County Affordable Housing Recap and Update

Last Tuesday the Santa Cruz County Board of Supervisors voted yet again to continue the public consideration of changes to the County’s Affordable Housing program to a later date. The move was initiated by Supervisor Friend in response to a new alternative fee structure affecting smaller developments that was proposed, on the spot, by Supervisors Coonerty and McPherson. The new fee structure came as a surprise to everyone in the room, especially in light of both the Housing Advisory Commission/Planning Commission and the Planning Director already having presented their own fee structures. The new fees almost passed with a motion from Supervisor Leopold, who later withdrew the motion in response to the growing confusion amongst the 10 separate items being considered in one vote. The proposed changes have now been considered during 2 separate Board meetings, as well as multiple meetings of the Housing Advisory Commission and Planning Commission.

The need to update the program was originally initiated over 6 months ago when a series of state court rulings called into question some of the longstanding rules of Measure J, the ordinance governing the County program. In particular, the County needed to amend it’s inclusionary zoning rules for affordable rental housing, and address smaller changes with regard to state wide density bonus requirements. The County also proactively commissioned a nexus study in anticipation of another court ruling, which provided a new tool to assess the potential for additional impact fees on development.

Many of these newly proposed changes and impact fees proved uncontroversial, especially when paired with a proposed “developer option”, which would grant developers the ability to choose between building onsite affordable units, or paying an impact fee. The impact fee for 5 or more units was set at $15.00/sqf, while the fee structure for developments of 4 or less units is still being debated. Initially the proposed fees were met with opposition from both local developers and construction companies, issues that the “developer option”, and tiered fee structure for smaller units were meant to address, respectively. However, the developer option proved to be a sticking point between Supervisor Leopold and Supervisor Friend, a sticking point that ultimately led to the continuation of the ordinance back for another round of hearings at both the Planning Commission, and later again at the Board in mid March.

Based on input from developers and construction companies in the Business Council, we have expressed support for the developers’ ability to choose fees rather than inclusionary units, and we have urged careful consideration of fee levels to prevent barriers to entry. The overarching goal is to increase the number of units built at both market and affordable rates, and private developers have an essential role in this process.

If you would like to offer any additional input on this topic, please feel free to contact Policy Analyst Robert Singleton at