By Jon Chown
The Santa Cruz County Board of Supervisors on Tuesday, March 11 decided to seek clarification from the California Department of Housing and Community Development about when the county’s housing plan was considered in compliance with state law, a determination that could affect several controversial development proposals under review.
Supervisors voted to send a letter asking the state agency to confirm that the county’s 2023–2031 Housing Element was deemed in substantial compliance on March 15, 2024 — the date county officials say the state completed its substantive review of the plan.
The county formally adopted its Housing Element on Nov. 14, 2023, and submitted revisions to the state on Feb. 23, 2024 after a required public comment period. Unfortunately, the state did nothing with the paperwork for several weeks. It would later issue a certification letter on April 23, 2024 that was backdated to April 12 after acknowledging the administrative error.
The gap between when the Housing Element could have been certified and when it finally was has become a point of contention because several developers submitted projects invoking the Builder’s Remedy provision of California housing law, which allows housing developments to bypass local zoning and General Plan requirements if a jurisdiction does not have a state-compliant Housing Element at the time of application.
Among those projects was a 57-unit apartment building proposed at 841 Capitola Road in Live Oak. Developers filed the application on April 9, 2024, shortly before the state’s certification letter was issued.
The Builder’s Remedy law has been used across California to advance housing developments in cities and counties that failed to adopt state-compliant housing plans on time. No county or city in the state has yet to successfully challenge it in court.
The Santa Cruz County Board of Supervisors ultimately approved the Capitola Road project earlier this year after a lengthy and contentious hearing, with neighbors arguing the development was too large for the surrounding neighborhood. County officials said state housing law left them with the choice to either approve the project or lose a costly court battle fighting it.
The neighbors wanted the county to fight and be the first to beat a developer using Builder’s Remedy. According to documents they obtained through Freedom of Information Act requests, state housing officials had verbally informed county staff by March 15, 2024 that the Housing Element was ready for certification. Internal communications also indicate that no additional substantive review occurred after that date.
County officials say confirming all this could clarify whether Builder’s Remedy should apply to projects submitted during the gap between the completion of the state’s review and the issuance of the formal certification letter.
Other proposals submitted during the same period include developments on Paul Sweet Road and Graham Hill Road. County Supervisor Manu Koenig said that the FIOA requests may have revealed a way for the county to oppose these projects.
“There were no substantial changes after March 15, which means it was in compliance, and then HCD was just kind of sitting on it … which really is not in good faith,’” said Koenig. “We should require the state to acknowledge that.”
Koenig added that state legislators had requested the county issue a formal letter after supervisors discussed the subject with them.
Supervisors also directed county staff to return March 24 with an analysis of how any clarification from the state could affect the pending projects. Unfortunately for the neighbors to the project at 841 Capitola Road, the supervisors’ action doesn’t change much for them. Supervisors already knew of this situation when they approved the project and encouraged neighbors to go to court, rather than spend county money. That still appears to be the case.
“Obviously this board has already had the hearing on 841 Capitola Road. We’ve already approved that project and we cannot go back in time and change that,” said Supervisor Justin Cummings. “So if HCD were to grant this request, all that does is provider greater clarity or strength of argument for anyone who chooses to challenge that approval. And, of course, it could also potentially impact the other projects.”
Concerns about the action were raised by Jason Health, county counsel for the county, who advised the supervisors that there would likely be some sort of legal consequences for the county, but was vague on what they might be. “You are inviting or accepting some kind of risk to the county,” he told them.
Board Chair Monica Martinez wanted to vote for staff to come back with a report on the possible legal consequences, but Cummings and Koenig pushed it forward.
“There’s a lot of risk in everything we do, and I think in this instance, it’s pretty clear HCD made a mistake,” Cummings said.
The motion to send the letter passed 4-1 with Martinez voting against.
TOP PHOTO: This home at 841 Capitola Road is set to be the site of a 57-unit apartment.