Cover Stories

Re-thinking the Future of Santa Cruz

coverwebA new county plan seeks to pave the way for new solutions to local housing, tech and traffic problems over the next two decades. Can supervisors see it through?

Aspiring business owners attempting to navigate the labyrinth of county codes. Recent college grads, living three deep in a one room apartment. Daily commuters, muttering obscenities to themselves on Highway 1 as they peer down the line of cars stretching into the interminable distance. For all of these frustrated locals, help may be on the way.

Last month, the County of Santa Cruz released a working draft of their Economic Vitality Strategy (EVS), a comprehensive document that seeks to till the soil for budding businesses, grow existing companies, and ease some of the biggest complaints about living in Santa Cruz County.

The plan will essentially lay the blueprint for the next 20 years of day-to-day business in Santa Cruz County. After a year-and-a-half of research, data analysis and meetings with community members, the county’s planning and economic development departments have outlined more than a hundred individual strategies they hope will guide Santa Cruz County into a more prosperous future—and repair the biggest problems in existing regulations.

“We want to grow, econom- ically and otherwise, within the values of this county, and interest- ingly enough we’ve actually created a code that in some respects blocks us from being able to do that,” says County Supervisor Zach Friend. “You have people who want to live here, creative people who are innovating brilliant ideas here, but because of the code can’t actually grow a business here—and in some respects can’t even continue to raise a family here, or their kids can’t stay here because of the cost of living. All of these are things the strategy is taking a look at in order to address.”

Can housing be fixed?

While conducting community outreach for the strategy, Friend asked his constituents what hopes and concerns they had in regard to economic development in the county. One of biggest recurring themes: the high cost of living.

It’s no secret that Santa Cruz County is one of the most expen- sive places to live in the coun- try. According to preliminary research compiled for the EVS, the county is the least affordable metropolitan area with less than 500,000 residents.

With this in mind, the EVS outlines a number of strategies to try to ensure that in the future, county residents will be able to afffford a roof over their heads, and those looking to start businesses here won’t be scared off by the high cost of living.

“We heard from a lot of our focus groups that employers seeking to establish here, or to expand here, have a big concern that their employees can’t find housing that is available and can fifit their budget,” says Kathy Previsich, director of the county’s planning department. “It doesn’t necessarily need to be formal, deed-restricted affffordable housing. Even on the market, the price of housing compared to the income levels is high.”
Since redevelopment agen- cies in California were dissolved by Gov. Brown in 2012, the county’s funding for affordable housing has diminished.

“The County of Santa Cruz was successful in being able to retain the affffordable housing money that we had. We got it into third-party agreements, and the funds were encumbered before the agency was dissolved. In the past few years we have actually been working with nonprofit housing pro- viders and built a couple of hundred units, but those funds are dwin- dling,” says Previsich.

The EVS outlines specific strate- gies to support more affordable hous- ing, such as reevaluating building codes to make it easier to build struc- tures like townhouses, condos and apartment buildings in the county that are considered “affordable by de- sign.” The document also acknowl- edges the need to develop housing units for agricultural workers, which could alleviate labor shortages on South County farms caused in part by the high cost of living.

Changing lanes

Most of the recommendations in the EVS concerning affordable housing line up with a similar document that the county is developing concurrently, called the Sustainable Santa Cruz County Plan. Both plans recommend changes to the county’s codes to make it simpler for smaller units to be built in urban areas and along high-traffic corridors.

Focusing development on urban infill along busy streets like Soquel Drive may also help to ease some of the congestion on Highway 1. If people are living in places where they can easily walk or bike to work or the grocery store, it may shave off travel time for those who still need to commute by car.

“We have a huge issue with our local highways and roadways,” says Joe Foster, executive director of the Santa Cruz County Business Council. “Not just with personal traffic, where people are traveling from work and school, but in the movement of goods and products. It’s a challenge for a lot of businesses that rely on going up and down Highway 1, and Mission Street, and Soquel Avenue to be able to efficiently move their product. It affects the bottom line, because they lose time.”

Foster also describes concerns from those in the medical field who fear that they can’t respond to emergency situations when the highway is backed up day in and day out. Although the EVS touches only briefly on traffic issues, it does stress the need for the county government to partner with the Association of Monterey Bay Area Governments and the Regional Transportation Commission to improve existing roads, create auxiliary lanes on Highway 1, and expand the local system of walkways and bike paths.

Backbone of Tech

The EVS also addresses the issue of how to increase the flow of infor- mation via an expanded broadband infrastructure. With the recent fund- ing provided for the construction of a broadband backbone traveling through the center of the county all the way to Soledad, the future expansion of broadband in the county is inevitable, but still a couple of years away. Without high-speed Internet connections, which are especially lacking in the unincorporated areas of the county, emerging companies may take their business elsewhere.

“Personally, I think broadband is really imperative, and can provide us with a competitive edge,” says Robert Singleton, co-founder of Civinomics and policy analyst for the Santa Cruz County Business Council. “For every point of access you provide for the Internet, it’s a one-to-four return. For every dollar of Internet you invest in, you get four dollars back.”

Broadband access is extremely vital to the local tech industry, which the EVS recognizes as one of the fastest-growing business sectors in the county—and one that is showing promise. One sector the EVS focuses on is tech transfer, which essentially means cultivating intellectual property developed at UCSC, or elsewhere, and transforming it into local businesses.

Five3 Genomics is a prime example of tech transfer in action. The local tech firm composed of UCSC alumni utilizes patented algorithms BAE Urban Economics, a consulting company with offices in Emeryville, found that 82 percent of all the jobs in Santa Cruz County, both in the cities and unincorporated areas, are with companies that have fewer than 10 employees. The firm also discovered that the county holds a high percentage of home-based businesses in comparison to the state.

In order to unite these small businesses in a coworking envi- ronment similar to Cruzio and Nextspace, the EVS proposes publicly funded coworking facilities to reduce the capital costs necessary to grow these smaller companies.

Some of the biggest business concerns laid out in the EVS are the county’s antiquated planning codes and permitting processes.

“The current process is so onerous that you have people not even engaging in the process,” says Friend.

With so many forms and fees and reviews and appeals, many entrepreneurs choose to either operate their businesses illegally or relocate. Friend and the other supervisors are already taking steps to refine the county’s permit framework.

“If we’re going to invite people to establish businesses here or expand their businesses here, we need to invite them into a functional permitting framework,” says Previsich.

She says there is a need for increased customer service from the county to help nascent businesses with the permitting and planning work, through a sort of one-stop shop, where a county employee would guide entrepreneurs through every step in the process and work collaboratively with all of the agencies involved, from inception to completion.

“We will be engaged across departments to try and problem solve, and streamline the process,” says Previsich.

Supporting the large industry staples in the county like tourism, agriculture, health, and education are key components of the EVS. In regard to agriculture, a significant sector of the local economy, the county is already working to streamline regulations. But the EVS also pushes for the regular meeting of industry stakeholders—like the Farm Bureau—with county officials, in order to address ongoing issues and simply stay connected, which is an underlying theme in the EVS as a whole.

“Our first goal is about creating a shared vision and organizing for action. It’s a lot about convening and having these groups together in a cohesive effort—understanding that they all have their own idiosyncrasies and things that they’re working on, but also getting them to collaborate and work together in a united effort,” says Previsich.

Creating a business license requirement, which is suggested in the first goal of the EVS, may seem like an extra burden to business owners in the county, but the information the county would gain through the establishment of the requirement would allow for better planning in the future.

“The whole purpose of the county requiring a business license is so that they can get better data around the businesses operating in the unincorporated areas,” says Singleton. “Right now, we don’t have accurate data, because no one is required to annually submit that kind of information. If a business license was required, we could obtain those accurate metrics.”

Singleton says metrics are essential for the economic vitality of the county and the success of the EVS in the future.

“You have to know where you are to know where you’re going,” he says.

Making it happen

The first goal of the EVS also stresses the importance of county officials meeting with community leaders from all sectors of business to discuss the strategy as it is imple- mented in the future—which is strikingly similar to the last economic vitality plan, created in 1994. In fact, much of the wording in the 20-year- old document is nearly identical to the current EVS draft.

For example, the 1994 document states that the utmost goal of the Economic Development Action Plan (EDAP), as it was then called, was to “protect and enhance the community’s quality of life.” The EDAP also calls for a strategic action team whose charge was to serve smaller businesses with permit processing, which the document states “can take an excruciatingly long time.” Sound familiar?

Although there are definite differences in the two documents, the similarities in themes and ideas are undeniable. So what’s to prevent the EVS from falling by the wayside as the EDAP did in the past?

Supervisor McPherson feels that the county’s current leadership will make all the difference. “We have an attitude adjustment in the county,” says McPherson. “We really want to see things happen here.”

Foster sees the parallels between the documents as a warning, and hopes that the EVS doesn’t suffer the same fate as the EDAP.

“It’s going to be very important for the county to work with its partners, like the business council, the chambers of commerce, and other stakeholder groups to make sure that if it is approved for implementation, it gets done,” says Foster, “and we don’t look back in 2034 and say, ‘Well, it’s been 20 years since we made the last one.”

The EVS is currently in a public review period until early July, and if the strategy is to be successful in achieving its goals, county officials need to know which of the 110 points in the document the community feels are most important.

“The question is, ‘What are we going to focus on?’” says Supervisor John Leopold. “The challenge will be for the board to discuss with each other and with the community at large where are the places we can see success early, and build on that momentum to achieve the entire plan.”

“The community has the direct ability to change, comment on, and shape the economic strategies of the county for the next generation,” says Friend.

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