ARTICLE
For the better part of the last six years, the Santa Cruz County Chamber (and several other business organizations throughout our region) have made Housing our #1 policy issue. At every event, business after hours, community affairs committee meeting and in casual conversations that I’ve had during the last half decade — the word housing and associated thoughts stream into the discussion. Yes, there are auxiliary comments too — homelessness, land use, community diversity, low level crime, traffic, neighborhood gentrification, urban boundary lines, green belts, rent control, Not in my Back Yard (NIMBY) Yes in my Back Yard (YIMBY), walkable and bike friendly communities all connected to housing. Yet, here we are holding a bag of options provided to us from the state legislature and in some instances through minor tweaks to local zoning and regulatory processes, legislative fixes to move communities forward. However, we can’t seem to get out of our own path. While these adjustments in ADU language, bonus density opportunities (in Santa Cruz County) and short stop ideas from planning and community development departments can help, we have fallen so far behind the housing development curve — it will take bold action to change course now. Sadly, as a whole, our local governments seem to not grasp the urgency of the problem and respond only out of pressure from those in our community that say they want affordable housing, then press the city leaders to go in the opposite direction. Let’s take one example from the silver tongued wording of the City Council’s action at last Tuesday’s council meeting — the last meeting of 2019. After hours of discussion on a request to increase the percentage of housing units that must be allocated as ‘affordable,’ the moment came when one Councilmember made a motion to increase the City’s inclusionary housing percentage from 15% to 20% without any economic justification that 20% is feasible. This motion was against the City staff recommendation, the Planning Commission and series of housing advocates that pleaded with the City Council to choose a different path — and moments later we hear a hue cry from city council colleagues and City staff to exempt a housing project for Santa Cruz City school teachers. You see, Santa Cruz City schools have a teacher shortage. A teacher here cannot afford to reside in the region for lack of housing. The inconvenient truth is that a teacher’s salary is above the means for them to qualify for ‘affordable housing.’ Essentially, it is not a lack of affordable housing (an economic means test) but a complete lack of ‘HOUSING’ that makes Santa Cruz County the least affordable place to live in the United States. The majority vote of the City council response was ‘matter of fact.’ Their conceptual idea was: “Here’s how we’ll address this issue — let’s convene another study group to re-review the housing blue print recommendations from a previous city council — drop kick the action to the Planning Commission to come up for novel ways to make housing affordable.” According to the Planning Commission pre-agenda set for tonight (Dec. 19) - The commission will consider proposed updates to the city’s Downtown Plan — including allowing tattoo parlors, modifying alcohol sales permits and formalizing “personal services” standards — and creation of a new ad hoc committee on inclusionary housing. A slight-of-hand gesture: The council believes that sending the updated ordinance back for Planning Commission review, with a request to prioritize modifying future versions to add “flexibility” for workforce housing projects. Really? We have traveled this path for the past two plus decades and we are not making progress. One word can summarize the council’s action: Delay. It is intriguing to look around the state and listen to how other communities are addressing housing issues: Bay Area housing advocates want to take advantage of a new state law to generate up to $1 billion per year in fresh funds for affordable housing. The recently formed campaign, Bay Area Housing for All, aims to get a measure on the November 2020 ballot in all nine Bay Area counties. “In the Bay Area region, we are so fragmented,” said Geeta Rao, Northern California director for Enterprise Community Partners, a group that helps developers assemble funding for subsidized housing, which is managing the campaign along with the Non-Profit Housing Association of Northern California. The state Legislature passed AB 1487, a law that gives a regional agency the authority to raise regional affordable funds using parcel tax, general obligation bond, a gross receipts tax, business taxes or commercial linkage fees. For this region, that authority falls to Metropolitan Transportation Commission and the Association of Bay Area Governments. Is it time for us to stop the city-by-city approach and focus on a regional approach? In 2018, we tried passing a county-wide housing measure but failed to garner the necessary 2/3 voter approval. So two years later, we have fallen further behind. Building affordable housing requires developers to create what’s known as a layer cake of funding sources from local, state and federal programs, grants, tax credits and other sources. With the cost of construction rising in recent years and competition for sites from market-rate developers, non-profit developers have had a hard time making projects financially feasible. Insert the City Council’s new ordinance of 20% for both for sale and rental housing and you guessed it — the action will increase the cost of unit to offset the ‘affordable unit’ if the builder is willing to take the financial risk. While we are talking affordable here — let’s also add in another layer of cost associated with the state’s movement (approved by the legislature and signed into law by Governor Brown in 2018) to require all new housing construction to have solar roofs. This new construction policy shift is one way to address climate change (a policy that the Chamber supports) by making new homes more energy efficient. Regardless of the intent to capture the sun for more renewable and sustainable energy — the mandated solar addition will increase the cost of new housing. Just last week, former governors Jerry Brown and Arnold Schwarzenegger celebrated the installation of a million solar roofs across the state. There is an on-going debate on how roof top solar is a competitive option to utilities owned and operated solar farms. A battle over where California will get its renewable power is poised to heat up in coming months — as the thriving rooftop solar industry faces off with the state’s most powerful electric utilities. At stake is the extent to which solar power will be generated atop homes and businesses, as opposed to using massive solar arrays in the desert and other remote locations. Experts say the outcome could dramatically influence the cost of power in the state — and, by extension, the speed at which residents adopt electric appliances and cars. Ratcheting up the tension, private purchases of solar panels have outpaced expectations over the last decade. Back to the question at hand: What do we do regionally to address our housing shortage — both in the short and long term? Our partner in the region - Monterey Bay Economic Partnership (MBEP) — is doing their due diligence to seek regional solutions that have a lasting impact. In 2016 MBEP launched its housing initiative in conjunction with the Housing Trust of Silicon Valley. The Monterey Bay Housing Trust (MBHT) is a revolving loan fund managed by MBEP, enabled through a partnership with Housing Trust Silicon Valley. The goal of this fund is to increase the supply of affordable housing in the region, with an emphasis on low to very low income households. MBHT loans can finance acquisition, pre-development or construction of affordable housing in the Monterey Bay region, inclusive of Santa Cruz, San Benito and Monterey counties. To date, most of the housing project approvals have come in Monterey and San Benito Counties — with Santa Cruz County cities lagging behind. In 2018, they further developed a white paper analysis to help drive the conversation: 2018/08/MBRegionLocalHousingPolicyWP_Final.pdf The full intention of these activities is to spur on housing development and link potential funding strategies to build more housing. The Chamber supports this activity and has joined with MBEP, other business organizations and housing advocates to support housing projects throughout Santa Cruz County. But this advocacy is a project by project effort. The drip-drip-drip process has not produced the volume of housing construction we desperately need — TODAY. Sadly, the latest activities in the City of Santa Cruz has hindered real progress to produce much needed housing. Santa Cruz has the best opportunity to build more housing but it will take leadership on this issue from the City Council. As we enter a new decade in 2020, the County and every city must step forward to update general plans that include more density in design and development projects. Santa Cruz County is at a tipping point — let’s make a serious path correction before it is too late.
For the better part of the last six years, the Santa Cruz County Chamber (and several other business organizations throughout our region) have made Housing our #1 policy issue. At every event, business after hours, community affairs committee meeting and in casual conversations that I’ve had during the last half decade — the word housing and associated thoughts stream into the discussion. Yes, there are auxiliary comments too — homelessness, land use, community diversity, low level crime, traffic, neighborhood gentrification, urban boundary lines, green belts, rent control, Not in my Back Yard (NIMBY) Yes in my Back Yard (YIMBY), walkable and bike friendly communities all connected to housing. Yet, here we are holding a bag of options provided to us from the state legislature and in some instances through minor tweaks to local zoning and regulatory processes, legislative fixes to move communities forward. However, we can’t seem to get out of our own path. While these adjustments in ADU language, bonus density opportunities (in Santa Cruz County) and short stop ideas from planning and community development departments can help, we have fallen so far behind the housing development curve — it will take bold action to change course now. Sadly, as a whole, our local governments seem to not grasp the urgency of the problem and respond only out of pressure from those in our community that say they want affordable housing, then press the city leaders to go in the opposite direction.
Let’s take one example from the silver tongued wording of the City Council’s action at last Tuesday’s council meeting — the last meeting of 2019. After hours of discussion on a request to increase the percentage of housing units that must be allocated as ‘affordable,’ the moment came when one Councilmember made a motion to increase the City’s inclusionary housing percentage from 15% to 20% without any economic justification that 20% is feasible. This motion was against the City staff recommendation, the Planning Commission and series of housing advocates that pleaded with the City Council to choose a different path — and moments later we hear a hue cry from city council colleagues and City staff to exempt a housing project for Santa Cruz City school teachers. You see, Santa Cruz City schools have a teacher shortage. A teacher here cannot afford to reside in the region for lack of housing. The inconvenient truth is that a teacher’s salary is above the means for them to qualify for ‘affordable housing.’ Essentially, it is not a lack of affordable housing (an economic means test) but a complete lack of ‘HOUSING’ that makes Santa Cruz County the least affordable place to live in the United States.
The majority vote of the City council response was ‘matter of fact.’ Their conceptual idea was: “Here’s how we’ll address this issue — let’s convene another study group to re-review the housing blue print recommendations from a previous city council — drop kick the action to the Planning Commission to come up for novel ways to make housing affordable.” According to the Planning Commission pre-agenda set for tonight (Dec. 19) - The commission will consider proposed updates to the city’s Downtown Plan — including allowing tattoo parlors, modifying alcohol sales permits and formalizing “personal services” standards — and creation of a new ad hoc committee on inclusionary housing. A slight-of-hand gesture: The council believes that sending the updated ordinance back for Planning Commission review, with a request to prioritize modifying future versions to add “flexibility” for workforce housing projects. Really? We have traveled this path for the past two plus decades and we are not making progress.
One word can summarize the council’s action: Delay.
It is intriguing to look around the state and listen to how other communities are addressing housing issues: Bay Area housing advocates want to take advantage of a new state law to generate up to $1 billion per year in fresh funds for affordable housing. The recently formed campaign, Bay Area Housing for All, aims to get a measure on the November 2020 ballot in all nine Bay Area counties. “In the Bay Area region, we are so fragmented,” said Geeta Rao, Northern California director for Enterprise Community Partners, a group that helps developers assemble funding for subsidized housing, which is managing the campaign along with the Non-Profit Housing Association of Northern California.
The state Legislature passed AB 1487, a law that gives a regional agency the authority to raise regional affordable funds using parcel tax, general obligation bond, a gross receipts tax, business taxes or commercial linkage fees. For this region, that authority falls to Metropolitan Transportation Commission and the Association of Bay Area Governments. Is it time for us to stop the city-by-city approach and focus on a regional approach? In 2018, we tried passing a county-wide housing measure but failed to garner the necessary 2/3 voter approval. So two years later, we have fallen further behind.
Building affordable housing requires developers to create what’s known as a layer cake of funding sources from local, state and federal programs, grants, tax credits and other sources. With the cost of construction rising in recent years and competition for sites from market-rate developers, non-profit developers have had a hard time making projects financially feasible. Insert the City Council’s new ordinance of 20% for both for sale and rental housing and you guessed it — the action will increase the cost of unit to offset the ‘affordable unit’ if the builder is willing to take the financial risk.
While we are talking affordable here — let’s also add in another layer of cost associated with the state’s movement (approved by the legislature and signed into law by Governor Brown in 2018) to require all new housing construction to have solar roofs. This new construction policy shift is one way to address climate change (a policy that the Chamber supports) by making new homes more energy efficient. Regardless of the intent to capture the sun for more renewable and sustainable energy — the mandated solar addition will increase the cost of new housing.
Just last week, former governors Jerry Brown and Arnold Schwarzenegger celebrated the installation of a million solar roofs across the state. There is an on-going debate on how roof top solar is a competitive option to utilities owned and operated solar farms. A battle over where California will get its renewable power is poised to heat up in coming months — as the thriving rooftop solar industry faces off with the state’s most powerful electric utilities. At stake is the extent to which solar power will be generated atop homes and businesses, as opposed to using massive solar arrays in the desert and other remote locations.
Experts say the outcome could dramatically influence the cost of power in the state — and, by extension, the speed at which residents adopt electric appliances and cars. Ratcheting up the tension, private purchases of solar panels have outpaced expectations over the last decade.
Back to the question at hand: What do we do regionally to address our housing shortage — both in the short and long term? Our partner in the region - Monterey Bay Economic Partnership (MBEP) — is doing their due diligence to seek regional solutions that have a lasting impact. In 2016 MBEP launched its housing initiative in conjunction with the Housing Trust of Silicon Valley. The Monterey Bay Housing Trust (MBHT) is a revolving loan fund managed by MBEP, enabled through a partnership with Housing Trust Silicon Valley. The goal of this fund is to increase the supply of affordable housing in the region, with an emphasis on low to very low income households. MBHT loans can finance acquisition, pre-development or construction of affordable housing in the Monterey Bay region, inclusive of Santa Cruz, San Benito and Monterey counties. To date, most of the housing project approvals have come in Monterey and San Benito Counties — with Santa Cruz County cities lagging behind.
In 2018, they further developed a white paper analysis to help drive the conversation: 2018/08/MBRegionLocalHousingPolicyWP_Final.pdf
The full intention of these activities is to spur on housing development and link potential funding strategies to build more housing. The Chamber supports this activity and has joined with MBEP, other business organizations and housing advocates to support housing projects throughout Santa Cruz County. But this advocacy is a project by project effort. The drip-drip-drip process has not produced the volume of housing construction we desperately need — TODAY.
Sadly, the latest activities in the City of Santa Cruz has hindered real progress to produce much needed housing. Santa Cruz has the best opportunity to build more housing but it will take leadership on this issue from the City Council.
As we enter a new decade in 2020, the County and every city must step forward to update general plans that include more density in design and development projects. Santa Cruz County is at a tipping point — let’s make a serious path correction before it is too late.