ARTICLE
Imagining Our Housing Future The Rules That Will Define Us The City of Santa Cruz Planning Commission will continue its consideration of proposed modification to the Downtown Recovery Plan (described in the Chamber May 12 eNews.) Also pending are the long-awaited zoning code amendments that will implement the City’s General Plan adopted in June of 2012 and the subsequent detail being developed in the City’s Corridor Plan. Together these documents will describe the environment in which private-sector developers will be responding to City’s housing crisis. The Downtown Plan, the zoning code, and the processes for obtaining approval for housing projects throughout City define the environment in which developers must operate. It is not overreaching to say that the future of our community – who lives here, what they do, the quality of their lives – will be significantly influenced by these plans and codes. The Downtown Plan and the zoning code are the principal documents that define the use of property in Santa Cruz. Many of these regulations describe the “maximum” use of the property limiting the size of the building and the size of the “footprint” of the building on the lot. The current revisions are also reconsidering what should be used to measure these features e.g., building height or number of floors) and the degree of specificity regarding elements such as the building’s shape and architectural detail. The product of these rules describes the “basic” building permitted on each property. However, as has long been the case, these code provisions also provide for exceptions. Historically these exceptions turned on “public benefits” that might result from the alteration of the provisions. These used to relate primarily to improvements in the quality or utility of the building itself. For instance, the location of a building on a lot to preserve trees or a design that was more complimentary to existing nearby structures. But over time character of these conditions was expanded, especially in the late 1990s and early 2000s. The public benefits required to obtain exceptions were increasingly focused on other public good rather than improving the utility, design, or compatibility of the building itself. The quid-pro-quo for exceptions was increasingly direct contributions to the public welfare for things such as parks, streets and roads, parking and other public investments. Sometimes these contributions related to the project site or the building itself, sometimes they came in the form of other benefits to the City. These conditions played a major role in the adoption of plans for major projects such as the West Coast Santa Cruz Hotel and the several iterations of the La Bahia hotel, and also in smaller projects, especially rental housing projects. The uncertainty of the process of negotiating a project’s design, cost, and public contributions has deterred local developers for several decades. It has made it difficult to estimate the cost of any given project and can result in tradeoffs that require reduction the quality of a project itself. Over time it has had the effect of discouraging some developers from undertaking projects at all. And, most importantly, it has contributed to the shortage of housing and the continuing escalation of the cost of both new and existing housing. One would think that given the value of housing in Santa Cruz almost anyone could be successful in developing more. But we have as a community defined strict limits to the quantity of land available for housing development. There is virtually no “green field” property that is currently undeveloped. To create housing implies the risk of tearing-down a property that is already generating high rents. Existing land use rules frequently require developers to seek exceptions before a project is economically viable. It is important to remember that the City is still operating under a zoning code that was adopted pursuant to the General Plan implemented in 1992 – a time when the population of the City of Santa Cruz was 27% less than today. The “permitted” option is to build low-density housing that is “by design” very expensive in today’s market. As a result many developers undertake the process of requesting variances – from reducing the amount of required parking to reflect changing national and local parking standards to developing smaller units, taller buildings, and/or a greater proportion of the property than is permitted under current rules. This results in an open-ended negotiation between the developer/property owner and the City. Conditions for exceptions to the rules might include owner-subsidized rents for some units, contributions to other projects, or other compromises that cost money. Of course the negotiation process, itself, costs money: legal and design costs regarding project revisions, direct costs of the changes in the project, and/or contributions to be made by the developer for other purposes. Unfortunately, this is not the end of the uncertainty. The project as modified must now be approve by the City Council which often faces the demands of nearby neighbors, environmental groups, transportation advocates, and an array of other individual interests for more changes or denial of the project altogether. Over the past few years these have resulted in public debates between affordable housing advocates and neighborhood preservationist… with the housing builder (and the City) caught in the middle. If these issues had been resolved in the process at which the zoning code was adopted– in a form that did not require further debate over contingencies, exceptions, and conditions – the developer would not be required to run the risks of this last gauntlet. Providing greater certainty would not deprive the public or its special interests a voice in such decisions; it would require that those issues be resolved in the discussions regarding zoning rules themselves that would then guide development throughout the design and entitlement process without future hearings. Could such a “prior approval” methodology actually succeed? Yes, it could and does in many other communities. In fact, it was the basis for Santa Cruz’s the original Downtown Recovery Plan, currently being considered by the Planning Commission. The Recovery Plan provides that property owners and developers who submitted designs that are consistent with the plan are entitled as a matter of right to build the buildings contemplated by the plan. Today the result is our highly regarded downtown streetscape and buildings. Is the City moving towards this position? Perhaps. The City’s is considering many elements of the same sort of form-based code embodied in the Downtown Recovery Plan in the pending Downtown Plan amendments. The ROMA design group from San Francisco, who wrote much of the original plan, continues to be a principal consultant in the revisions of the document. On the other hand, the City is also studying a Community Benefits Program for Santa Cruz’s Mixed Use Corridors that would memorialize a complex scoring of “public benefits,” A high score would permit the development of larger / more dense buildings in exchange for providing things like subsidized housing, day care, public right-of-way improvements. This is simply the negotiation process cast in stone. This would turn every project along the corridor into one of two things: the building allowed by the basic zoning requirements – almost certainly containing less housing -- or, an extended negotiation replicating the same sorts of uncertainties and expenses that have caused the City to be one of the five least affordable in the United States. The Chamber will continue to monitor progress on these rules and work to insure an economically viable plan for the City, its residents and the economic community dependent upon these outcomes.
The Rules That Will Define Us
The City of Santa Cruz Planning Commission will continue its consideration of proposed modification to the Downtown Recovery Plan (described in the Chamber May 12 eNews.) Also pending are the long-awaited zoning code amendments that will implement the City’s General Plan adopted in June of 2012 and the subsequent detail being developed in the City’s Corridor Plan. Together these documents will describe the environment in which private-sector developers will be responding to City’s housing crisis.
The Downtown Plan, the zoning code, and the processes for obtaining approval for housing projects throughout City define the environment in which developers must operate. It is not overreaching to say that the future of our community – who lives here, what they do, the quality of their lives – will be significantly influenced by these plans and codes.
The Downtown Plan and the zoning code are the principal documents that define the use of property in Santa Cruz. Many of these regulations describe the “maximum” use of the property limiting the size of the building and the size of the “footprint” of the building on the lot. The current revisions are also reconsidering what should be used to measure these features e.g., building height or number of floors) and the degree of specificity regarding elements such as the building’s shape and architectural detail. The product of these rules describes the “basic” building permitted on each property.
However, as has long been the case, these code provisions also provide for exceptions. Historically these exceptions turned on “public benefits” that might result from the alteration of the provisions. These used to relate primarily to improvements in the quality or utility of the building itself. For instance, the location of a building on a lot to preserve trees or a design that was more complimentary to existing nearby structures.
But over time character of these conditions was expanded, especially in the late 1990s and early 2000s. The public benefits required to obtain exceptions were increasingly focused on other public good rather than improving the utility, design, or compatibility of the building itself. The quid-pro-quo for exceptions was increasingly direct contributions to the public welfare for things such as parks, streets and roads, parking and other public investments.
Sometimes these contributions related to the project site or the building itself, sometimes they came in the form of other benefits to the City. These conditions played a major role in the adoption of plans for major projects such as the West Coast Santa Cruz Hotel and the several iterations of the La Bahia hotel, and also in smaller projects, especially rental housing projects.
The uncertainty of the process of negotiating a project’s design, cost, and public contributions has deterred local developers for several decades. It has made it difficult to estimate the cost of any given project and can result in tradeoffs that require reduction the quality of a project itself. Over time it has had the effect of discouraging some developers from undertaking projects at all. And, most importantly, it has contributed to the shortage of housing and the continuing escalation of the cost of both new and existing housing.
One would think that given the value of housing in Santa Cruz almost anyone could be successful in developing more. But we have as a community defined strict limits to the quantity of land available for housing development. There is virtually no “green field” property that is currently undeveloped. To create housing implies the risk of tearing-down a property that is already generating high rents.
Existing land use rules frequently require developers to seek exceptions before a project is economically viable. It is important to remember that the City is still operating under a zoning code that was adopted pursuant to the General Plan implemented in 1992 – a time when the population of the City of Santa Cruz was 27% less than today. The “permitted” option is to build low-density housing that is “by design” very expensive in today’s market.
As a result many developers undertake the process of requesting variances – from reducing the amount of required parking to reflect changing national and local parking standards to developing smaller units, taller buildings, and/or a greater proportion of the property than is permitted under current rules.
This results in an open-ended negotiation between the developer/property owner and the City. Conditions for exceptions to the rules might include owner-subsidized rents for some units, contributions to other projects, or other compromises that cost money. Of course the negotiation process, itself, costs money: legal and design costs regarding project revisions, direct costs of the changes in the project, and/or contributions to be made by the developer for other purposes.
Unfortunately, this is not the end of the uncertainty. The project as modified must now be approve by the City Council which often faces the demands of nearby neighbors, environmental groups, transportation advocates, and an array of other individual interests for more changes or denial of the project altogether. Over the past few years these have resulted in public debates between affordable housing advocates and neighborhood preservationist… with the housing builder (and the City) caught in the middle.
If these issues had been resolved in the process at which the zoning code was adopted– in a form that did not require further debate over contingencies, exceptions, and conditions – the developer would not be required to run the risks of this last gauntlet.
Providing greater certainty would not deprive the public or its special interests a voice in such decisions; it would require that those issues be resolved in the discussions regarding zoning rules themselves that would then guide development throughout the design and entitlement process without future hearings.
Could such a “prior approval” methodology actually succeed? Yes, it could and does in many other communities. In fact, it was the basis for Santa Cruz’s the original Downtown Recovery Plan, currently being considered by the Planning Commission.
The Recovery Plan provides that property owners and developers who submitted designs that are consistent with the plan are entitled as a matter of right to build the buildings contemplated by the plan. Today the result is our highly regarded downtown streetscape and buildings.
Is the City moving towards this position? Perhaps. The City’s is considering many elements of the same sort of form-based code embodied in the Downtown Recovery Plan in the pending Downtown Plan amendments. The ROMA design group from San Francisco, who wrote much of the original plan, continues to be a principal consultant in the revisions of the document.
On the other hand, the City is also studying a Community Benefits Program for Santa Cruz’s Mixed Use Corridors that would memorialize a complex scoring of “public benefits,” A high score would permit the development of larger / more dense buildings in exchange for providing things like subsidized housing, day care, public right-of-way improvements. This is simply the negotiation process cast in stone.
This would turn every project along the corridor into one of two things: the building allowed by the basic zoning requirements – almost certainly containing less housing -- or, an extended negotiation replicating the same sorts of uncertainties and expenses that have caused the City to be one of the five least affordable in the United States.
The Chamber will continue to monitor progress on these rules and work to insure an economically viable plan for the City, its residents and the economic community dependent upon these outcomes.