Santa Cruz Gets the Jump on Affordable Housing
Supply vs Demand
The housing shortage has been going on for years. Why? In the United States, we overbuilt in the lead-up to the housing crash in the mid-2000s. Builders went out of business, workers left the industry. Builders were just about to catch up when the pandemic hit. Suddenly, supplies became scarce, costs soared for everything, plus persistent labor shortages: BOOM - a housing shortage. Now the industry can’t build fast enough to meet the demand. According to the folks at Make Me Smart, in the US, there are 1-5M housing units in demand.
In the County of Santa Cruz, AMBAG estimates that we need as many as 33,000 units to meet the demand. So what are we doing about it?
What is Pacific Station South?
The Ground Floor Plan for Pacific Station South.
According to the City of Santa Cruz, Pacific Station South Redevelopment is a project that aims to “construct a seven-story, mixed-use building with 70 affordable residential apartments, 15,228 square feet of ground floor commercial and residential amenity space, and 15,665 feet of medical office space on the second floor, on a property located within the CBD/CZ-O/FP-O zone district and within the Pacific Avenue Retail District and Front Street/Riverfront Corridor subareas of the Downtown Plan.”
This project has been in discussion for several decades but has not been able to come to fruition due to a variety of reasons such as lack of funding and a project developer. As of recent, the project is fully funded and the City will be working with For the Future. Funds for this project came from a variety of sources including the Apple Affordable Housing Fund which committed to $2.5 billion for affordable housing construction.
$29.1m Affordable Housing Sustainability Community Grant Funds (AHSC)
$22m in tax credits
$21m Infill and Infrastructure grant (IIG)
$5m Apple via Housing Trust Silicon Valley
Bonnie Lipscomb and new puppy who needs a name!
“Approximately 1400 units are set to be built in Downtown Santa Cruz in the next 3-4 years,” explains Bonnie Lipscomb, Director Economic Development City of Santa Cruz. “The type of housing we are building is for low to extremely low to very low AMI because that is the most difficult to build.”
According to the federal government, housing is “affordable” if it costs no more than 30% of the monthly household income for rent and utilities. Most affordable housing developments are built for families and individuals with incomes of 60% or less than the area median income (AMI).
Santa Cruz has a state mandate for the amount of affordable housing we must build for the next 8-9 years. The city will need to build nearly 4.5 times more units than the last 8-9 year period - an additional 3700 units over the next 9 years to meet a mandate set forth by the RHNA (Regional Housing Needs Assessment). 800 of the 3700 need to be at the very low affordable housing threshold. The current 3 projects plus the projects by New Way Homes are critical to meet the mandate, or else lose access to crucial grants and funding.
“Most coastal cities are facing these same daunting mandates,” explains Bonnie Lipscomb. “Santa Cruz has a real jump ahead vs other coastal cities because of progress and funding on these current projects.”
YIMBY vs NIMBY
It is unlikely for any city, including the City of Santa Cruz to fulfill the mandates and housing goals unless building heights are increased to accommodate more units. This means buildings will need to be built several stories higher than their current heights.
The City of Santa Cruz is conducting a study on the development of additional housing units with increased density. Increasing density means building bigger buildings with higher heights. The City of Santa Cruz is looking at potentially adding housing units that are between 100-200 feet or approximately 14-16 stories. For reference, the tallest building in Santa Cruz is St. George Apartments at 95 feet.
Your Feedback Wanted!
We want to know what our members think! If you would like to share your input, feel free to fill out the form below via our survey. Responses collected by June 12th will be shared with the City of Santa Cruz for the Downtown Plan Expansion study next week. UPDATE: Survey is now closed. Thanks to those who took the time to fill out the form! If you would like to learn more and share your comments directly with the City, follow this link.
Additional Resources