APPROVED BY DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT, APRIL 6, 2010
ADOPTED BY CITY COUNCIL RESOLUTION NO. 3803, FEBRUARY 11, 2010


City of Capitola Housing Element of the General Plan 2007-2014, prepared by: The City of
Capitola Planning Commission, David Foster, Project Manager, City staff, Julianne Ward,
Housing Element Consultant and Ariana Green, Intern
	

EXECUTIVE SUMMARY .................................................................................................... 1
CHAPTER 1: INTRODUCTION ......................................................................................... 1
A. Community Overview .................................................................................... 1-1
B. Purpose of the Element ................................................................................. 1-3
C. Legislative Requirements .............................................................................. 1-4
D. Scope and Content ........................................................................................ 1-4
E. Relationship to Other General Plan Elements ............................................... 1-5
F. Public Participation ........................................................................................ 1-5
G. Sources of Information .................................................................................. 1-9
CHAPTER 2: HOUSING NEEDS ASSESSMENT .......................................................... 2-1
A. Population Characteristics ............................................................................. 2-2
B. Household Characteristics ........................................................................... 2-12
C. Housing Characteristics ............................................................................... 2-28
D. Assisted Housing ......................................................................................... 2-40
CHAPTER 3: CONSTRAINTS ON HOUSING PRODUCTION ....................................... 3-1
A. Market Constraints ........................................................................................ 3-1
B. Governmental Constraints ............................................................................. 3-5
C. Environmental and Infrastructure Constraints ............................................. 3-17
CHAPTER 4: HOUSING NEED AND OPPORTUNITIES ............................................... 4-1
A. Regional Housing Needs ............................................................................... 4-1
B. Opportunity Sites ......................................................................................... 4-10
C. Resources Available .................................................................................... 4-25
CHAPTER 5: PROGRAM EVALUATION ....................................................................... 5-1
A. Progress Toward Implementing the 2000-2007 Housing Element Program .. 5-1
B. Outstanding Issues from the 2000-2007 Housing Element ........................... 5-9
C. Analysis of Implementation of Prior Housing Element ................................. 5-10
CHAPTER 6: HOUSING PLAN ...................................................................................... 6-1
A. Goals, Policies and Programs of the 2007-2014 Housing Element ............... 6-1
B. Quantified Objectives .................................................................................. 6-24
C. Capitola Housing Element Compliance with State Law ............................... 6.27
APPENDICES
APPENDIX A: Glossary of Terms ......................................................................... A-2
APPENDIX B: Public Workshop I ......................................................................... A-7
APPENDIX C: Public Workshop II ...................................................................... A-18
APPENDIX D: 2002 ASR Housing Conditions Survey ....................................... A-23
APPENDIX E: Adequate Sites Program Alternative Checklist ............................ A-59
APPENDIX F: Inventory of Opportunity Sites 2007-2014 ................................... A-64
APPENDIX G: April 6, 2010 Letter from State Department of Housing and
Community Development .................................................................................... A-73
APPENDIX H: February 11, 2010 City Council Resolution No. 3803 ................. A-75
Executive Summary-1
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With a population of 10,0151 persons residing in 5,4782 dwelling units the City of Capitola
is nearly built out. Capitola’s existing housing is uniquely balanced to meet the diverse
needs of its residents. Though its history, Capitola has served as a vacation destination
with a mixture of summer cottages and fairly high-valued single-family homes with ocean
views.
Capitola’s housing stock is comprised of over 63% multiple-family units with over 53% of
the total housing units in the City occupied by renters. Capitola has a fairly high population
density of 6,220 persons per square mile and a housing unit density of 3,292 units per
square mile.3 Multiple family dwellings and mobile home parks are interspersed within and
adjacent to single family neighborhoods. Many of the community’s major commercial
areas are zoned to encourage mixed uses and a more pedestrian friendly environment.
The City of Capitola has been, and continues to be, a proponent of affordable housing. It
has actively assisted with the construction of new affordable units and the maintenance
and improvement of its existing affordable housing stock. In this 2007-2014 Housing
Element Update, the City of Capitola outlines its plan to identify new opportunities for
expanding affordable housing opportunities. This Housing Element includes the
continuation of the following housing programs from the prior Housing Element:
1 Department of Finance, E-5 City/County Population and Housing Estimates, 2001-2007
2 City of Capitola Building Department Records, 2007
3 Census 2000, SF 3 Population and Housing Unit Density for “Places”
Executive Summary-2
These programs include the following:
Continued Housing Element Programs
 Continued encouraged development of mixed use (multifamily housing
in concert with commercial) within existing commercial zones and to
locate higher density residential developments along transit routes and
arterial corridors.
 Continued support for resident involved acquisitions of mobile home
parks to guarantee long-term affordability and to facilitate
infrastructure improvements.
 Continued support of the City Rent Stabilization ordinance to protect
residents in rental mobile home parks.
 Continued use of the Affordable Housing Overlay District to facilitate
development of new low and moderate income units at densities of 20
units per acre. The Overlay can be used to also encourage the
preservation of existing rental housing units that currently serve lower
income residents.
 Continued enforcement and implementation of the Secondary Dwelling
Unit Ordinance that has resulted in the development of six units since
2004 and that should result in an additional 7 units during this planning
period.
 Continued enforcement and implementation of the Density Bonus
Ordinance consistent with state law.
 Preservation of the City’s eight existing affordable housing projects in
perpetuity.
 Continued enforcement and implementation of the City Condominium
Conversion ordinance.
 Continued collaboration with non-profit housing developers in the
acquisition and rehabilitation of existing apartment complexes which
serve lower income residents.
 Continued operation of the City’s first time homebuyer programs.
 Continued operation of the City’s housing rehabilitation programs.
Executive Summary-3
This Housing Element will initiate the following additional housing programs:
Additional Housing Element Programs
 Continued encouraged development of mixed use (multifamily housing
in concert with commercial) within existing commercial zones and to
locate higher density residential developments along transit routes and
arterial corridors.
 Review existing Secondary Dwelling Unit Ordinance to identify
modifications needed to encourage increased participation.
 In accordance with Government Code Section 65583(4) (A) Capitola
will amend its Zoning Ordinance to allow emergency shelters without
CUP or other discretionary approval in the Industrial Park (IP) zone.
 Capitola will review and will, if necessary to comply with Section
65583( c) (1), propose zoning amendments that will make transitional
and supportive housing a residential use of property, subject only to
the same restrictions that apply to other residential dwellings of the
same type in the same zoning district.
 Capitola will review and consider zoning changes to reduce barriers to
child care centers and family day care homes
 Capitola will review and consider zoning changes to existing
residential parking requirements to reduce development barriers and
encourage more efficient land use.
 Capitola will prepare and adopt a Reasonable Accommodation
Ordinance.
 Capitola will prepare and adopt a zoning amendment to allow Single-
Room-Occupancy (SRO) units.
Chapter 1-1
	
.
A. Community Overview
The City of Capitola is a small (1.6 square mile) seaside community, located along
Monterey Bay in Santa Cruz County. (Refer to Figure 1, Vicinity Map.) Soquel Creek
generally bisects the community in a northwest-southeasterly direction, with residences
and community and regional-serving commercial uses to the west of the creek, and a
mixture of residences and small shops and businesses along the east side of the creek.
Capitola was originally founded in 1869 as California's first seaside resort. Incorporated as
a city in 1949, the village area remains California’s oldest coastal resort and includes one
of the region’s most active beaches. Most of the growth in Capitola occurred in the 1970s
as the community annexed surrounding land and residential growth accelerated.
Today, Capitola, with a population of 10,0154 persons residing in 5,4785 dwelling units6, is
nearly built-out. Its housing stock contains a varied and balanced mix of housing types,
including single family houses, multifamily structures and mobile homes. Older Victorian-era
homes and small cottages on small lots characterize its older neighborhoods such as
Depot Hill, the Village and parts of the Jewel Box. Cliffwood Heights, Upper Village and
41st Avenue, located in the northern portions of the City, are newer, more typical suburban
neighborhoods, with most of the housing stock between 30-40 years of age (Refer to
Figure 2, Capitola Neighborhood Map). New housing, constructed during the past decade,
is found on in-fill sites scattered throughout the community.
4 California Department of Finance, Table E5 City/County Population and Housing Estimates, 2001-2007
5 Capitola Building Department Records, 2007
6 Population and dwelling unit totals from the U.S. Census Bureau, Census 2000.
Chapter 1-2
Figure 1-1 Vicinity Map
Chapter 1-3
Figure 1-2 Capitola Neighborhoods
B. Purpose of the Element
The provision of adequate housing for families and individuals of all economic levels is an
important public goal. It has been a main focus for state and local governments. The
issue has grown in complexity due to rising land and construction costs, as well as
increasing competition for physical and financial resources in both the public and the
private sectors.
In response to this concern, the California Legislature amended the Government Code in
1980. The amendment instituted the requirement that each local community is to include a
specific analysis of its housing needs and a realistic set of programs designed to meet
those needs. This analysis is to be set forth in a Housing Element and incorporated in the
General Plan of each municipality.
The requirements of the law are prefaced by several statements of State policy set forth in
Section 65580 of the Government Code:
Chapter 1-4
“... The availability of housing is of vital statewide importance, and the early attainment of
decent housing and a suitable living environment for every California family is a priority of
the highest order.”
“... Local and State governments have a responsibility to use the powers vested in them to
facilitate the improvement and development of housing to make adequate provision for the
housing needs of all economic segments of the community.”
“... The legislature recognizes that in carrying out this responsibility, each local government
also has the responsibility to consider economic, environmental, and fiscal factors and
community goals set forth in the general plan and to cooperate with other local
governments and the State in addressing regional housing needs.”
C. Legislative Requirements
State law requires each municipality to accomplish the following tasks:
 To identify and analyze the current and projected housing needs of all economic
segments of the community including persons with disabilities.
 To evaluate and remove, as legally feasible and appropriate, the current and
potential constraints to meeting those needs, including identifying the constraints
that are due to the marketplace and those imposed by the government.
 To identify adequate sites to facilitate and encourage housing for households of all
economic levels, including persons with disabilities. To establish a series of goals,
objectives, policies and programs aimed at responding to the identified housing
needs, the market and governmental constraints, and the housing opportunities.
This Housing Element addresses the planning period from 2007-2014. It has been
prepared in accordance with applicable state law, and consistent with the City of Capitola
General Plan and the community’s vision of its housing needs and objectives. For more
information regarding compliance with State law please see chapter 6 of this document.
D. Scope and Content
The Housing Element consists of five major components:
 An analysis of the City’s demographic, housing and special needs characteristics
and trends.
 Review of potential market, governmental, and environmental constraints which
impact the City’s ability to address its housing needs.
 Analysis of land, financial and organizational resource available to address the
community’s housing goals.
 Evaluation of the City’s accomplishments toward meeting the goals and objectives
of the prior 2000-2007 Housing Element.
Chapter 1-5
 A statement of the Housing Plan for the years 2007-2014 to address the City’s
identified housing needs, including the housing goals, policies and programs.
E. Relationship to Other General Plan Elements
The Government Code requires internal consistency among the various elements of a
General Plan. Section 65300.5 of the Government Code states that, “the General Plan,
and the parts and elements thereof, shall comprise an integrated and an internally
consistent and compatible statement of policies”. The Capitola General Plan contains the
following seven elements: 1) Land Use; 2) Housing; 3) Open Space, Parks and
Recreation; 4) Conservation; 5) Safety; 6) Noise; and 7) Circulation. The Capitola General
Plan is internally consistent. Policy direction introduced in one element is reflected in the
other elements.
Relative to housing, the General Plan identifies both constraints and opportunities to
providing new affordable housing. The Land Use Element addresses the scarcity of
available land to support new development, and the Circulation Element addresses the
limitations of the City’s roadway capacity. In spite of constraints, Capitola’s General Plan
supports a balanced land use pattern. Consistent with its Local Coastal Program policies,
the Land Use Element protects and promotes its seashore resources, providing
recreational facilities to the community and visitors. It also promotes commercial,
industrial, open space and mixed residential uses. The City’s residential and mixed use
densities allow for an adequate diversity and supply of housing to satisfy the requirements
of the Regional Housing Needs Assessment (RHNA) presented in this Housing Element.
This Housing Element builds upon the other General Plan elements. It is entirely
consistent with the policies and proposals set forth by the Plan.
Pursuant to Government Code Section 65400, the City will annually review its progress in
implementing this Housing Element and ensuring consistency between this and the City’s
other General Plan Elements.
F. Public Participation
Section 65583(c)(5) of the Government Code states that:
"The local government shall make a diligent effort to achieve public participation of all the
economic segments of the community in the development of the housing element, and the
program shall describe this effort."
Public workshops and hearings are opportunities for community members to not only learn
about certain plans or projects that may affect them in the future, but to let their voices be
heard by City officials and staff. The City of Capitola recognizes the importance of
community participation in future planning projects such as the Housing Element and
General Plan updates as they have the potential to affect all citizens within the City limits
for years to come. As such, public outreach was an important piece of the Housing
Chapter 1-6
Element update. For the duration of the Housing Element update, various noticing
techniques were used in order to increase public attendance at community workshops and
meetings. The goal of this public participation program was to gather the
opinions/comments of a large percentage of the population.
Public Outreach and Participation Goals
The City of Capitola took several measures in order to comply with the aforementioned
State requirement. All measures were taken in accordance with the Brown Act, which
requires the local government agency to provide the opportunity for the public to access
and participate in public meetings and workshops. As of July 1, 2008 the Brown Act also
requires that the public have access to non-confidential materials at the same time that
they are given or made available to Planning Commission or City Council members from
City staff (Section 54957.5, CA Government Code).
An early goal in the City of Capitola Housing Element update was to meet and exceed the
State requirements for public outreach and participation within the means of the City
budget and the time constraints of staff. Giving members of the community a chance to be
involved in long-range planning is a relatively infrequent opportunity, which is why the City
of Capitola recognizes the importance of public participation in updating the City of
Capitola Housing Element. The following sections describe the methods and strategies
that were used to accomplish the City’s public participation goal for this Housing Element.
Facilitation of Public Meetings
I. Capitola Planning Commission
The Capitola City Planning Commission served as the reviewing body for the development
of the Housing Element Update. The existing Commission was used as the venue for
gaining focused input from representatives of the entire City. Commission members
represented long-time residents, local professionals and public servants of Capitola. What
qualified them to serve as the Housing Element Review Board was their knowledge of
Capitola and the needs of the community.
II. Public Meetings
Table 1.1 outlines the public meetings that were held for the development of the Housing
Element update.
Chapter 1-7
Table 1.1: Public Hearings
DATE FORUM ACTION/PURPOSE OF MEETING
July 9, 2008 DC&E/Staff Public Workshop
Nov 20, 2008 Planning Commission Public Workshop II
May 7, 2009 Planning Commission Reviewed draft,
July 16, 2009 Planning Commission Reviewed draft, recommendation to CC
Aug.13, 2009 City Council
Review and approve DRAFT for
submittal to HCD
Jan.21, 2010 Planning Commission
Review of final draft , Initial Study and
Negative Declaration, recommendation
to CC
Feb. 11, 2010 City Council
Final HE and Negative Declaration
adopted. Submittal to HCD for
certification
One Community Meeting was held prior to the Planning Commission’s involvement in the
Housing Element Update process. The Community Meeting was widely publicized through
newspaper display advertisements and fliers posted throughout the City. The workshop
was held at the City community center at Jade Street Park on July 9, 2008. The meeting
was professionally facilitated and involved both a presentation as well as exercises for
group participation. More than twenty people attended the meeting and identified
important housing related issues in Capitola. The four most important issues identified in
the Community Meeting related to housing in the City are listed in Table 1.2 (refer to
Appendix B for more detail). These four issues were incorporated into the 2007-2014
Housing Plan (Chapter 6), in the form of policies and programs.
Three meetings were then held with the Planning Commission to review draft sections of
the document. At the first meeting, City staff presented Commission members and the
public with information about the Housing Element process and City of Capitola
demographics and current housing programs (refer to Appendix B for more detail). Also
presented was input from the Community Meeting and the results of an informal survey of
housing priorities. During the next two meetings, input from Commission members and the
public was solicited regarding the draft chapters of the housing element including the
housing goals, policies and programs. This input provided a valuable basis for the
Housing Element Update
On August 13, 2009 a preliminary draft Housing Element Update was presented at a
regularly scheduled City Council meeting. The draft was approved by Council for
submission to HCD for comments. Comments from HCD were then incorporated into a
revised draft that was then reviewed by the Planning Commission on January 21, 2010
and then adopted by the City Council on February 11, 2010. All of these meetings were
publicized and designed to receive community-wide input on the Housing Element’s goals,
policies and programs.
In accordance with the California Environmental Quality Act (CEQA) a draft Initial Study
and Negative Declaration (ISND) were prepared for the project. A 30-day review period
was advertised in the paper and the draft report was available for review from December
Chapter 1-8
18, 2009 through January 21, 2010. The ISND was reviewed by the Planning Commission
on January 21, 2010 and was reviewed and adopted by the City Council on February 11,
2010.
Table 1.2: Recommendations from the Community (Workshop I)
III. Outreach
The following methods were used to encourage public participation:
 Noticing in three local newspapers
 Noticing on public cable “scroll”
 Email and phone invitations to those in contact with special needs/minority groups
 Notification of upcoming workshops/meetings on the City Official Webpage
 The Draft Housing Element was made available at the public library, in person, as
well as online free of charge.
Giving notice of a public hearing via a local newspaper is common practice, as is noticing
on a public cable scroll. Both methods meet the requirements of the State of California for
public outreach. The City of Capitola exceeded requirements by also creating a Housing
Element webpage complete with a description of what a Housing Element is, access to the
draft Housing Element, information such as the date, time and location of public meetings,
and a link to an email account that was checked regularly by staff that allowed community
members to write in with comments and questions. Recognizing the fact that some
members of the public have constraints that keep them from attending public meetings,
community representatives of interest groups that represented all economic sements of the
community were contacted via email or telephone to inform them of public workshops and
meetings. This was an extra step taken to ensure that voices that have been absent from
public meetings in the past were heard (refer to Appendix B for the Workshop I Contact list
and attendance information).
1. Help developers build for extremely low-income residents
2. Preserve existing affordable housing
3. Provide housing above commercial uses on 41st Avenue
4. Support development of child care facilities for working families
(subsidized and market-rate)
Chapter 1-9
G. Sources of Information
A number of data sources were used to create the Capitola Housing Element. These
resources include:
 County of Santa Cruz Assessor’s Office Parcel Information Data
 City of Capitola General Plan.
 City of Capitola Community Development and Building Department building permit
records.
 Housing Needs Assessment/Housing Conditions Survey, May 2002.
 Association of Monterey Bay Area Governments (AMBAG) Regional Housing
Needs Assessment (RHNA), adopted June 11, 2008
 2000 and 1990 U.S. Census Reports.
 California Department of Housing and Community Development, State Income for
2008
 US Department of Finance, E-5 City/County Population and Housing Estimates,
2001-2007
 2007 Santa Cruz County Homeless Census and Survey
 Comprehensive Housing Affordability Strategy (CHAS) data
http://socds.huduser.org/chas/statetable.odb
 ChildCare Ventures/The use permit process for child care in Santa Cruz County
2005
 Child Development Resource Center (July 2004); the Status of Children, Their
Families and Child Care Services: An Assessment of Need and Supply in Santa
Cruz County, 2006
 Various other informational sources were also referenced where appropriate.
References to these informational sources are cited where they appear within the
text.
Chapter 2-1

	
.	
A successful strategy for improving housing conditions must be preceded by an
assessment of the housing needs of the community and region. This section of the
Housing Element reviews the major components of Capitola's housing need including
trends in population, households, and the type of housing available. These changes
reflect both local and regional conditions. Consequently, the regional context is also
presented.
The analysis that follows is broken down into four major subsections:
 Section A, Population Characteristics, analyzes the City of Capitola in terms of
individual persons and population trends that may affect future housing needs.
 Section B, Household Characteristics, analyzes Capitola in terms of households, or
living groups, to see how past and expected household changes will affect housing
needs.
 Section C, Housing Stock, analyzes the housing units in Capitola in terms of
availability, affordability, and condition.
 Section D, Assisted Housing At-Risk of Conversion, analyzes housing units that
have expiring use restrictions. Such projects may be at risk of losing rent restrictions
within the next few years, which could result in significant rent increases for their
tenants.
This assessment of Capitola's housing needs was used as the basis for identifying
appropriate policies and programs in this Element.
The most recent demographic data available was from the 2000 U.S. Census report.
Where more recent data was available, it was included. The City acknowledges 2000
Census data may be outdated. In some cases, the disparate dates for which data sources
were valid resulted in difficulty drawing direct comparisons or conclusions.
Chapter 2-2
A. Population Characteristics
Capitola's population characteristics are important factors affecting the type and
extent of housing needs in the City. Population growth, age, race/ethnicity and
employment characteristics are discussed in this section.
Population Change
According to the State of California, Department of Finance, the City of Capitola, unlike
other jurisdictions in the region, had a slightly smaller population in 2008 than in 2000.
During this time frame, the State of California grew by nearly 12% according to the U.S.
Census Bureau and Santa Cruz County grew by just over 4%. The fastest growing city
within the county, in terms of percentage growth, was Watsonville at 16.80% followed by
the City of Santa Cruz at 6.47% and the City of Scotts Valley at 2.74%. Capitola was the
only jurisdiction within Santa Cruz County that had a negative growth rate during this
period. The population in Capitola decreased by an estimated18 people or by -0.18%.
Table 2.1
Total Population of Santa Cruz County Jurisdictions and State in 2000 & 2008
2000 2008 % Change2000-2008
Capitola 10,033 10,015 -0.18%
Santa Cruz 54,593 58,125 6.47%
Scotts Valley 11,385 11,697 2.74%
Watsonville 44,265 51,703 16.80%
Santa Cruz County 255,602 266,519 4.27%
Source: California Department of Finance E-5 Estimates 2000-2008
Chapter 2-3
Figure 2-1, below, shows the population change between 2000 and 2008 in graphic form,
using the Census data shown in Table 2.1.
Figure 2-1: Percent Population Change (Growth or Loss) 2000 – 2008
Source: California Department of Finance, E-5 Population Estimates 2000-2008
Although it has the smallest population of all the jurisdictions in Santa Cruz County, the
City of Capitola is among the most densely populated (See Table 2.2). Housing in
Capitola is characterized by a large number of housing units per square mile and a small
household size. Some of this density occurs in the historic areas such as Capitola Village
where small beach bungalows that characterized “Camp Capitola” evolved into permanent
single-family housing. The large percentage of multi-residential developments and mobile
home parks has also contributed to the community’s higher than average density.
Table 2.2: Housing and Population Densities by Jurisdiction
Jurisdiction
Population per
Square Mile
Housing Units Per
Square Mile
Persons Per
Household
City of Capitola 6,220 3,291 1.89
City of Santa Cruz 4,356 1,716 2.54
City of Scotts Valley 2,473 961 2.57
City of Watsonville 6,969 1,841 3.79
Los Angeles City 7,876 2,851 2.76
San Francisco 16,634 7,421 2.24
Source: California-Place GCT-PH1: Population, Housing Units, Area and Density: 2000 U.S. Census Bureau
-2%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
CAPITOLA SANTA CRUZ
CITY
SCOTTS
VALLEY
WATSONVILLESANTA CRUZ
CO.
Chapter 2-4
Age Characteristics
The age characteristics of a population are important factors in evaluating housing needs
and planning future housing development. For example, if a city is experiencing an
outmigration of young adults (ages 25-34), there may be a shortage of first-time
homebuyer opportunities and/or well-paying employment opportunities. If a city has a
substantial elderly population, special housing types or services may be needed, such as
assisted living facilities, housing rehabilitation programs, paratransit, meals on wheels, and
home health care services, in order to enable seniors to remain in the community. Table
2.3 shows the number of Capitola and Santa Cruz County residents in each age group
according to data from the Census 2000.
Capitola is a maturing community. Between 1990 and 2000, the median age of Capitolans
increased from 35.2 to 38.4 years (See Table 2.3 below). County-wide during the same
period the median age increased from 33 years to 35 years and state-wide the median age
increased frokm 31 years to 33.3 years. Median age for the City, as well as the County
and State, is expected to continue to increase as the Baby Boom generation ages7.
Table 2.3
Population by Age Group: City of Capitola and Santa Cruz County Census 2000
City of Capitola Santa Cruz County
Age Range # of
Persons
% of
Population
# of
Persons
% of
Population
0-4 488 5% 15,544 6%
5-14 1,008 10% 34,707 14%
15-19 602 6% 19,939 8%
20-24 684 7% 20,948 8%
25-34 1,682 17% 36,728 14%
35-44 1,607 16% 42,087 16%
45-54 1,753 17% 40,673 16%
55-64 789 8% 19,489 8%
65-74 663 7% 12,347 5%
75-84 535 5% 9,295 4%
85 and over 222 2% 3,845 2%
Total 10,033 100% 255,602 100%
Median Age
2000
38.4 35.0
Median Age
1990
35.2 33.0
7 The Baby Boom is a defined as the generation of people born between 1946 and 1964, during the post
World War II period, when there was a marked increase in the national birth rate.
Chapter 2-5
As seen in the Figure 2-2 Capitola has a smaller proportional population of children than
the County: 15% of Capitolans were aged 14 or younger, while 20% of County residents
were children in this age group. 40% of Capitolans are aged 45 or older, while that group
comprises just over 30% of the County population.
Figure 2-2
Percent of Total Population by Age Group, Capitola and County, 2000
These age distributions reflect the local housing stock of Capitola, which has a high
percentage of apartments, small homes, and senior housing developments (including
senior mobilehome parks), and a smaller percentage of family-sized (3 or more bedroom)
units, single family homes, and owner-occupied units than the county as a whole.
Figure 2-3 shows how the number of people in each age group changed between 1990
and 2000. The size of each age group can change for two basic reasons: natural aging,
birth, and death; or migration (into or out of the City). For example, there were 100 fewer
children in the 0-4 year range in 2000 than in 1990. The largest decrease in any single
age group was in the group of young adults aged 25-34 years, which decreased by 310
persons over the 10-year period. In total there were 844 fewer young adults in the
combined age ranges of 20 to 44 years in 2000 than there were in 1990. At the same time
there was an increase of 962 persons in the 45-64 age groups.
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
0-4 5-14 15-19 20-24 25-34 35-44 45-54 55-64 65-74 75-84 85 and
over
Percent of Population
Age Range
Age Distribution for Capitola and County
Capitola
Santa Cruz County
Chapter 2-6
Figure 2-3: Population Change by Age Group, 1990 – 2000, City of Capitola
Source: 1990 Census STF 1 and Census 2000
Race and Ethnicity
The population of the City of Capitola in 2000 was not as racially or ethnically diverse as
the County, which in turn is less diverse than the State. For instance, 84% of Capitola’s
population was white, compared to 75% of the County and 60% of the State population.
One of every eight Capitola residents was Hispanic or Latino, while statewide nearly one of
every three residents was Hispanic or Latino. Capitola’s population had a slightly greater
proportion of Asians and African Americans than that of the County, but less than half that
of the State. Table 2.4 below shows the racial and ethnic composition of the population,
compared to that of the County and the State.
-400
-200
0
200
400
600
800
1000
0-4 5-14 15-19 20-24 25-34 35-44 45-54 55-64 65-74 75-84 85 +
Number of Persons
Age Group
Chapter 2-7
Table 2.4: Population by Race and Hispanic or Latino Origin, 2000
City of Capitola Santa Cruz
County
State of California
Race No.
Persons
% of
Total
No.
Persons
% of
Total
No.
Persons
% of
Total
One Race 9,562 95.3% 244,431 95.6% 32,264,002 95.3%
White 8,412 83.8% 191,931 75.1% 20,170,059 59.5%
Black or African America 117 1.2% 2,477 1.0% 2,263,882 6.7%
American Indian or Alaskan
Native
57 0.6% 2,461 1.0% 333,346 1.0%
Asian 401 4.0% 8,789 3.4% 3,697,513 10.9%
Native Hawaiian or other
Pacific Islander
20 0.2% 382 0.1% 116,961 0.3%
Some Other Race 555 5.5% 38,391 15.0% 5,682,241 16.8%
Two or More Races 471 4.7% 11,171 4.4% 1,607,646 4.7%
Total 10,033 100% 255,602 100% 33,871,648 100%
Hispanic or Latino Origin No.
Persons
% of
Total
No.
Persons
% of
Total
No.
Persons
% of
Total
Hispanic or Latino (of any
race)
1,267 12.6% 68,486 26.8% 10,966,556 32.4%
Not Hispanic or Latino 8,766 87.4% 187,116 73.2% 22,905,092 67.6%
Total 10,033 100% 255,602 100% 33,871,648 100%
Source: Census 2000
This comparatively low degree of racial and ethnic diversity may have resulted in part from
the high cost of housing in the area as compared to the state, combined with a local
employment base comprised of relatively low-wage jobs in the service, retail, and tourism
sectors. This combination of low-paying jobs and high cost housing makes it difficult for
lower and moderate income households, who may commute in to work in this area, to find
housing they can afford within Capitola. This can have a disproportionate effect on those
racial/ethnic groups that have lower median incomes compared to the overall population,
just as it affects other types of lower income households, such as younger workers, single
parents and recent immigrants. According to the 2000 Census, median household income
in 1999 for households headed by Hispanics or Latinos, African Americans, and Native
Americans was just 74% to 77% of the state median income for all households, which was
$47,493. For households headed by non-Hispanic Whites and Asians, median household
income was 113% and 117%, respectively, of the statewide median figure.8 These income
disparities tend to result in a lack of racial/ethnic diversity in many areas with high cost
housing. For this reason, sufficient affordable housing of all types is needed to ensure fair
8 Census 2000, Summary File 3, Median Household Income in 1999 by race of Householder and by
Hispanic/Latino origin.
Chapter 2-8
access to housing in this region for all racial and ethnic groups and to prevent further
housing segregation, consistent with fair housing goals and laws. The provision of housing
that is affordable to the Capitola workforce would also reduce the need for these workers
to commute from out of the area.
Employment
Capitola has approximately 900 businesses operating within its boundaries. Most of these
businesses are retail and service establishments. Most of the commercial and industrial
land in the City is already developed. There are some vacant and prospective commercial
parcels with potential to accommodate residential units, in a mixed-use or higher density
residential development pattern. The key housing opportunity sites on commercial lands
are identified in Appendix F. There were approximately 10,500 jobs, including part-time
jobs, based in Capitola according to 2000 Census figures. Most of the workers employed
in these jobs did not reside within the City, as only 5,699 of the City’s residents over the
age of 16 were employed in 2000, according to Census sample data9, and only 1,130 of
these residents worked within the City (20% of all employed Capitola residents). The
remaining 80% worked outside of the City of Capitola.
In accordance with the Table 2.5 below, the highest percentage of Capitola residents
worked in the educational, health and social services industry (18.5%) followed by workers
in the professional, scientific, management and administration industry (12.7%) and the
retail trade (11.8%). Again, it is important to note that the aforementioned industries and
associated jobs are not necessarily located within the City of Capitola.
9 Census 2000 Summary File 3 P27, Place of Work for Workers 16 Years and Over
Chapter 2-9
Table 2.5: Employment by Industry (Residents of Capitola)
Industry Type
2000
Number Percent
Agriculture, forestry, fishing and hunting, and mining: 50 0.9 %
Construction 447 7.6 %
Manufacturing 655 11.2%
Wholesale trade 239 4.1%
Retail trade 693 11.8%
Transportation, warehousing, and utilities: 241 4.1%
Information 260 4.4%
Finance, insurance, real estate, rental and leasing: 236 4.0%
Professional, scientific, management, administration. 744 12.7%
Educational, health and social services 1,085 18.5%
Arts, entertainment, recreation, and services 612 10.4%
Other services 371 6.3%
Public administration 238 4.1%
TOTAL 5,871 100%
Source: 2000 U.S. Census
The unemployment rate in Capitola dropped over the 2000-2007 planning period (see
Table 2.7 below). Although the unemployment rate was very low in 2006 and 2007, it is
unknown how the economic recession which began in 2008 will affect employment over
the next 10 years. The employment trend projections prepared by the Association of
Monterey Bay Area Governments (AMBAG) show an overall 29% increase in employment
from 2005 to 2035 (Table 2.6). The Service sector is expected to experience the greatest
percent increase in employment during this time period, with the addition of 1,766 jobs.
Table 2.6: City of Capitola Employment Projections 2005-2035
Employment
Sector
2005 2010 2015 2020 2025 2030 2035 %
Change
Retail 2,147 2,060 2,205 2,249 2,292 2,336 2,383 11%
Service 4,330 4,340 4,669 4,987 5,331 5,699 6,096 41%
Industrial 159 154 159 163 168 174 179 13%
Public* 1,146 1,148 1,185 1,241 1,299 1,362 1,427 25%
Construction 346 340 353 368 383 399 415 17%
Agriculture 0 0 0 0 0 0 0 0%
Total
Employment
8,128 8,042 8,571 9,008 9,474 9,968 10,500 29%
Source: AMBAG, Monterey Bay Area 2008 Regional Forecast
Chapter 2-10
Table 2.7: Unemployment Rate, City of Capitola and Santa Cruz County
Jurisdiction 2000 2001 2002 2003 2004 2005 2006 2007
’00-’07
Net
Change
Capitola 4.1 4.5 5.9 6.3 3.5 3.1 2.7 2.8 -1.3
Santa Cruz
County 5.6 6.1 8.0 8.4 7.2 6.3 5.6 5.9 -0.3
Source: State of California Employment Development Department, Labor Market Information Division, 2008.
U.S. Department of Labor, Bureau of Labor Statistics, 2008
Known as the first resort community on the California coast, Capitola still relies heavily on
tourism and retail sales tax. The revenue from the transient occupancy tax increased
nearly 60% over the 2000-2007 planning period (see Table 2.8 below), illustrating an
opportunity for economic growth in visitor-serving businesses.
Table 2.8: Transient Occupancy Tax City of Capitola and Santa Cruz County
(in thousands of dollars)
Jurisdiction 2000 2001 2002 2003 2004 2005 2006 ’00-’06 %
Change
Capitola
$340 $512 $470 $492 $493 $515 $543 59.4%
Santa Cruz
County
$8,601 $9,666 $7,846 $7,711 $7,962 $8,533 $8,956 4.1%
Source: Applied Survey Research: Santa Cruz County Community Profile 14
I. Commuting
As was previously mentioned, in 2000 the majority of the City’s employed residents worked
outside of the City of Capitola. Of the 80% of residents that worked outside of Capitola,
just over half worked in Santa Cruz County (52%), while 28% worked outside the county,
primarily in Santa Clara and Monterey counties. On average, Capitola residents traveled
approximately 28 minutes each way to get to work.10 As to the mode of transportation
used, Table 2.9 shows that the vast majority of commuters in Capitola drove to work alone
(77.1%). The least popular means of travel was public transportation at only 1.3% of
commuters.
Table 2.9: Commuting to Work
Mode of Travel 2000
Number Percent
Car, truck or van — drive alone 4,394 77.1%
Car, truck or van – carpool 517 9.1%
Public transport (including taxis) 74 1.3%
Walked 298 5.2%
Other means 174 3.1%
Worked at home 242 4.2%
Source: 2000 U.S. Census
10 Census 2000 SF 3, Sample Data on Place of Work
Chapter 2-11
A heavy reliance on automobile use contributes to air pollution and Carbon Dioxide (CO2)
emissions, which is a contributor to climate change. Lowering CO2 emissions has been
identified as a state goal through the passage of AB 32 and SB 375.
The proximity of housing to jobs is directly related to the amount of CO2 emitted. The
closer affordable housing is located to jobs, the more likely workers will choose alternative
modes of transportation over the automobile or drive shorter distances. The City of
Capitola intends to apply for a grant that will fund a jobs-housing balance survey and
identify the types of jobs and housing needed within the City limits. The survey will be
used as a tool to guide development in the future, and assist the City in becoming a more
sustainable community. In the meantime, all of the opportunity sites identified for the
2007-2014 planning period are located on or near major transportation corridors and are
walking distance to amenities and jobs.
The City of Capitola already has some infrastructure to support alternative modes of
transportation. The City is serviced by the Santa Cruz Metro buses, which act as the
public transit system for the region. One of the major transit stops is located at the
Capitola Mall, at the heart of the major commercial district in the City. In addition to
encouraging public transit, Capitola offered 10.8 miles of bike paths and bike lanes in 2007
(Table 2.10).
The City’s bike lanes extend along all of the major transportation corridors (Figure 2-4):
41st Avenue, Bay Avenue, Park Avenue and Capitola Road, and connect Capitola to the
immediately surrounding areas of Aptos, Live Oak and Soquel, and beyond to the City of
Santa Cruz. The City will continue to support alternative modes of transportation and their
relation to housing in anticipation of the implementation of SB375.
Table 2.10: Bikeway Miles
Jurisdiction
2002
2003
2004
2005
2006
2007
Capitola 6.4 8.3 10.4 11.0 10.8 10.8
Santa Cruz
County* 84.0 91.2 96.9 99.7 192.6 196.7
Source: Valley Transportation Authority, 2000. Santa Cruz County Regional Transportation Commission,
2007. Totals are for bike paths and bike lanes.
*Santa Cruz County includes incorporated jurisdictions such as the City of Capitola.
Applied Survey Research: Santa Cruz County Community Profile 14
Chapter 2-12
Figure 2-4: Capitola Bike Paths/Bike Lanes
Source: Santa Cruz County Regional Transportation Commission (SCCRTC) Santa Cruz County Bikeways
Map (2008).
Note: Routes lined in red are bike lanes, purple are alternative routes, and green are Class I bike paths.
B. Household Characteristics
Information on household characteristics is an important indicator of housing needs in a
community. Income and affordability is best measured at the household level, as are the
special housing needs of certain groups such as large families and families with children.
As an example, if a community has a substantial number of young family households
whose incomes combined with local housing costs preclude the option of home purchases,
the city may wish to initiate a home-buyer assistance program or participate in or publicize
the programs that are available elsewhere.
The Bureau of the Census defines a "household" as “all persons who occupy a housing
unit, which may include families, singles, or other." Boarders are included as part of the
primary household by the Census. Families are households related through marriage,
domestic partnership, blood or adoption and includes single-parent households with
children. A single household refers to individuals living alone. "Other" households reflect
unrelated individuals living together (e.g., roommates). Persons living in retirement or
convalescent homes, dormitories, or other group living situations are not considered
households.
Chapter 2-13
Table 2.11: Households by Type
City of Capitola Santa Cruz County
Household Type No. of
Households
% of
Total
No. of
Households
% of
Total
Families 2,279 48.6% 57,132 62.7%
Singles 1,738 37.0% 22,905 25.1%
Other Non-family 675 14.4% 11,102 12.2%
Total 4,692 100% 91,1396 100%
Average Household
Size (all households)
2.11 2.71
Average Family
Household Size
2.79 3.35
Source: Census 2000
Household Type
As shown in Table 2.11, there were a total of 4,692 households in Capitola according to
the 2000 US Census Report. Fewer than half of these households (48.6%) are family
households, compared to 62.7% family households for the County. Singles comprise over
one third (37.0%) of Capitola households, compared to only a quarter (25.1%) for the
County. The high proportion of single person households compared to family households
is also reflected in Capitola’s average household size, which is 2.11 persons per
household, compared to 2.71 for the County. As evidenced in Table 2.12, just over half
(53%) of the households in 2000 were renter-occupied, which is consistent with a high
number of single adult households and also attests to the high cost of housing in Capitola
(discussed in Section C of this Chapter). The balance of ownership housing and rental
housing remained essentially the same from 1990 to 2000 with a slight increase in the
percentage of ownership housing (1.7%), and a slight decrease in the percentage of rental
housing.
Table 2.12: Households by Tenure
1990 2000
Number Percent Number Percent
Owner 2,111 45.1% 2,195 46.8%
Renter 2,570 54.9% 2,497 53.2%
TOTAL 4,681 100% 4,692 100%
Source: 1990 U.S. Census, 2000 U.S. Census
Chapter 2-14
These household statistics coincide with the age distribution data presented in Table 2.3
and Figures 2-2 and 2-3 earlier in this chapter: Capitola has a relatively low percentage of
children, and high percentage of single adults and elderly, both of whom are more likely to
be in single person households. The City’s existing pattern of small and/or attached
housing units is expected to continue through the current planning period. Many families
prefer single family homes, with several bedrooms and a yard. There is very little vacant
land available for single family development in the City. New housing developments to be
built in Capitola are expected to be mostly medium and higher density dwellings (either
attached or detached), which can also accommodate families comfortably if they are
designed with families in mind.
Overcrowding
Overcrowding is an indicator of housing affordability. Unit overcrowding is caused by the
combined effect of low earnings and high housing costs in a community, and reflects the
inability of households to buy or rent housing that provides sufficient living space for their
needs. The Census defines overcrowded households as units with greater than 1.01
persons per room, excluding bathrooms, hallways and porches.
According to the 2000 Census, the incidence of overcrowding in Capitola was minimal,
with approximately 6.0% or 286 of the City's households defined as overcrowded,
compared with 10.9% county-wide. Census estimates indicate that 218 renter households
were overcrowded, which means that 76% of all overcrowded households were renters,
and 8.6% of all renter households were overcrowded (Table 2.13).
Table 2.13: Overcrowded Households
Owner Renter Total Overcrowded
Persons per Room Households Percent Households Percent Households Percent
0.50 or less 1,720 77.2% 1,449 57.4% 3,169 66.7%
0.51 to 1.00 440 19.7% 856 33.9% 1,296 27.3%
1.01 or more 68 3.1% 218 8.6% 286 6.0%
TOTAL 2,228 100% 2,523 100% 4,751 100 %
Source: 2000 U.S. Census of Population and Housing, Summary Tape File 3A- H20 Tenure by Occupants
per Room.
Household Income
An important factor in housing affordability is household income. While upper income
households have more discretionary income to spend on housing, extremely low-, very
low-, low and moderate-income households are more limited in the range of housing they
can afford.
Chapter 2-15
I. State-Defined Income Categories
According to the Federal Department of Housing and Urban Development (HUD) and the
California Department of Housing and Community Development (HCD), the area median
income for a four-person household in Santa Cruz County was $83,800 in 200911.
California law and some federal housing programs define several income categories based
on a percentage of the area median income (AMI) determined by HUD and HCD, as
follows:
 Extremely Low Income – less than 30% of the area median income
 Very Low Income – less than 50% of the area median income
 Lower Income - between 51 and 80% of the area median income
 Moderate Income – between 81 and 120% of the area median income
 Above Moderate Income – over 120% of the area median income
These income ranges are used to determine eligibility for various subsidized housing
programs. The 2009 income limits for these categories by household size are presented in
Table 2.14:
Table 2.14
Santa Cruz County 2009 Area Median Incomes and Income Limits Adjusted by
Household Size
MAXIMUM INOCME BY HOUSEHOLD SIZE
INCOME CATEGORY 1 Person 2 Person 3 Person 4 Person
Extremely Low
(Up to 30% of the Median)
$19,450
$22,250
$25,000
$27,800
Very Low Income
(up to 50% of the Median)
$32,450
$37,100
$41,700
$46,350
Lower Income
(51-80% of the Median)
$51,900
$59,300
$ 66,750
$74,150
Median Income
(100% of the Median)
$58,650
$67,050
$75,400
$83,800
Moderate Income
(81%-120% of the Median)
$70,400
$80,450
$90,500
$100,550
Source: CA Dept. of Housing and Community Development, April, 2009 and Census 2000 SF3
11 CA Dept. of Housing and Community Development
Chapter 2-16
Table 2.15: Capitola Household Income in 2000
Income Category Percentage of
Population
Number of
Households/Units
Needed
Extremely Low 14% 651
Very Low 9% 425
Low 32% 1,518
Moderate 19% 896
Above Moderate 26% 1,258
Total 100% 4,748
Although the above Table 2.15, was developed using 2000 Census data, is somewhat
outdated it is the most current data available; it shows that approximately 2,594 (55%) of
the households in Capitola were low-, very low-,or extremely low-income.
Special Needs Groups
Capitola, like many communities, is home to a range of residents with special needs that
affect their ability to afford or find suitable housing. State law defines special needs
households to include extremely low-income households, seniors, people with disabilities,
female headed households, large households, people and families who are homeless, and
farmworkers. The identified special needs groups are defined in Table 2.16.
Chapter 2-17
Table 2.16
Estimated Population of Special Needs Households in Capitola and
Santa Cruz County
Special Needs Group
City of Capitola Santa Cruz County
Number Percent Number Percent
House-holds
Persons
House-holds
Persons
House-holds
Persons
House-holds
Persons
Elderly (65 years and older) 1,030 1,429 22% 14% 18,173 25,487 20% 11%
Disabled Persons - 1,619 - 16% - 37,895 - 15%
Female-Headed Households
with Children under 18
445 - 9.6% - 1,482 - 2% -
Farm workers (Persons) - 50 - 0.5% - 5,721 - 4%
Large Households 220 - 4.6% - 11,480 - 13% -
Source: Census 2000 SF3: H14, P11
I. Extremely Low-Income Households
An extremely low-income household is one that makes less than 30% of the Area Median
Income. The most current information on household incomes in Capitola is from the 2000
U.S. Census. In 2000, 14% of households were extremely low-income, creating a demand
for 651 units (Table 2.15). In 2009, there were 57 housing units and 150 Housing Choice
Vouchers available for extremely low income households. Most of these housing units
were in multifamily residential developments.
The 2007-2014 Housing Plan (Chapter 6) addresses the need for more alternative types of
housing that will accommodate groups such as extremely low income households. Over
the planning period, City staff will review and amend the zoning code to allow Single Room
Occupancy (SRO) units (Program 1.3).
II. Elderly
The special needs of many elderly households results from their fixed incomes, higher rate
of physical disabilities and increased need for assistance from others.
Elderly households, those headed by a person 65 year or older, comprised 23% of all
Capitola households in 2000. By comparison, only 20% of households in the County were
headed by elderly persons. 2000 Census data shows that in Capitola, 39.55% of
households in the lower income category are 65 and over.
Chapter 2-18
Table 2.17: Householders by Tenure by Age
Householder Age
Capitola Santa Cruz County
Owners Renters Total Owners Renters Total
65-74 years 265 186 451 6,189 1,520 7,709
75 plus years 410 169 579 6,706 1,940 8,646
Total Elderly Households 675 355 1,030 12,895 3,460 16,355
TOTAL HOUSEHOLDS 2,228 2,523 4,751 54,665 36,474 91,139
Source: 2000 Census, SF 3: H14
The median age for the City, as well as the County and the State, is expected to continue
to increase. According to a projection by AMBAG the percentage of seniors 65 and over in
Santa Cruz County will nearly double between 2000 and 2035.12
In terms of housing, senior households typically require smaller, more affordable housing
options and/or assistance with accessibility and home maintenance.
In 2000 the majority of households ages 62 and over owned their home (Table 2.18,
below). Over one-third of ownership households were extremely low and very low income
(below 50% of the Median Family Income (MFI)). In contrast, nearly two-thirds of elderly
renter households were extremely low and very low-income.
The City has been able to meet the demand for elderly rental housing, and currently has a
number of existing affordable housing projects that rent exclusively or primarily to senior
citizens. These include the Bay Avenue Senior Apartments (formerly known as Silvercrest
Apartments), Loma Vista Mobile Home Park, and the Shorelife Community Church
Neighborhood Manor. In addition, many seniors reside in non-senior restricted mobile
home parks within the City, that are subject to a rent stabilization ordinance limiting space
rents or that have converted to cooperative ownership with income eligibility requirements.
Table 2.18: Elderly Households by Income and Tenure
Income Level Elderly Owner Households Elderly Renter Households
Below 50% MFI 250 260
51% to 80% 220 69
Above 80% 265 69
TOTAL 735 398
Source: CHAS Data, Housing Problems
Note: An “Elderly” Household in Table 2.18 is a household that contains one or more persons 62 years or
older, which is why numbers are slightly different than in Tables 2.16 and 2.17
12 Association of Monterey Bay Area Governments, 2008, Forecast of Population, Housing and Employment
to 2035
Chapter 2-19
To address the housing needs of Capitola’s elderly population the Housing Element
establishes policies and programs to:
 Protect the existing affordable senior housing units through support for resident
acquisitions of mobile home parks;
 Encourage and support the acquisition and rehabilitation of existing non-regulated
rental housing units by nonprofit affordable housing developers;
 Utilize the City’s Affordable Housing Overlay Ordinance to offer increased density in
exchange for long-term affordability. This program can be particularly effective in
helping encourage non-profit involvement in the acquisition, rehabilitation and new
construction of existing non-regulated rental housing sites
 Promote development of new affordable senior housing;
 Assist senior homeowners with maintenance and rehabilitation of their housing
units, retrofit senior homes to provide disabled accessibility, and obtain housing
support services.
 Consider investigating ways to support the development of gradated care facilities,
in-home care assistance and senior day care facilities to help serve our growing
senior population.
III. Large Households
Large households are identified in State housing law as a “group with special housing
needs based on the generally limited availability of adequately sized, affordable housing
units.” Large households are defined as those with five or more members. According to
Census 2000 estimates, only 5% of all households in the City, or 220 households, were
large households. Approximately two-thirds of these large households, or 141
households, were renters, while one third, or 79 households, were homeowners (Table
2.19). See Figure 2-5 below for detail on household size.
Table 2.19: Household Size by Tenure
1-4 Persons 5+ Persons
Number Percent Number Percent
Owner 2,149 47.4% 79 35.9%
Renter 2,382 52.6% 141 64.1%
TOTAL 4,531 100% 220 100%
Source: 2000 Census, SF 3: H17
Chapter 2-20
Figure 2-5: Household Size By Tenure, Capitola
Source: Census 2000 SF3
Given the small number of large households in the city, and the relatively low rate of
overcrowding, the need for larger housing units does not appear to be one of the most
pressing special housing needs in the City at this time. However, in 2002, 31.6% of the
participants of a city-wide telephone survey felt that Capitola needs more housing for
larger families (Figure 2-7).
IV. People with Disabilities
According to the Americans with Disabilities Act, a disability refers to a “physical or mental
impairment that substantially limits one or more of the major life activities.” People with
“mental” disabilities may include people with psychiatric disabilities. Persons with
disabilities, including persons with psychiatric disabilities, are protected by the Americans
with Disabilities Act and thus are entitled to fair housing treatment. People with disabilities
have special housing needs because they are often on a fixed income, usually have higher
health costs, and sometimes require accessible housing. They may also face
discrimination if landlords treat them differently due to their source of income or perceived
ability to maintain the unit.
According to the 2000 Census, 1,619 Capitolans (16% of the City population) were
identified as disabled. Of these disabled residents, 39 were children ages 5-15 (or 2.4%),
551 were elderly persons over 65 years old (34.0%) and the majority were ages 16-64
(63.6%). According to the U.S. Census, employment age is from 16-64; 41% of all
disabled Capitola residents were employed as opposed to 21.9% who were unemployed
(Table 2.20).
-
100
200
300
400
500
600
700
800
900
1,000
1 2 3 4 5 6 7 or more
Number Households
Persons per Household
Owner-Occupied
Renter-Occupied
Chapter 2-21
Table 2.20: Persons with Disability by Employment Status
Number Percent
Age 5-15, with a Disability 39 2.4%
Age 16-64, Employed Persons with a Disability 674 41.6%
Age 16-64, Not Employed Persons with a Disability 355 21.9%
Persons Age 65 Plus with a Disability 551 34.0%
Total Persons with a Disability 1,619 16.8%
Total Population (Civilian Non-institutional) 9,633 100%
Source: 2000 Census SF 3: P42
During the 2000-2007 planning period, the City assisted with the construction of the
Dakota Apartments Project, which provided 25 accessible rental units for very low and low
income disabled persons. One of the City assisted Habitat for Humanity units is also an
accessible unit for a very low income household. The Bay Avenue Senior Apartment
project, which is being developed during this current Housing Element Planning period, will
provide a total of 39 units of housing for very low income chronically ill seniors and five
units of housing for extremely low income seniors with mental illness and who are
homeless or at risk of homelessness.
Housing opportunities for the disabled will continue to be addressed through the provision
of affordable, barrier-free housing. This Housing Element sets forth policies to implement
State standards for the provision of disabled accessible units in new developments. Other
policies and programs of the Housing Element provide rehabilitation assistance to allow
disabled renters and homeowners to modify their dwelling units to improve accessibility.
One of the obstacles that people with physical disabilities face when seeking accessible
housing is that a large percentage of the accessible units now being developed are
restricted for senior-only occupancy. As new affordable housing projects are developed,
or as existing housing units are rehabilitated and converted to provide affordable and
accessible housing, it will be important that these units be financed and regulated in ways
that allow for occupancy by households of all age groups.
V. Female Headed Households
Female headed households require special consideration and assistance because of their
often greater needs for day care, health care, and other services. Female-headed
households with children, in particular, tend to have lower incomes, thus limiting housing
availability for this group. Out of 4,748 total households in 2000, there were 445 (9.4%)
female headed households with children 18 years or younger. The majority of those
households were above the poverty line, but 23 were living below the poverty line. (Table
2.21). The 23 impoverished female headed households comprised just over half of all the
households living under the poverty level. Countywide, female-headed households
Chapter 2-22
comprise 2% of the population, 86% of which have children 18 years or younger and live in
poverty.
Table 2.21: Female Headed Households
Householder Type Number Percent
Total Households 4,748 100%
Total Female Headed Householders 1,911 40.2%
Female Heads with Children under 18 445 9.4%
Female Heads without Children under 18 1,466 30.9%
Total Families Under the Poverty Level 45 100%
Female Headed Households Under the Poverty Level 23 51.1%
Source: 2000 Census SF 3: P10 and P90
An issue affecting all households with children, especially those headed by a single parent,
is finding quality, affordable child care. Many households find this a severe constraint, and
in the case of a single parent household, the parent often becomes unable to work. As a
result, the parent cannot provide basic necessities, such as food and housing for their
children.
In households with young children in which the single-parent, or both parents in a two-parent,
work, convenient and affordable childcare is a necessity. In 2007, the Santa Cruz
County Local Child Care Planning Council recommended that child care should be a top
funding priority of the County of Santa Cruz. Within the County, the City of Capitola does
not have any licensed child care facilities for infants, elementary schools, or licensed family
child care centers for school aged children. (see Tables 2.22 and 2.23 below). Less than
3% of the need for child care for children 0-23 months old has been met in the city of
Capitola. While the surrounding areas of Aptos and Live Oak offer elementary schools,
they cannot meet the demand for child care for children ages 0-23 months. Therefore,
there is a definite need for additional child care facilities to meet the needs of the City’s
younger population.
Chapter 2-23
Table 2.22: Child Care Expansion Priorities for Santa Cruz County 2007
Jurisdiction Zip
Code
Percentage
of need met
for child care
for 0-23
month olds
Priority Ranking
High Need: 0-50%
Medium Need: 51-75%
Low Need: 75-100%
Total #
Income
Eligible
Children
w/Working
Parents
Risk
Factors
API Scores All
public
elementary
schools listed
Aptos 95003 4.69% Priority 1 (High Need) 149 Medium-
Low
3 schools ranked
7-10
Capitola 95010 2.72% Priority 1 (High Need) 74 Medium-
High
No Elementary
Schools
Live Oak 95062 5.25% Priority 1 (High Need) 229 High
Risk
4 schools ranked
4-6
Source: Community in Crisis: Working Families Lack Subsidized Child Care, Santa Cruz County Local
Childcare Planning Council, 2007
In 2004, there were a total of 119 children enrolled in licensed child care centers in
Capitola, however there were no child care centers that offered care for infants. There
were 17 children enrolled in family child care centers for infants and preschool children.
According to the City of Capitola Municipal Code (17.03.242) a “Family day care home” is
a home that regularly provides care, protection, and supervision for fourteen or fewer
children in the provider’s own home, for periods of less than twenty-four hours per day”.
Table 2.23: Availability of Child Care
CHILD CARE CENTERS* FAMILY CHILD CARE CENTERS**
Jurisdiction Preschool School-Age Infant Preschool
Enrolled Vacancy Enrolled Vacancy*** Enrolled Vacancy Enrolled Vacancy
Capitola 63 15 56 21 5 1 12 1
Santa Cruz
County
3,448 372 1,138 75 483 188 1,368 548
*In 2004 there were no licensed child care centers for infants in Capitola
** In 2004 there were no licensed family child care centers for school-aged children in Capitola
*** Vacancy levels shown in child care facilities often reflects preferred occupancy levels that are lower
than the maximum allowed by state licensing. The vacancy levels shown do not accurately identify
actual vacancies.
Source: Child Development Resource Center (July 2004); the Status of Children, Their Families and Child
Care Services: An Assessment of Need and Supply in Santa Cruz County, 2006
Family day care homes can be large or small providing care for up to 14 children in a large
home, and up to eight children in a small home if certain criteria are met. By State law
small family day care homes are principally permitted in all zones without the need for a
use permit or local business license. In Capitola all large family day care homes require a
Large Family Day Care Home permit from the City. There are no zoning districts that allow
large family day care homes as a principally permitted use. Child care centers are not
provided for under Capitola’s current municipal code.
The Housing Element provides for the needs of this group through policies that promote
maintenance and construction of affordable housing, specifically in areas close to
Chapter 2-24
commercial districts and transportation corridors, as well as programs to improve the
availability of affordable child care. The City’s Density Bonus Ordinance also provides
specific incentives to encourage the development of child care facilities in conjunction with
new affordable housing projects.
VI. Farm Workers
The special housing needs of many agricultural workers stem from their lower wages and
the insecure nature of their employment. Estimates of the "farm worker" population in the
City are extrapolated from individuals who categorize their employment as "Agriculture,
Forestry, Fishing and Hunting, and Mining” in the 2000 Census. This category also
includes people who work in such non-agricultural fields as boating, veterinary services,
and landscape and horticultural. Based on these estimates, there are 50 persons,
approximately 0.5% of the City population, engaged in this broad category of agricultural
employment.
There are no designated agricultural uses in or immediately adjacent to Capitola. Persons
employed in this broad category are most likely associated with fishing or boating activities
at the nearby Santa Cruz Small Craft Harbor, forestry activities in the nearby state parks,
or landscape and horticultural jobs. Consequently, farm workers are not expected to be a
significant special needs group in Capitola.
VII. People and Families Who are Homeless
During the past decade, homelessness has become an increasingly reported problem
throughout the State. Factors contributing to the rise in homelessness included the
general lack of housing affordable to low and very low income persons, an increased
number of persons whose incomes fall below the poverty level, reductions in public
subsidies to the poor, and the de-institutionalization of people with mental illness without
adequate support services necessary for independent living.
A comprehensive survey in 2002 reported 3,293 homeless people countywide, whereas a
2007 comprehensive survey reported 3,371 – an increase of 78 homeless individuals. The
2007 Santa Cruz County Homeless Census and Survey, completed by Applied Survey
Research, found that there were approximately 23 homeless persons in Capitola (see
Table 2.24). Of the 23 homeless, fifteen were unsheltered individuals and eight were in
families, three of whom were unsheltered. The homeless population in Capitola
represents 0.8% of the total homeless population in Santa Cruz County in 2007. It is
unclear from the 2007 Survey the age, sex or personal needs of the homeless persons in
Capitola. Based on the results of this survey the City of Capitola has an unmet need for
eighteen (18) shelter beds. Five supportive housing units are currently under construction
as a part of the Bay Avenue Senior Apartments project. These five units will be set aside
to serve seniors with mental illness who are at risk of homelessness. As defined by State
Law, this leaves an unmet need for 13 homeless shelter beds in Capitola. This need will
be met through the development of a year-round shelter in conjunction with adjacent
jurisdcitions through a Multi-jurisdictional Agreement.
Chapter 2-25
Table 2.24 Sheltered and Unsheltered Homeless Population in Capitola
Status Individuals People in
Families
Total
Sheltered 0 5 5
Unsheltered 15 3 18
Sub-Total of Need 15 3 18
Homeless units currently under
construction
5
Unsheltered Need 10 3 13
Source: 2007 Santa Cruz County Homeless Census and Survey
The Continuum of Care Program13:
The needs of homeless families and individuals are as varied as the reasons for their
homelessness. Homeless people may have insufficient employment and credit history to
obtain housing. Even with employment, the high cost of housing may preclude a homeless
person from obtaining housing or cause them to cycle in and out of homelessness. Taken
from a countywide perspective, the demographic portrait that emerges is one of diversity.
People who are homeless come from a wide range of backgrounds, and require a range of
housing and supportive services. The Continuum of Care Services in Santa Cruz County
are broken down into the following four basic areas of service:
- Prevention
- Emergency Shelter
- Transitional Housing
- Permanent and Supportive Affordable Housing
The following is a listing of the programs currently available in Santa Cruz County under
these basic service areas:
Prevention:
- Santa Cruz County’s Human Services Department and Santa Cruz AIDS project
provides people with HIV/AIDS emergency assistance with rent and utilities
- Santa Cruz Community Action Board’s Shelter Project provides rental and mortgage
assistance
- Families in Transition provides rental assistance to potentially homeless individuals
and families who participate in case management
- Catholic Charities, The Salvation Army, Valley Churches United and Valley
Resource Center all provide emergency rental assistance
California Rural Legal Assistance provides legal assistance for low-income housing and
landlord problems
Housing Authority of the County of Santa Cruz provides security deposit assistance.
13 Information on the Continuum of Care services was provided by the Santa Cruz County Homeless Action
Partnership.
Chapter 2-26
Emergency Shelter:
The emergency shelter system is comprised of various short-term housing options
including permanent shelters with services and case management, temporary winter
shelters, and motel vouchers for those with medical emergencies. Some shelters serve
special groups, such as families, youth or severely mentally ill adults, while others serve
the general homeless population.
The County has 354 emergency beds available in the winter and 250 beds available during
the balance of the year. It is estimated that approximately 270 additional people need, but
do not receive, emergency shelter on a typical night.
Transitional Housing:
Transitional housing provides time-limited housing, at least six months as defined in
Housing Element law, to prepare individuals and families to become fully self-sufficient. In
addition to housing, programs typically include comprehensive and intensive supportive
services, case management, housing placement services and aftercare.
Currently the County has approximately 372 transitional housing beds. It is estimated that
there is a need for 614 additional transitional beds for individuals and 423 additional beds
for families with children.
Permanent and Supportive Affordable Housing:
Availability of permanent affordable housing is critical to the success of a Continuum of
Care system. Unless they can access permanent housing, homeless people cannot reach
their goal of becoming permanently self-sufficient. Because homeless people typically
have extremely low or non incomes, those ready for self-sufficient lives often need some
form of affordable subsidized housing. This includes Public Housing, Housing Choice
(Section 8) Vouchers, Single Room Occupancy units and site-based programs often
targeted to disabled individuals or families.
Permanent affordable housing is in very short supply in Santa Cruz County. No units are
currently targeted specifically to homeless individuals or families. Rather, homeless
families seeking subsidized housing must rely upon mainstream affordable housing
sources such as Public Housing and Section 8 programs operated by the Housing
Authority. Countywide, there are a total of 6,484 affordable housing units, including 1,972
Section 8 vouchers. Primary target populations are low-income families, disabled persons,
and senior citizens. At any given time, approximately 6,000 people are on the Housing
Authority’s waiting list, and they wait an average of four to six years for housing.
Homeless people facing serious disabilities often need permanent supportive housing.
This model provides permanent affordable housing with comprehensive supportive
services tailored to the residents’ particular needs. Permanent Supportive Housing helps
break the costly cycle of repeat homelessness, shelter stays, correctional and other
institutional stays, emergency health system use, and more.
Chapter 2-27
At this time, most of the 241 units of permanent supportive housing in Santa Cruz County
are for persons with servere mental illness or for persons with HIV/AIDS. It is estimated
that 668 additional units of permanent supportive housing are needed countywide.
Capitola Actions to Assist People Who are Homeless:
Capitola recognizes the diversity of needs of homeless people. Therefore, the City
participates in inter-jurisdictional efforts to comprehensively address the needs of people
who are homeless. Capitola is a participating jurisdiction in the Santa Cruz County
Continuum of Care, a consortium of local jurisdictions and homeless service providers that
developed a 5-year Strategic Plan on Homelessness, 2003-2007. Capitola’s City Manager
now serves on the Executive Committee for the Continuum of Care’s Homeless Action
Partnership which is in the process of preparing the Santa Cruz County 10-Year Strategic
Plan to End Homelessness.
Although there are no homeless shelters or transitional housing projects currently located
in Capitola the City does provide direct financial support to a number of agencies that
provide social services to people and families who are homeless. This assistance includes
$85,000 each year from the Redevelopment Agency for the Community Action Agency
administered Emergency Housing Assistance Program, $15,000 each year from the
Redevelopment Agency to the Housing Authority administered Security Deposit Program
and funding from the City’s General Fund including $2,500 per year to the Homeless
Services Center, $2,400 per year to Families and Transition and $10,785 per year to the
Homeless Action Partnership.
To decrease the frequency of homelessness, the City has also begun development of the
acquisition/rehabilitation and new construction project, Bay Avenue Senior Apartments,
which will include 50 units for extremely low-income seniors and 30 very-low income
seniors. 39 of these units well be set aside for chronically ill seniors and five of the units,
with funding through the Mental Health Services Act, will serve extremely low-income
seniors with mental illness who are homeless or who are at risk of becoming homeless.
In accordance with SB2 Capitola is reviewing any existing barriers to the development of
homeless shelters and transitional housing programs. Capitola will plan for and encourage
the development of homeless shelters and transitional housing programs. Should a
homeless shelter be proposed to be located in Capitola, there are no zoning requirements
that would prohibit it. Homeless shelters are conditionally permitted in all residential
districts in the City. A conditional use permit is required if the shelter provides housing for
more than six people.
Capitola requires conditional use permits for many uses in many of its zoning districts. For
example, nearly all uses in the CC Community Commercial zoning districts require
conditional use permits. Although Capitola has not received or processed an application
for a homeless shelter use permit, based on typical use permit requirements, such a use
would likely be reviewed and conditioned similarly to any use that includes group activities.
For example, the adequacy of parking supply, noise, exterior lighting, and other site
considerations would likely be reviewed.
Chapter 2-28
Homeless Shelters
Within one year of adoption of the housing element, the City will amend its Zoning
Ordinance to allow emergency shelters without CUP or other discretionary approval in the
Industrial Park (IP) zone. The IP zone includes a total of 6.37 acres in eight parcels. Four
of the parcels (approximately 2.17 acres) are vacant or underutilized and demonstrate that
sufficient land is available for at least one emergency shelter to accommodate the City’s
identified homeless need. The City may apply objective development standards to
encourage and facilitate the use as provided under Government Code Section
65583(a)(4)(A).
Transitional and Supportive Housing Programs
Capitola will further review and, if necessary to comply with Section 65583(c)(1), will
propose zoning amendments to make transitional and supportive housing a residential use
of property, subject only to the same restricitions that apply to other residential dwellings of
the same type in the same zoning district. This review and any required amendments will
be completed within one year of the adoption of the housing element, as required by State
Law.
C. Housing Characteristics
A housing unit is defined as a house, apartment, mobile home, or a single room occupied
as a separate living quarters or, if vacant, intended for occupancy as a separate living
quarters. Separate living quarters are those in which the occupants live and eat separately
from any other persons in the building and which have direct access from the outside of
the building or through a common hall. A community's housing stock is the compilation of
all its housing units.
Housing Growth
Most of Capitola’s housing was built between 1970 and 1980. During this decade, the
number of housing units in the City increased by 53%, from 2,536 units to 4,794. By 1990,
construction rates in the City had begun to slow; there were 5,282 housing units in 1990
according to the Census, a 10% increase from 1980. By 2000, Capitola was nearly built
out. City building department records show that 119 net new units were added to the
housing stock from 1990 to 2000 for a total of 5,401 units by the end of 1999. Between
2000 and 2006 122 units were built, but 45 of those units involved the demolition of an
existing unit. These data indicates an increase of 1.0% since 2000, for a total of
approximately 5,478 units (Table 2.25). The slowing rate of construction during the last
decade is primarily due to the fact that most of the vacant, easily developable parcels in
the City were built out during the prior decades.
Chapter 2-29
Table 2.25: Total Number of Housing Units, City of Capitola, 2000 and 2006
Year Housing Units
2006
5,478 (building records)
2000
5,401(building records)
1990 (Census)
5,282
Increase according to City permit
records (2000-2006)
1.04% (77 units)
Source: Census 1990 STF 1 (baseline) and City Building Permit Records, 2007
Housing Type
The majority of Capitola’s housing units are multi-family attached units. As summarized in
Table 2.26 below, single- family detached homes comprise only 36% of the housing stock,
with another 10% that is single family attached (townhomes with independent exterior
walls and utilities). In comparison, 63% of the County’s housing units are single family
detached homes, which is due in part to the rural nature of much of the county’s land area.
A small portion of the population of Capitola, 156 people, lived in Group Quarters in 2008
compared to 9,948 people who lived in Group Quarters in Santa Cruz County.14
Table 2.26: 2008 Total Housing Units by Type
Total
Single Multiple
Mobile
Homes
Occupied
Persons per
Detached Attached 2 to 4 5 Plus Household
Capitola 5,412 1,997 516 1,142 1,107 650 4,782 2.062
Santa Cruz
County 104,479 65,650 9,213 8,641 13,720 7,255 96,311 2.664
Source: Table 2: E-5 City/County Population and Housing Estimates, 1/1/2008
In 2000, multi-family developments with 20 or more units in a structure comprised nearly
14% of Capitola’s housing stock, compared to 6% for the County and 12% statewide.
Capitola also has a larger percentage of mobile home units, 12% compared to 7% for the
County and only 4% statewide. Mobile homes in Capitola are installed in nine mobile home
parks varying in size from 34 to 114 units (Table 2.27). The relative proportion of the
City’s housing units in each type of structure is shown in Figure 2-6 below.
14 California Department of Finance, 2008
Chapter 2-30
Table 2.27: Housing Units by Type
City of Capitola Santa Cruz County
Unit Type Number Percent Number Percent
Single-Family detached 1,957 36.4% 62,706 63.4%
Single-Family Attached 521 9.7% 8,750 8.8%
Duplex 246 4.6% 3,181 3.2%
3-4 Units 908 16.9% 5,187 5.2%
5-19 Units 354 6.6% 6,182 6.3%
20 + Units 734 13.6% 5,604 5.7%
Mobile Home 659 12.3% 6,916 7.0%
Boat, RV, van, etc… 0 0.0% 347 0.4%
Totals 5,379 100% 98,873 100%
Source: Census 2000 Summary File 3 (SF 3) H30. Units in structure
Chapter 2-31
Figure 2-6
Percent of Capitola Housing Units by Type and Number of Units in Structure
Source: Census 2000 SF 3
Age and Condition of Housing Stock
Most homes begin to exhibit signs of decay when they approach 30 years of age.
Common repairs needed include new roofs, wall plaster and stucco. Homes 30 years or
over with deferred maintenance require more substantial repairs, such as new siding,
plumbing or multiple repairs to the roof, walls, etc. According to the 2000 Census and
Capitola Building Department records, as of 2009 approximately 84% of Capitola’s housing
stock is over 30 years old (Table 2.28).
Single-Family
detached
36%
Single-Family
attached
10% 2 units
5%
3 or 4 units
17%
5 to 9 units
5%
10 to 19 units
1%
20 to 49 units
14%
50 or more
units
9%
Mobile homes
12%
Housing Types and Number of Units in Structure
Chapter 2-32
Table 2.28: Year Structure Built
Year Built Number Percentage
Built 2000 to 2006 112 2.1%
Built 1995 to 1999 131 2.5%
Built 1990 to 1994 59 1.1%
Built 1980 to 1989 539 10.1%
Built 1970 to 1979 1,831 34.3%
Built 1960 to 1969 1,114 20.9%
Built 1950 to 1959 662 12.4%
Built 1940 to 1949 344 6.4%
Built 1939 or earlier 543 10.2%
Total* 5,335 100%
*Total is not representative of total housing units; this table counts only new
structures built and not units demolished.
Source: Census 2000 Summary File 3 (SF 3) H34. Year structure built up to 1989; City of
Capitola Building Department records for years 1990-2006
Understanding the aging character of its housing stock, the City of Capitola undertook a
comprehensive housing conditions survey in 2002. The survey was funded by a CDBG
grant and conducted by Applied Survey Research (ASR) under a contract with the City.
ASR walked every neighborhood of the City, manually recording exterior housing
conditions observed. Traditional wood framed and/or masonry dwellings were evaluated
according to the following criteria:
 Frontage Improvements – including presence of curb and gutter, and identification
of apparent site drainage problems.
 Foundation – foundation condition including identification of visible cracks in the
foundation, or leaning or unstable structures.
 Roofing – roof and chimney condition.
 Siding/Stucco – condition of exterior paint, stucco and siding.
 Windows – condition of window frames and glass.
 Electrical – apparent electrical condition including hanging wires, damaged
electrical panel.
Based on these criteria, ASR found that 94% of the traditional wood framed and/or
masonry homes in Capitola are in sound condition, although many homes need minor
improvements or renovation. The most obvious type of needed improvement was exterior
siding and stucco. Homes with minor or moderate repair needs were generally scattered
throughout the community.
Chapter 2-33
Condominiums and Townhouses were in the best condition overall with 98.3% of the
structures in “sound condition”. Duplexes were in the worst condition of the non-mobile
home residential structures. In 2002, there were 63 single-family homes, 4 duplexes and
two multiple-family buildings in need of moderate rehabilitation, (Table 2.29).
To evaluate the condition of Capitola’s 718 mobile homes, ASR conducted a drive-through
inspection of the nine mobile home parks in the City. The following criteria were used to
assess the condition of each individual mobile home unit:
 Sound – a unit that appears new or well-maintained and structurally intact.
 Minor – a unit that shows signs of deferred maintenance, or which needs only one
major component, such as a roof.
 Moderate – a unit in need of replacement of one or more major components and
other repairs, such as roof replacement, painting, and window repairs.
 Substantial – a unit that requires replacement of several major systems and
possibly other repairs (e.g. complete foundation work, roof structure replacement
and re-roofing, as well as painting and window replacement.)
 Dilapidated – a unit suffering from excessive neglect, where the building appears
structurally unsound and maintenance is non-existent, not fit for human habitation in
its current condition, may be considered for demolition or at minimum, major
rehabilitation will be required.
Table 2.29: Condition of Housing Stock in 2002
Housing Type Sound Minor Moderate Substantial Total
Structures
Single-Family 1,717 78 63 0 1,858
Condominium/Townhome 1,127 20 0 0 1,147
Mobile Home 42 296 338 42 718
Duplex 136 12 4 0 152
Multiple family building 141 6 2 0 149
*Extrapolated from the City of Capitola Housing Needs Assessment 2002, ASR
The mobile homes in Capitola were found to be generally in good repair, but almost all
were found to need some minor to moderate repairs, such as roof replacement, painting or
window repair. In 2002, 338 mobile homes were in need of moderate rehabilitation, and
42 were in need of substantial rehabilitation. Since the completion of the 2002 survey the
City’s rehabilitation loan and grant program has helped to address issues involving the
mobile home units that needed substantial repairs or replacement.
The City’s nine mobile home parks also contain significant infrastructure systems that in
many cases are in need of upgrades. As the parks are subdivided, or purchased by non-profits
or resident controlled cooperatives, the infrastructure needs should be carefully
evaluated so that appropriate upgrades or replacement reserves can be included as a part
of the project’s new financing arrangements.
Chapter 2-34
Findings of the telephone survey indicated many residents are concerned about the high
cost of homeownership (75.6% of survey respondents) and the high cost of rent (68.6% of
survey respondents). Telephone survey respondents wanted to see more housing for
seniors, more apartments and more affordable and low-income housing. These housing
preferences are described in Figure 2-7, below (refer to Appendix D for more detail):
Figure 2-7: Top Five Most Needed Housing Types
According to ASR Telephone Survey Respondents
Unfortunately the Housing Conditions Survey completed by ASR in 2002 did not gather
information related to the relative energy efficiency of the current housing stock. No
current information exists as to the percentage of units that lack insulation or dual-glazed
windows and no current information is available on the type, age or efficiency of the
heating systems being utilized.
Capitola has been actively working to maintain its existing housing stock. It operates a
rehabilitation program that offers financial assistance to eligible homeowners for home
maintenance and rehabilitation. Eligible owners of single-family homes and mobile homes
can take advantage of this program. The City’s continued commitment to these programs
is discussed in Chapter 6 of this Element. Between January 1, 2000 and December 21,
2006, 400 building permits were issued for residential remodels and/or additions.
Housing Costs
Housing costs are driven by the price of raw land, infrastructure costs (e.g. sewer and
water), construction costs, supply relative to demand, and financing costs. The
diminishing supply of developable land in Capitola, the built-out nature of the community,
its attractive coastal location, and the level of unmet demand for housing in the entire
region have driven up the cost of both ownership and rental housing in Capitola.
Nevertheless, the City has not been immune to the state-wide and national declines in real
estate prices.
52.3% 51.4% 48.4%
41.0%
31.6%
0%
25%
50%
75%
100%
Apartments Senior housing
facilities
Condominiums /
townhouses
Accessory units
or granny flats
Housing for
larger families
Chapter 2-35
Due to the rapid changes in housing prices, and the changes in market dynamics, the
numbers presented in this section may, at times, be difficult to interpret.
I. Ownership Housing
California’s homeownership rate in 2003 was the third lowest in the nation (58.9)
compared to the national homeownership rate of 68.3%. Homeownership in Santa Cruz
County is at 55% and in Capitola the rate is about 47%.
The value of homes in Capitola varies based on the type, size and location. Recent sales
data show prices ranging from $376,185 for a 2 bedroom, 1 bath home; to $3,000,000 for
a 3 bedroom, 2 bath home with an oceanfront view15. At the end of 2008, the median sale
price of a single-family home in Capitola was $755,000 according to the Santa Cruz
Association of Realtors (SCAR) (Table 2.30).
Table 2.30
2008 REGIONAL MEDIAN HOME VALUES
City
Median Value
Single-Family Common Interest
Capitola $755,000 $302,000
Santa Cruz $675,000 $545,000
Scotts Valley $702,500 $415,000
Watsonville $376,000 $214,900
Source: Santa Cruz Association of Realtors, Regional Median Home Values
November 2008
Median home values in neighboring Santa Cruz County communities are similar to that of
Capitola, $675,000 in Santa Cruz and $702,500 in Scotts Valley.
According to the California Department of Finance “California Economic Indicators” report,
2008, California had the highest number of subprime mortgages in the country. It is
unclear as to the number of people who have lost their homes as a result of the mortgage
crisis in Capitola. There were 906 homes sold in foreclosure auctions in Santa Cruz
County in 2008 and an estimated 300 local homeowners received default notices during
the first two quarters of 2009. The majority of these defaults and foreclosures took place in
the south county area.
II. Rental Housing
According to the State’s 2005-2010 Consolidated Plan “renters represent a higher need
group than owners in both total numbers and in the percentage of households
experiencing housing problems. Renters have median incomes just under half as high as
15 Vanguard Real Estate, 2009
Chapter 2-36
owners; are predominantly low-income, and represent a majority of low-income
households.”16 The recent unemployment and foreclosure crises have only exacerbated
the difficulties that low-income households have historically encountered in their search for
decent, affordable rental housing.
Table 2.31
CURRENT MEDIAN RENTS
Bedroom Type Median Market Rents Mean Market Rents
Studio $845 $834
One-Bedroom $1000 $1072
Two-Bedroom $1600 $1683
Three-Bedroom $2300 $2154
Source: Craigslist April, May 2009
The rental housing market in Capitola is comprised of apartments, condominiums, mobile
homes and single-family homes. Some of the rental units are rented on a short-term basis
as vacation lodging. The Census 2000 reported that 425 Capitola dwellings (8% of the
City’s housing stock) were being used as seasonal or recreational units. The City of
Capitola maintains a Mobile Home Park Rent Stabilization Ordinance that regulates the
space rents that are charged in rental parks in the City. Currently only four parks (with a
total of 292 spaces) remain as rental parks covered by the ordinance with the balance of
the parks having been subdivided into individual parcels or having been purchased by
resident controlled cooperative ownership structures.
III. Vacancy Rates
The residential vacancy rate, a translation of the number of unoccupied housing units on
the market, is a good indicator of the balance between housing supply and demand in a
community. When the demand for housing exceeds the available supply, the vacancy rate
will be low. Concurrently, a low vacancy rate drives the cost of housing upward to the
disadvantage of prospective buyers or renters.
In a healthy housing market, the vacancy rate would be between 5.0 and 8.0 percent.
These vacant units should be distributed across a variety of housing types, sizes, price
ranges and locations within the City. This allows adequate selection opportunities for
households seeking new residences.
According to the 2000 Census, Capitola’s owner-occupied units have a vacancy rate of
1.5% and rental units have a rate of 3.0%. These rates indicate that the housing market is
very tight with little room for buyers or renters to find a suitable unit or negotiate a lower
purchase or rental price. However, nearly 12% of all the housing units in the City were
classified as vacant during the Census 2000 survey. Of these vacant units, nearly 70%
16 2005-2010 Consolidated Plan, California Department of Housing and Community Development
Chapter 2-37
(425 units) were vacant for seasonal use as either vacation homes or vacation rental
properties. In the county as a whole, more than 5,000 units, or nearly 8% of the entire
housing stock in the county, including the cities, were vacant for seasonal use as vacation
homes or rentals, as shown in Figure 2.8 below.
Figure 2.8: Occupancy Status of Housing Units in Capitola and Santa Cruz County
Source: Census 2000
*The 12% Capitola Vacancy Rate shown includes both rental housing vacancies and vacant non-primary
residences.
IV. Household Tenure
According to the 2000 Census, there were 4,692 households residing in Capitola. Of
these households, 53% were renters and 47% were homeowners. See Figure 2-9, below,
for further detail regarding housing tenure in Capitola. It is important to note that a
relatively high number of multi-family rental housing units exist in Capitola.
V. Housing Affordability and Overpayment
State and Federal standards for housing overpayment are based on an income-to-housing
cost ratio of 30% and above. The cost of housing includes: rent or mortgage payments,
utilities (e.g. water, sewer, electric, gas), taxes and insurance. Households spending more
than 30% of their incomes on housing have limited remaining income for other necessities
such as food, clothing, and health care. Upper income households are generally capable
of spending a larger proportion of their incomes on housing.
Owner-occupied
41%
Renter-occupied
47%
Vacant
12%
Capitola Housing Units
Owner-occupied
55%
Renter-occupied
37%
Vacant
8%
Santa Cruz County Housing Units
Chapter 2-38
Figure 2-9: Estimated Percent of Capitola Renter and Homeowner Households
Paying Over 30% of Income on Housing Cost, by Income Range
Source: Census 2000 SF 3. Universe: Specified Renter- and Owner-occupied Housing Units
Figure 2-9 shows that the majority of households in the lower income ranges paid over
30% of their incomes on housing in 1999. Among lower income households, a greater
proportion of renters overpaid than homeowners. Fewer than half of the higher income
households paid over 30% of their incomes on housing, however most of those overpaying
in this group were homeowners.
The prevalence of overpayment among lower income renters indicates a significant need
for more rental housing affordable to the City’s low and very low income households. In
California 56 percent of the state’s renter households are low- or very low-income. A study
released in April 2009 by the National Low Income Housing Coalition “Out of Reach 2009”
found that Santa Cruz County is the seventh most expensive rental market in the nation.
The Fair Market Rent (FMR) in Santa Cruz County for a two-bedroom apartment is $1,590.
In order to afford this level of rent and utilities, without paying more than 30% of income on
housing, a household must earn $5,300 monthly or $63,600 annually. Assuming a 40-hour
work week, 52 weeks per year, this level of income translates into a Housing Wage of
$30.58. In Santa Cruz County, the estimated mean (average) wage for a renter is
currently only $13.69 an hour.
Tables 2.31 and 2.32 summarize the information on housing tenure, median home values,
rent, and housing cost as a percentage of income, for households in Capitola. Cost
Burden Greater than 30% means that the cost of rent is over 30% of the renter’s income.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
< $10K $10K -
$19K
$20K –
$34K
$35K -
$49K
$50K -
$74K
$75K -
$99K
> $100K
% of Overpaying
Households in
Income Range
Gross Annual Household Income
Renter HHs
Owner HHs
Chapter 2-39
Table 2.32: Overpayment for Housing in Capitola-Renters
Household Income Number of Renters Number of Renters
w/Cost Burden Greater
than 30% of Income
Income < 50% Median Family
Income (Extremely-Low to Very
Low Income)
706 588
Income >50% to <80% Median
Family Income (Low Income) 532 361
Income >80% Median Family
Income (Moderate & Above
Moderate Income)
1,284 124
Source: CHAS Data, 2000 Census
Table 2.33: Overpayment for Housing in Capitola-Owners
Household Income Number of Owners Number of Owners
w/Cost Burden Greater
than 30% of Income *
Income < 50% Median Family
Income (Extremely-Low to Very
Low Income)
414 220
Income >50% to <80% Median
Family Income (Low Income)
433 209
Income >80% Median Family
Income (Moderate & Above
Moderate Income)
1,374 345
Source: CHAS Data, 2000 Census
Table 2.34 estimates the maximum sales prices and rents affordable to very low, low, and
moderate income households in Capitola by family size. In each case, the maximum
monthly payment is equal to 30% of monthly household income and includes the cost of
utilities. For example, in 2009 a two-person household that is very low-income could rent a
housing unit for no more than $853 per month, and would be able to purchase a unit at a
maximum sales price of $86,786. Likewise, a two person moderate income household
could afford to purchase a $196,972 home or rent a unit for up to $1,936 per month.
Chapter 2-40
Table 2.34
Maximum Affordable Rents and Purchase Prices by Income Level and Unit Size for
Low and Moderate Income Capitola Households
Income
Category
Maximum Affordable
Cost
Family
Size
Annual
Income1
Maximum
Monthly
Payment2
Purchase
Price3 Rent4
Extremely
Low
1 $19,450 $486 $44,359 $436
2 $22,250 $556 $48,938 $481
3 $25,000 $625 $53,414 $525
4 $27,800 $695 $57,993 $570
Very Low 1 $32,450 $811 $77,426 $761
2 $37,100 $928 $86,786 $853
3 $41,700 $1,043 $95,943 $943
4 $46,350 $1,159 $105,201 $1,034
Low 1 $51,900 $1,298 $126,974 $1,248
2 $59,300 $1,483 $143,252 $1,408
3 $66,750 $1,669 $159,633 $1,569
4 $74,150 $1,854 $175,912 $1,729
Moderate 1 $70,400 $1,760 $173,979 $1,710
2 $80,450 $2,011 $196,972 $1,936
3 $90,500 $2,263 $220,068 $2,163
4 $100,550 $2,514 $243,061 $2,389
Notations:
1. Income limits based upon HCD income categories based on HUD Surveys
2. Monthly affordable payment is 30% of household income.
3. Affordable sales prices based on a 6% interest rate, 30-year mortgage, 1% property taxes
and insurance (0.3%), and 30% cost burden including utilities. A down payment was not
included in this calculation.
4. Affordable rent based on 30% cost burden after utilities are deducted. Utility expenditures
assume a base of $50 per person plus $25 for each additional person.
D. Assisted Housing
State law requires the City to identify, analyze, and propose programs to preserve housing
units that are currently deed restricted to low income families and will possibly be lost as
low-income housing as these deed restrictions expire.
Chapter 2-41
Description of At-Risk Projects
No currently assisted housing units in the City of Capitola have been identified as “at-risk”
of converting from low-income use to market rate. The majority of our current assisted
housing units have been built in recent years and have at least 55-years of affordability
required as a part of their original financing agreements.
Capitola Gardens, a 78 unit low-income housing development on 46th Avenue was
restricted to low-income senior households for the first 20 years following its construction.
This project, however, was converted to non-assisted housing once its original federal
funding and affordability requirements expired in December of 1999. This was Capitola’s
only example of an “at-risk” assisted housing project. When the project’s affordability
requirements expired in 1999 the Housing Authority of Santa Cruz County was able to
provide enhanced Section 8 vouchers (tenant-based rental assistance) to all income-eligible
households in the project. These vouchers have allowed the residents to either
stay in place as continuing residents of Capitola Gardens, or to use their voucher to move
to other housing. Since 1999 Capitola Gardens has continued under private ownership.
Although the current residents were provided with Section 8 vouchers to protect their rental
assistance status, as of January, 2000 Capitola, has lost the 78 units of the Capitola
Gardens Apartments as permanently affordable housing units. As of March 2009 only 44
of the 78 units in the Capitola Gardens project continue to be rented with households
utilizing the Section 8 vouchers that ensure affordability.
Mobile Home Parks in Capitola
Mobile home parks provide another important source of affordable housing for Capitola
and should be discussed as a separate form of “at-risk” housing. As a tourist and
retirement oriented beach community Capitola developed over time with a large number of
small cottage homes and a mobile home parks. The City today continues to host a total of
nine parks serving a total of 718 households. Because alternative sites for the relocation
of mobile homes are difficult to find, and moving and installation of mobile homes is
expensive, the City Council in 1994 adopted the City’s Mobile Home Park Rent
Stabilization Program. The program protects park residents by limiting annual rental
increases to 60% of the change in the consumer price index while also allowing for a fair
rate of return to park owners.
Since the adoption of the Rent Stabilization Ordinance five of the City’s mobile home parks
have converted to cooperative ownership or have been subdivided in order for the
residents to purchase their own lots. The two cooperative conversions were carried out
with technical and financial assistance from the City and have resulted in parks that have
have long-term affordability requirements. The three parks that have now been subdivided
did not result in similar long-term affordablity restrictions with the exception of seven
affordable spaces that were required under the City’s Affordable “Inclusionary” Housing
Ordinance that now covers the subdivision of mobile home parks.
Four parks (292 spaces) currently remain as rental parks covered under the City’s Rent
Stabilization Ordinance. These four parks could ultimately transition either to
cooperative/non-profit ownership or be subdivided so that the residents can purchase their
Chapter 2-42
individual lots. From past experience a transition to cooperative/ non-profit ownership
offers the highest likelyhood of preserving long-term affordability. The subdivision of a
park also offers some protections to the current residents and provides affordable
ownership opportunities consistant with the City’s Inclusionary Housing Policy. Both of
these options, however, are dependent upon a willingness on the part of the current owers
and park residents agreeing on a price.
There is a concern that another option would be that one or more of the rental parks could
close in the future and be converted to other uses. The closure of a park could cause the
potential loss of housing stock that currently serves low and moderate-income residents.
In the case of a park closure the City will ensure that :
- The park closure is consistent with City Municipal Code Section 17.090.045, and
other applicable sections of City Municipal Code.
- The closure is consistent with relevant state law.
Inventory of Affordable Housing Not at-Risk
There are seven other affordable housing developments in the City. The majority of these
projects were constructed with assistance from the City. None of these projects are at risk
during this planning period, and the majority of the projects will remain affordable
indefinitely. A summary of these projects is provided below:
I. Shorelife Church Neighborhood Manor
A 20-unit rental property owned by Shorelife Community Church. Rents are below-market
and some units are rented to households who have Section 8 rental assistance. The
church generally fills vacancies with households referred to them by local social agencies,
such as the Housing Authority and the Skills Center, with a preference for disabled,
elderly, or low-income students and church staff. Because these units are owned by a
nonprofit agency, they are expected to remain affordable indefinitely.
II. Grace Street Apartments
This 12-unit apartment project built in 1997 is managed and owned by the Housing
Authority of the County of Santa Cruz. Rents are affordable and units are limited to
occupancy by low and very low-income households. Because these units are owned by a
nonprofit agency, they are expected to remain affordable indefinitely.
III. Bay Avenue Senior Apartments (750 Bay Avenue)
Until September, 2008 this apartment complex was owned by the Salvation Army and was
know as the Silvercrest Apartments. The 96 unit complex was rented at rates affordable to
low -income senior households but no long-term affordability requirements were recorded
against the property. Having been built in the 1970s the six building complex was nearing
the end of its useful life and was in drastic need of major rehabilitation work.
Chapter 2-43
In September of 2008 the property was purchased by First Community Housing, a non-profit
affordable housing developer. Major rehabilitation and new construction plans have
been approved by the City and construction was begun in January 2009. The $28 million
dollar acquisition, rehabilitation and new construction project will be carried out in four
phases of construction in order to avoid having to relocate any existing residents off site.
The completed project will contain a total of 109 units and will have a 55-year affordability
requirement. 50 of the units will be restricted to extremely low-income senior households,
30 units will be restricted to very low-income senior households, 28 units will be restricted
to low-income senior households and one, 2-bedroom unit will serve as the manager’s unit
and will not be restricted. 39 units in the development will be set aside to serve seniors
who need assistance with certain activities of daily living and qualify under the State’s
definition of Chronically Ill. In addition, First Community Housing is working in participation
with the County of Santa Cruz provide assistance through the Mental Health Services Act
(MHSA) program to set aside five units to serve extremely low-income seniors with mental
illness who are homeless or at risk of homelessness.
IV. Habitat for Humanity Project (38th and Brommer)
Six very low income dwellings constructed for very low-income first-time homebuyers in
1999. The Capitola Redevelopment Agency (RDA) provided the land, and a CDBG grant
to help with cost related to infrastructure improvements. These ownership units will remain
affordable in perpetuity and are not at risk of losing their affordability restrictions.
V. Dakota Apartments Accessible Housing
The 25 accessible rental unit project located at Clares/Capitola Road was constructed in
2000. The rentals are available for very low-income households with one or more persons
affected by mobility impairment/traumatic brain injury. The project used funding from the
Capitola Redevelopment Agency’s Housing Fund, HOME Program Income Re-Use Funds,
and the HUD 811 program. The development is owned by the National Handicapped
Housing Institute, a nonprofit agency, and restrictions ensure that the units will remain
affordable in perpetuity.
VI. Loma Vista Mobile home Park Resident Acquisition
This project is an existing 90-space mobile home park that was purchased by a resident-owned
cooperative in 2000. The project was funded with assistance from the
Redevelopment Agency’s Housing Fund, CDBG funds and the State’s Mobile home Park
Resident Ownership Project (MPROP). The mobile home park lots are owned by the
cooperative and the homes are owned by the individual residents. These lots are bound
by a covenant which allows the lots to be sold only to senior households with incomes at or
below 120% of the area Median Income.
VII. Wharf Road Manor Mobile Home Park residents Acquisition
This project is an existing 36-space mobile home park that was purchased by a resident-owned
cooperative in 2006. The project was funding with assistance from the
Redevelopment Agency’s Housing Fund, HOME Program Re-Use funds and the State’s
Chapter 2-44
Mobile home Park Resident Ownership Program (MPROP). The mobile home park lots
are owned by the cooperative and the homes are owned by the individual residents. 34 of
the lots are restricted to moderate income households with incomes at or below 100% of
the area median income. Two units in the park were newly constructed in 2006 with the
assistance of HOME Program Re-use Funds. These two units are regulated under the
City’s Inclusionary Housing Program and are resale restricted to remain affordable for
Low-Income households.
VIII. Inclusionary Housing Units
Beginning in 2004 the City passed an Inclusionary Housing Ordinance which requires that
15% of the units in any new construction ownership project of seven units or more be
made permanently affordable to low or moderate-income households. Three projects
have now been constructed that will include Inclusionary housing units.
The first Inclusionary housing units were developed in 2006 as a part of the 12-unit
Heritage Lane condominium project of single-family homes. Two of these units have now
been sold as resale restricted inclusionary units for moderate-income homeowners. The
second project to include inclusionary housing units was the 55-unit Capitola Beach Villas
Condominium Project, completed in November 2008. This project included eight
inclusionary housing units that will be income and resale restricted when they are sold. In
2007 the residents of the 78-space Turner Lane Mobile home park purchased their park
and obtained approval from the City to subdivide the park into individual spaced. Under
the City’s Inclusionary Housing Program seven of the lots in the park will be restricted as
permanently affordable to moderate-income households with incomes at or below 110% of
the area median income.
Overall, since the program’s adoption in 2004 a total of 17 units and mobile home park
spaces have been setaside under the Inclusionary Housing Ordinance.
The City of Capitola has complemented its Inclusionary Housing Ordinance with its First
Time Homebuyer program as a way to assist the developer with the marketing of the
inclusionary units so that they do not become a burden to the project but actually offer a
marketing advantage. For the Capitola Beach Villas project, for example, the City
committed $240,000 in Redevelopment Agency Housing Funds and $240,000 in State
BEGIN Program funds to be spent specifically to assist with the purchase of the project’s
eight inclusionary housing units.
In the case of the Turner Lane Mobile Home park the City has provided First Time
Homebuyer and rehabilitation loan funds to assist two of the park’s very low-income
residents with the purchase and rehabilition of their Inclusionary lot and home. Without
this assistance these two resident households would not have been able to buy into the
subdivided park and the park would have been obligated to continue renting to these two
households at a subsidized rate as a requirement under the State’s subdivision process.
By combining the first time homebuyer program funding with the inclusionary housing
program the City has also been able to serve more lower income households than what
could have been served under either of these programs being used alone.
Chapter 2-45
The City’s Inclusionary Housing Program was designed only to require inclusionary units in
the case of for-sale developments of seven units or more. Rental housing developments
and projects of six units or less do not have an inclusionary requirement. Because the
inclusionary program is relatively new, and because to date only four of the 17 inclusionary
units required have been sold, it has not yet been possible to conduct a statistically
meaningful analysis of the impacts that this program will have on the overall cost and
supply of housing in the community. However, as several projects have been developed
since the Inclusionary Ordinance was adopted, the program has not discouraged housing
development or caused a significant overall increase in the sales prices of the market rate
units. Clearly the program has assisted in the development of permanently affordable
housing units that would not have otherwise been developed in the community.
Chapter 3-1

PTER
3CHAP
	
/.	

A variety of factors add to the cost of housing in Capitola and constrain the provision of
affordable units. These factors include: the market, governmental constraints and
environmental considerations. Moreover, housing goals may at times conflict with the
need to promote other important City goals, such as the desire to provide open space and
recreational facilities, protect environmental and historic resources, and maintain current
service levels.
State law requires the housing element to analyze potential and actual governmental and
nongovernmental constraints to the productions, maintenance, and improvement of
housing for all persons of all income levels, including persons with disabilities. This
chapter analyzes the following three potential constraints:
A. Market Constraints
B. Governmental Constraints
C. Environmental Constraints
A. Market Constraints
The high cost of building new housing in Capitola is at least partially due to the scarcity
and high cost of developable land. High materials costs and labor costs also contribute to
the high cost of housing development. Capitola’s beach-front setting and commutable
distance from Silicon Valley has also allowed many existing and new Capitola homes to
sell and rent at higher than average levels. For these reasons, most of the development
initiated by the private market in recent years has been within the market niches of custom
single-family homes and small high-end subdivisions of fewer than 15 homes. No units
affordable to low or moderate-income buyers or renters are being developed with the
exception of the required Inclusionary Housing units, and units that are being built by non-profit
developers with the assistance of federal, state and local government programs. The
only possible exception to this would be the development of Secondary Dwelling Units
that, by the nature of their small size, are most likely renting at rates that are affordable to
low- and moderate-income households.
Chapter 3-2
Land Costs
In Capitola, vacant, single-family zoned lots are almost non-existant. In April 2009 only
two substandard sized lots were listed for sale at $475,000 and $525,000 each. There are
only seven vacant single family and multi-residential zoned sites remaining within Capitola.
Because of the built-out nature of Capitola new development is almost invariably requires
the acquisition and redevelopment of prospective in-fill sites. Developing on prospective
sites is often more expensive and difficult due to increased acquisition costs, demolition or
rehabilitation of existing buildings, and the possible need to remove toxic materials left by
earlier uses on the site. Because most new residential construction is taking place on sites
that contain some existing residential units the net increase of new units is often greatly
reduced.
Utilization of the Low and Moderate Income Housing Fund of the Redevelopment Agency
and other available state and federal funding can counterbalance the constraint of high
land costs to some extent. The involvement of Redevelopment Agency funds or State or
Federal funds, however, also dramatically increases the cost of new development in that
the use of these funds triggers the need to comply with both federal and state relocation
laws and prevailing wage regulations. Relocation costs in some instances can be nearly
as high as the original cost of site acquisition.
Allowing for increased densities through the City’s Density Bonus Ordinance and
Affordable Housing Overlay are important tools to reduce the per unit cost of land in the
case of developments that include affordable housing units. These ordinances are actually
more successful in lowering per unit land costs than are across-the- board zoning changes
that allow density increases. Typical zoning changes that allow increased density often
cause an increase in the sales price of the property in that zone. The Density Bonus and
Affordable Housing Overlay, on the other hand, only allow an increase in density in
exchange for guaranteed levels of affordability and therefore do not tend to cause an
increase in the sales price of the land.
Construction Costs
Development costs for housing can vary significantly, depending on the type of housing,
such as single-family, townhomes, and apartments. Even within a particular building type
construction costs can vary by unit size, amenities, materials used and site conditions.
Capitola’s building department has maintained an in-house survey of costs. The survey
suggests that the labor, materials and design costs of an average quality single-family
home in 2008 was about $200 per square foot and about $300 per square foot for good
quality (land costs not included). Multi-family development costs are closer to $160 per
square foot. These costs have more than doubled since 2002 due to significant increases
in the costs of materials, shipping and labor.
The current downturn in the economy has slowed the amount of construction taking place,
but the City’s building department staff does not anticipate that this will have a significant
long-term impact in terms of lowering the cost of development. Included in the cost of
development are the costs of building materials. The cost of building materials varies
Chapter 3-3
tremendously depending on the material, quality, style, scale of construction and shipping
costs related to the particular product.
This being said, there are ways of reducing materials cost in certain development
situations. One way to reduce the cost of a demolition/rebuild is to reuse and recycle
materials from the old (demolished) structure. Not only is this measure cost-effective but it
is one of the Green Building methods suggested in the City of Capitola’s Green Building
program. Selecting materials that are manufactured locally can also help save costs while
also helping to reinvest our development dollars in the local economy.
Lower residential construction costs can also be achieved by reducing amenities, quality
and/or type of building materials and by reducing the actual square footage of the homes
being developed. Since 1950 the square footage of homes has more than doubles in the
United States, according to the National Association of Home Builders, while average
household size has dropped.
Oversized homes require significantly more construction materials than smaller homes,
require more land and use significantly more energy to operate. Reduced square footage
can also allow for a higher density of development on the site and thus reduced per unit
land costs. The City’s efforts to allow higher density housing construction and to
encourage the development of smaller square footage housing units are illustrated in the
Capitola Green Building Program, the Secondary Dwelling Unit Ordinance, and the City’s
Density Bonus and Affordable Housing Overlay Ordinances. The City has also used the
Planned Development zoning process to allow for the development of small units at higher
densities.
The move toward smaller homes is not new to Capitola. Due to the community’s vacation
cottage history many of the City’s single-family lots are less than 4,000 square feet in size
and can accommodate only fairly modest sized homes. Capitola’s Jewel Box
neighborhood, for example, averages 14 units per acre and the Upper Village
neighborhood average 15 units per acre. Capitola’s zoning ordinances also help to restrict
the size of homes by imposing fairly strict lot coverage, set-back and height requirements
in the single-family zones. In addition, parking requirements for single family homes vary
by house size, thereby further reducing the incentive to build larger homes.
The City of Capitola also contains a total of nine existing mobile home parks that have
been developed at an average of about 10 units per acre with relatively small individual
units. While the development of new parks is not being pursued t