Santa Cruz voters will decide March 5 on a measure that will shape the future of downtown development — or at least the height of it.
Measure M, which appears on ballots only in the City of Santa Cruz, would require a referendum on any development project that exceeds the existing height limits, generally around seven stories for high-rise buildings. The measure would also raise the requirements for affordable units in new developments to 25% from the current 20%.
A grassroots organization calling itself “Housing for People” developed the proposal in response to a city plan to redevelop a 29-acre site just south of downtown — from Laurel Street to Beach Hill, and from the San Lorenzo River to Depot Park — with a heavy emphasis on new housing.
The plan, which still needs final approval, calls for 1,600 new housing units, some in high-rises up to 12 stories tall. While not officially a part of the project, the new development also includes room for a new arena for the Santa Cruz Warriors. City officials say the development plan is a key strategy to comply with a state mandate to build more than 3,700 new housing units in the city by 2031. Measure M backers say there is plenty of room to build elsewhere in the city, and that the downtown expansion should be scaled down.
“It would be a forever change in Santa Cruz that a lot of people think is too much, too soon,” said Housing for People spokesman Frank Barron, a retired urban planner.
Barron noted that a 12-story apartment building would be roughly twice as tall as any structure currently in the city, including the newest apartment building under construction on the northeast corner of Pacific and Laurel Avenues.
“We think that the people should have some say in it,” he said. “It's not that there's anything wrong with it. If 50% plus one want to do it, it'll happen. But the citizens should have a say in how the city is going to grow and look.”
Barron said that the other part of the proposal, raising the affordability requirement, is a small but meaningful way to address a longstanding issue in Santa Cruz.
“It's still a very minimal amount of affordable housing that's going to get built,” he said. “But at least we're going to bump it up by this marginal amount, 5%. And we do think it can be done.”
But opponents of the measure say it is loaded with unintended consequences.
“It covers way too many things that are irrelevant,” said Don Lane, a former Santa Cruz Mayor and an expert on affordable housing. Lane is a leader of Affordable Housing Advocates, which is campaigning against Measure M. Other opponents include the Downtown Association of Santa Cruz, which represents downtown businesses, and the Santa Cruz Warriors, though the team noted in a statement that its new arena — and the associated development — would be no more than 85 feet tall, or within the existing height limits.
Affordable Housing Advocates, which, according to campaign finance records, is heavily backed by development interests including Swenson Builders, Milpitas-based Devcon Construction, and the Santa Cruz Seaside Company, which owns the Beach Boardwalk, argues that the measure would force costly elections, even for trivial projects.
“So things like fences and granny units, if the city is going to change the rules about height on those, it would also be required to have a vote,” Lane said.
Barron said that the measure would only apply to major projects that require a change to the city’s zoning ordinance or general plan. But Lane pointed to the language in the measure itself, which would require a vote on “development projects.” The zoning ordinance defines a development project as “a project involving the issuance of a permit for construction or reconstruction.”
The city’s impartial fiscal analysis of the proposal does not address the possibility of citywide elections for things like fence heights, but it does predict that the measure would add, on average, one new referendum per year, at a cost of between $115,000 and $185,000. Barron notes that developers are typically expected to bear the cost of such votes.
Lane said the city already has a robust process for public input, including a requirement for public meetings before any big project can be considered. “That’s democracy, too,” he said.
And, he said, defeating Measure M would not mean that citizens could not force a referendum on an individual project like a big high-rise. But he said that a blanket provision under Measure M would hinder housing development in the city.
“A home builder who was bumping up against these rules would just say, never mind, I'm not going to do it, because why am I going to wait for a year for an election and spend all the money?” he said.
Raising the affordability requirement — even by 5% — would also scare developers away, Lane said, defeating the purpose of increasing affordable housing.
“Some builders are just barely making it possible with that 20%. If it goes to 25%, that's just an additional cost to the builder. And a lot of builders are just going to go, 'I can't make it go anymore,'” he said. “It's good that we want to have affordable apartments. I'm all for that. But if we make it so that the builders don't build anything, we get 25% of nothing.”
But Barron said that in a desirable market like Santa Cruz, developers are not going anywhere.
“We are one of the top beach towns in California, if not the world, 45 minutes away from the number one economic engine in the world. So we have a huge amount of demand for housing here,” he said. “We are in such a unique situation that I'm not concerned that developers will go elsewhere.”
But that demand has not been enough to prevent the city’s critical housing shortage.
“The city of Santa Cruz in the last 40 years has grown by 18,000 in population, and yet we've only constructed 3,500 housing units in that same time,” Lane said. “We have a lot of catching up to do here.”
