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City eyeballs the math for housing needs ahead: A staggering 3,400 more units required by 2031

The Santa Cruz City Council moved ahead on a regional housing needs allocation (RHNA) draft that spells out just how much housing — including 826 very-low-income units — must be built during the 2024-31 cycle. That represents a 457% increase over the current cycle.

The What: The Santa Cruz City Council said Tuesday it was willing to work with a regional authority’s recommendations for the development of thousands of additional housing units within the next decade.

The 6-0 vote means the drafted regional housing needs allocation numbers can move on to the next step with the Association of Monterey Bay Area Governments.

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The So What: Because of the continued housing shortfalls locally and statewide, the state says Santa Cruz is far behind in its approvals for new developments. The draft plan put out by the regional association includes a total of 3,400 units, with:

  • 826 very low income;
  • 540 low income;
  • 617 moderate income;
  • 1,417 above moderate income.

These numbers represent a 457% increase over numbers for the current housing needs cycle, and are greater than the regional average by 319%. Should the city not meet these targets, developers could invoke a state law to streamline for their projects, giving officials less opportunity to approve or deny the developments.

Santa Cruz has had a tumultuous run with its first so-called SB 35 development proposal, submitted on July 1. The city will next evaluate updates to the project and the council’s future role with similar proposals during its Dec. 14 meeting.

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The Background: Santa Cruz isn’t the only city not keeping up with housing development. A February report by the San Jose Mercury News found that only 3% of all California jurisdictions — cities, towns and counties — were on track to meet or had met their RHNA targets.

For the current cycle, Santa Cruz has met three RHNA affordability categories but has not met the target for very-low-income units. Such units are more challenging to develop, typically requiring significant financial subsidies for developers to build; currently, the city needs to develop at least 123 more such units.

Additionally, new housing bills — addressing vacancy rates, overcrowding and higher-than-average cost burdens — have led to the sharp uptick in housing needs for the coming RHNA cycle.

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Questions from councilmembers, the public: The coming cycle — which runs from 2024-31 — could lead to further issues with development within Santa Cruz city limits, but there are also potential issues if the city doesn’t develop more.

I think the intent [from constituents] was that we were concerned about the increase in the total amount of housing...in the city limits, we are pretty built out.

“It sounds like the state’s putting more pressure on jurisdictions to provide this housing,” said Councilmember Justin Cummings. “I think the intent [from constituents] was that we were concerned about the increase in the total amount of housing ... in the city limits, we are pretty built out.”

Kyle Kelley, a lead with Santa Cruz YIMBY, said that if the RHNA numbers were contested, it would cause those units to be moved elsewhere in the region, causing larger problems for the workforce, neighboring jurisdictions and commuters.

“We shouldn’t be demanding that Watsonville and Salinas get the housing, and then commute in,” he said. “We need to make room for people that work in Santa Cruz.”

We shouldn’t be demanding that Watsonville and Salinas get the housing, and then commute in. We need to make room for people that work in Santa Cruz.

What’s next: By a vote of 6-0 — with Councilmember Renee Golder absent — council voted to move the motion forward. City staff will continue working with the board of directors of the Association of Monterey Bay Area Governments to finalize the draft and proposed numbers for a follow-up meeting on Dec. 8.

As Director Heather Adamson explained, she hopes the numbers are approved sooner rather than later for Santa Cruz’s benefit.

“The further we go with the RHNA development process and methodology, the less time that each jurisdiction knows their RHNA numbers,” she said.

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