Blog Santa Cruz YIMBY comments on the City of Scotts Valley May 2023 Draft Housing Element

June 20, 2023

Santa Cruz YIMBY advocates for abundant housing at all levels of affordability to meet the needs of a growing population in Santa Cruz County. We support sustainable growth, including along transportation corridors and activity centers and a commitment to lower Vehicle Miles Traveled by housing people near services and jobs.

We submit the following comments on the City of Scotts Valley’s 6th cycle Housing Element draft of May 19, 2023(1).

(1) Scotts Valley Housing Element - Public Review Draft 5.19.2023

Probability of Meeting Low Income Targets

“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.”(2) According to the site inventory (3) Scotts Valley is expecting that all sites identified for rezoning will set aside roughly 50% of their units for very-low, low, or moderate income families, while providing little evidence that this level of affordability will be realistically produced. Meanwhile, the city’s four pipeline projects consist of only 18% affordable units. We would like the city to explain why it expects to achieve this 50% target, and how it will enable the development of additional housing if this target is not being met. For comparison, the City of Santa Cruz (4) is projecting a 20% affordability rate for most parcels in its site inventory.

If the city misses its target of 50% affordability, it faces the daunting task of identifying other sites to make up the difference under No Net Loss law. With nearly half of its very-low and low income units planned for through the Town Center Specific Plan, this single project not producing as many units as expected would subject the city to this law. Additionally, there is only a 9% buffer for moderate income units, HCD recommends a buffer of between 15 and 30 percent (5).

In order for Scotts Valley to meet the needs of its most vulnerable residents, it is essential that plans for affordable housing not only sound good, but are workable and realistic.

(2) Santa Cruz Civil Grand Jury - Housing Our Workers, page 18, Finding 9
(3) Housing Element, F-23
(4) The only jurisdiction in Santa Cruz County to meet its 5th cycle goals
(5) Housing Element Sites Inventory Guidebook, page 22

Pipeline Projects

A significant source of new units for the city during the 6th cycle will be from pipeline projects. For jurisdictions relying heavily on pipeline projects, HCD recommends (6) that “…the element should include programs with actions that commit to facilitating development and monitoring approvals of the projects, including the number of units and affordability (e.g., coordination with applicants to approve remaining entitlements, supporting funding applications, expediting approvals and monitoring of project progress, including rezoning or identification of additional sites, if necessary).”

In order to meet this recommendation by HCD, the city should create policies to monitor the progress of pipeline projects. This could include automatic entitlement extensions until midway through the 6th cycle and proactively reaching out to all pipeline project developers to confirm that there is still development interest.

In recent public meetings, local leaders said that they were contacting developers of existing pipeline projects to gauge their interest in resubmitting plans at a higher density or with additional units. The La Madrona and Valley Gardens projects together represent a vast majority of the city’s pipeline units. We urge the city to work with the project developers to increase the amount of multifamily and missing middle (7) housing, especially in those areas of the project site closest to Mt Hermon Road. The number of units in these two projects alone represents nearly 30% (8) of the city’s RHNA, and could easily fulfill more if they were revised to have majority multifamily units. These sites offer an opportunity for Scotts Valley to demonstrate leadership in building mixed density neighborhoods that bring people of different income levels together.

(6) City of Brisbane’s 6th Cycle (2023-2031) Draft Housing Element, page 3
(7) Missing Middle Housing
(8) On a total unit basis, not 30% of all affordability categories

Goal H-1 - Housing Production

With the city’s RHNA increasing nearly tenfold from the 5th cycle, we see significant need for policies and programs which enable, not restrict, development. We applaud the city for identifying significant commercial and parking requirements as constraints to development but strongly disagree with the assertion that “...the City’s standards for lot size, setbacks, height, and site coverage are not considered [constraints]...” (9)

As mentioned, the city has accurately identified its limit of 50% residential in mixed-use developments to be a constraint and is rezoning select parcels along main corridors to increase this cap to 70%.(10) We would like to see the city go further and either remove this limitation entirely or allow for mixed-use development with an option for ground floor commercial only rather than as a percentage of total square footage. Additionally, granting this flexibility to all mixed-use projects in the city would incentivize development and allow developers to better respond to Scotts Valley’s housing shortage.

We would like to see the city commit to allowing more residential square footage in mixed-use developments if the proposed rezoning does not result in developer interest.

With regards to parking requirements, the city should go much further in reducing or even eliminating requirements and the existing programs should have stronger language. Currently, program H-1.5 does not commit to lowering parking requirements and has a timeline of 2027. We would like to see this timeline moved up and a commitment to lowering requirements to no more than half a space per unit, uncovered.

Creation of missing middle housing isn’t mentioned within the policy plan - the city should adopt zoning regulations that would incentivize this form of housing. Examples include reducing minimum lot size, setbacks, and lot coverage restrictions. In Redwood City’s compliant 6th cycle housing element (11) amendments such as these are anticipated to result in an increase of at least 80 homes. Currently, duplexes are not conditionally or principally permitted in any of Scotts Valley’s zoning districts. (12)

The City of Scotts Valley should seek to allow a wide variety of housing types including duplexes, triplexes, fourplexes and other multifamily project types throughout the City. Much of this could be achieved without an EIR thanks to Senate Bill 1013.

(9) Housing Element, C-24
(10) Housing Element, F-19
(11) Redwood City 2023-2031 Housing Element
(12) Housing Element, C-16
(13) SB 10 - California YIMBY

Unaddressed Constraints

Along with the commercial and parking constraints discussed in the prior section, there are other constraints that we believe the city should address to ensure that housing can be built.

We expect projects to make use of State Density Bonus law for feasibility of development of affordable housing. Currently, Scotts Valley zoning code includes constraints and limitations that could limit affordable multifamily or mixed-use housing from achieving assumed base densities. These include but are not limited to building height, FAR, and parking requirements.

The city should better explore to what extent its density restrictions are a constraint to development. With the city’s highest density residential zoning district capped at 20 du/acre, this is likely a significant barrier. We recommend the city expand its rezoning efforts to all ‘Very High Residential’ parcels at a minimum and allow up to 40 du/acre on such parcels.

There are a number of small sites on the inventory which fall outside of the parcel size requirements set forth by AB 1397. These sites may still be included for a variety of reasons, in Scotts Valley’s case “…a program to facilitate lot consolidation.” (14) There is no such program in the policy plan.

(14) Housing Element, F-21

Town Center

One of the largest projects projected for Scotts Valley’s 6th cycle will be further development of the Town Center Specific Plan, encompassing 58 acres in the heart of the city. This area is well situated to accommodate a significant amount of housing and associated amenities. While we are pleased that the city anticipates 657 units to be built on these sites we would like to see more in the housing element to indicate that the city is determined to see this housing come to fruition.

This plan has been in the works since at least 2008 (15) and has not seen a significant amount of the proposed housing be built in that time. According to the city, “...project applications have been submitted for the Plan, but development was not successful. Interest in developing the Town Center area has increased over recent years.”(16) Despite these failed developments and increased interest, there is no mention or analysis of the reasons for these failures or why development has not moved forward for this area in the housing element.

Additionally, we would like the city to provide more detail on the affordability projections for the Kings Village parcel (17) as part of the Town Center plan. While the other four parcels are publicly owned (by METRO or the city) this shopping center is privately owned. The city estimates that this parcel will produce a 50% affordable project, but provides no indication that there is interest from the owner, a developer, or any other type of agreement that would be required for housing production to happen.

(15) Scotts Valley Town Center Specific Plan EIR
(16) Housing Element, F-12
(17) Parcel #022-601-18

Mid-cycle Review

To ensure the city makes appropriate progress towards its 6th cycle goals we would like to see a commitment to a mid-cycle review and adjustment (if needed). Tying this review to programs to increase housing production such as rezoning, ADU incentives, or removing development constraints would allow the city to quickly make up lost ground and minimize impacts of falling behind in the 6th cycle. This would also be a time to review pipeline projects which have not progressed.

Additional mid-cycle programs could include:

  • Ministerial approval process for all site inventory projects
  • SB10 upzoning of small sites to 10 units per parcel
  • Tracking commercial occupancy, and if vacancy is too high, relaxing commercial requirements in favor of more residential, including live/work units

Transit Oriented Development

Despite being home to the Cavallaro Transit Center (CTC), Scotts Valley lacks any current or planned high quality transit stops. In the 2040 MTP/SCS (18) the CTC was identified as such a site, however, it was subsequently removed in the 2045 MTP/SCS (19). We encourage the city to commit to working with AMBAG in the 2050 MTP/SCS (scheduled for June 2026) to designate the CTC as a planned high quality major transit stop. This designation would incentivise more sustainable, affordable, and equitable development in an area identified for a significant amount of new housing in the 6th RHNA cycle.

Scotts Valley is currently not a pedestrian and bike friendly community. The transit center is a key connector for jobs and opportunities for low income people that do not own cars. Further investment in housing around transit stops has been shown to increase ridership on public transit. Denser housing and investments in walking and biking infrastructure between the Valley Gardens, Town Center, and the CTC could together make great strides in helping Scotts Valley achieve its housing, climate, and safety goals while also making it easier for people of all ages, abilities, and incomes to access the city.

(18) AMBAG 2040 Metropolitan Transportation Plan
(19) AMBAG 2045 Metropolitan Transportation Plan

Tenant Protections

As a city with a growing percentage of renters, it is important to have strong tenant protections. The housing element notes that “[a]bout 51.8 percent of renters are cost burdened, and 33.1 percent are severely cost burdened.”(20) There are a number of programs we would like to see implemented or expanded in the city including:

  • Elimination of or cap on rental application fees
  • Creation of a rental registry. This was recently passed by both Salinas (21) and Monterey (22)
  • Local preference for people employed in the county
  • COPA(23) and TOPA(24) programs
  • Conduct a disparate impact analysis of non-high(est) resource areas (25) and apply a live-work preference if if it matches county demographics

(20) Housing Element, B-14
(21) Salinas passes rental registry
(22) Monterey City Council moves ahead with rental registry
(23) Community Opportunity to Purchase Act (COPA) | San Francisco
(24) EBCLC's Tenant Opportunity to Purchase Act (TOPA) - East Bay Community Law Center
(25) 2023 CTCAC HCD Opportunity Map