WATSONVILLE—As the three dozen or so people attending a Feb. 10 virtual meeting about the future of Watsonville’s downtown gave their final comments, one speaker’s remarks invoked some smiles and produced nodding heads from the rows of attendees displayed in their windows.
“We’re talking to a number of large companies in the area who have expressed the possibility of wanting to move their headquarters downtown, and that would be tremendous if we could make that happen,” said Benjamin Ow, the president of Ow Commercial, a major developer in Santa Cruz County. “But, of all the different product types for what would go into downtown, residential is the highest and best use in terms of what developers can actually afford to build.”
Ow’s comments succinctly encapsulated much of the discussion during the marathon two-and-a-half-hour meeting about the city’s vision for its downtown. While the ultimate goal is to convince shops, restaurants and large employers to move into the struggling corridor, the city must first make things easier for developers to build more housing so that those businesses have a built-in clientele.
“We should be encouraging new housing because the need for housing is so dire,” Ow said.
The Feb. 10 meeting, the sixth such gathering of business owners, developers, city representatives and community leaders on the advisory committee, centered around the types of housing that the Downtown Specific Plan would encourage and how it would try to account for possible displacement of residents who might be priced out if the corridor does indeed boom after the plan is completed and adopted.
While all in attendance agreed that creating new housing should be the focus of the specific plan—a document that, when adopted later this year, will provide a blueprint for developers and business owners to follow while operating in downtown, there was some disagreement on how many new units should be deed-restricted for low-income residents.
Neva Hansen, whose family company Pacific Coast Development has constructed several local projects, including The Terrace on Main Street, said that the conversations during the meeting were too tilted toward low-income housing and worried that there was little to no mention of market-rate housing production.
“I have a grave concern here,” she said. “For a thriving downtown, we need all kinds of levels of housing. We need a multi-housing plan and not just a low-income [plan]. That’s what this focus has been.”
The consultant team from Berkeley-based Raimi + Associates leading the creation of the plan said the document will encourage housing for residents at all income levels. But the consultants added that combating the displacement of low-income residents has been a consistent topic in previous discussions, so they chose to focus their presentation at the latest meeting on what the city can do to help them.
As such, the consultants recommended the plan should promote the development of affordable housing by encouraging the city to work with nonprofits to build 100% affordable projects on underutilized public land—such as parking lots and single-story buildings owned by the city—and preserve and renovate existing affordable housing options.
But Hansen maintained that the committee’s conversation was incomplete because the presentation did not acknowledge that the majority of the housing options downtown at the moment are geared toward low-income residents.
“It’s not that low-income housing hasn’t been represented in the downtown, it is well-represented in the downtown currently,” she said. “We’ve actually asked for the numbers of the percentages of what it is market rate compared to low-income, and the city has yet to provide those actual numbers. I think that would be helpful especially in a conversation just like tonight.”
Watsonville Community Development Department Director Suzi Merriam in an interview on Monday said the consultants’ market analysis done for the Feb. 10 meeting did not identify deed-restricted affordable housing. But she explained that simply looking at a map of deed-restricted affordable housing in downtown or the percentage of units that are being rented below market rate would not paint a full picture of the conditions in the corridor.
According to the analysis, 80% of the 740 homes and apartments are rental units, and the average household income of downtown residents is just below $50,000—well below the city’s average household income of $72,591. In addition, the vast majority of the buildings downtown are aging structures built before 1939 that are in need of repairs.
“All of these metrics indicate that we have a lot of affordable housing downtown, which is not necessarily deed-restricted but is being rented to lower-income individuals,” Merriam said.
A handful of participants said the recommendations did not go far enough to account for gentrification and displacement. Some, including El Pájaro Community Development Corporation Executive Director Carmen Herrera-Mansir, said that low-income residents in Watsonville would not be able to afford to live downtown unless the city changed its inclusionary housing ordinance and adjusted the qualifications for its income limits around affordable housing. Currently, the city determines the median household income it uses for the affordable housing program by taking 70% of the county’s area median household income of about $96,000, or $67,000.
“But the reality in Watsonville is that the median income is about $55,000,” said Watsonville Housing Manager Carlos Landaverry. “We’re going to get better numbers once the census data comes in, but about 73% of our residents are low income, which means they make below 80% of the county’s median income.”
Others said that the specific plan should force new large developments to set aside 25% of their units for the city’s affordable housing program. Watsonville already requires 20% of most new developments to be deed-restricted for low-income residents.
But several developers and the consultant team said that in the current climate of construction a 5% increase would likely kill several projects before they ever began.
“Would an extra 5% for affordable housing be great? Absolutely. But an extra 5% of nothing, is not as good as 5% less of something that actually gets built,” Ow said.
The city will hold at least two more meetings on the specific plan so the consultant team can prepare a rough draft for the advisory committee to look over this summer. The plan will likely be adopted this fall.
The next meeting will be centered around mobility and parking. At the following meeting, economic development will take center stage.
‘Road Diet’ Lives
The proposed reduction of lanes on downtown Main Street has gained momentum. Merriam says Caltrans has offered to add the so-called ‘road diet’ to its upcoming long-range work plan and pay for the alterations—because Main Street is a thoroughfare for Highway 152, Caltrans has a say on how the city can use the road.
The plan, however, still has several hurdles to clear. For one, the city and Caltrans must conduct separate environmental impact reports to see if the lane reduction—which was first introduced in 2019—will have a significant impact on traffic, the city and the surrounding streets, among other things.
Even if everything checks out, the reduction of lanes would not happen for another 10 years, Merriam says.
The city has said a road diet would slow traffic, and allow businesses to flourish by producing a more walkable downtown corridor.