The Santa Cruz County Board of Supervisors voted to move forward with a controversial housing project at 841 Captiola Road in Live Oak. (Amaya Edwards — Santa Cruz Local/CatchLight Local)

WATSONVILLE >> The Santa Cruz County Board of Supervisors approved a controversial five-story apartment complex in Live Oak on Tuesday, to the dismay of dozens of residents who were vehemently against it. 

The approval came in a 4-1 vote with Supervisor Justin Cummings dissenting, after more than two hours of discussion. The development was initially approved by the county’s Planning Commission in October 2025, but was appealed by Michael Reis, a nearby resident. 

Both Reis, and Santa Cruz-based developer Workbench which proposed the project, have suggested they would sue if the supervisors’ vote went against them. After the vote, Reis said he’ll need to regroup with other neighbors and their attorney to discuss how to move forward.

“The decision boiled down to the county making the responsible decision of not to take on the financial risk of being wrong,” Reis said. “We had hoped there would be a different outcome but at the end of the day, the numbers speak for themselves.”

Prior to the vote, County Counsel Jason Heath fielded questions from supervisors about possible legal backlash of not approving the project. He cautioned the board that denying the project could cost upwards of $2.8 million, if the state found the county to be “acting in bad faith” against new housing. State housing laws have largely removed local authority to deny or change projects, and can penalize jurisdictions that don’t comply.

Workbench utilized a state law known as the Builder’s Remedy in proposing the project. The law allows developers to propose housing projects larger than zoning would otherwise allow if the project includes some below-market-rate units. The county was subject to Builder’s Remedy rules for several months in early 2024 when it lacked a state-approved housing plan, called a Housing Element.

Of the project’s 57 units, four will be affordable to low income residents based on state-set income limits.

Part of the dispute has to do with the timeline of approval on the county’s Housing Element. While the county’s Housing Element was last reviewed by the state’s Department of Housing and Community Development on March 15, 2024, the department didn’t issue a certification letter until April 23, and then back dated the letter to April 15. Workbench submitted its application for the project on April 9, 2024.

Reis’ lawyer Mark Wolfe argued at the meeting that the state’s approval would have taken effect on the day the county’s Housing Element was last reviewed — not when the certification letter was issued. 

“[The Builder’s Remedy] is intended as a punishment, it punishes recalcitrant agencies who are failing to work in good faith to get their Housing Elements done in time, who are dragging their feet and basically obstructing the approval of housing,” Wolfe said at the meeting. “That is not what happened here.”

Workbench President Tim Gordin and lawyer Ryan Patterson both disagreed, citing a state bill that specifies a jurisdiction’s Housing Element is in compliance only when they receive a certification letter. 

“Respectfully, they’re incorrect about this point. If [the state] had already certified, why would they send a second letter certifying on April 23?” Patterson asked.

Residents have been lobbying against the project for months, including at this Santa Cruz County Planning Commission meeting in October. (Amaya Edwards — Santa Cruz Local/CatchLight Local)

Despite the approval, supervisors were largely sympathetic to the neighbors’ concerns. 

Supervisor Manu Koenig, who represents the district that includes the proposed development, said he was inclined to deny the project in agreement with residents, but was concerned about the legal ramifications of being sued by Workbench.

“I completely understand, as my colleague does, why the neighbors in the room are frustrated,” Supervisor Monica Martinez said at the meeting. “It’s an incredibly difficult position to be in, to be representing a community but to have decisions taken out of our hands by the state.”

Cummings, the sole supervisor to vote against the project’s approval, urged residents to reach out to state lawmakers with their concerns about the process.

More than a dozen county residents spoke against the project, including some living on Grey Seal Road, where the proposed development would have its entrance and exit. Grey Seal Road is a single-family cul-de-sac with one exit, and neighbors voiced safety concerns with the increase in traffic from cars and delivery drivers. Some asked for specific changes to the project citing safety concerns, such as adding traffic bollards to the end of Grey Seal Road. 

“There are 11 children at the ages of 10 or younger who play in the street constantly,” neighbor Molly Brame said at the meeting. “Obviously, we can share if that’s the case for a smaller addition to the neighborhood, but this is outrageous.”

The rendering of the five-story apartment complex proposed at 841 Capitola Road in Live Oak. (Workbench)