Much of Santa Cruz’s affordable housing development is dependent on market-rate developers. In December, the Santa Cruz City Council will consider an increase in the number of affordable housing units that developers are required to build. It’s called an inclusionary rate, and the city council may raise it from 15% of new units to 20%.
The city needs to set the rate high enough that it forces the maximum number of affordable units. But the rate shouldn’t be so high that the costs scare away developers.
Likely the debate will come down to whether the city should do an economic study. We break down the value and shortcomings of economic studies and what’s at risk. We talk to a developer and discuss some economic factors that go into developers’ decisions to build.
Editor’s note: This episode and transcript has been updated to reflect that Santa Cruz has made enough progress on its above-moderate housing production goals to avoid a state-required economic feasibility study. An earlier version misstated the type of housing production.
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