“We’ve come a long way,” said Katie Herlihy, Capitola’s community development director.
Like many cities and counties, Capitola has not met recent state requirements to add housing.
- City leaders were supposed to permit 143 homes from 2014 to 2023, city leaders said. Staff permitted 49 homes in that period.
- State authorities now require Capitola to permit 1,336 new homes in the city from June 30, 2023 to Dec. 15, 2031.
- Capitola’s September draft Housing Element allows 1,559 new homes to be permitted through December 2031. That number could change in the final draft.
- Nearly half of the potential new homes are planned at the Capitola Mall, where redevelopment has stalled since 2019.
Capitola is expected to adopt a final Housing Element on Nov. 9.
California authorities require cities and counties to update their Housing Elements to meet housing goals. When areas do not make enough progress on those goals, state law allows streamlined approval of some housing projects. City leaders then have limited power to change or veto projects.
The Association of Monterey Bay Area Governments, or AMBAG, sets goals for jurisdictions within Santa Cruz and Monterey counties. In October, AMBAG adopted the region’s sixth Regional Housing Needs Allocation Plan.
Thursday, Herlihy discussed state authorities’ comments on Capitola’s Housing Element draft and previewed some expected changes for the final draft.
A map from a September draft of Capitola’s Housing Element shows sites where more housing could be built in the next eight years. The map removes areas for potential homes at New Brighton State Beach and the DMV at 4200 Capitola Road. (City of Capitola)
Housing plans at Capitola Mall
Nearly half of the new homes in Capitola’s draft Housing Element are slated for the Capitola Mall on 41st Avenue, a site the city has sought to redevelop since 2011. Initial plans for the site were submitted in 2019, but developers have not submitted new plans towards redevelopment.
The final Housing Element draft is expected to include plans to allow 641 homes on the site, Herlihy said. The plans include 55 possible homes on the land occupied by Macy’s, which has a different owner than the rest of the mall. Half of the store’s area could be used for homes, according to the plan.
The site occupied by Kohl’s was removed from the Housing Element because it has a long-term lease agreement, according to the draft plan.
City leaders reviewed a conceptual plan for the mall in November 2019 which included stores and restaurants, a theater, and new homes. Developer Merlone Geier Partners has not submitted a formal application to city leaders.
Capitola is conducting a land-use study that aims to determine what the city could do to encourage the redevelopment of the mall. The results of that study are expected to be presented to the city council in January 2024.
City leaders plan to use the results of the study to update its rules that incentivize development in some areas of the city, including the mall. The rules allow higher or denser buildings if developers include features that benefit the public – such as public space or improved crosswalks.
“We do need to figure out what it’s going to take, particularly for the mall, which is such a huge part of our housing, to actually come forward and be developed,” said Susan Westman, chair of the Capitola Planning Commission, at the commission’s Oct. 5 meeting.
Nonprofit housing developer MidPen Housing has proposed 52 affordable homes at 1098 38th Ave. in Capitola. (Naomi Friedland — Santa Cruz Local file)
The Housing Elements for the county and the City of Santa Cruz include vacant lots as sites for potential housing development. But Capitola’s small size means the city doesn’t have much suitable undeveloped land — just four parcels that total less than one acre, according to the draft Housing Element. Those sites could host up to 12 units, according to the draft.
Instead, Capitola is leaning on small projects in parking lots and areas that could be redeveloped to include more homes. Some sites are on multiple smaller parcels that would require consolidation.
Other potential housing sites in Capitola
Some potential housing sites include:
- Parking lots or unused buildings at churches. Shorelife Community Church at 875 Monterey Ave. and St. Joseph’s Catholic Church at 435 Monterey Ave. could add five housing units each.
- Parts of parking lots at Kings Plaza Shopping Center on 41st Avenue, which could accommodate 51 homes, and Nob Hill Foods on Bay Avenue which could see 29 new homes.
- In the final draft, the staff will consider allowing more density along bus routes, Herlihy said.
- The most recent draft includes an estimated 50 in-law units that could be built. A law signed by Gov. Gavin Newsom Oct. 11 allows in-law units, or accessory dwelling units, to be sold as condos.
Previous drafts of Capitola’s Housing Element included plans for potential homes on state-owned properties such as New Brighton State Beach and the DMV office on Capitola Road.
City leaders contacted state authorities about developing housing on the sites, but received “very little response,” Herlihy said at the Oct. 5 planning commission meeting. City leaders plan to continue conversations with state leaders in hopes of developing the sites in the future, Herlihy said.
Members of the planning commission said they were frustrated that the state had not cooperated to create new housing on the sites. “It’s an obvious target in a great location,” Planning Commissioner Paul Estey said of the DMV.
“It’s ridiculous” that the state isn’t working with the city to allow redevelopment, said Westman, chair of the commission. “The state of California owns so much land. They should make a commitment to reuse some of their sites,” she said.
The final draft of Capitola’s Housing Element is expected to include more places where homes could be built for people who make too much money to qualify for affordable housing but can’t afford market-rate homes.
- A potential rule in the final Housing Element would allow duplexes on corners in neighborhoods zoned for single-family homes.
- The final plan is expected to slightly raise the allowed density in areas zoned for low- and medium-density multifamily housing. For example, a neighborhood that allows 10 homes per acre could be rezoned to allow 12 homes, Herlihy said in the planning commission meeting.
The council voted unanimously to direct staff to prepare a final draft with the proposed changes.
Next steps for Capitola’s Housing Element
- Oct. 19: The Capitola Planning Commission has scheduled a special meeting to review the final draft and issue a recommendation to the city council.
- Nov. 9: The city council is expected to adopt the final draft and approve its submission to the state.
- Dec. 15: The state deadline for Capitola to have an up-to-date certified Housing Element is Dec. 15.