Submitted by Robert Singleton, Policy Analyst
During the recent Economic Vitality Strategy study session/luncheon on June 26th over 60 north county community leaders gathered to discuss the 100+ recommendations from the County’s first economic plan (EVS) in 20 years. In attendance were business owners from key industries such as hospitality, real estate, health and finance, as well as elected leaders, and city and county staff. The event was hosted/facilitated by the Santa Cruz Area Chamber of Commerce, and was structured around the 7 core goals laid out in the plan, in the form of breakout groups. One of the most important of these goals is to “Support Sustainable Development and Availability of Housing” within the county, of which Santa Cruz is in dire need. According to the National Association of Homebuilders, Santa Cruz County is ranked as the least affordable metropolitan area with a population of less than 500,000. The main point, as made clear in the EVS and by all community leaders present, is that employees need to be able live here as well as work here in order to achieve greater economic prosperity. Additionally, in terms of sustainability, more transit oriented and mixed use development will reduce car traffic and the burden on our other severely lacking infrastructure need, transportation.
In the breakout group focused on “Sustainable Development and Housing”, those present included multiple developers, real estate lenders, the owner of a local construction company and a land use consultant; all of who have hands on experience in working to develop housing in Santa Cruz County. The key takeaway, at least from their perspective, is that politics prevents the adoption of many of the solutions that could best address the shortage of all forms of housing. From stringent zoning regulations, to layers of planning restrictions and development fees, the difficulty in bringing a new housing development to life reduces the incentive to pursue new projects. Furthermore, the lack of planning process consistency and political variability creates unwarranted risk in the approval process. Those in the group also expressed frustration with the political attitude in Santa Cruz that they see as being against any and all new projects. As one participant lamented, “you can’t have a meaningful conversation with people, you have to treat [the process] like a game.”
Despite this, the group evaluated most of the proposed recommendations and had a great deal of feedback. Of paramount importance are recommendations 2.3-2.5 (from the EVS draft document), which deal with streamlining the County permitting process to make it easier and more predictable. With the loss of state redevelopment funds, alternative funding sources need to be identified to help incentivize the development of more affordable housing. One of the participants suggested levying a “transfer tax” whenever a property is bought or sold, and despite the groups willingness to consider this idea, most believed that it wasn’t politically feasible. In terms of updating the County’s Housing Element (2.9), group participants expressed that any update should be based upon existing demand for housing and not projected growth. For the consideration of small unit and supportive service housing overlay zones (2.12), group participants were extremely cautious given the language of the recommendation. Specifically, they believe that rezoning needs to come before applications are submitted to provide certainty in the development process. For recommendation 2.13, which deals with second units and units that are “affordable by design”, most group participants considered this to be low hanging fruit in that this recommendation seems pretty straight forward and immediate, but some participants were adamant that any new fee structure applicable to these types of units be based upon the size of unit, by square foot.