Making Housing More Affordable in Santa Cruz County

County Board of Supervisors Approves Revised Housing Regulations

By Zach Friend, County Supervisor 2nd District

With median home prices in the County currently hovering around $700,000 it’s easy to see why many in our community find it difficult to afford to live here. I often hear stories about families that worry about their children being able to have enough money to buy a home in our county. People find themselves unable to retire when they had planned or both partners working full time because of a high mortgage. Functionally, over the last few decades, local land use policies have not done enough to help provide a supply of affordable housing for current and future generations.

Over the last year, the County has taken significant steps toward modernizing and improving housing regulations to encourage the creation of affordable housing. With the loss of redevelopment funding in California, changes to legal frameworks around affordable housing in our state and that there hadn’t been an in-depth review of this section of the county’s polices for some time, the Board worked with County Planning staff and outside housing experts to craft policies that would encourage more affordable housing in our county moving forward.

Overall, these policies are designed to encourage smaller unit sizes (which are often more affordable), reduces fees, and makes it easier for builders to construct more sustainable housing along urban transportation corridors. It also provides fee incentives for property owners wanting to build deed-restricted ADUs (Accessory Dwelling Units) as many have children, parents or others wanting to live on the property.

But affordable housing policy can’t occur in a vacuum. It requires reviews and policy changes in zoning and even economic development regulations. No matter how affordable a house is it won’t be affordable if there aren’t jobs in an area to allow someone to pay for it in the first place. As a result, the affordable housing changes have been occurring in tandem with reviews in zoning and economic development regulations in order to encourage more job creation in our area – while at the same time respecting long-term established land use protections that ensure environmental priorities are maintained.

After multiple public hearings, the Board of Supervisors passed a set of affordable housing policies at its last meeting. While some of these policy details may seem somewhat esoteric, I wanted to make sure you had an overview of what was adopted in those affordable housing policies.

The key features are:

1. Reducing fees for most projects, while providing builders a choice to either pay into an affordable housing fund, or build affordable housing units on-site;
2. Incentives for smaller unit construction;
3. All new construction (including commercial) would pay affordable housing impact fees; and
4. Aligning our policies with the most recent state and case law.

Here is an overview of the revised regulations voted on by the Board of Supervisors:

• Lower fees ($2.00/sq. ft) for units up to 2,000 sq. ft. and ($3.00/sq.ft) for 2,000-2,500 sq. ft.)
• Accept the recommendation of the Housing Advisory Commission and Planning Commission to give builders a choice of whether to pay a $15 per habitable square foot impact fee, or provide 15 percent of the units as on-site deed restricted ADUs.
• For rental housing there is no requirement to include affordable units
• Rental housing projects and non-residential projects would pay the $2.00/sq. ft. affordable housing impact fee
• Residential addition projects, and deed-restricted ADUs, are exempt from all affordable housing fee requirements
• Residential projects that include on-site inclusionary units will qualify for housing density bonuses
• Sales prices of on-site inclusionary units will be calculated to be affordable for households earning up to 110 percent of the Area Median Income
• Projects on lands rezoned from non-residential to residential use will be subject to the 15 percent on-site or affordable housing fees requirement.

It took years for our County to be faced with the housing issues we have today so there will be no quick or immediate fix. However, I believe the policies the Board has adopted, both directly for affordable housing and more broadly for economic development and zoning, are a large first step toward putting us on a path toward improved options for future generations.

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As always, I’d love to hear your thoughts. Feel free to call at 454-2200.