Quick Take
Santa Cruz City Manager Matt Huffaker and Economic Development and Housing Director Bonnie Lipscomb want to set the record straight on occupancy rates for affordable housing in Santa Cruz. They admit the city could do a better job reporting occupancy rates of new affordable housing units to the public, but insist the buildings are filling and the city is meeting its state reporting obligations. “While we understand the desire for more transparency, the reality is that these units almost never sit empty,” they write. Filling new buildings, they say, just takes time.
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Local activists recently wrote a Community Voices op-ed questioning whether new residential buildings in Santa Cruz are fulfilling their goals of providing housing for previously unhoused, low-income, and middle-income residents. The article criticized the city for not providing a way for the public to see occupancy rates or ensure that these projects meet their affordability benchmarks.
While the city does not report on general occupancy rates for housing, our team maintains an interactive housing map that provides details on all housing projects, including affordability levels, locations and development status. Additionally, state law requires all affordable housing multifamily projects that receive governmental financial assistance to report on affordability levels annually. These reports verify that buildings meet affordability commitments and are not being leased to tenants outside the income brackets they were intended to serve.
In short, there is already a clear and regulated process that ensures affordable housing developments are doing what they were built to do.
While we understand the desire for more transparency, the reality is that these units almost never sit empty. Affordable housing projects in Santa Cruz operate at or near 100% occupancy and maintain long waitlists. Because of this, vacancy rates are rarely meaningful — when an affordable unit becomes available, it is almost immediately leased to someone already waiting.
Santa Cruz has made substantial progress in building and maintaining affordable housing. Every 100% affordable housing project developed in recent years has been built with strict affordability requirements and monitored annually. The most recently completed projects demonstrate that:
- Cedar Street Apartments: 100% leased (65 affordable units).
- Natural Bridges Apartments: 100% leased (20 affordable units).
- Riverwalk Apartments: 100% leased (21 affordable units).
- Water Street Apartments: 98% leased, with one vacancy currently in final processing for a project-based voucher through the county housing authority (41 affordable units).
- Pacific Station South: 94% leased with the remaining four tenants in the final verification process (69 affordable units).
Santa Cruz’s newest affordable housing developments are not only full but operating as intended — providing homes for individuals and families who qualify under affordable housing guidelines.
For example, Pacific Station South, which was just completed through a partnership with For the Future Housing and the City of Santa Cruz, currently has two waitlists totaling 819 people seeking housing. One waitlist is managed by the housing authority, which is responsible for approving and verifying tenants funded with project-based vouchers awarded through the housing authority. For the Future Housing completes the selection process for the remaining units. Both entities adhere to approved income verification and affordability levels that were approved and codified in an affordable housing agreement between the developer and the city prior to construction.
That said, we hear the community’s request for more readily accessible information, and we are exploring the creation of a public dashboard that could be updated regularly to provide clearer insight into leasing activity on affordable housing units.
However, the real frustration residents may feel isn’t about transparency — it’s about the overwhelming demand for affordable housing far exceeding supply. The fact that 1,600 people applied for the 69 affordable units at Pacific Station South highlights this reality.
Even though the system is working as designed, it still isn’t enough to meet the need.
The city is currently working with For the Future Housing and Eden Housing on two public-private, mixed-use affordable housing projects to bring an additional 272 affordable units to the downtown.
The first, Pacific Station North, is currently in construction. The project includes 128 units of housing, 100% of which will be affordable units, a new home and a bus transfer center for Santa Cruz Metro, along with transportation improvements to our lower downtown area.
The second project, the Downtown Library and Affordable Housing Project, is slated to break ground later this spring and includes a new state-of-the- art library with a rooftop garden and patio, day care center and additional parking supply along with 124 units of housing, 100% of which will be affordable units. One area that remains more difficult to track is private, market-rate housing.
Unlike affordable housing, private landlords and developers of market-rate projects are not required to disclose information about their units or information on occupancy rates. While some have called for making this data public, it’s important to recognize that the only legal disclosures for market-rate projects are related to any affordable units contained within their project.
Measure O, adopted by voters in 1979, requires that developers of residential projects must provide 15% of the total number of units in a project as affordable to average-income households. In furthering that measure, the city’s regulations now require that 20% of a project’s units are affordable to low-income households (those making 80% or less of area median income). Each development project that receives entitlements to build a new housing project in the city of Santa Cruz must enter into an enforceable agreement with the city requiring compliance with the city’s affordable housing program.
Market-rate housing operates under different rules than affordable housing; the development is driven by the market, and while there are policies in place to require a certain percentage of affordability in each project, the city does not have the same regulatory authority over the market-rate units in the private developments.
In competitive rental markets like the San Francisco Bay Area, market-rate apartments typically lease up at a rate of 10 to 20 units per month, influenced by factors such as location, demand and property type. Santa Cruz sees new units renting at a rate of 12 to 20 units per month. Given this pace, leasing a 207-unit apartment building could take a year or more — this is a standard timeline and reflects the normal process of reaching full occupancy.
From what we hear from developers, this is a well-understood reality in the industry. Lease-ups take time, and a healthy rental market always has some level of vacancy to allow for mobility. This also highlights a common misconception about apartments downtown and the need for both market-rate and affordable units. A balanced housing market ensures that people can move here when they secure a job or need to relocate for other reasons. Expanding the supply of apartments helps meet housing demand while also easing pressure on the broader market — allowing more movement within the housing system and freeing up single-family homes.
Santa Cruz has made real progress in addressing its housing crisis, but we know there’s more work to do. The city has welcomed community dialogue, and we share the belief that everyone should have access to safe, stable and affordable housing.
The demand for housing far exceeds supply, but new developments are meeting their affordability requirements and helping to house those most in need.
When someone moves into a new affordable or market-rate unit, it can create a ripple effect — potentially freeing up another housing unit elsewhere in the community, helping to ease overall demand and making housing more accessible for others. The full benefits of new housing developments won’t be immediate on a larger scale, and it will take time to see meaningful change, but we are committed to seeing that change through.
The real issue is that there isn’t enough affordable housing to go around, and the solution isn’t to stop supporting new housing — it’s to build more.
Matt Huffaker is the Santa Cruz city manager and Bonnie Lipscomb is the economic development and housing director.