Housing Fact Check | Our Downtown

Affordable Housing Fact Check

Claim

Measure O will prevent a 'ready to go' project, of 124 affordable housing units.

The Facts

The Mixed-Use Proposal is an extraordinarily complicated and expensive project. The City would need to both fund & construct each element before housing is move-in ready.

It is far from 'ready to go.'

Technical Proposal Status

Project infancy: The City’s proposal has been in the “concept” phase until just this September, 2022, when they filed the official project application and held their very first community meeting for the project as a whole.
Check for yourself here, on the City’s Planning Department project webpage.
- Why it seems far along: We voted yes for the Measure S Library bond in 2016. That initiated this 6 year discussion on how to spend those library funds. It included highly curated and controlled public meetings and committees, taking us down the road to build our library somewhere else as part of a parking garage. It then morphed into a "concept proposal" in City Council meetings for a library/ garage/ housing/ commercial project that would take up the entire Farmers' Market lot and go up to 87 feet (8 stories).
  - The actual first official project application "as a whole" was submitted 9/8/20222.
  - "Significant Projects" in Santa Cruz go through a very specific process:
  1. They start with 1 or more community meetings in which the community gives feedback. "Multiple community meetings may be required if the scope or significance of the project or community interest warrants additional meetings." - City of Santa Cruz
    - Watch the very first community meeting for this project here. Note the date and listen as the City Staff and developers explain the process themselves.
  2. Significant projects then go to the Planning Commission for feedback and approval.
  3. Following the Planning Commission, they then go through two City Council Hearings, before they become approved projects.
    - Most funding grants restrict applications to only already approved projects.

Funding

The City needs to buy the Toadal Fitness lot and hasn’t yet done so. They still don’t know how much it will cost to buy that land, or demolish and dispose of the building.
- From the 9/8/2022 Project Application: "The privately owned parcel owner: Christophe J. Bellito (APN: 005-141-11) has been in ongoing discussions with the City of Santa Cruz and the development team to sell their property to the City of Santa Cruz. As such, that owner has agreed to allow the project application to proceed as those negotiations continue to occur in good faith."
- Question: How much will that cost?
The proposed project is SHORT $121,000,000++ for the housing component alone.*
- Note: With the 7.39 million in funding they secured (while knowing this would be on the ballot), the affordable units will cost more than $1,000,000 per unit to construct.
  - This high cost is with already owning the majority, but not all, of the parcel.
  - The City insists we need this project for "cost sharing" of project elements, but the cost per unit is higher than it should be to build (especially because we own most of the parcel already).
    - Question: Are we subsidizing some of the cost of building the parking garage with the housing?

*Source: City Staff's presentation to Council in September of 2022

The new library plan is currently $13-17 million over budget, according to various City documents/estimates.
The City was denied the State Library Grant for $10,000,000. Check granted projects here.
- Quote from the City of Santa Cruz's application, obtained from the state department: "If this grant funding opportunity is not approved it could delay the development/construction of the Library and will increase the funding gap of $3.2M to $13.2M."
- Check the state grant guidelines; it is clear that the renovation plans would be better suited for attaining the grant. It lists prioritizing applications based on critical infrastructure and safety, listing many things that the renovation specifically needs, like:
  - Asbestos abatement
  - Roof replacement
  - HVAC
The City's Parking District will not qualify the City for a bond debt to pay for the garage.
- The City simply describes its excellent bond rating, which is true. But bonds are issued based on verifying revenue streams that can pay for it.
- The City's Economic Development Director admitted they may need a direct loan for this garage, verifying the staff knows we may not qualify for the bond.
- Question: Who will pay for the loan or bond if the parking district remains in the red, as it has since way before the pandemic?
- See more details on this on our Parking Garage Fact Check Page.
The City acquired roughly $6 million commitments for housing grants in the last year, while knowing this proposal for downtown would be going to a vote of the people. They have other affordable housing projects already approved they should have applied for instead of this unapproved project.

Claim

Measure O gives false promises of housing in some future date. It is encouraging housing on Lot 7, which is a pipe dream.

The Facts

One of the most expensive elements of building affordable housing is land. Measure O is a land use measure, not a specific proposal to build a housing development.
Unlike with the City's current proposal (where we do not own the entire parcel needed on Lot 4), we own all of Lot 7.
Measure O requires the City to initiate projects on the most feasible parcels reserved for affordable housing. Lot 7 is the largest and most feasible site to start with and can have at least 125 or more units (with density bonus).
An affordable housing proposal for Lot 7 could move quickly without the complications of funding and building the parking garage, library, and commercial.
More affordable housing can be built, without sharing part of the footprint with a library and the vertical space of 3 above ground levels of garage.
With Measure O being a vote to move forward on Lot 7 for housing instead, the City could quickly put out an RFP (request for proposals), select a developer and move forward with the first community meeting on designs. We have full faith that if the City committed to building this housing on Lot 7, the project could move much more quickly than the very complicated proposal on Lot 4 that faces many funding issues involving each element of the project, and includes the problem of land ownership for the Toadal Fitness parcel.

Claim

Some of the 8 lots designated for affordable housing in Measure O are too small to feasibly build affordable housing.

The Facts

Even the City's biased impact report concluded that 3 of the lots are plenty large enough to build far more affordable housing than what is proposed in the City's plan.
Most of the smaller lots in Measure O are equal to or larger than identified existing affordable housing projects in the City.
- Measure O's smaller lots:
  - next to Library .35 acres
  - Cedar/Lincoln .49 acres
  - 120 Elm .45 acres
- Comparison to existing affordable housing projects:
  - 111 Barson St, .35 acres, 27 units
  - 1041 Cayuga St, .3 acres, 14 units
  - 314 Jessie St, .39 acres, units tbd
Our publicly owned land is dwindling fast as we face massive redevelopment. We need to hold even the smaller lots for what will continue to be a need into the future.
- These can be assembled with nearby parcels, investing our land (a very expensive part of building housing) toward future affordable housing.
- They can either be built into smaller affordable developments, or assembled with neighboring lots to build larger developments (they can also be land-swapped for other parcels, to do the same).

Claim

Even if Measure O "says" affordable housing can be built on Lot 4, there's no way there is enough room for both the Farmers' Market & housing.
There is no way to save the heritage trees and still build housing there.

The Facts

We strongly believe Lot 7 would be the best place for this next big affordable housing project, so that the public plaza for the Farmers' Market, Antique Faire and other public events/activities may have unencumbered space.

However, with Measure O, the housing can technically be built exactly where planned.

With ground level underneath being "sheltered," interior Farmers' Market/Public Plaza space for events and community use.
With more housing possible than the current mixed-use proposal
- Without 3 levels of parking garage
- Freeing up 2 levels for more housing (ground level for sheltered market infrastructure)
This would also save most of the big heritage trees.
- They are on the periphery, on the opposite side of the lot.
- The housing development's design can also be modified to accommodate some of the trees closer to the housing (following our Heritage Tree Ordinance).

Source: Ballot Initiative - Section 4. C. (LU1.1.6)

Lot 4 Housing W/ ODOF Initiative

Market/Plaza Sharing Space on Lot 4 with Housing

Mixed-Use Proposal Components

Remove Library

Keep Housing

Remove Commercial

Remove 3 Level Garage

Add 1-2 more levels of housing

Ground Level -Sheltered Downtown Commons Infrastructure

Mixed-Use Proposal
Side View

Claim

From the City's commissioned impact report: Measure O would not allow parking or commercial on the ground level, making it harder to build affordable housing on the Measure's 8 designated lots.

The Facts

Measure O specifically requires levels "above ground level" to be 100% affordable housing. It allows the ground level to be things like parking, commercial, daycare, or anything else the community may need.
- From Measure O Section 5. B.: "...shall be developed with permanently affordable housing,
  with parking permissible on the ground level and not permissible on floors above the ground level..."
Keyser Marston Associates specifically admitted during their presentation to council that they are not lawyers. They then gave their "expert" opinion that Measure O was poorly written and confusing.
To create Measure O, community organizations contracted a highly accredited law firm who specializes in urban planning and land use policy:
- "Combining law, public policy, economics, and land use planning tools, we work at the federal, state, and local levels to help clients develop and implement comprehensive strategies to facilitate quality, resource-efficient patterns of land use."

Affordable Housing Fact Check

Claim

Measure O will prevent a 'ready to go' project, of 124 affordable housing units.

The Facts

The Mixed-Use Proposal is an extraordinarily complicated and expensive project. The City would need to both fund & construct each element before housing is move-in ready.

​

It is far from 'ready to go.'

​

Technical Proposal Status

Project infancy: The City’s proposal has been in the “concept” phase until just this September, 2022, when they filed the official project application and held their very first community meeting for the project as a whole.

Check for yourself here, on the City’s Planning Department project webpage.

The actual first official project application "as a whole" was submitted 9/8/20222​.

"Significant Projects" in Santa Cruz go through a very specific process:

They start with 1 or more community meetings in which the community gives feedback. "Multiple community meetings may be required if the scope or significance of the project or community interest warrants additional meetings." - City of Santa Cruz

​Watch the very first community meeting for this project here. Note the date and listen as the City Staff and developers explain the process themselves.​

Significant projects then go to the Planning Commission for feedback and approval.

Following the Planning Commission, they then go through two City Council Hearings, before they become approved projects.

Most funding grants restrict applications to only already approved projects.

​

Funding

The City needs to buy the Toadal Fitness lot and hasn’t yet done so. They still don’t know how much it will cost to buy that land, or demolish and dispose of the building.

Question: How much will that cost?

The proposed project is SHORT $121,000,000++ for the housing component alone.*

Note: With the 7.39 million in funding they secured (while knowing this would be on the ballot), the affordable units will cost more than $1,000,000 per unit to construct.

This high cost is with already owning the majority, but not all, of the parcel.​

The City insists we need this project for "cost sharing" of project elements, but the cost per unit is higher than it should be to build (especially because we own most of the parcel already).

Question: Are we subsidizing some of the cost of building the parking garage with the housing?​

​

The new library plan is currently $13-17 million over budget, according to various City documents/estimates.

The City was denied the State Library Grant for $10,000,000. Check granted projects here.

Quote from the City of Santa Cruz's application, obtained from the state department: "If this grant funding opportunity is not approved it could delay the development/construction of the Library and will increase the funding gap of $3.2M to $13.2M."​

Check the state grant guidelines; it is clear that the renovation plans would be better suited for attaining the grant. It lists prioritizing applications based on critical infrastructure and safety, listing many things that the renovation specifically needs, like:

Asbestos abatement​

Roof replacement

HVAC

The City's Parking District will not qualify the City for a bond debt to pay for the garage.​

The City simply describes its excellent bond rating, which is true. But bonds are issued based on verifying revenue streams that can pay for it.​

The City's Economic Development Director admitted they may need a direct loan for this garage, verifying the staff knows we may not qualify for the bond.

Question: Who will pay for the loan or bond if the parking district remains in the red, as it has since way before the pandemic?

See more details on this on our Parking Garage Fact Check Page.

The City acquired roughly $6 million commitments for housing grants​ in the last year, while knowing this proposal for downtown would be going to a vote of the people. They have other affordable housing projects already approved they should have applied for instead of this unapproved project.

Claim

Measure O gives false promises of housing in some future date. It is encouraging housing on Lot 7, which is a pipe dream.​

The Facts

One of the most expensive elements of building affordable housing is land. Measure O is a land use measure, not a specific proposal to build a housing development.

Unlike with the City's current proposal (where we do not own the entire parcel needed on Lot 4), we own all of Lot 7.

Measure O requires the City to initiate projects on the most feasible parcels reserved for affordable housing. Lot 7 is the largest and most feasible site to start with and can have at least 125 or more units (with density bonus).

An affordable housing proposal for Lot 7 could move quickly without the complications of funding and building the parking garage, library, and commercial.

More affordable housing can be built, without sharing part of the footprint with a library and the vertical space of 3 above ground levels of garage.

Claim

Some of the 8 lots designated for affordable housing in Measure O are too small to feasibly build affordable housing.

The Facts

Even the City's biased impact report concluded that 3 of the lots are plenty large enough to build far more affordable housing than what is proposed in the City's plan.

Most of the smaller lots in Measure O are equal to or larger than identified existing affordable housing projects in the City.

Measure O's smaller lots:​

next to Library .35 acres

Cedar/Lincoln .49 acres

120 Elm .45 acres

Comparison to existing affordable housing projects:​

​111 Barson St, .35 acres, 27 units

1041 Cayuga St, .3 acres, 14 units

314 Jessie St, .39 acres, units tbd

Our publicly owned land is dwindling fast as we face massive redevelopment. We need to hold even the smaller lots for what will continue to be a need into the future.

These can be assembled with nearby parcels, investing our land (a very expensive part of building housing) toward future affordable housing.

They can either be built into smaller affordable developments, or assembled with neighboring lots to build larger developments (they can also be land-swapped for other parcels, to do the same).

Claim

Even if Measure O "says" affordable housing can be built on Lot 4, there's no way there is enough room for both the Farmers' Market & housing.​

There is no way to save the heritage trees and still build housing there.

The Facts

We strongly believe Lot 7 would be the best place for this next big affordable housing project, so that the public plaza for the Farmers' Market, Antique Faire and other public events/activities may have unencumbered space.

However, with Measure O, the housing can technically be built exactly where planned.

With ground level underneath being "sheltered," interior Farmers' Market/Public Plaza space for events and community use.

​With more housing possible than the current mixed-use proposal

Without 3 levels of parking garage

Freeing up 2 levels for more housing​ (ground level for sheltered market infrastructure)

This would also save most of the big heritage trees.

They are on the periphery, on the opposite side of the lot.

The housing development's design can also be modified to accommodate some of the trees closer to the housing (following our Heritage Tree Ordinance).

Lot 4 Housing W/ ODOF Initiative

Market/Plaza Sharing Space on Lot 4 with Housing

The actual first official project application "as a whole" was submitted 9/8/20222.

Watch the very first community meeting for this project here. Note the date and listen as the City Staff and developers explain the process themselves.

This high cost is with already owning the majority, but not all, of the parcel.

Question: Are we subsidizing some of the cost of building the parking garage with the housing?

Quote from the City of Santa Cruz's application, obtained from the state department: "If this grant funding opportunity is not approved it could delay the development/construction of the Library and will increase the funding gap of $3.2M to $13.2M."

Asbestos abatement

The City's Parking District will not qualify the City for a bond debt to pay for the garage.

The City simply describes its excellent bond rating, which is true. But bonds are issued based on verifying revenue streams that can pay for it.

The City acquired roughly $6 million commitments for housing grants in the last year, while knowing this proposal for downtown would be going to a vote of the people. They have other affordable housing projects already approved they should have applied for instead of this unapproved project.

Measure O gives false promises of housing in some future date. It is encouraging housing on Lot 7, which is a pipe dream.

Measure O's smaller lots:

Comparison to existing affordable housing projects:

111 Barson St, .35 acres, 27 units

Even if Measure O "says" affordable housing can be built on Lot 4, there's no way there is enough room for both the Farmers' Market & housing.

With more housing possible than the current mixed-use proposal

Freeing up 2 levels for more housing (ground level for sheltered market infrastructure)

Mixed-Use Proposal
Side View

From Measure O Section 5. B.: "...shall be developed with permanently affordable housing,
with parking permissible on the ground level and not permissible on floors above the ground level..."

"Combining law, public policy, economics, and land use planning tools, we work at the federal, state, and local levels to help clients develop and implement comprehensive strategies to facilitate quality, resource-efficient patterns of land use."