, face hidden behind sunglasses and a Monterey Jazz Festival hat, saw Barron and stopped by the table to say hello. Swift quickly reminded Barron that he’s strongly against Measure M. 

“Where do I even start?” Swift said. He said he supports keeping land-use power in the hands of directly elected city councilmembers, who have already seen their powers steeply minimized by a state government hungry to see more housing developed. Although Swift said he disagrees with the proposed height restriction, the 25% affordability requirement is what will really harm development. 

“If 25% of the units are going to be required to be sold at a loss, what do you think is going to happen to the cost of the remaining 75%?” Swift said. “There are so many costs dumped on development. I think [Barron’s] position would be, well, look at all the costs development is dumping on the community. It’s both. We all want affordable housing, yet we continue to make the cost of building so high. It’s a balancing act. I support one balance, [Barron] is arguing for another balance. So, we’ll see what happens. I hope he loses.” 

If Measure M passes, it will be the second time in four years that the City of Santa Cruz has increased its affordability requirement on new development. The city council approved a bump from 15% to 20% in 2020. 

California communities today exist in a new housing reality, in which the state government has called for cities and towns to permit unprecedented levels of new housing units. Between 2015 and 2023, the state mandated Santa Cruz produce 747 new housing units of varying affordability. Over the next eight years, the state wants to see 3,736 more units in the city. 

There has been much hand-wringing over whether higher affordable housing requirements actually secure more affordable housing or stymie development. However, these new housing mandates are motivating cities to reexamine possible barriers to development. Last year, leaders in San Francisco took aim at its affordability requirements. For already proposed projects, the city slashed its affordable housing requirements in half. These developments now have only to reserve either 12% of the onsite units as affordable (down from 22%) or provide the equivalent of 16% of the project’s units in fees or off-site affordable housing. Over the next three years, new projects will have to build only 15% on-site affordable housing, or the equivalent of 21% in fees or off-site. 

“An analysis conducted by the Controller showed the current inclusionary housing levels set in 2017 make the construction of new housing infeasible,” Mayor London Breed’s office wrote in a news release. “By setting these requirements based on data, San Francisco can remove a significant barrier to housing being built.” 

Santa Cruz doesn’t have an independent controller to analyze its policies; however, the independent consultant Keyser Marston analyzed the impact of increasing the affordability requirement to 25%. While developer budgets are often cloaked from public view, KM’s bona fides derive from having access to developer pro formas and housing economic data. That has helped Keyser Marston analyze affordable housing rules for 37 jurisdictions over the past 25 years. In its report, it analyzed different rental and ownership development models to test the proposed 25% requirement. 

“A 25% inclusionary housing requirement could not be supported by any of the apartment prototypes,” KM concluded. It also found that since the city increased its rate from 15 to 20%, only one apartment building with a mix of market-rate and affordable housing has commenced construction. The rush of development Santa Cruzans see around them today are either 100% affordable projects, or those tied to the old 15% inclusionary rule. 

Don Lane, board chair for Housing Santa Cruz County, has taken up the mantle of leading the opposition to Measure M. His motivation, he said, is based solely on the impacts of the 25% affordability proposal. 

“By throwing in this 25% thing into the measure, it drew a lot of people out in a negative way,” Lane said. “If it was just tall buildings, I probably still wouldn’t have supported it, but I wouldn’t have jumped into the opposition campaign.”

Lane, who served as mayor before he began his work with Housing Santa Cruz County, said he is concerned not only that development will slow and the community will, in effect, develop even fewer affordable housing units, but also that the state could respond by imposing what’s known as the “builder’s remedy” on Santa Cruz. Builder’s remedy — the state’s way of stimulating housing development in an overly restrictive local regulatory environment — would essentially rubber-stamp any development with a certain level of affordability, without regard for local zoning or design standards. When people talk about the state’s new teeth in mandating housing development, the builder’s remedy is among its sharpest incisors.  

However, such a drastic measure could be put into effect only if the state decertified the city’s housing element — the formal local plan to fit the mandated 3,736 new units by 2031. Santa Cruz Planning Director Lee Butler told Lookout that, if Measure M passes and strains development, it’s unlikely the state would decertify the housing element for the 2023-31 cycle. However, if fewer housing units are coming online, builder’s remedy could become a reality in the 2031-39 cycle. Butler said, regardless of any new local regulations, he and the city’s planning staff will be “working very hard to make sure decertification doesn’t happen.” 

“Would [the state] take that step of decertifying our housing element if we were really trying? I would be putting forth the effort so that decertification will not happen,” Butler said. “Does that mean it wouldn’t happen? I can’t say that.” 

What if the 25% affordability requirement is too much for developers to swallow, and housing development does slow down? City attorney Condotti said any regulation passed through a ballot measure can be amended only by passage of another ballot measure. 

Barron understands the concerns about Measure M and a possible slowdown in housing development and the consequences of builder’s remedy. However, he said he maintains a belief in the Santa Cruz electorate. 

“If it got to the point where the 25% was found to be a true hindrance, the city council could just put it on the ballot themselves,” Barron said. “The [importance of passing it] would be something that can be easily conveyed to the people, that, OK, we’re at a point where the housing element is about to be decertified or whatever. But honestly, we’re nowhere near that.”

Have something to say? Lookout welcomes letters to the editor, within our policies, from readers. Guidelines here.