We are planning commissioners: Santa Cruz can and should do better on affordable housing

Of the 276 units planned for the 530 Front Street project, only 37 (13%) will be classified as affordable housing.
(Via City of Santa Cruz)

Two veteran planning commissioners want Santa Cruz decision-makers to require more affordable housing. The city council, Cyndi Dawson and Sean Maxwell say, is too often more aligned with developers.

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Over the past three years as planning commissioners, we have watched the Santa Cruz City Council repeatedly ignore our recommendations about building affordable housing.

This has resulted in less affordable housing production than could be provided — and certainly less than the community needs.

The seven-member planning commission operates as an advisory body to the council. But it’s the council that makes decisions for almost all land use and development, and the council is ultimately responsible for how much affordable housing gets built.

The council recently appointed two new planning commissioners, which makes it a good time to reflect on Santa Cruz’s process and progress to address our affordable housing crisis. As continuing planning commissioners, we have been on the front lines of trying to get more affordable housing, but, too often, have not seen our advice heeded.

This is frustrating since the vast majority of Santa Cruzans — regardless of politics — agree that the need for affordable housing here far exceeds the supply. The two of us writing this piece have differing political views, but we have consistently voted together to push affordable housing.

We applaud the few 100% affordable developments — like the Pacific Station projects near the Metro Station, with 164 affordable units — and would like to see more of this. However, most projects rising on the Santa Cruz skyline and in the pipeline are market-rate development with a small number of affordable units.

Increasing our production of affordable units will take all of us — the city council, the planning department and the planning commission. We will need to broaden our view, learn from other municipalities and prioritize affordable housing needs above producing over 85% market-rate housing that most people can’t afford.

This means asking more from private real estate in living up to Santa Cruz’s “inclusionary” requirements, as well as considering new, tested approaches to affordable housing production, preservation and neighborhood stabilization. This is especially urgent now, on the cusp of the largest increase in housing development in Santa Cruz history.

But it will require political will.

If you have watched any meeting related to a proposed land-use development in the city, it is likely you have heard the refrain from developers and staff that they support affordable housing, but can’t add any more affordable units to a project because it “doesn’t pencil out.” Yet the developer has little to no burden of proof in making this assertion, and typically developers present no evidence to the commission to back it up.

Even when commissioners ask for it. And we do.

You’ve also likely heard the argument from developers and city staff that increasing affordability requirements is actually unnecessary if not counterproductive — since with enough market-rate supply, affordable units will naturally “filter” down. Underlying “filtering,” or “trickle-down housing,” theory is the idea that building more high-end housing will naturally free up older housing and bring down costs at the low end.

There are numerous problems with this theory — from the fact that older houses in prime locations are snapped up and flipped by investors, to the fact that, even if it worked, it could take 30 years, by which time low-income people will have been displaced.

Research shows that large increases in market-rate housing supply should be accompanied by greater affordability interventions. Yet when we have sought to make these arguments, we’ve been opposed, either on “penciling” or “filtering” grounds.

A rendering of the proposed senior-living facility at 126 Eucalyptus Ave. in Santa Cruz.
(Via City of Santa Cruz)

This includes opposition to the most modest project-specific recommendations to allow for a single additional affordable unit, to more far-reaching policy changes, like increasing affordable housing requirements or studying the impacts of large, market-rate developments on displacement, both of which have been done by neighboring cities. In all cases, we found ourselves opposed not only by developers, which one might expect, but by planning staff and the majority of the city council.

Too often, staff recommendations, which are usually supported by the developers, are taken as the final word. We need decision-makers to engage in more critical, independent evaluation of staff reports.

A short explainer on inclusionary zoning (IZ) requirements is in order.

Many municipalities, including Santa Cruz, require a percentage of new projects be reserved for lower-income households. When city officials say “affordable housing,” they mean housing that is affordable to extremely low-, very low-, low- and moderate-income households, with those levels determined by state law. Santa Cruz currently has an IZ of 20%. With density bonus projects, this gets reduced to 13% overall.

Cyndi Dawson is a Santa Cruz planning commissioner.
Cyndi Dawson is a Santa Cruz planning commissioner.
(Kevin Painchaud / Lookout Santa Cruz)

Here is what that means practically: A recently approved project that will span from 514 Front St. to the corner of Soquel Avenue will be over 90 feet tall and includes 276 units, with only 37 (13%) affordable.

Sometimes, even the 13% gets further reduced.

Since 2020, the city council has approved a number of projects with fewer affordable units than were allowable — despite planning commission recommendations. A prime example is the 126 Eucalyptus Avenue project, a senior housing development to be built by a large national developer, with monthly rents estimated at $12,000. The planning commission majority recommended 11 affordable units, but the city council majority approved the project with only three affordable units, which is 4% of the 76 total units.

Sean Maxwell is a Santa Cruz planning commissioner.
Sean Maxwell is a Santa Cruz planning commissioner.
(Via Sean Maxwell)

This just is not good enough, especially given the dire need for affordable senior housing in our community.

At its May 5, 2022, meeting, the commission approved higher affordability requirements within the downtown expansion area, as well as the creation of a task force to study the potentially significant gentrification and displacement effects of this massive expansion on Beach Flats, Lower Ocean and downtown-adjacent neighborhoods.

These are areas with some of the city’s last remaining relatively affordable, multifamily housing, as well as working class communities and communities of color which are especially vulnerable to displacement. Scores of other cities, from Watsonville to San Jose, Portland to New York, have studied displacement risk associated with major new development and created anti-displacement task forces and policies.

Yet these recommendations were not advanced by the council.

Our elected leaders can do more.

Santa Cruz is not the only place struggling with skyrocketing housing costs, gentrification and displacement. While more and better state and federal housing policy is needed, there are local policies we know work.

The city council needs to enact them.

Many cities, as we mentioned above, already have policies and programs such as linkage fees, transfer taxes, neighborhood stabilization protections and increased inclusionary requirements in downtown areas. These policies produce more affordable housing, protect tenants and preserve affordable housing that might otherwise be lost.

We are heartened to see Mayor Fred Keeley propose and get support from the new council for part of what was proposed by the planning commission, requiring 20% affordable units on the total number of units in the proposed Downtown Expansion Area Plan Amendment.

With a new city council and a mayor well-versed in policy development, we invite our city council to work to make real progress on increasing and preserving affordable housing, and protecting low and moderate-income communities.

This should start with critically interrogating project proposals to ensure maximum affordability within our existing code. And the council must offer bold, new policies and plans to increase affordability and prevent displacement.

Action is needed now.

We are losing our economic diversity, which drives cultural and racial diversity. We are losing our service workers, artists, teachers, medical workers and, in many ways, our community. Every day our businesses are cutting hours because they don’t have workers, and our neighbors are falling into being unhoused or moving away.

The city council needs to stand up to those who would sacrifice affordable housing for ever more high-end housing.

Our experience has taught us that more can and must be done.

Cyndi Dawson is a marine scientist and a current member of the City of Santa Cruz Planning Commission.

Sean Maxwell is general contractor, ran for the Santa Cruz City Council in 2022 and is a current member of the City of Santa Cruz Planning Commission.

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