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What’s Really Driving Santa Cruz’s Affordable Housing Crunch

The county is behind on its goals—but so is most of the state

UCSC Associate Sociology Professor Steve McKay is presenting a new report on local effects of the housing crisis. PHOTO: JULES HOLDSWORTH

When UCSC students made their way around Santa Cruz to conduct a survey about housing, some residents slammed the door in their faces. They got a similarly chilly response during community meetings, while conducting research for the latest installment of a university project to assess the effects of the housing crisis. That they hoped to contribute to a solution didn’t sway many locals who believe UCSC students are part of the problem.

While there is widespread agreement that more needs to be done in Santa Cruz County to make it an affordable place to live for people of all income levels, there’s a simmering disagreement about the dynamics of the problem and how to best address it. While some encourage construction of all types as a starting point to help boost the overall housing supply, others say the focus of any new development should be affordable housing.

The co-leads of the UCSC “No Place Like Home” study believe their data can help create a more informed conversation around these issues. Last year’s study, which focused on renters, highlighted issues around rent burden, forced moves and more. This year’s study includes findings from both renters and homeowners. Students surveyed nearly 500 city and county employees, as well as employees of Community Bridges and Salud Para la Gente, two of the largest local nonprofits. The UCSC team collaborated with Service Employees International Union Local 521 on the research.

The goal is to make the research relevant for students and the community, say project co-leads Miriam Greenberg, a UCSC sociology professor, and Steve McKay, an associate sociology professor.

They’ll share the results at the free event “No Place Like Home: Building Local Housing Solutions for All” on Oct. 18 at the Santa Cruz Civic Auditorium, which will include a panel discussion of the findings and cap off a week of Affordable Housing Week gatherings.  

The study found that more than 60 percent of renters and half of homeowners surveyed spend more than 30 percent of their income on housing. Nearly half say they’ve had difficulty paying their rent or mortgage in the last five years, and half of those individuals say they skipped buying food or medicine to make their housing payments.

Possible ways to address those issues include expanding social services and exploring the need for the production of new affordable housing, the preservation of existing affordable housing, and the protection of tenants and renters, Greenberg says.

In addition to two ambitious statewide initiatives, there are two housing-related local measures on the Nov. 6 ballot. The first is a contentious citywide Santa Cruz rent control measure, Measure M, which has garnered high-profile opposition, although Greenberg and McKay both support it. The second, Measure H, is a countywide bond measure with wide-ranging support—but also opposition from a few homeowners—which requires support from two-thirds of voters in order for it to pass. The measure would fund assistance for first-time homebuyers and put money toward homeless facilities and more than 1,000 new affordable units. Such homes are badly needed, according to data collected statewide.

One thing that’s clear is that there’s likely no silver bullet to the complex crisis. “These kinds of things should be thought of holistically; they should be thought of in connection with one another,” Greenberg says. “We need to both be thinking long-term [about] really expanding the supply, and at the same time protecting folks who are desperately trying to hold on right now.”

LARGER LAG

The issues in the Santa Cruz region reflect a larger problem: a dearth of housing statewide, with the number of new homes failing to keep pace with population growth. State housing department data from June showed 96 percent of California’s 539 local governments are not meeting their housing goals as set by the Regional Housing Needs Assessment. That includes Santa Cruz County and its four cities.

That data shows that the pace of affordable housing, in particular, has failed to meet expectations locally.

The state and the Association of Monterey Bay Area Governments set goals for the total number of housing units that must be added from 2014-2023 to meet the needs of people at different income levels locally, including a total target of 3,044 units in Santa Cruz County, 747 units in the city of Santa Cruz, 700 in Watsonville, 143 in Capitola and 140 in Scotts Valley.

The disparity in the affordability of that housing is clear: While the city of Santa Cruz issued permits to meet 79 percent of its goal for above moderate-income housing, and 141 percent of its goal for moderate-income housing, it only issued permits for 30 percent of its low income housing goal and 14 percent of its very low-income housing goal.

Capitola issued permits for 38 percent of above moderate-income housing but only 4 percent of moderate-income housing, and nothing for low and very low-income tiers.

Watsonville issued permits for 4.5 percent of its low-income housing goal and 14 percent of its very low-income housing goal. In unincorporated Santa Cruz County, those numbers were 11 percent and 10 percent respectively.

Scotts Valley has not submitted any annual progress reports to the state. (The city did not immediately respond to a request for comment on whether it has the data on its housing development by income tier.)  

The numbers collected by the state reflect building permits issued for housing, not the number of building permits where construction is finished. That housing may never be built for a variety of reasons, even though it’s counted for now as if it will be.

NAIL ON THE HEAD

In the city of Santa Cruz, staff are well aware of the progress that still needs to be made on affordable housing.

One challenge, planners say, has been recovering from the elimination in early 2012 of the state’s more than 400 redevelopment agencies. Those agencies collected around $5 billion per year statewide, a portion of which was targeted at building low-income housing.

“A lot of times that was our tool to be able to develop those types of housing which may not be as lucrative for a developer,” says Sarah Fleming, principal planner in the city of Santa Cruz Department of Planning and Community Development. “Without those tools, we’re looking at additional ways to do that.”  

That involves changing rules to encourage more development of accessory dwelling units and more inclusionary housing to help generate affordable units.

“It is very much on the radar—how do we address that very low-income need without the tools that we had in the days of yore?” Fleming says.

A number of local groups have sprung up in recent years to present their own ideas.

Santa Cruz YIMBY, which stands for “Yes in My Backyard,” formed last year with the goal of educating people on housing policy and getting them involved by going to city council and planning commission meetings.

Jamileh Cannon, founder of Santa Cruz-based development, design and construction company Workbench, is part of the local YIMBY group.

“Housing is a basic right,” she says. It disturbs her to know that, while the greater Bay Area is thriving economically, housing can easily eat up half of a resident’s income.

In addition to being active with YIMBY, Cannon is taking direct action through her company. Workbench owns a property in Soquel, where it hopes to start construction on 16 new townhomes, including four affordable units, next year.

“It is not adding a giant number of units to the housing stock, but it is something,” she says. It’s important that families, seniors, people on fixed income and others are able to stay in their communities, she adds, and that means building a variety of kinds of housing.

Groups like Save Santa Cruz take the stance that affordable housing, and not just any housing, should be the priority.

“This housing crisis has linked any housing with the idea that any housing is good,” says Candace Brown, a longtime East Morrissey resident and steering committee member of Save Santa Cruz, which formed in opposition to the corridor zoning update, a policy idea that the City Council has back-burnered for now. That plan calls for increased density and taller buildings on Santa Cruz’s busiest streets.

Brown doesn’t believe building market-rate housing will have any impact on affordability.

“No Place Like Home” researchers hope to see housing get dissected from a number of different angles at their Oct. 18 event.

“We know we don’t all agree,” UCSC’s McKay says, “but we think it is really important that we talk to each other.”  

‘No Place Like Home’ will be 7-9 p.m. on Thursday, Oct. 18 in the Santa Cruz Civic Auditorium. Affordable Housing Week begins on Saturday, Oct. 13 at 9:30 a.m with Measure H Canvass and Volunteer Party, located at the campaign kickoff at 115 River St., Santa Cruz. For a full list of the week’s events, visit santacruzcommunitycalendar.org.

Update, Oct. 11: A previous version of this story misreported the address of the Measure H campaign office.

Alisha is a freelance reporter covering tech, policy and business news. Prior to moving to Santa Cruz, she covered policy and politics for CQ Roll Call in Washington, D.C., and for The Associated Press in Michigan, her home state.

3 Comments

3 Comments

  1. Cheatum Liespotter

    October 11, 2018 at 9:27 pm

    I see no evidence that Steve McKay has built, operated, managed, or invested in any significant housing supply. I see no evidence that he has held a political or government office largely concerned with the management off housing. If true, he has no experience. No experience is a substantial issue. I also see plenty of evidence of extreme bias and chasing data to support preconceived conclusions. Housing and the economy is a huge issue. I am not going to take advice from a biased sociologist about what the problems are with income and housing in the U.S., especially when the work refuses to incorporate hard economic analysis and also only interviews people from one side of the issue. As far as I am concerned, the study is nothing but propaganda, activism trying to fan the flames of class warfare. Is there an income versus housing cost problem, you bet. Should we trust Steve McKay to lead us to a an effective, efficient, and equitable solution? Not for my money, no thank you!

    • Intheend werealldead

      October 15, 2018 at 3:39 pm

      i wonder how many of the investors, contractors, and landlords in santa cruz are renters? … oh their not? wow, then they have no experience and should have not have an opinion on renting or the rental market? oh wait, you mean to tell me that the economists who do “hard economic analysis” aren’t renters either? oh you mean that “hard” analysis is based on rational actor theory? hmmm well it seems like you can’t trust them either, they have no experience and their models are based on completely incorrect assumption about how a market works – they STILL use the same models that completely missed the housing crisis and the stagnation of the us economy. they are the ones who still (after nearly 40 years of failed attempts) advocate trickle down economics. i’ll take a qualitative sociological study over a (completely delusional) quantitative or “hard” econometric study any day. at least sociologists don’t claim to be completely objective when it comes to politics (btw that’s not possible). one last thing cheatum, if you don’t think there is class warfare already in progress, then i’d urge you to pay attention to the most famous investor of our times (since apparently you only care what investors and economists think).

      “There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.”

      ― Warren Buffett

  2. Jeff

    October 11, 2018 at 8:10 am

    The elephant in the room is prop 13. It’s prop 13 that made MOST California cities operate at a fiscal deficit that drives taxes, fees and zoning restrictions that created the current housing crisis.

    It’s also the Bay Area delusion that everyone can continue living their bucolic or bubble world ideal that also causes the problem. In 1776 less than 4% of Americans lived in urban cities. Today it’s 80% and growing.

    The reason is: urban areas scale better thus are better for health care, energy, carbon foot print, global warming, etc. are more efficient for all of these per capital with density. If you live in any town or city in a metro area (e.g. Santa Cruz) and you oppose even minor urbanization, you are on the Wrong Side of History. You are the evil jerk who is harming everyone else. You are benefiting economically with your very life directly from the economic growth that requires urbanization but you are asking for privileges to be excluded or absolved our YOUR obligation to the rest of society which you do not deserve as a member of society – you are part of both the problem and you must be part of the solution.

    The world we lived in 50 years ago no longer exists and it’s never coming back. Nostalgia and generally being a “stick in the mud” will not save us. Our world today requires a different contract and solution. If you won’t participate, which includes urbanization and density, YOU are the bad guy, no less than the Koch Brothers are with their obsession with cars and oil!!

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