Quick Take
A group of residents has filed a lawsuit against Santa Cruz County over a proposed development at 841 Capitola Rd., while local architecture firm Workbench is going to court over another of its projects, at 3500 Paul Sweet Rd.
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Santa Cruz County has been hit with lawsuits involving two contentious housing developments in Live Oak led by local architecture firm Workbench.
One suit was filed by residents objecting to the timing of a Workbench project; the other was filed by Workbench itself on a different project, claiming its work has been inappropriately delayed.
Last week, days before the county’s planning commission was scheduled to hear Workbench’s proposal for a 105-unit apartment project at 3500 Paul Sweet Rd., the firm sued the commission and the county. Nearly a week before that, a group of residents filed its lawsuit over the board of supervisors’ approval of a separate Workbench project at 841 Capitola Rd.
Both projects use a state provision known as the builder’s remedy, which allows developers to bypass local zoning laws if a jurisdiction is out of compliance with state housing development requirements.
Although the county adopted its housing element in November 2023, the California Department of Housing and Community Development did not certify it until April 2024, according to the county’s website. During that four-month period, the county was out of compliance, which allowed developers to qualify under the builder’s remedy mechanism.
Workbench submitted applications for both projects during that time period, therefore qualifying them for the provision.
Live Oak residents ask courts to clarify housing element certification
A group of Live Oak residents is challenging county officials’ February approval of the 841 Capitola Rd. project, and are asking the courts to clarify that the county’s housing element was already in compliance by March 15, 2024, weeks before Workbench submitted its application.
The board of supervisors approved the project to avoid a costly lawsuit and fines if the matter wasn’t decided in the county’s favor. County Counsel Jason Heath advised the elected officials that pursuing relief through the courts would risk nearly $3 million in state fines and fees, which would come out of the county’s general fund.
Mike Reis, who lives on Grey Seal Road adjacent to the project site and is listed on the lawsuit filed March 17, told Lookout via email that the neighbors’ position is straightforward: The county was in compliance by the March 2024 date, which would disqualify the Capitola Road project from using the builder’s remedy.
“If we prevail, the project will be subject to the same development standards that apply to everyone; it will not be able to bypass them by exploiting a loophole,” Reis said.
Reis previously told Lookout that, according to emails between county planning staff and the state department of housing that he obtained via a public records request, the county was in compliance with state law and the builder’s remedy should be revoked.
However, county staff argued that the state certified the county’s housing element on April 12, 2024, which allowed developers to apply under the builder’s remedy rules from within the four-month period.
At its March 10 meeting, the board of supervisors approved to draft and send a letter to the state housing authority to ask whether it was compliant with the housing code.
“It’s our responsibility to represent the people and not the developers,” Supervisor Justin Cummings said during the meeting. “These are the people who voted for us, not the developers, and they have asked us to exhaust all options and so this is an option for us to exhaust.”
County spokesperson Jason Hoppin told Lookout that the county has yet to receive a response from the state.
Workbench says county is “dragging their feet” on Paul Sweet Road project
Workbench says the county is attempting to avoid the consequences of not being in compliance with the state housing rules and “dragging their feet and refusing to issue an approval” for the 105-unit housing development at 3500 Paul Sweet Rd., in the unincorporated area north of Highway 1.
The firm filed its lawsuit against the county and its planning commission on March 23, days before it was scheduled to be heard by the commission, which led to the project being pulled from the agenda.
In January, the commission delayed any decision on the project, requesting more information about fire standards, evacuation plans, parking and traffic.
Residents living in the nearby Dominican Oaks senior community have previously voiced their concerns over the project, saying it will create “an immediate health hazard” because the site lacks adequate water or sewage infrastructure to withstand a new, high-density population. The project site is also located near Dominican Hospital.
Workbench, in its lawsuit, said this particular case demonstrates why California continues to struggle with a housing crisis. The firm alleges that the county has failed to carry out its responsibilities to adequately plan to accommodate its fair share of the region’s housing needs.
There is no indication regarding next steps or when either lawsuit will be heard by a judge.
“It’s disappointing that taxpayer resources will now be utilized in litigation over projects the county did not bring forward, involving a law the county did not write,” Hoppin said of both lawsuits. “We look forward to a speedy resolution.”
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