The Housing Element process is intended to make sure all California jurisdictions undertake a good-faith effort to plan for the housing needs of their communities over the following eight years. This feedback is on the March 2024 update to the December draft adopted by the City Council. We appreciate the updates that have been made, but still do not believe the changes on the revised December draft substantively address findings that HCD shared in a letter dated December 19, 2023 to Scotts Valley.
Affirmatively Furthering Fair Housing
HCD comment(s)from letter dated December 19, 2023, AFFH: Given the fair housing conditions in the City and the location of RHNA sites, the element will need to include significant actions to promote housing mobility (e.g., housing choices and affordability) throughout the City to promote inclusive communities.
Scotts Valley has added additional text or Housing Mobility. We contend that Scotts Valley has not gone far enough to analyze and propose changes to enable AFFH Housing Mobility as needed.
- The Quantified Objectives on page 2-39 indicates that Scotts Valley looks to achieve 260 homes towards AFFH Housing Mobility strategies. We remind Scotts Valley that that the AMBAG 6th Cycle Allocation Plan (1) took AFFH into consideration, specifically:
“[T]he methodology allocates lower-income unit to all jurisdictions, particularly those with the most access to opportunity,allocating… units based on the jurisdictions’ access to opportunity according to the California Tax Credit Allocation Committee (TCAC) Opportunity Maps and Racially Concentrated Areas of Affluence (RCAA)” (2)
Through this allocation methodology, all jurisdictions besides Watsonville received additional AFFH units; Scotts Valley was assigned 650 homes, more than double the 260 homes in Quantified Objectives. - We appreciate the specific commitment in Program H-3.2 to remove CUP requirements for townhomes and condominiums.
- Program H-3.2 and Program H-1.3 now commit to “implement '' something from a general list of strategies. Still missing from any program is any feasibility analysis or specific incentives for missing middle homes.
- Program H-3.2 now includes commitments to “facilitate the development” of condo/townhomes, triplexes and development on religious institutional sites. What “facilitate” means is unknown. (It also includes a commitment to “provide opportunities to facilitate” missing middle units - quite vague!)
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(1) https://ambag.org/sites/default/files/2022-09/PDFA_AMBAG%20RHNA%202023-2031_Final%20Plan_091522V4.pdf
(2) ibid, page 19
Likelihood of Development of Nonvacant Sites
HCD comment(s) from letter dated December 19, 2023: Suitability of Nonvacant Sites: The element was revised to describe the various factors utilized to identify redevelopment potential on nonvacant sites (pg. F-24)... The element should be revised to include additional factors or other relevant information for sites that only have two factors. Lastly, the element must provide support for the identified factors to demonstrate how they are indicative of redevelopment potential on nonvacant sites. For example, the element should be revised to support and relate these factors by including past projects that redeveloped with the same criteria.
Scotts Valley added substantially to information to Section E, Adequacy of Sites. Scotts Valley has so few past development projects that they are using other jurisdictions to indicate redevelopment potential on their own nonvacant sites (Table F-9). These comparisons are not valid; Scotts Valley does not have the zoning that facilitates projects at the same scale of the City of Santa Cruz, e.g.:
- Scotts Valley proposes a max density of 40 du/acre for mixed-use commercial; the City of Santa Cruz has a max density of 55 du/acre
- Scotts Valley proposes a max density of 20 du/acre for high density residential; the City of Santa Cruz has a max density of 55 du/acre
- Scotts Valley has a 70% residential component in mixed-use; the City of Santa Cruz only requires a mix of commercial and residential.
- Scotts Valley has a 35’ height limit; Santa Cruz has a 55’ height limit.
Scotts Valley also notes that “the region is having successful redevelopment projects on non-vacant sites with high rates of affordability” (page F-35 after Table F-9). The City of Santa Cruz, or the affordable housing developers owned the land on which 100% affordable projects are being built. Scotts Valley only owns three (3) Town Center parcels. The city owns none of the rezone sites anticipated to have 50% affordable homes.
As well, Scotts Valley adds information about the Capitola Mall to indicate redevelopment potential, with affordable units, for sites >10 acres that have existing commercial uses. A comparison to the redevelopment potential of the Capitola Mall is not valid:
- After conversations with the Mall developer, the city of Capitola recently proposed significant modifications to height (75’) and FAR that far exceed what Scotts Valley is proposing.
- Scotts Valley anticipates a max density of 40 du/acre for Town Center parcels; Capitola’s max density for the Mall’s C-R zone is unlimited.
- Capitola has added additional sites to their Housing Element because even with additional height and FAR changes, the Mall developer has rejected the level of affordability they indicated.
- There are multiple problems with this sentence: “Residential units included as part of the [Capitola Mall] project would be subject to the City’s affordable housing overlay, which requires a minimum of 25 percent of total project units to be affordable.” (Page F-27)
- In their Housing Element, Capitola plans to remove their obsolete Affordable Housing Overlay from their zoning ordinance.
- Capitola has a 15% inclusionary requirement.
Scotts Valley indicates “The City is also including programs in the City’s Housing Plan to provide incentives and assistance to encourage affordable housing production.” (page F-27).
- Program H-2.6, Development of Large Lots does not list any specific incentives or assistance for affordable housing production, just one action: “Adopt and implement a program to facilitate the development of lots larger than ten acres.”
- Only Program H-1.10 Surplus Land Act, which relates to the Town Center project (large lots) speaks to affordability.
Scotts Valley also highlights two projects > 10 acres that are on their pipeline list . As noted above, La Madrona’s EIR was started in 2020, and Valley Gardens’ in 2021 and Scotts Valley has not demonstrated that they will be constructed and made available during the planning period. (see Pipeline Projects below).
Lower-Income on Nonvacant sites
HCD comment(s) from letter dated December 19, 2023: Suitability of Nonvacant Sites: [T]he 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.
Scotts Valley added substantially to Section E, Adequacy of Sites and made a point to say that the the City sought out parcels without existing housing units. However, a number of their Rezone parcels (pages F-36 -40) include commercial uses, and Scotts Valley has not demonstrated that these existing uses are not an impediment to additional residential development and will likely discontinue in the planning period.
Constraints
HCD comment(s) from letter dated December 19, 2023: Land-Use Controls:...HCD’s prior review found that the element must analyze the City’s development standards including heights, lot sizes, setbacks, site coverage and maximum density requirements for potential constraints.…..While the element includes a program to revise development standards as part of the City’s rezone requirements, this program should not be limited to rezoned sites and should generally address parcels in the C-S and C- SC zones that permit multifamily and mixed-use housing.
Scotts Valley claims that “...development standards do not hinder projects from reaching the maximum allowed density.” (Page G-39). We disagree and feel that Scotts Valley’s lackluster history of mixed-use or multifamily developments are indicative of constraints.
Appendix C includes two development examples (Page C-31, response to our 3/18/24 letter) to demonstrate that a project can physically fit on a site - theoretically. This is not an analysis.
Program H-1.6 must:
- Include financial feasibility as part of any comprehensive study of residential development standards
- Modify building height for mixed-use parcels. Scotts Valley considers two stories a factor for redevelopment, because they know the buildings could be….three stories (Page F-32, Building Height Underutilization). This is too low, especially for mixed-use along transit corridors and the Town Center.
- Modify base density for R-VH and C-S and C-SC. With the city’s highest density residential zoning district capped at 20 du/acre and the commercial district capped at 40 du/acre, this is likely a significant barrier. As noted above, other jurisdictions with active development projects have a higher base density for residential and commercial zoning. We continue to recommend a higher base density than 40 du/acre for mixed-use parcels along transit corridors.
We appreciate the addition to Program H-2.2 that replaces subjective language with objective findings in design review.
Pipeline Projects
HCD comment(s) from letter dated December 19, 2023: Progress in Meeting the RHNA: The element was revised with a high-level statement indicating that there are no known barriers to development (pg. F-7) and updated each project status to state that the City continues to work with applicants on remaining steps. However, this does not demonstrate whether these units will be constructed and made available during the planning period.
Pipeline projects account for 34 percent of RHNA. Some pipeline projects have been around for a while, including in the last RHNA cycle. La Madrona’s EIR was started in 2020, and Valley Gardens’ in 2021.
The updates to Table F-5, along with Table F-7, do NOT “demonstrate whether these units will be constructed and made available during the planning period.”
While Scotts Valley may believe the “projects listed do not have any known constraints or barriers which may hold-up or delay the entitlement and/or permitting process”(page F-7), that is NOT demonstrating whether they will be constructed and made available during the planning period. (See Constraints above)