The City of Santa Cruz officially received a Prohousing Designation Award on August 4, 2023, from the California Department of Housing and Community Development Department (HCD).

The Prohousing program creates incentives for jurisdictions that are compliant with Housing Element requirements and that have enacted Prohousing Policies. These incentives take the form of additional points or other preference in the scoring of applications for competitive housing and infrastructure programs. Prohousing communities get priority for resources to build housing to help meet the statewide goal of 2.5 million homes by 2030.

To obtain this award, the City’s Economic Development and Housing Department submitted a completed application for the designation under the Prohousing Designation Program, which is administered by the HCD. The City’s Planning Division also assisted in bringing the application to fruition, and the project collectively, was a true team effort.

In order to be considered for a Prohousing Designation, a jurisdiction must accurately complete all sections of a 22-page application, including any relevant appendices, and score a minimum of 30 points across the following four categories:

1. Favorable Zoning and Land Use
2. Acceleration of Housing Production Timeframes
3. Reduction of Construction and Development Costs
4. Providing Financial Subsidies

The City of Santa Cruz scored a total of 57 points, which is the 7^th highest score out of the 47 awarded California jurisdictions, to date. (Data as of April 2024)

The benefits of this designation paved the way for the City to be eligible to apply for the second round of the Prohousing Incentive Program (PIP Round 2), a $9.5 million state investment from the Building Homes and Jobs Trust Fund. We can now also receive priority processing or funding points when applying for several funding programs, including the Affordable Housing and Sustainable Communities (AHSC) Program, the Infill Infrastructure Grant (IIG), Transformative Climate Communities Programs, and more.

The Prohousing Designation Program was established in the 2019-2020 Budget Act to acknowledge the policies of local governments that promote housing development. The purpose of the program is to encourage jurisdictions to pass and implement policies that accelerate housing production, promote favorable zoning and land use, reduce construction and development costs, and provide financial subsidies.

The City of Santa Cruz Prohousing Application highlighted several programs, accomplishments, proposals, and ongoing housing efforts including, but not limited to:

1. Innovative programs which help reduce barriers for affordable housing.
2. Information about the City-created Flexible Density Units (FDUs) that can be added to residential or mixed-use development in four commercial zone districts including the City’s Downtown area. FDU is a new designation which allows a greater range of sizes of auxiliary housing units, which can be owned or rented with no restrictions. This change will allow development in those zones to exercise the full floor area ratio permitted, even if this exceeded a relevant density standard that would otherwise apply.
3. Evidence of the My House My Home Program, available within the City, which is designed to help low-income seniors age in place by helping to develop an on-site rental ADU that helps supplement their fixed incomes.
4. Verification that the City publicly posts status updates on project permit approvals on the Internet.
5. Information about City-funded and constructed transportation projects, including bike-share and bike-locker programs. Since 2017, over $56 million has been secured to build out bike and pedestrian projects, with an emphasis on types of facilities that increase safety for non-motorized users. A new bike share program was launched in June 2023, designed to encourage non-auto use. The City also funds and manages the GO Santa Cruz program for all downtown Santa Cruz employees, which provides free transit passes, bike locker cards, carpool incentives, and education/encouragement for non-auto use.
6. A streamline project review program proposal that would review projects up to four units that have previously been approved for development during the same Building Code cycle. This would allow developers of these projects to reuse plans on multiple sites or share the approved plans with other property owners.
7. Acknowledgement that the City of Santa Cruz partners with the Housing Authority of Santa Cruz County and Community Action Board (a local nonprofit) to provide security deposit assistance and emergency rental assistance to Santa Cruz residents as a way to provide financial resources for housing. Low-income households are assisted to obtain or retain housing, and participant statistics are collected annually. The funds come from the federal HOME and CDBG programs as well as City prior Red Cross funds.

This year the HCD released new and permanent program regulations that went into effect on March 2, 2024. As per section 6608 of the new regulations, Prohousing Awards have expiration dates. The award we received in 2023 will expire January 1, 2027; however, we will be able to apply for the designation again in July 2026, six months prior to the original designation’s expiration date.

Achieving the Prohousing designation takes dedication to community development, minimizing obstacles and barriers, and enacting housing policies aligned with state goals that accelerate housing production. Through the Prohousing Designation, the City of Santa Cruz has demonstrated our determination, fortitude, and a commitment to partnering with the State in meeting housing goals.

All application materials, including a copy of the permanent regulations, are available under “Prohousing Designation Program Application” at: https://www.hcd.ca.gov/planning-and-community-development/prohousing-designation-program