The Neptune Apartments on Pacific Avenue could become an eight-story apartment building. (Amaya Edwards — Santa Cruz Local/CatchLight Local)

SANTA CRUZ >> Tenants of the Neptune Apartments in Downtown Santa Cruz could soon be the first residents displaced by the upzoning of the area. The renters have until July 27 to leave their homes and make way for a new eight-story apartment building approved by the Santa Cruz Planning Commission this month. 

“I’m super anxious because I’m old and my ability to earn more than what I’m making right now does not exist,” said Laurie Dodt, who has lived at the apartments at 407 Pacific Ave. for four years and works as a caregiver for seniors. “I don’t want to be homeless.”

Dodt, who was born in Santa Cruz and has lived here ever since, said she often thinks about the possibility of becoming homeless.

“I could be in a tent and it’s sad. It’s scary and it’s sad,” she said. “I don’t live there — in fear — but that’s the reality.”

“It’s nice that they build affordable housing, but then I find out they can use this building, because it’s [eight] stories, against other buildings which then can now be totally luxury apartments,” said Leonard Ross, who has lived at Neptune Apartments since 2020. “That kind of rubs me the wrong way.”

Ross said he and the other tenants are waiting to see how much relocation assistance they will be offered, and if it will be enough to stay in Santa Cruz, where last year rents were ranked as the most expensive in the U.S. by the Low Income Housing Coalition for the third year in a row. 

Leonard Ross stands in front of his home. ‘It’s an old building, but it has that certain kind of style to it,’ he says of Neptune Apartments. (Amaya Edwards — Santa Cruz Local/CatchLight Local)

Paul Yale, who has lived at Neptune Apartments for more than 20 years, implored the Santa Cruz Planning Commission to not let the project, and the razing of his home, go through.

“By demolishing it, you’d pretty much be kicking me out of town,” Yale said to commissioners at the April 16 meeting. Planning commissioners approved the project unanimously, in what was essentially a formality. State housing law strips local authority to change or deny most housing proposals.

In an interview with Santa Cruz Local, Yale said he’s lived in Santa Cruz since he was a child and doesn’t know if he’ll be able to stay after he loses his home in July.

“I don’t have a credit rating because I’ve been renting for the last 20 years month-to-month,” he said, adding that he pays $1,200 for the two-bedroom apartment. “Rates for finding a new place to live are ridiculously higher than what I’m paying right now.” He said if he ends up in a studio costing $2,000, the rent would be more than half his monthly income.

The developer informed residents last year that the property would be redeveloped, Yale said, and some tenants have since left.

City rules require developers to hire an independent company to facilitate relocation of tenants and Long Beach-based real estate consulting firm Overland, Pacific & Cutler, Inc. was hired for the Neptune tenants. 

In a 180-day notice to vacate dated Jan. 26 and shared with Santa Cruz Local, the company advised residents to wait until a 90-day notice is given before signing a lease or moving out. Otherwise, they may not be eligible for relocation assistance.

Paul Yale says ‘it felt terrible to be right’ when he finally got the notice he was expecting, informing tenants the building would be redeveloped. (Amaya Edwards — Santa Cruz Local/CatchLight Local)

Yale said that makes the situation more stressful, as finding adequate housing in Santa Cruz can be a lengthy and challenging ordeal.

Tenants will be guaranteed a spot in the new housing once it finishes construction, but rents for the below-market-rate apartments could be double, or even higher than what they pay at Neptune. 

The expected displacement of the tenants comes just under a year after the city council approved upzoning the neighborhood. City leaders dubbed the area “SoLa” or “South of Laurel” in the process of rezoning to allow buildings up to 85 feet. 

“I’ve seen the downtown plan, and there was a gray box over where I live,” Yale said, referring to the map of which blocks were to be upzoned.

Though the loss of the Neptune Apartments is a relatively small number of affordable homes compared to the 102 units set to replace them, it will serve as an important case that puts the city’s anti-displacement policies to the test. 

How many of the residents land on their feet, or are forced to leave town in search of affordable rents, remains to be seen.

Anticipated rents in a proposed eight-story, below-market-rent apartment building have not yet been published. (CRP Affordable Housing & Community Development)

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