In the Public Interest: As Santa Cruz County faces a mandate of fourfold increase in new housing, all stick, no carrot from state

California Attorney General Rob Bonta holds a news conference in April.
(Gary Coronado / Los Angeles Times)

In this edition of In the Public Interest, Christopher Neely delves into regional housing allocation numbers, how many new units Santa Cruz County and its cities are expected to build by 2031 and the state of California’s approach to making sure those goals are met.

This story was originally featured in this week’s In the Public Interest newsletter from Christopher Neely. Be first the first to hear about politics and policy news in Santa Cruz County — sign up for Christopher’s email newsletter here.

Last week, California Attorney General Rob Bonta announced that his office will be suing Huntington Beach after the city council in the Southern California community rejected a state-mandated plan to permit 13,000 additional units in the city over the next eight years. The conservative-led city council refused to play ball, believing it needed to shield its community, where the median home sale this year is $1.2 million, from the state’s aggressive attempts to address a worsening housing crisis.

Since coming into office in 2021, Bonta has vowed to use the full power of the state to compel California cities and counties to add their fair share of housing, a stark change from the slap-on-the-wrist of the past. The Huntington Beach lawsuit will set the stage for jurisdictions across the Golden State, including Santa Cruz County and its cities, as they develop their own plans to add unprecedented levels of state-ordered housing. The City of Santa Cruz’s planning commision will vote Thursday on the city’s first draft of its plan to permit more than 3,700 additional units by 2031, ahead of a city council vote on April 25.

First, let’s get smart on some key terms. The more than 3,700 units the state wants Santa Cruz to add are considered the city’s regional housing needs allocation, or its RHNA number, (pronounced “reena”). Every eight years, the state’s Dept. of Housing and Community Development decides how many new housing units are needed throughout California. It then determines each region’s fair share of new housing stock before handing down RHNA numbers across the state. This program began in 1969 and the latest period, covering 2023-31, is the program’s sixth cycle.

The RHNA number is then divided among a region’s cities and counties by a regional government association. For Santa Cruz, this is done by the Association of Monterey Bay Area Governments, or AMBAG. Once cities and counties learn how many new units they need to fit, local governments must draft what is known as a “housing element.” Housing elements are state-mandated, local plans which aim to prove, to the state, that the jurisdictions can reasonably permit the required housing units by the end of the eight-year cycle. The housing element is what Huntington Beach voted to reject and what the Santa Cruz City Council will take up later this month.

In Santa Cruz County, and jurisdictions across the state, the multifold increase of housing required in the latest RHNA cycle reflects the urgency of California’s crisis. Between 2015 and 2023, the county and its four cities were called on to permit just 3,044 total new units. This time around, the state wants to see 12,979 units, a more than fourfold jump from the previous cycle. The City of Santa Cruz alone will need to permit 3,736 units, and 4,634 new units will have to fit in the unincorporated parts of the county (anywhere that isn’t Santa Cruz, Capitola, Watsonville and Scotts Valley), while Watsonville will need to find room for 2,053 units.

An artist's rendering of the completed mall renovation project.
An artist’s rendering of the completed Capitola Mall renovation project.
(Via Capitola Mall)

In the previous cycle, Capitola and Scotts Valley were called to add 143 and 140 new units, respectively. The new mandates are greater by an order of magnitude: 1,336 units for Capitola, 1,220 for Scotts Valley. This poses significant challenges for Capitola, a town of only about 2 square miles and already fairly densely developed. Katie Herlihy, Capitola’s community development director and lead on the housing element, says Capitola tried unsuccessfully to push back on its number.

“The way these numbers were assigned, we feel strongly they should have taken land area into consideration,” Herlihy tells me. Yet, Herlihy says she is confident the city can draft a housing element that proves to the state it can fit its 1,336 units. Capitola’s housing element will lean heavily on the Capitola Mall redevelopment, which Herlihy says could yield 850 units, and redevelopment along its corridors and commercial districts, with some fractional progress coming through accessory dwelling units in the neighborhoods. Without rezoning any parcels, Herlihy says the city has the capacity to add about 1,600 additional units.

That buffer is razor thin compared to the city of Santa Cruz. Matthew VanHua, a principal planner leading Santa Cruz’s housing element process, says the city can prove it has capacity for 8,304 new units without making any changes to its zoning (a big part of that is the prospective 1,600-unit South of Laurel project in the works). That number sounds large, but the state’s housing crisis has VanHua viewing it differently.

“Our RHNA target in future cycles is probably never going to get smaller,” VanHua said. “We’re going to have another eight-year cycle in the future. The capacity is great now, but it’s going to be important that we increase our capacity in the future.”

The county and its four cities will need to have their housing elements approved by the state before the end of the year. Once approved, additional units that are permitted will begin counting against the roughly 13,000 required throughout the county. Aside from the city of Santa Cruz, which plans to send its first housing element draft to the state at the end of the month, the county and its cities will be developing their plans over the next few months, setting the stage for public debates over where officials expect all this housing to go.

Meanwhile, actions by AG Bonta have put local officials on notice that the state’s top prosecutor is committed to helping California out of its housing crisis by using the stick of law enforcement.

The Huntington Beach lawsuit is a real test of that commitment, and both sides have much to lose. A Huntington Beach victory diminishes the AG’s office’s perceived power in enforcing housing policy. If the state prevails, Huntington Beach could lose local control over housing developments, and the court could come in and begin approving projects without any say from residents or local decision-makers.

“We’re definitely paying attention to the deadlines,” Herlihy said.

Of Note

Toadal Fitness' Lincoln Street location in downtown Santa Cruz.
(Via Google Maps)

Toadally not a done deal: The downtown library mixed-use project in Santa Cruz earned overwhelming support at the ballot box in November, and received its final approvals from the Santa Cruz City Council in March. However, the city has yet to strike a deal with the owners of Toadal Fitness on buying the gym’s Lincoln Street building — a critical piece of the project’s parcel. Beyond a mention that the deal was “several weeks” away back in February, the city has been silent on the negotiations. A representative from Toadal Fitness told me via email last week that “a decision has not been made yet.” The city and Toadal Fitness representatives declined to offer any clarity.

Joby goes to Washington: JoeBen Bevirt, CEO and founder of Santa Cruz’s own flying-car company, Joby Aviation, skipped over to the U.S. Capitol to testify in front of the House Transportation and Infrastructure Committee’s Subcommittee on Aviation on March 30 to urge Congress, among other things, to permit aircrafts like Joby’s to operate out the country’s 13,000 airports and 6,000 heliports. “If [electric vertical takeoff and landing vehicles are] unable to use existing aviation infrastructure, it will drastically impact our nation’s ability to lead in the future of flight since it will require all new infrastructure to be permitted for operations to begin.” Read his written testimony here.

Say It Again

California Sen. Alex Padilla (front left) and U.S. Rep. Jimmy Panetta walk along the Pajaro River levee.
(Via Alison Gamel)

“There is still a fundamental flaw in the way the Army Corps of Engineers has done business by targeting flood protection efforts on property that’s worth the most, while low income communities with lower property values are far too often left out and left to fend for themselves. That, simply, needs to change.”

— U.S. Senator Alex Padilla, during a news conference in Pajaro on April 12. Padilla, with U.S. Rep. Jimmy Panetta, promised to put pressure on the federal government to increase the pace of the Pajaro levee repairs and eventual overhaul.

In this edition of In the Public Interest, Christopher Neely digs into the Access to Medical Care Agreement approved...

The Week Ahead

Housing elements: The City of Santa Cruz’s planning commission will meet on Thursday, April 20, to vote on the city’s housing element, which is its plan to permit 3,736 new units in the city by 2031. The city council will take up the issue on April 25. Check out an early draft of the city’s housing element here.

Weekly News Diet

Local: Land acknowledgements before government meetings, which note that the meeting is taking place on stolen Native land, have become increasingly common in California and across the country. However, as my colleague Hillary Ojeda reports, the head of the local Amah Mutsun Tribal Band is calling for UCSC to tweak its standard land acknowledgment to include more about the tribes who originally called the land home.

Rebecca Hernandez and Amah Mutsun Tribal Band Chairman Valentin Lopez discuss the meaning of the UCSC land acknowledgement.
Rebecca Hernandez (left) and Amah Mutsun Tribal Band Chairman Valentin Lopez discuss the meaning of the UCSC land acknowledgement on campus.
(Via Carolyn Lagattuta / UC Santa Cruz)

Golden State: While cities such as Santa Cruz, Oakland and Los Angeles have become increasingly emboldened to clear homeless encampments, the state has hesitated to get involved. Might that be changing soon? (Marisa Kendall for CalMatters)

World: Amid the buzz terms such as a “multipolar” world and a new “global strategic partnership” that emerged following French President Emmanuel Macron’s three-day trip to Beijing to visit Chinese President Xi Jinping, many questions remain around Macron’s motivations and how a French-Chinese partnership will sit with America and the European Union. (Roger Cohen for the New York Times)

One Great Read

“The Battle over Techno’s Origins” by T.M. Brown for The New Yorker

When the Museum of Modern Electronic Music (MOMEM) opened in Frankfurt last year, it was hailed as the first true monument to techno, celebrating its German origins and its cultural impact. As word made its way across the Atlantic, it surprised a collective in Detroit that had been running its own museum, Exhibit 3000. Although Exhibit 3000 wasn’t the government-backed, expensive and modern facility seen in Frankfurt, the museum was founded in 2002 to tell the story of techno’s origins, in its birthplace of Detroit.

Set against the opening of MOMEM, author T.M. Brown paints a portrait of a genre that has struggled to get its due, the tense debate around who the true techno pioneers are and what is seen as an erasure of the nonwhite/queer community’s role in bringing techno from the warehouses of Detroit and Chicago to the headlining stages at world-class music festivals. Of course, this is a story that calls for a backing track: Try this 2019 set from one of those Detroit pioneers, Derrick May.

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