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

Letter sent to HCD on November 21, 2023

Nov. 21, 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 October 20, 2023 as they relate to HCD’s letter dated October 3, 2023

AFFH - General

HCD comment: Contributing Factors: The element identifies two contributing factors to fair housing issues. However, these issues and goals do not appear to be rooted in the AFFH analysis and do not appear adequate to facilitate the formulation of meaningful action to AFFH. The element should re-assess contributing factors upon completion of analysis and make revisions as appropriate

Scotts Valley added more factors on Page E-53 and more analysis on E-57+. Without substantial changes to their site inventory or rezoning, Scotts Valley perpetuates segregation and exclusivity. In particular, they are not addressing housing mobility including in their Racially Concentrated Areas of Affluence. 

AFFH - Census Tract 1

HCD comment: Identified Sites and AFFH: The element analyzed the identified sites for various fair housing components including access to opportunity and segregation and integration of income. However, the element states (p. E-11) that the City allocated a majority of its low- and very low-income Regional Housing Needs Allocation (RHNA) to Census Tract 1 since it has the lowest median income. The element must include analysis and reasoning about the location of sites and impact on current fair housing conditions. The element should discuss whether this strategy potentially isolates a significant number of the housing need for lower-income households and include actions as appropriate to promote inclusive communities and equitable quality of life throughout the City.

Scotts Valley added more explanation regarding Census Tracts 2 and 3. Census Tract 2 and 3 can be targeted for more housing, especially Missing Middle housing.

  • Both Census Tract 2 and 3 have large portions of  R-1-10 zoning with 10,000 sq foot min lot size. (See Figure C-5 on page C-15) Lots are big enough.

The City claims that both of these Census Tracts “...experience topographic conditions that make the development of housing, specifically affordable housing, more difficult. The topography of this portion of the City creates a financial constraint to the development of housing.”

  • Much of Census 2 and 3 R1-10 zoning has slope of 0-15% (See page E-59) 

There is no Missing Middle housing mentioned in the Housing Element: 

  • Under Goal H-1, the City of Scotts Valley should commit to allowing a variety of housing types including duplexes, triplexes, fourplexes and other multifamily project types throughout the City. 

They have not addressed housing mobility throughout the city.

Monitoring - Pipeline Projects

HCD comment: While the describes the status of each project, to fully demonstrate these units are expected to be constructed during the planning period, the element should provide information on anticipated remaining steps and any known barriers to development in the planning period. For example, the element could analyze infrastructure schedules, City’s past completion rates on pipeline projects, outreach with project developers, and should describe any anticipated timelines for final approvals. This is particularly important given that several of these projects were identified to accommodate the RHNA during the last planning period but have not yet been constructed.

In addition, given the element’s reliance on pipeline projects, the element should include a program that commits to facilitating development and monitoring approvals of the projects (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).

There is more language in Appendix F regarding the status and prospects of each of the pipeline projects. On page F-7: “Projects listed do not have any known constraints or barriers which may hold-up or delay the entitlement and/or permitting process. As such, these sites are included for their anticipated development in the planning period.” 

However, some pipeline projects have been around for a while, including in the last RHNA cycle. The Town Center project has been in discussion since at least 2008, La Madrona’s EIR was started in 2020, and Valley Gardens’ in 2021.  In order to meet this recommendation by HCD, the city should create specific programs to monitor and expedite 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.

Non Vacant sites - Lower Income 

HCD comment: In addition, the housing element relies upon nonvacant sites to accommodate more than 50 percent of the RHNA for lower-income households. For your information, the housing element must demonstrate existing uses are not an impediment to additional residential development and will likely discontinue in the planning period (Gov. Code, §65583.2, subd. (g)(2).). Absent findings (e.g., adoption resolution) based on substantial evidence, the existing uses will be presumed to impede additional residential development and will not be utilized toward demonstrating adequate sites to accommodate the RHNA

Scotts Valley’s “facilitation of affordable housing development” (Program H-1.8) is focused on the inclusionary zoning (IZ). They are not going to meet their targets using a 15% IZ citywide.

City-owned land - Lower Income (Town Ctr)

Program H-1.10 (Surplus Land): While the Program commits to surplus sites and comply with the surplus land act, it should include additional steps the City will take to encourage development in the planning period, including facilitating entitlements, assisting with funding, issuing building permits and taking alternative actions by a specified date if development will not occur in the planning period

Scotts Valley’s Surplus Land Act program (H-1.10) indicates that City-owned land is for affordable housing.  Town Center (city-owned) is identified as all lower-income and is the APNs identified in the Timeframe objective. However the Timeframe in H-1.10 allows for only 25% for lower income.  

The only reference to the Town Center Specific Plan is in Program H-1.1 and does not include alternative actions if development is not occurring in the planning period.


HCD Comment: Finally, While the element provides a brief analysis of development controls, the analysis must address height limits, minimum lot size, setbacks, site coverage and maximum density requirements. The analysis should address any impacts on cost, supply, housing choice, affordability, timing, approval certainty and ability to achieve maximum densities and include programs to address identified constraints.

HCD Comment: In addition, while the element includes Program H-1.1 to increase the residential cap on R-H zoned sites from 50 percent to 70 percent, the commercial requirement may constrain residential development. The element should analyze the 30 percent commercial requirement as a constraint on multifamily development and add or modify programs as appropriate.

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]..” (Page C-25)

If this is the case, why hasn’t there been more housing built in the last cycle? 

  • 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 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.
  • In Program H-1.7, the city should commit to adopting a further reduction in residential square footage in mixed-use developments if the proposed rezoning does not result in developer interest as evidenced by at least one formally submitted project application where total unit count meets or exceeds the units expected in the site inventory.
  • Program H-1.7 should also include a comprehensive study on Mixed-Use development standards as constraints.
  • Program H-1.8 should include undertaking a study to ensure expansion of the inclusionary zoning policy will enable development of additional housing, not chill it. 

Consolidation - Small Sites

HCD Comment: Small Sites: Sites smaller than half an acre are deemed inadequate to accommodate housing for lower-income households unless it is demonstrated, with sufficient evidence , that sites of equivalent size and affordability were successfully developed during the prior planning period or other evidence demonstrates the suitability of these sites. The element mentions some parcels are located next to one another and under common ownership but should also discuss the potential for consolidation. For example, the element could evaluate the circumstances potentially leading to consolidation such as existing shared access, necessity for consolidation to share access, necessity for consolidation to promote financial feasibility, meet development standards or facilitate site planning. Based on the outcomes of this analysis, the element should add or modify actions (Program H-2.8) to encourage lot consolidation. For example, the element could consider graduated density as an additional incentive to promote lot consolidation.

There has been no change to Program H-2.8 which lacks active language and does not commit the City to any changes which would enable lot consolidation.

Large Lots

HCD Comment: Large Sites: Sites larger than ten acres in size are deemed inadequate to accommodate housing for lower-income housing unless it is demonstrated that sites of equivalent size were successfully developed during the prior planning period for an equivalent number of lower-income housing units as projected for the site or unless the housing element describes other evidence to HCD that the site is adequate to accommodate lower- income housing (Gov. Code, § 65583.2, subd. (c)(2)(A).). While the element mentions parceling is not necessary, it should also discuss how the site facilitate developments with units affordable to lower-income households, particularly how the level of affordability could be achieved as assumed in the inventory. Alternatively, the element could adjust affordability assumptions similar to the application of inclusionary requirements.

Program H-2.6 (Development of Large Lots): The Program should commit to establish incentives to promote affordability on identified large sites as assumed in the inventory.

There has been no change to Program H-2.6 which lacks active language and does not commit the City to any changes which would enable large lot development.

Transit Oriented Development

Scotts Valley added language on Page F-31: “This parcel contains the METRO Cavallero transit center and the Scotts Valley Park and Ride center. The City has been in discussions with METRO about converting the site to affordable residential units with workforce components. Redevelopment of the site would result in parking being moved underground or provided through a parking structure. This would allow for Transit-Oriented Development (TOD) to occur in partnership with the transit center.”

Despite being home to the METRO Cavallero transit center and the Scotts Valley Park and Ride center, Scotts Valley lacks any current or planned high quality transit stops. A high-quality transit stop can help Scotts Valley/affordable housing developers in securing additional funding, e.g. through grant programs that focus on transit-oriented development or reduction of green-house gasses.

We recommend Scotts Valley add a program objective:: 

“Scotts Valley will work with AMBAG in the 2050 MTP/SCS (scheduled for June 2026) to designate the METRO Cavallero transit center as a planned high quality major transit stop.”