LIVE OAK — Standing before a small gathering on a bulldozed dirt lot off East Cliff Drive, MidPen Housing President and CEO Matt Franklin observed that, like many simple good ideas, housing developments can be “remarkably hard.”
Franklin told his audience Wednesday it was seated on what will become the future parking area for the 57-unit 1500 Capitola Road family housing project within the coming two years. The Capitola Road site was a former Santa Cruz County Redevelopment Agency property that was sold by Santa Cruz County to MidPen, a nonprofit developer which specializes in building affordable housing. On the same property, the project’s “phase one” construction for both a Dientes Community Dental clinic and Santa Cruz Community Health center is well underway, with a goal of an October ribbon cutting for the health center. The overall project has been in the works since 2017.
“During the community outreach meetings that we did for this property, it’s a redevelopment property, we heard over and over again from the community that they really wanted this to be a center, a town center, a community center,” Santa Cruz County 1st District Supervisor Manu Koenig said. “And you can’t have a community without housing. That’s why it’s so fantastic to be breaking ground on this project today.”
“If we have learned anything at all from the pandemic, I think that we’ve learned that the link between housing and health care is indisputable,” said Jenny Panetta, executive director of Housing Authority of the County of Santa Cruz. “That both are absolutely necessary for any individual, for any community to prosper.”
Spotlight shifts
The housing project’s groundbreaking comes in a month when affordable housing is taking center stage, both in a practical sense and because housing advocates have dubbed May as Affordable Housing Month.
Real estate investment analyst Stessa calculated Santa Cruz County’s median rent at $3,212, compared to $2,628 in 2019 — a 22% increase in three years. The median rent is the midpoint of rents. That information is according to the company’s recently released report, drawing from the real estate search engine Zillow, U.S. Department of Housing and Urban Development and the U.S. Census Bureau. Stessa calculated that the greater Santa Cruz metro had experienced the 15th largest rent increase out of all small U.S. metros. Meanwhile, nationwide, rents increased 12.5% or about $161 from 2019 to 2022, according to Stessa’s research.
Online residential rental listing marketplace site Dwellsy went one step further, calculating that Santa Cruz’s one-month median rent increase by $200 from March to April of this year caused the city to become the most expensive rental market in the country. The Los Altos-based company, which relies on landlord listings to compile its data, put Santa Cruz’s median rent price in April at $3,200.
Market challenges affordability options
In Capitola Road’s future three-story apartment complex, 26 units will be one bedroom, 15 will be two bedrooms and 16 will be three bedrooms. On-site services will include case management, community resource connection, employment preparation, exercise and nutrition support, independent living skills, financial literacy classes and adult education services. Renters will be those whose income is between 30% and 80% of the area’s median income, assisted by 40 rental subsidy vouchers from the Housing Authority. Also, 15 units will be set aside for people who were formerly homeless.
All units in the housing project will have energy-efficient electric ranges, electric heat pump water heaters and electric space heating and cooling, facilitated by a $142,500 grant from Central Coast Community Energy’s New Construction Electrification Program.
Affordable housing concerns are among top Santa Cruz County resident concerns, a topic repeatedly referenced by candidates during a recent primary election forum. Santa Cruz County Supervisor’s 3rd District contender Justin Cummings, a Beach Flats neighborhood renter who holds a doctorate degree in environmental studies, told voters on Thursday night that he cannot afford the rent for some of the city’s market-rate units, such as those going for $2,800 a month at the Five55 Pacific Avenue luxury apartment development.
According to a report released last week by the California Housing Partnership, Santa Cruz County renters need to earn $48.08 per hour — 3.2 times the state minimum wage — to afford the average monthly asking rent of $2,500. The “California Affordable Housing Needs Report 2022” estimated that state and federal funding for housing production and preservation in Santa Cruz County was $19 million in 2021, a $48% decrease from the year prior.
Lawmakers focus on needs
During the candidate forum, Cummings defended his decision to vote against some housing projects before the Santa Cruz City Council, saying he sought to push back on market-rate developers in order to gain additional affordable units. Opponent Shebreh Kalantari-Johnson, also a Santa Cruz council member and supervisorial candidate, boasted to the audience gathered Thursday night at Hotel Paradox that she had a “100% yes-vote on housing in Santa Cruz.” Third candidate Ami Chen Mills said, if elected, she would seek to declare a “housing emergency” for the county, while Cummings said he would seek to raise the percentage of required affordable units in new housing developments from 15% to 20% and “knock on the state’s door” for funding to support mandated housing growth plans. Kalantari-Johnson said she would seek ways to fast-track fully-affordable housing projects and ease in-law unit permitting requirements.
The Association of Monterey Bay Area Governments is in the process of developing its latest update to the Regional Housing Need Assessment plan for Monterey and Santa Cruz counties. Each region’s governing body divides a state-set number of overall affordable housing units needed for the region to each city and county. A draft version of the plan, available at ambag.org/planning, is in the midst of a 45-day public comment period, through June 6. Housing advocacy group Santa Cruz YIMBY, along with Housing Santa Cruz County and other backers, will host a virtual event titled “The Plan For More Affordable Housing: Influencing the Housing Element Process,” at 4 p.m. Wednesday, with a sign-up at housingsantacruzcounty.com. A full list of Affordable Housing Month events is available online at housingsantacruzcounty.com/affordable-housing-month.
The 1500 Capitola Road project is not the only development celebrating a groundbreaking this month. The City of Santa Cruz will hold a groundbreaking event next week for two of its upcoming affordable housing projects. The Pacific Station South project, a seven-story mixed-use project with 70 low-income apartments, will replace three commercial buildings at 818, 820, 822 Pacific Ave. and 325, 329 Front St. The Cedar Street Apartments, to be located at 524, 532, 538 Center St., will feature 65 supportive residential units above commercial retail space and a public paseo on the Calvary Church parking lot.
Separately, on May 25, Eden Housing breaks ground for 53 affordable apartments for its housing project on a vacant lot at 1482 Freedom Blvd in Watsonville.
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