A controversial new measure is on the March ballot that could affect the future of housing development in the City of Santa Cruz. As the election nears, two sides that claim to support the building of affordable housing are at odds on how to get there in the heart of the nation’s most expensive rental market.

California’s Inclusionary Housing Ordinance gives city’s the power to enact their own affordable (or inclusionary) housing requirements for building developers. In Santa Cruz, the current ordinance adopted in 2020 requires developers to make 20% of the total units for residential projects affordable.

The definition of “affordable” is tied to the area’s median income (AMI) and is broken down into categories ranging from very-low to above-moderate income, according to the state’s Department of Housing and Community Development. In Santa Cruz, the AMI for a household is $132,800. A family of four could be making $132,000 per year and still be considered low-income.

Measure M would raise the number of affordable units that developers are required to build for a given project. Some affordable housing advocates say that the measure actually hinders future development in the city. The measure would also trigger a vote of the people in the event that the city wants to change zoning laws to build taller buildings. Opponents say that this puts projects like the city’s planned homeless service center in jeopardy.

Both sides are looking to sway voters on March 5 with their vision of what affordable housing looks like. 

Housing for People

Before Measure M, there was the Housing for People initiative. The initiative was born in the summer of 2023 out of residents’ concerns over real estate development in downtown Santa Cruz. This included the city’s downtown plan expansion, which would redevelop 29 acres south of Laurel Street. The plan would bring 1,800 units of new housing, 20% of which would be required to be affordable to people with moderate, low and very low incomes.It includes 60,000 square feet of commercial retail space, as well as a new 3,200-seat arena for the Santa Cruz Warriors basketball team. 

The downtown plan’s proposed development could allow for buildings up to 12 stories, about double the current zoning limits. In order to do that, the city would have to “upzone”, or raise the height limits with a change to the zoning ordinance. Public input is not necessary for that to happen.

By October of 2023, the Housing for People initiative had amassed nearly double the 3,100 required signatures to get on the March 2024 ballot. Now known as Measure M, the initiative would do two things if passed:

• Raise the city of Santa Cruz’s affordable housing rate to 25% for all new housing developments over 30 units
• Require a vote by city residents to approve any changes to the general plan or zoning ordinances that increase height limits to developments.

Opponents say that if passed, Measure M would kill all housing development—including affordable housing—in the city. Developers couldn’t afford to build projects if a quarter of them had to be below market rates.

In early January, the “No on M ” campaign kicked into gear, touting support from various pro-housing organizations. These include Affordable Housing Now, Housing Santa Cruz County, Santa Cruz YIMBY and the UCSC Student Housing Coalition. The Santa Cruz County Democratic Party and the Santa Cruz City Council have also taken an official position against Measure M.

Local leaders who have historically been pro-affordable housing have also come out against the measure, and are campaigning to strike it down.

20 or 25

Don Lane, former three-time mayor of Santa Cruz, has worked on affordable housing initiatives throughout his career, including 2018’s Measure H. He is against Measure M.While initially thinking that taking a vote on height limits for development projects was a good idea, he says that Measure M’s raising of the affordable housing percentage to 25% is not.

“You’ve got to be careful because, if you go too high, we’ll just won’t be able to go forward and build those projects and we just won’t build houses,” Lane says. “They’ve reached too far and they wanted to sort of sell this as a pro-housing measure. It sounds good, but I think it’s counterproductive.”

Lane cites a recent report commissioned by the city staff which states that raising the affordable housing rate would make the city less desirable for developers if the affordable housing requirement is raised to 25%. 

During the Santa Cruz City Council meeting in which the report was presented, city planning director Lee Butler also said that since the affordable housing rate was raised to 20% in 2020, only one development project has met that target number.

Frank Barron, a retired land-use planner and a key figure in developing Measure M, says that the pandemic, high interest rates and building costs could have contributed to the slowing of construction projects. He also says that the city’s fears of turning away development by adopting the  25% rate should be put to the test.

“[If] after Measure M passes and five years from now—supposing what they say is true—and it’s shut off all development, […] the city council can put it back on the ballot,” Barron says.

Other cities—San Francisco, for example—have lowered their affordable housing requirement in recent years. Development projects within the city of San Francisco are now required to make 15-21% of units affordable, down from 22 to 33%.

Elizabeth Madrigal, a Santa Cruz resident who works for an affordable housing developer in the Bay Area, says that raising the rate to 25% would result in no housing being developed. She, like Lane, also cites the study commissioned by the city.

“If Measure M were to pass it would stop all market-rate housing and also affordable housing,” Madrigal says.

Joe Quigg, a retired affordable housing developer in the area, says that raising the affordable rate to 25% won’t stop large developers from building in the city. It may deter smaller, local developers, but projects like the eight-story Anton Pacific building on Pacific Avenue and Front Street would still go up.

“A lot of the reason I support [Measure M} is that increasing the affordability won’t be a problem for larger projects. Because the new state laws give higher bonus densities to those projects and they’ll be able to do a lot more units,” Quigg says.

The City of Santa Cruz website lists all development project applications currently in the pipeline. At the time this article was written, the website lists applications for nearly 50 “significant projects” which would build “25 or more new housing units or over 25,000 square feet of commercial [development],” according to the city.

How High?

Taking any amendments to the city’s general plan or any zoning changes to a vote is a form of direct democracy, according to proponents of Measure M. Keresha Durham, a bilingual educator and part of the Measure M campaign, says that city officials have not been listening to the will of residents. 

“They would have voted in different ways on different issues, you know. They’re not providing affordable housing. We need more affordable housing and we also need more democracy,” Durham says.

Durham also says that local officials are prioritizing the needs of large housing development firms instead of those of the community, and that the over 6,000 signatures they gathered to put the measure on the ballot reflects that. The original name of their group was Housing for People not Unaffordable Towers.

She also says that even the current projects going up, like Anton Pacific, will be out of reach for working-class families and students.

Don Lane says that while the measure might have only intended to require a vote around changes in building heights, the language in the final version does not make that clear. Lane says the measure could trigger a vote on changes to a residential fence’s height. He also pointed out that the new homeless services development planned for Coral Street would have to be voted on.

“They thought they were just talking about tall buildings but they just didn’t write it that way,” Lane says.

Frank Barron clarifies that the measure only seeks to vote on housing developments over the height limit—not fences— and that the Coral Street project would be exempt from a vote under state law.

Currently, the height limits on buildings within the city limits is six to eight stories. Frank Barron says that he is not against more development, or even taller buildings, but that if the height limits are to be increased they should be taken to a vote.

“It’s not even [that] it’s bad, it should be subject to the vote of the people,” Barron says.

Visit cityofsantacruz.com to read the full text of Measure M and official arguments against it.