The site of a proposed housing development in Capitola.

Nonprofit housing developer MidPen Housing has proposed 52 units of affordable housing at 1098 38th Ave. in Capitola. (Naomi Friedland — Santa Cruz Local)

Last updated: November 2023

Location: 1098 38th Ave., Capitola 

The location is the site of a former convalescent home that closed in 2016. The Santa Cruz Branch Rail Line runs next to the site, where Segment 10 of the rail-trail project is planned. 

A map showing 1098 38th Ave. in Capitola.


  • The Capitola City Council on Nov. 9 approved a $250,000 loan to the developer for predevelopment work including surveys and architectural design. Some of the work has started, said MidPen spokeswoman Lyn Hikida. “If everything goes smoothly with design and financing, we hope to begin construction in late 2025,” Hikida wrote in an email to Santa Cruz Local.
  • A project application was submitted in September 2022. A MidPen affiliate acquired the property in March 2023. The project is expected to cost $46 million, MidPen representative Joanna Carman said at a June 22 meeting.


The Foster City-based nonprofit MidPen Housing Corp.

Project description

  • Total units: 52.
  • Affordable units: The proposal is 100% affordable based on state income limits. It’s not yet clear how many units will be for each income level, said Hikida. 
  • Height: Three stories with a community room and property management offices on the ground floor.
  • Details: A convalescent home on the proposed project site closed in 2016.
  • Cost: The project is expected to cost $46 million, MidPen representative Joanna Carman said at a June 22 meeting.

Santa Cruz Metro Bus Route 66 runs past the proposed homes at 1098 38th Ave. (Naomi Friedland — Santa Cruz Local)

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