The City of Watsonville, in partnership with Santa Cruz METRO and MidPen Housing, has been awarded a $39 million state grant to help build a new affordable housing and transit-centered development in downtown Watsonville.
The funding, awarded through the state’s Affordable Housing and Sustainable Communities (AHSC) Program, will support the Watsonville Metro Project, which will redevelop the Watsonville Transit Center at 475 Rodriguez St. into a multi-story, mixed-use development that combines housing, transit and commercial space.
The project was one of just 21 selected statewide in this funding round, and the only one on the Central Coast.
Plans for the site call for 79 new affordable housing units, with a mix of one-, two- and three-bedroom apartments, along with upgraded transit facilities, a new bike hub and bike lanes, ground-floor commercial space and an outdoor forecourt.
City officials said the redesigned site is intended to serve as a pedestrian-friendly, transit-connected hub that improves regional mobility while supporting nearby businesses.
“The AHSC award is a major investment in the future of our downtown and in the residents who rely on accessible, affordable housing and transportation,” said Assistant Community Development Director Justin Meek. “We are grateful for the collaboration with Santa Cruz METRO and MidPen Housing that made this competitive award possible.”
The project builds on the city’s 2023 Downtown Watsonville Specific Plan, which outlines a long-term vision for revitalizing the downtown core through new housing, mixed-use development and expanded commercial activity.
City staff said the Watsonville Metro Project aligns with the plan’s goals of creating a walkable, inclusive and active downtown.
The AHSC Program, administered by the California Strategic Growth Council, funds developments that aim to reduce greenhouse gas emissions by integrating affordable housing with public transit and active transportation infrastructure. Eligible projects are designed to reduce vehicle miles traveled while expanding access to transit, biking and walking.
Construction timelines and next steps for the project have not yet been announced.
