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Extracted from Consolidated Report

This investigation was originally published as part of a larger consolidated report containing multiple investigations. View the consolidated PDF for the complete document.

Santa Cruz County Grand Jury • 2023-2024

ScottsValleyCityCouncil

Published: December 11, 2023 14 pages
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Note: Missing finding numbers detected: F3, F4, F5, F6, F7, F8, F11

Findings and Recommendations 6 findings

F1 Page 272
While all city and county planning departments have demonstrated a good understanding of the new State housing laws and the need to facilitate more housing, the failure to do so in a timely manner has served to further decrease the availability of housing and further increase the need and cost of more housing. __ AGREE _X_ PARTIALLY DISAGREE __ DISAGREE Response explanation (required for a response other than Agree): The City of Santa Cruz was recently designated as a Prohousing community by the California Department of Housing and Community Development (HCD), one of only 30 communities in the state to receive this designation. As a Prohousing community, the City of Santa Cruz will receive priority consideration for funding programs administered by HCD, the primary state provider of affordable housing funding. This partnership with HCD is a testament to our unwavering commitment to creating accessible housing opportunities and underscores the effectiveness of our initiatives to support affordable housing development in our community. The City of Santa Cruz provides an annual update to the Council on housing legislation changes. With the many annual housing bills, cities and developers alike must be diligent in understanding the latest legislative changes. Even in doing so, the state Housing and Community Development Department and case law provide new interpretations and precedents. The pace of entitlements and construction in Santa Cruz has increased in recent years, partly due to the changes in state legislation and the City’s rapid incorporation of those changes into the daily narrative and development entitlement decisions. While the City has taken advantage of regulatory changes to facilitate housing production on properties it owns, the City is also dependent on the private sector to initiate housing production on private properties. The City’s up-to-date understanding of housing legislation does and will continue to facilitate housing production. The City will continue to remain diligent in staying knowledgeable about the latest legislative changes, interpretations, and case law. Required Response from the Santa Cruz City Council Housing Our Workers Due by August 31, 2023 2022-2023 Consolidated Final Report with Responses 265
No recommendations for this finding
F2 Page 273
With the planned growth of UCSC to 28,000 students, the potential demand for off campus housing for students, faculty and staff has the potential to make the affordable housing problem even worse. _X_ AGREE __ PARTIALLY DISAGREE __ DISAGREE Response explanation (required for a response other than Agree): Thus, it is critical for UCSC to provide on-campus housing for its growing student body and accompanying faculty and staff. Required Response from the Santa Cruz City Council Housing Our Workers Due by August 31, 2023 266 Santa Cruz County Civil Grand Jury
No recommendations for this finding
F9 Page 284
The City of Scotts Valley has facilitated the building of market rate housing in recent years, but has made little effort to develop housing for low income workers. __ AGREE _X_ PARTIALLY DISAGREE __ DISAGREE Response explanation (required for a response other than Agree): Historically, the City had more tools to encourage and facilitate affordable housing but with the elimination of the Redevelopment Agency, those funds have been significantly reduced. The City works closely with housing developers to encourage more diversity in the City’s overall housing inventory, including more rentals, multifamily, mixed use, and smaller units. Chapter 14 of the Scotts Valley Municipal Code (SVMC) outlines the City’s inclusionary zoning requirements that apply to the production of both market rate and below market rate housing production. Residential developments of seven or more dwelling units are required to deed restrict 15 percent of the units for sale/rental to low-income households on- or off-site. Residential developments of six or fewer dwelling units are required to pay an in-lieu affordable housing fee. As such, new residential development projects of seven or greater units are required to provide affordable housing for low-income workers. The City’s Affordable Housing Subcommittee reviews proposed housing projects and often advocates for even more low and very-low affordable units. 2022-2023 Consolidated Final Report with Responses 277
No recommendations for this finding
F10 Page 285
The City of Scotts Valley has made little progress towards developing the Town Square project which could accommodate both business and housing. __ AGREE _X_ PARTIALLY DISAGREE __ DISAGREE Response explanation (required for a response other than Agree): The development of Town Center has faced a complex set of challenges, many of which are outside of the City’s control. For the last two years, the City has been actively engaged in characterizing and removing environmental contamination from the site and has initiated a Town Center Specific Plan update to encourage the development of the Town Center. The site continues to be included in the City’s Housing Element and in the most recent draft, the number of housing units is proposed to increased significantly which should improve the economic viability of the project.
No recommendations for this finding
F12 Page 274
While all local municipalities have voiced support for prioritizing housing for local workers, only some of them have clear local preference guidelines that give some priority to local workers. Without clear guidelines and incentives, new housing is more likely to be purchased by those who do not live and work here. __ AGREE _X_ PARTIALLY DISAGREE __ DISAGREE Response explanation (required for a response other than Agree): While new housing can be purchased (or rented) by those who do not currently live and work in the County, it is the City’s experience in projects where the City is involved that the majority of housing does get purchased (or rented) by individuals already living or working in the area. That said, the City’s inclusionary housing ordinance gives preference to local residents, consistent with state and federal law. (Santa Cruz Municipal Code (“SCMC”) 24.16.045(6).) The City’s Zoning Code requires that local preferences for rental inclusionary units shall be given in the following priority order: a. Residents of the City of Santa Cruz for at least one year. b. Those employed in the City of Santa Cruz. c. Residents of the County of Santa Cruz for at least one year. d. Those employed in the County of Santa Cruz. (SCMC 24.16.045(7).) As consistent with state and federal law, the City’s inclusionary ordinance also gives preferences for ownership inclusionary units in the following priority order: a. Those who live or work in the City of Santa Cruz. b. Those who live or work in the County of Santa Cruz. (SCMC 24.16.045(7).) When it comes to market-rate residences that are not subject to the City’s affordability restrictions, the City cannot dictate to whom those residences are sold or rented. However, as noted above, the City’s local regulations set forth a clear preference for in- County workers and residents in the inclusionary units that are part of private developments. The City also requires the aforementioned local preferences in the housing projects to which the City provides financial support, as a condition of the City providing said support. Required Response from the Santa Cruz City Council Housing Our Workers Due by August 31, 2023 2022-2023 Consolidated Final Report with Responses 267
Related Recommendations (1)
R17
Page 277
, the City of Santa Cruz should develop clear, measureable guidelines to ensure that preference is given to local workers in the construction of low income housing. (F12) __ HAS BEEN IMPLEMENTED – summarize what has been done HAS NOT YET BEEN IMPLEMENTED BUT WILL BE IN THE FUTURE – __ summarize what will be done and the timeframe REQUIRES FURTHER ANALYSIS – explain the scope and timeframe __ (not to exceed six months) _X_ WILL NOT BE IMPLEMENTED – explain why Required response explanation, summary, and timeframe: The City does have a Local Business Preference Ordinance (SCMC 3.11), which applies when the City itself is evaluating bids in a competitive process “for goods, supplies, equipment, materials, services or professional services”[.] (SCMC 3.11.012.) Similarly, Chapter 3.10 of the Municipal Code is entitled “Local Hiring – Public Works Contractors” and provides that: “all city contracts for public works or improvements of estimated value of greater than the formal bid limit shall contain provisions pursuant to which the contractor promises to make a good-faith effort, with the assistance of local labor union hiring halls or community organizations designated by the city to employ qualified individuals who are, and have been for one year prior to the effective date of the contract, residents of the county of Santa Cruz in sufficient numbers so that no less than fifty percent of the contractor’s total construction work force, including any subcontractor work force, measured in labor work hours, is comprised of Santa Cruz County residents.” (SCMC 3.10.010(1).) However, it is not typical for these Ordinances to apply to the construction of low-income housing, given that the City is not the party that directly seeks or reviews bids for construction services. Instead, while the City certainly helps to facilitate the development of low-income housing, the project itself is executed by a housing developer. Given that the City itself does not have a direct role in contracting for construction services for housing projects, it is not clear that the City has a lawful regulatory path forward to be able to enact the recommended local preferences. Additionally, the City would note that the available local construction workforce is very limited for many reasons (e.g., housing availability, general cost of living, an overall lack of enough workers currently trained in this sector). Thus, even assuming for the sake of argument that the recommended local p
F13 Page 275
All municipalities are trying to identify and facilitate the building of housing projects, but most of that is done independently of the other municipalities or with outside partners. Since workforce housing and transportation gridlock is a county-wide problem, all county municipalities need to work more closely together and with property owners to develop housing solutions. __ AGREE _X_ PARTIALLY DISAGREE __ DISAGREE Response explanation (required for a response other than Agree): While representatives from the different jurisdictions can and do regularly learn from one another and collaborate on the best ways to grow across the region, particularly when it comes to planning for and requiring increased densities in areas close to transit and other daily needs, individual projects are typically best handled by the jurisdiction in which they are located. Although most specific housing projects are developed without the involvement of outside jurisdictions, there is coordination and communication between the jurisdictions when a city’s or the county’s land ownership occurs in another jurisdiction and with regards to transportation issues that cross jurisdictional boundaries. For example, the City regularly coordinates with the County to facilitate housing development, including affordable housing, on County-owned properties within the City, and the City coordinates with Scotts Valley regarding land the City owns in that jurisdiction. And the Regional Transportation Commission, Santa Cruz Metropolitan Transit, and Association of Monterey Bay Area Governments all work on regional transportation planning and implementation, and those organizations are all governed by local government officials. Planning Directors throughout the County also meet at least five times per year to collaborate on housing and other related issues. The Planning Department staff from countywide jurisdictions also collaborate through AMBAG meetings, trainings, discussions of state legislation, joint presentations, and various other communication streams. Required Response from the Santa Cruz City Council Housing Our Workers Due by August 31, 2023 268 Santa Cruz County Civil Grand Jury
Related Recommendations (1)
R16
Page 276
the City of Santa Cruz should demonstrate that they have reestablished regular meetings of a workgroup or other entity that would allow planners from all 5 county jurisdictions to share ideas on housing development and develop joint projects. (F13) _X_ HAS BEEN IMPLEMENTED – summarize what has been done HAS NOT YET BEEN IMPLEMENTED BUT WILL BE IN THE FUTURE – __ summarize what will be done and the timeframe REQUIRES FURTHER ANALYSIS – explain the scope and timeframe __ (not to exceed six months) __ WILL NOT BE IMPLEMENTED – explain why Required response explanation, summary, and timeframe: Planning Directors throughout the County meet at least five times per year to collaborate on housing and other related issues. The Planning Department staff from countywide jurisdictions also collaborate through AMBAG meetings, trainings, discussions of state legislation, joint presentations, and various other communication streams. As previously noted in the response to F13, specific development projects typically are handled by the specific jurisdiction where they are located. Required Response from the Santa Cruz City Council Housing Our Workers Due by August 31, 2023 2022-2023 Consolidated Final Report with Responses 269

Additional Recommendations 4

These recommendations are not explicitly linked to specific findings.