SANTA CRUZ — The city of Santa Cruz has little data on who is occupying the housing units that are deemed affordable in the city, according to a recently released Santa Cruz County Civil Grand Jury report titled “Housing for Whom?”
For the report, the grand jury investigated the implementation and tracking of the city’s inclusionary housing ordinance, which was first established after the passage of Measure O by city voters in 1979 and amended multiple times since then. The inclusionary rate in the city was increased from 15% of the total units in a project to 20% in 2020.
Inclusionary housing units are those that are set at a rate or price below the market rate in a housing development in the city and are considered affordable to lower-wage workers at different income brackets. Currently, there are total of 240 affordable units in the city of Santa Cruz that are built and occupied with 93 of those being owned units and the remaining 147 are rental units, according to the report.
To determine what is affordable, local jurisdictions use income data from the U.S. Department of Housing and Urban Development and the State Housing and Community Development Department. Income limits and the levels of those considered low, very low and extremely low wage earners are calculated using a county’s area median income or AMI and are based off of percentages of that figure.
For example, housing units considered “low income” are 50% to 80% of the area median income established by the state. which was $92,950 for 2023. That means the monthly rent for a one-person studio for a worker considered low-income was $2,169 a month.
The report states that “the AMI in Santa Cruz is rapidly rising due to the influx of higher wage earners. This rise can be seen in the comparison between the AMI in 2020 and the AMI in 2023. The AMI in 2020 for Santa Cruz County was $77,000. Three years later in 2023 it was $92,950. For comparison, the 2023 AMI in Monterey County was $70,300.”
The report states that the grand jury reviewed documents, articles and conducted interviews with city and county staffers to determine if there was data tracking of the inclusionary ordinance by the city of Santa Cruz, and specifically whether affordable housing is occupied by local workers per the city code. The grand jury also tried to determine the number of UC Santa Cruz students that occupy inclusionary housing in the city.
According to the report, the city of Santa Cruz has, “conflicting and contradictory policies on whether Inclusionary Housing applies to low, very low and extremely low income earners only, or whether moderate income earners are also eligible. The city cannot state what percentage of the city’s affordable housing is occupied by income-verified UCSC students.”
The grand jury examined whether local workers who meet income eligibility requirements are actually being given priority to rent affordable units and the investigation determined that the city of Santa Cruz does not maintain records or gather data on the subject and has no evidence to determine if preference is given to local workers when renting inclusionary housing units.
The ultimate findings of the grand jury’s investigation were that entries on the city’s website and legal documents are contradictory and that it is difficult to determine whether the city’s inclusionary housing ordinance also includes the moderate income category. The grand jury also found the city has no data on whether inclusionary housing is occupied by income-verified local residents and local workers, who should be given priority per the city code. And finally, that the city has no data on the percentage of units in Inclusionary and 100% Affordable Housing projects that are rented to UCSC students, which the grand jury said it felt is important to know.
With those findings in mind, the grand jury lists its recommendations to the Santa Cruz City Council. First, that the City Council settle which income levels are included in the inclusionary housing ordinance and resolutions and that the body make that information public by the end of the calendar year.
The grand jury recommends that the City Council develop a system to “track, document and verify within 30 days of occupancy whether a unit is occupied by an income-verified local resident or local worker as required by the ordinance, specifying which category the renter fulfills, and have such a system in place by Jan. 31, 2025.” And also to document the percentage of the city’s affordable units that are rented to UCSC students and make the information public with a deadline of Feb. 28, 2025. Finally, the grand jury asks that the City Council orders the creation of a public dashboard that displays the information called for in the report with the same February 2025 deadline.
The City Council has until Sept. 19 to respond to the report.
To read all of the 2023-2024 Santa Cruz County Civil Grand Jury reports, visit santacruzcountyca.gov.