After narrow approval of Santa Cruz’s Measure C, Keeley sets sights on addressing concerns of the 46% who voted against it
This year, President Donald Trump has dominated politics, even locally. Supporters of Santa Cruz’s Measure C say federal politics helped the affordable housing measure pass last week.
Turnout was nearly 60% countywide in last Tuesday’s special election, even though there were no major local, state or federal races. Proposition 50, the Democratic statewide redistricting measure meant to counter Republican efforts in Texas, drew some voters who might not have voted in an off-year election. Enough of those voters backed Measure C, which aims to raise millions for homelessness and affordable housing in the city over the next two decades.
In an interview published Monday, Santa Cruz Mayor Fred Keeley, the chief architect of Measure C, tells Hillary Ojeda how Prop 50 helped the city pass its first affordable housing funding measure after several failed local attempts at bonds and taxes.
Yet Keeley argues that beyond the good luck of a major statewide proposition on the ballot, a deliberate strategy drove the long, complex, and at times fraught push to get Measure C on the ballot, one he likens to moving a bill through the state Legislature. “That wasn’t by design. We got lucky on that,” he said of Prop 50. “But all the other decisions were deliberate decisions.”
For one, Measure C was a citizen-led initiative that needed only a simple majority, not a supermajority, to pass. It was on a ballot with no other major local tax measures, mindful that voters are growing weary after many recent measures seeking money for a wide array of public services and amenities, several of which failed to get enough support. Measure B, a competing ballot initiative from the local real estate industry, threw a wrench in those plans, but ultimately did not siphon enough votes to sink Measure C.
Measure C creates a $96 annual parcel tax and adds a real estate transfer tax on sales above $1.8 million, capped at $200,000 per sale. It aims to raise about $4.5 million each year, though a fiscal analysis estimates it might raise closer to $3.5 million annually for the next 20 years.
That steady stream of tax revenue could finance affordable housing in many ways, but Keeley says the plan is to use the money to push developers to include more low- and very low-income units in market-rate projects, rather than build brand-new all-affordable projects. The funding could come sooner than a steady drip over decades. Keeley says the city must now decide whether to borrow against the parcel tax to raise money now, rather than spread it over 20 years. (A small portion of the money will fund homelessness services.)
Yet the vote for Measure C also highlighted the stark divide in the city when it comes to issues of housing and homelessness. Lower-income, renter-heavy neighborhoods strongly backed the measure, while upper-income areas with more homeowners were more skeptical.
Mapping analysis by Lookout’s Michael Zhang shows downtown Santa Cruz and the Beach Flats voted more than 70% in favor of Measure C. It also drew support from parts of Midtown and around UC Santa Cruz. Meanwhile, neighborhoods around Branciforte Drive and DeLaveaga Park, the Westside and Seabright largely rejected it. (Click on the map below to view neighborhood voting data.)
“Affordable housing, to me, is another term for big business coming in, big money coming in and putting in a small layer of something they’re calling affordable and destroying our town,” Seabright voter Paula Castagna told Lookout’s Kevin Painchaud.
Mary, a voter who lives on Center Street and declined to give her last name, voted for Measure C. She wants the money used strictly for low-income housing. “I would like the city council to stop thinking it has to build for everyone in California and maybe reach out to the county to put some of this housing in other places, rather than in downtown Santa Cruz,” she said.
Measure C’s supporters knew the initiative would test the community’s mixed feelings about deteriorating housing affordability and the downtown building boom that is quickly changing the city’s skyline. “We were concerned that for some number of voters, it was the only way since all this development has started for them to cast a vote to say, ‘I don’t like it,’” Keeley said. “We were concerned that this was going to be a proxy vote for that feeling.”
Keeley, 75, has a year left in his four-year term as the city’s first full-time mayor and says he has no plans to run again in 2026. He acknowledged that his final year in office will have to be spent answering some of the concerns of the roughly 46% of city voters who didn’t support Measure C. “What I’m saying is: For my remainder of the term, I will try to get what I think it is you’re looking for, which is, you’re looking for more affordable housing and deeper affordability,” he said. “I don’t think there’s a debate over that.”
POINTS FOR PARTICIPATION
Capitola city boundaries: Should the city of Capitola grow its boundaries and annex the neighboring communities of Opal Cliffs and Pleasure Point? That was the question the Santa Cruz Local Agency Formation Commission, which oversees city boundaries across the county, asked Capitola to study.
The answer, according to a consultant’s report that the city council is set to consider on Thursday, is likely no.
The city of Capitola covers about 2 square miles and has about 9,600 residents. Annexing unincorporated areas of the county to the north near the Capitola Mall, along with Opal Cliffs and Pleasure Point, would nearly double the city’s population by adding more than 8,000 people.
By folding those areas into the city boundaries, Capitola would take responsibility from the county for providing a host of services to residents there, including policing, parks and recreation, street maintenance, lighting and garbage collection.
While the study by consultant RSG found that annexing the neighborhoods would add more tax revenue to city coffers, it would not be enough to pay for the increased service demands. Police calls could rise 11% to 12%. Street work could grow 22% to 36%. The number of parks the city maintains could more than double in some cases. The report also said the city would likely need more staff, and possibly new public works projects.
The study was prompted by a routine 2022 review of Capitola’s “sphere of influence” by the Santa Cruz Local Agency Formation Commission, or LAFCO, which asked the city to study whether annexing nearby neighborhoods would be financially and operationally feasible. LAFCO gave the city a deadline of May 2027 to submit the analysis.
Thursday’s presentation is the first step in a longer discussion about whether expanding Capitola’s boundaries makes sense.
41st Avenue corridor plans: Capitola’s city council will also hear about community feedback on Thursday from a series of recent meetings and surveys on its plan for the 41st Avenue commercial corridor.
Among the concerns and ideas that came out of public consultation, residents want the city to reduce traffic congestion and make 41st Avenue safer for people to walk, bike or ride the bus, including better crosswalks, and to reduce cars speeding near Highway 1 and Clares Street. Neighbors also want the city to make 41st Avenue a more attractive and welcoming place, with better landscaping, public art, outdoor seating and places to gather.
The council will not vote on plans to update the avenue at its Thursday meeting, but it is set to provide direction to city planners so they can draft the next stage of the corridor plan.
A new dog park for Scotts Valley: Scotts Valley’s Parks and Recreation Commission is set to review designs for a new dog park at a special meeting at 6 p.m. Monday.
Al Shugart Park, an overgrown field adjacent to Stiltanen Park, will eventually become Scotts Valley’s newest dog park. The city has been planning to redevelop the 7-acre park since 2008, including building a pedestrian bridge and access between Siltanen Park and Glenwood Drive. But much of the plans for the dog park sat on the shelf for years because of limited funding.
Now, the city wants to finish the park plans. An updated design from consulting firm Verde Design includes two off-leash fenced dog areas, one for small dogs and one for large dogs. It also includes dog waste stations, benches, picnic tables, bike racks, bathrooms, drinking fountains with pet bowls, agility course features and a walking path around the park. The city’s Parks and Recreation Commission is set to give feedback on the design.
Coastal resiliency: The City of Santa Cruz is holding its third open house on Thursday at the Santa Cruz Museum of Natural History on how to plan for a future of rising seas and storms that are quickly reshaping the city’s coastline. City staff will share maps, answer questions and take in community feedback. Visitors can also try a virtual reality display. The goal is to create a long-term plan to protect beaches, cliffs, and coastal neighborhoods. The open house runs from 5:30 to 7:30 p.m. on Nov. 13.
OF NOTE
Battery storage rules: Santa Cruz County released a new draft battery storage ordinance ahead of a Nov. 18 hearing on the issue, adding restrictions on where such projects can go, increasing setbacks, banning certain types of batteries and requiring air and water reports from developers of such facilities, following the January blaze in Moss Landing.
In Watsonville, however, city councilmembers say they want a seat at the table as the county writes its new rules for battery storage facilities. Several members of the city council sent a letter to the county flagging safety, air quality and agricultural impacts tied to a proposal by Massachusetts-based New Leaf Energy to build a battery storage facility site just outside Watsonville’s city limits. County Supervisor Felipe Hernandez told Tania Ortiz that he welcomes input and wants to preserve local control.
Food banks see surge in demand: Local food banks have seen a sharp rise in people needing food after a pause in federal SNAP benefits. To meet the demand, Second Harvest Food Bank Santa Cruz County has added more distribution sites and doubled the number of volunteer shifts, Lily Belli writes.
Santa Cruz city workers reach tentative deal: City of Santa Cruz workers are set to vote Wednesday on a tentative agreement with the city that includes a 13.5% pay increase spread over three years, Max Chun writes. It also provides extra pay for workers who are bilingual or have worked for the city for many years, and paid leave for workers who experience traumatic events on the job. Union members still need to vote before the deal becomes final. City officials and workers say the agreement is a step toward easing staffing shortages.
Watsonville’s battle with its trade unions continues: The Watsonville City Council voted 4–3 last week to end the city’s project labor agreement, which sets rules for wages and labor on city construction projects. The decision came despite opposition from the Monterey/Santa Cruz Building & Construction Trades Council. Councilmembers who supported the change said they need to exempt wastewater projects from requirements to use unionized labor so they can receive more competitive bids on such projects. The vote sends the city and the trades council back to the drawing board to negotiate a new agreement.