The face of downtown Santa Cruz could soon dramatically change.

 The City Of Santa Cruz began developing the Downtown Plan Expansion in June 2021 and is now in the late stages of planning. If fully approved, it will extend the boundaries of downtown south toward the Santa Cruz Beach Boardwalk and east along the San Lorenzo River. 

“I think we have this tension [between] being a growing city, home to a major university, and adjacent to one of the biggest job generators in the world [while] a lot of people really strongly want it to be a little funky beach town,” said project manager and senior planner Sarah Neuse.

Housing

One of the main objectives of the Downtown Plan Expansion is to create a minimum 1,600 units of housing, a mix of market rate and low-income options. A combination of state and local density bonus laws stipulate that 20 percent of housing units initially planned must be designated as affordable housing.

According to Neuse, local and state density bonus law requires that every new development of five or more units must allocate at least 20 percent of the total number of units as affordable housing. If the requirement is met, developers can increase the amount of market rate housing they build. Beginning January 2024, state density bonus law will provide developers a 100 percent bonus on projects that meet affordable housing requirements, up to 50 percent. The Santa Cruz City Council has recommended that new development produces 20 percent affordable housing after the 50 percent bonus is applied. Planners are still exploring options.

These units are part of a larger effort by the City to meet its Regional Housing Needs Allocation (RHNA) requirements, whereby the City must demonstrate concrete plans to build 3,736 housing units over the next eight years. Failure to meet this target would result in Santa Cruz handing over its authority from city planning to the state. 

The question then becomes where and how to build this housing.

“This is ultimately where we really want housing in cities,” said Principle Planner of Advanced Planning Matthew VanHua. “It’s downtown. It’s close to a lot of amenities and transit. And it’s really, truly the best place to grow not just in the city, but in this whole region.”

The Downtown Plan Expansion incorporates housing types yet to be seen in Santa Cruz. The tallest buildings in the plan could be up to 12 stories. New and increasing density bonuses are also spurring development and changing the face of downtown.

The plan has received pushback from community groups like Housing For People, who are concerned about the construction of luxury high rise buildings in Santa Cruz. This is for fear that the buildings might primarily serve Silicon Valley commuters and UCSC students from higher income households.

A ballot initiative entitled “Housing For People” has received over 6,800 signatures — 3,690 valid signatures are required to appear on the ballot. The measure seeks to democratize large developments and increase the affordable housing ratio requirement from 20 to 25 percent. Due to density bonus laws both of these figures would be significantly watered down.

“They don’t understand that [our initiative] truly protects your neighborhood by requiring a vote of the people, when heights exceed the current limits,” said Keresha Durham of the Housing for People steering committee. 

Opponents of the bill, like Sara Neuse, say it would restrict the city’s ability to make land use changes, including in the planned expansion area.

“Without the land use changes, the envisioned enhancements to the public realm and new civic spaces become extremely challenging to execute,” said Neuse in an email comment to City on a Hill Press.

For UC Santa Cruz students, questions of housing affordability and availability are an ever-present concern. According to a recent report from the National Low Income Housing Coalition, Santa Cruz County is now the most expensive rental market in the country.

This is felt acutely by UCSC students, nine percent of whom have experienced houslessness according to a 2020 survey. In Santa Cruz at large there are an estimated 1,804 people experiencing houslessness according to 2023’s Point-In-Time count conducted in February. 

When putting this plan together the city solicited input from members of the community — including representatives of the Student Housing Coalition (SHC). 

“I think it’s a value judgment of what we want,” said Student Housing Coalition (SHC) founder Zennon Ulyate-Crow. “Do we want people living on the street? Do we want people paying upwards of 50% of their income on housing? Do we want people being forced to live in really unsafe and battered conditions?”

Ulyate-Crow believes the only way to address these problems is by building taller.

Sarah Neuse agrees with Ulyate-Crow’s sentiments that many of Santa Cruz’s housing woes stem from a lack of building coupled with the city’s proximity to Silicon Valley. Housing projects like these help create a better overall housing landscape according to Neuse.

Entertainment District

In addition to creating more housing, another objective of the plan is to incorporate the scenery of Santa Cruz, such as the San Lorenzo river, to make space for more bars, restaurants, and other businesses along a reimagined river walk.

“This is going to integrate the experience of the river, the wetlands, [and] the wildlife,” said Mayor Keeley. “We’re going to expand that river walk so that it’s not just on top of the river and the levee but so that it’s integrated into all this development that’s going to occur.” 

The Environmental Impact Report will be released at the beginning of 2024.

A centerpiece of the plan is a new arena. According to Mayor Keeley, it will be paid for by the Golden State Warriors for their G League affiliate, the Santa Cruz Warriors. The new arena would not only serve the Warriors team, but also host larger concerts and other events.

VanHua believes that extending downtown toward the boardwalk would more effectively funnel Santa Cruz’s beach-going tourists into downtown. The proximity to the Santa Cruz Metro Station, high density housing, and the beach would also help to promote businesses that do not depend on parking availability.

VanHua explains these opportunities will help the city achieve another one of the project’s stated objectives: generating tax revenue to fund other city government operations such as the housing team, parks department, or fire department.

Barring any setbacks, the Downtown Expansion plan will be fully approved by mid-2024, said Sarah Neuse. It’s likely also a couple years away from anything being built. 

The mayor and planners agree that, once completed, the project will change the face of Santa Cruz’s downtown and the city’s overall housing landscape.

“This is urban living,” said Mayor Keeley. “There’s a huge market for that in [Gen Z] and one generation older. There is a huge market for urban living and for active entertainment.”