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.

Members of the development community listen with mixed emotions to the Santa Cruz Planning Commission meeting Thursday, Nov. 21, 2019 at Santa Cruz City Hall. In the rear corner, from left, retired architect Henry Hooker, developer Owen Lawlor, developer John Swift, and Swenson’s Jessie Bristow (blue shirt). Gail Jack of Affordable Housing Now, right, spoke in favor of cutting permitting times to spur development, rather than increasing inclusionary rates. (Kara Meyberg Guzman — Santa Cruz Local)

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Kara Meyberg Guzman is the CEO and co-founder of Santa Cruz Local. ​Prior to Santa Cruz Local, she served as the Santa Cruz Sentinel’s managing editor. She has a biology degree from Stanford University and lives in Santa Cruz.

[email protected] | Website | + posts

Stephen Baxter is a co-founder and editor of Santa Cruz Local. He covers Santa Cruz County government.