This is Part 4 of our series “Is Silicon Valley Invading Santa Cruz”.

From Division to Development

What we know: The housing shortage caused by decades of under-development continues to grow—dramatically, unless changes are made. But, because of California's particular economic and wealth situation, the crisis created by that underdevelopment is now frequently perceived as a problem of haves and haves-nots.

Yet it’s not so much that California’s wealth and income disparity caused the housing crisis, but rather that it has greatly exacerbated it. It has also rapidly changed the make-up and personalities of communities across the state, while increasing poverty and homelessness. And California’s housing shortage most dramatically affects lower-income households, particularly renters and communities of color.

“Santa Cruzians tend to think we have a single housing crisis. In fact, we have three: there is not enough housing inventory for 1) new home buyers, 2) for renters, and 3) for homeless”. Jeremy Neuner

It’s tempting to look at the current crisis and try to simplify and scapegoat the causes while generalizing solutions. But leaders in the movement for solutions say that now is the time to find novel paths forward—a type of thinking that might be a combination of what Buddhism calls “The Middle Path” and the affinity-mapping, empathy-based logic of design thinking. 

Water Resources

There are a multitude of factors that need to be considered when it comes to the “perfect” way to build housing that will solve this crisis. Affordability, size, and location are biggies, but—this being drought-ridden California—concerns about water supply often come up in community conversation about housing and development. 

“Santa Cruz has done such a fabulous job with conservation and living the conservation ethic,” says Doug Engfer, member and former Chair of the Santa Cruz Water Commission, “that our water use is way down from what we had originally projected.”

Looking out as far as 2045, Engfer reported, the Water Commission’s most recent projections see Santa Cruz’s water consumption continuing at an essentially flat rate. And that includes accommodating all the development contemplated in the general plan and under AMBAG expectations of regional housing allocations, as well as full allocations for UCSC’s groth and the predicted overall population growth (as reflected in General Planning).

How?! Firstly, building codes and waterflow appliances continue to improve so that water consumption is inherently lessened. Plus, water rates have increased.

But most impactfully, Engfer says, is the way Santa Cruzan’s changed their water-hungry ways after the most devastating years of drought in 2011 to 2017.

“Right now we’re using about 2.5 billion gallons a year,” said Engfer. “We used to project that we would be using 4 million by now… But we aren’t. And experts actually don’t see it going up much more dramatically any time soon.”

(By the way, did you know Santa Cruz relies solely on local rainfall for our water supply? That Santa Cruz is one of the only communities in the state that doesn’t have a pipeline connection to either the state or federal water supply? And that our only storage is in Loch Lomond, which might be the only upcoming water problem due to population growth—that might run out of space to store our annual supply of water? I didn’t! Talk about a hyper-independent ethos…) 

That’s right! Santa Cruzans were adaptable to changing their lifestyle for the greater good.

Plus, Engfer also notes the simple but vital fact that single family homes use more water than multi-family units—overall they have smaller carbon footprints, plus they're just smarter growth fo 

And denser multi-family units are what we want, to solve the housing and homeless crisis. Experts all agree. But how dense will Santa Cruz let it get?

Whose Plan Is It Anyway?

Let’s take a pause for design thinking: even if someone is interested in completing some sort of dramatic life change or major decision, and is considering it slowly and deliberately, how do you think that someone might feel if an omni-powerful entity came along and demanded that they complete said change immediately and even more dramatically? Probably a little trapped, unheard. Maybe even dismissed and off-put.

Councilmember Kalantari-Johnson emphasizes the overarching California state housing development laws as both “needed and unfortunate.” Because Santa Cruz is and has been so lacking in keeping up with housing needs, we are now seeing severe consequences imposed by the state.

California’s SB-35, which took effect on January 1, 2018, requires cities that are not meeting their Regional Housing Need Allocation (RHNA) goal to streamline the approval of certain housing projects. That means Santa Cruz is exposed to aggressive pro-development laws like SB35 that provide density and height incentives.

Since state rules supersede local guidelines, Santa Cruz and other similarly growing California communities are somewhat trapped when it comes to address local needs in a local context. Local planning leadership’s ability to move on solutions is weakened or narrowed.

“That’s not what we want—we want to be forward-thinking,” Kalantari-Johnson told me. “We want to create our own processes and standards and shape our own community.”

A huge issue, cited nonstop by lawmakers and activists alike, is the desperate need for a cohesive, modernized General Plan. The current Plan was set in 2014 and was intended to run to 2030, but the rapidly changing state of housing and development has been crying out for responsive updates.

Engfer is also an active leader in the pushback to reassess the proposed development for a five-story (plus rooftop bar; because nothing says Santa Cruz like rooftop bar...) complex at 831 Water Street. Engfer and his coalition are crystal clear that they are not opposed to development and, in fact, are very supportive of new building in Santa Cruz—they just want it to be done in a sustainable, responsible way that serves all Santa Cruzans, future AND present.

“In parts of town where we could expect to see medium-scale housing,” he says, “instead we’re seeing proposals for much larger-scale buildings within the neighborhoods.” 

Engfer notes that many of the prospective developments that are worrying residents are tall buildings planned for narrow lots in neighborhoods—lots that border low-profile residential areas, bordering against houses and backyards.

Santa Cruz Local covered the issue of a new for an updated City General Plan in truly eye-opening and beautifully written details—go check it out!

While local Planning works on setting objective standards for a cohesive and properly zoned Santa Cruz, opportunistic developers are ready to hastily build as big as possible on available lots. 

831 Water Street

While the 831 Water Street plan includes a lump of “affordable housing,” in this case, that means just 77 units priced 30% to 80% of area median income (remember that 61% of Santa Cruz County residents are already spending at least one third of their income on rent)—68 of which would be studios, and only 8 one-bedroom “affordable” units.

Even the proposed 74 “workforce housing” building units include half studios, only 2 two-bedrooms, and would be priced based on 80% to 120% of area median income.

Needless to say, studio apartments, or even one-bedrooms, are not the direly needed housing for the many low-income or even medium-income families. But those units certainly could be what college students are desperately looking for. 

(Read much more about the proposed development and what happened in a January public meeting with developers in Santa Cruz Local’s thorough report.)

And as Sibley Simon, longtime leader in housing and opportunity development, told me in our interview for a November look at the housing crisis in Santa Cruz, “Just one big service or building can make a huge difference.”

So what exactly does that one big development need to look like, who does it need to serve, and where should it be?

A New Way

“I don't have all the answers,” Kalanatri-Johnson said, which struck me. How often do we hear leaders, public officials, authority figures, and spokespeople just lay it down like that: I don't have all the answers. 

In Kalanatri-Johnson’s statement, and in the perspectives of many other interested parties working toward solutions, we can hear the spirit of collaboration, humility, curiosity, flexibility.

If there was a “Middle Path”, a novel prototype it would be New Way Homes. Founded by Sibley Simon, New Way Homes is fusing private investment with nonprofit social impact.

Individual investors can drop as little as $100 into a fund that returns with 4% interest, and New Way uses that to spearhead the creation of below-market rate housing in partnership with powerful nonprofits. New Way projects focus on higher density, urban-infill development—all the aspects that experts say are essential to crafting solutions to the complex problems facing California. Smart growth: in-full housing like duplexes, small multi-family units, with an eye on sustainability.

Councilmember Kalanatri-Johnson emphasized the need to look to other communities that have found solutions that work, to listen to experts who can advise on smart growth and sustainable development, in addition to a shift in societal mindset. 

The many layers of this housing crisis are what makes finding solutions so complex. And yet, perhaps really digging into those layers and unspooling the many contradictory perspectives could be how solutions come to light, too.

Part 1: Is Silicon Valley invading Santa Cruz

Part 2: Is Silicon Valley invading Santa Cruz

Part 3: Santa Cruz’s Crisis is Unique