Blog To HCD: Santa Cruz YIMBY Comments on Scotts Valley Draft Housing Element (July 2023)

Sept. 1, 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.

The following are our comments on the City of Scotts Valley’s submitted Housing Element of July 5, 2023.

Justification and Analysis of 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.” (1)

Scotts Valley is expecting that all sites identified for rezoning (2) will develop roughly 50% of their units for very-low, low, or moderate income families, while providing little to no evidence (historic or otherwise) that this level of affordability will be realistically produced. 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.

Most of the parcels in the Site Inventory under Rezones-Mixed Use are non-vacant, as is the largest one in the Town Center Specific Plan. The City has not described the realistic development potential of each site, including, as HCD recommends, “...the extent that the nonvacant site’s existing use impedes additional residential development, the jurisdiction's past experience converting existing uses to higher density residential development, market trends and conditions, and regulatory or other incentives or standards that encourage additional housing development on the nonvacant sites.” (3)

This is compounded by the fact that these sites (Rezones-Mixed Use and the Town Center Specific Plan parcel) account for more than 50% of the lower income RHNA, so ” …the existing use is presumed to impede additional residential development, unless the housing element describes findings based on substantial evidence that the use will likely be discontinued during the planning period.” (4) The city has not provided such findings aside from noting surface soil contamination in the process of remediation at the town center site.

If the city misses its target of 50% affordability on even just a few parcels (especially its larger sites), it faces the daunting task of identifying other sites to make up the difference under No Net Loss 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.

(1) Santa Cruz Civil Grand Jury - Housing Our Workers, page 18, Finding 9
(2) Housing Element, F24-26
(3)  Housing Element Sites Inventory Guidebook, Page 24
(4)  Housing Element Sites Inventory Guidebook, Page 27
(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 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 specific programs 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.

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 (7) 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.” (8) The city also notes that “surface soil contamination has been an obstacle to development.” The City should include a program to ensure that the soil contamination remediation will be completed successfully and that the site will be developable after.

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 the No Net Loss law. It is imperative that the city demonstrate that these sites are appropriate to accommodate lower income RHNA.

Additionally, we would like the city to provide more detail on the affordability and development potential projections for the Kings Village parcel (9) as part of the Town Center plan. While the other four parcels in this plan are publicly owned (by METRO or the city) this shopping center is privately owned. The city claims that this parcel will produce a 50% affordable project with 383 total units - almost 18% of the City’s RHNA. The only evidence cited is that “the City is currently reviewing two projects on sites that are over 10 acres.” (10) These two projects are on vacant land and have a 15% affordability component, whereas the Kings Village parcel is currently occupied by numerous commercial tenants and is projected to have a 50% affordability component. Without further evidence from the City to the contrary, it is hard to accept the cited pipeline projects as development interest in an occupied parcel’s conversion to 50% affordable housing.  

(7) Scotts Valley Town Center Specific Plan EIR
(8) Housing Element, F-13
(9) Parcel #022-601-18
(10) Housing Element, F-22

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. The city has correctly identified significant commercial and parking requirements as barriers to development but does not go far enough to remove these constraints. We strongly disagree with the assertion that “...the City’s standards for lot size, setbacks, height, and site coverage are not considered [constraints]..” (11)

To ensure the city makes appropriate progress towards its 6th cycle goals we would like to see a commitment in Program H-1.1 to a mid-cycle review or circuit-breaker language for progress beyond only ADUs (~3% of RHNA). Tying this to programs developed now would allow the city to quickly make up lost ground and minimize impacts of falling behind in the 6th cycle. Additional mid-cycle programs could include:

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

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%. (12) Based on feedback the city received from local planning consultants and Scotts Valley property owners interested in development, this reduction still does not allow for development. (13) In Program H-1.7, we would like to see the city commit to adopting a further reduction in residential square footage in mixed-use developments. This should occur if the proposed rezoning does not result in developer interest as evidenced within the first year by at least one formally submitted project application with a total unit count that meets or exceeds the units expected in the site inventory for the given site at all income levels.

With regards to parking, the city should go much further in reducing or even eliminating such requirements. Currently, Program H-1.6 does not commit to lowering parking requirements and has a timeframe of 2027. We would like to see this timeline moved up and a commitment to lowering requirements to no more than a space per unit, uncovered.

There are other constraints that we believe the city should address to ensure that housing can be built as well.

In Program H-1.6, H-1.7, and H-1.8 the city should better explore to what extent its density restrictions are a constraint to development, especially of affordable housing. 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. We recommend a higher base density than 40 du/acre for Mixed-Use parcels along transit corridors. These programs should also occur sooner than 2027, nearly halfway through the 6th cycle.

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. Program H-1.7 should also include a “comprehensive study” on Mixed-Use development standards as constraints, as they are a different portion of the current zoning code. 

Program H-1.8 should include undertaking a study to ensure expansion of this policy will enable development of additional housing, not chill it. This could take the form of a study similar to Capitola’s 2021 affordable housing fee assessment. (14)

Creation of missing middle housing isn’t mentioned within the policy plan. Under Goal H-1, 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 10.(15) This would be a significant addition to Program H-3.2. We recommend that the city develop objective standards for multi-family projects - this would fit into Program H-2.7 for SB35 streamlining.

Program H-2.6 and H-2.8 lack active language and do not commit the City to any changes which would enable large lot development or lot consolidation. These programs should be more specific and commit to specific actions as outlined in the description of each. There are a number of sites on the inventory which fall outside of the parcel size requirements for lower income housing set forth by AB 1397. (16) In addition, the City has not included a sufficient analysis of these parcels. Despite this, all of these parcels are projected to provide lower income housing. 

(11)Housing Element, C-25
(12)Housing Element, F-19
(13) Housing Element, Appendix G, Letters from Civil Consultants Group, Charles Eadie, and David Duquette
(14) Capitola Affordable Housing Study 2021
(15) SB 10 - California YIMBY
(16) Housing Element Sites Inventory Guidebook, Page 16-17

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 (17) the CTC was identified as such a site, however, it was subsequently removed in the 2045 MTP/SCS.(18) 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. 

Scotts Valley includes no programs to promote development near transit.

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

Tenant Protections

As a city with a growing percentage of renters, it is important to have strong tenant protections. There are a number of programs we would like to see implemented or expanded in the city to protect tenants:

  • Elimination of or cap on rental application fees
  • Creation of a rental registry. This was recently passed by both Salinas (19) and Monterey (20)
  • Local preference for people employed in the county
  • COPA (21) and TOPA(22) programs
  • Conduct a disparate impact analysis of non-high(est) resource areas (23) and apply a live-work preference if if it matches county demographics

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