A local developer has sued the County of Santa Cruz after the Planning Commission in January tabled considering it for approval. A rendering shows the proposed building. (Workbench)

Both projects were proposed utilizing a state rule known as the Builder’s Remedy, which allows developers to largely bypass local zoning requirements if a county or city lacks a state-approved housing plan, called a Housing Element.

The county thus finds itself being sued for one Builder’s Remedy project it approved and another it hasn’t. 

“It’s disappointing that taxpayer resources will now be utilized in litigation over projects the county did not bring forward, involving a law the county did not write,” Santa Cruz County spokesperson Jason Hoppin wrote in an email. “We look forward to a speedy resolution.”

Builder’s Remedy dispute

The most recent Housing Element, intended to help address the state’s chronic housing shortage, was due in December 2023. But the state did not issue a letter certifying Santa Cruz County’s plan until April 23, 2024. (This letter was later backdated to April 12, court documents asserted.)

The exact date matters, because opponents of both the Paul Sweet Road and Capitola Road projects argue that when Workbench submitted their applications in April 2024, it was already too late to qualify for the Builder’s Remedy. 

The lawsuit filed by residents over supervisors’ approval of 841 Capitola Road last month alleged the county’s Housing Element was in compliance by March 15, 2024, when county staff received “verbal confirmation” that the state was “ready to certify.” 

“If we prevail, the project will be subject to the same development standards that apply to everyone; it will not be able to bypass them by exploiting a loophole,” Mike Reis, who lives near 841 Capitola Road and is part of the group suing the county, wrote in an email. 

The Board of Supervisors appears to agree with this interpretation. In a March 18 letter to the state Department of Housing and Community Development, supervisors requested that the county’s Housing Element “should be determined to be in substantial compliance and certified as of March 15, 2024.” 

The state didn’t substantially review the Housing Element after that date, supervisors wrote, and the delay in issuing a formal certification letter was “largely administrative in nature” rather than the result of “any failure by the county to comply with Housing Element law.”

Workbench representatives did not respond to several requests for comment this week. 

In a prior interview with Santa Cruz Local, Workbench President Tim Gordin said that it required more than “phone calls and emails between people [to] constitute approval” of the Housing Element. He added that more housing was a “huge public benefit” in a county that has had a “dearth of market-rate apartments being built for the last 50 years.”

“This case demonstrates why California continues to suffer from a housing crisis of epic proportions,” Workbench’s lawsuit alleged.

The Santa Cruz County Planning Commission considers a proposal to replace a single-family home with 57 apartments at 841 Capitola Road in October. (Amaya Edwards — Santa Cruz Local/CatchLight Local file)

Workbench sues, again

The proposed development at 3500 Paul Sweet Road, which would be surrounded on three sides by the Dominican Oaks senior living facility, calls for six of its 105 rental units to be reserved for extremely low income households, based on state-set income limits. The project would include a 68-space parking garage, a common area terrace, covered bicycle parking and electric vehicle charging stations.

Dominican Oaks and Dominican Hospital — which are owned by the same parent company — have aired many reservations about the project. These include concerns that increased traffic and other factors could delay ambulance response times and impede an emergency evacuation of Dominican Oaks. The new building could also interfere with the flight path of helicopters traveling to and from the hospital, and residents worry about potential health impacts of construction noise and dust.

“This proposed development, given its scale, presents a direct and perilous risk to patient and resident safety,” Rachel Howley, vice president of ancillary services at Dominican Hospital, wrote in an email. “Any obstruction to emergency access to our facility — whether impacting ground vehicles arriving at our emergency room, compromising our helipad operations, or obstructing critical time-sensitive services — puts lives in immediate jeopardy.”

State Sen. John Laird, D-Santa Cruz, wrote in an email that the concerns raised by his constituents should be taken seriously. 

“It is my hope that a process can be developed that returns local land use control if the goals for construction of new housing are being met at all income levels,” he wrote.

Supervisor Manu Koenig, whose district includes 3500 Paul Sweet Road and 841 Capitola Road, could not immediately be reached for comment.

Because state law largely prevents local jurisdictions from altering or denying housing proposals, Workbench also sued the City of Santa Cruz in 2024 after the city council did not approve proposed ADU conversions in its apartment proposal at the Food Bin on Mission Street. That case was thrown out by a superior court judge and remains in appeals. 

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