Careful what you wish for

I moved our business to Santa Cruz in 2008, a point when all the geeky people in silos were joining together, in hopes of putting Santa Cruz on the map as a tech hub. Mission Accomplished! One of the primary goals was for those of us in Santa Cruz County to avoid the commute, and have jobs here locally. That direction should not have reduced housing inventory since we already lived here.

Those of us in tech are certainly benefiting from the tech boom that followed the 2008 downturn. What was unanticipated, in my mind, was what I call the “spilling over” of Silicon Valley into Santa Cruz, and the economic pressure it’s put on the availability and cost of housing as well as qualified talent. For those of us who run non-VC-startup companies, it’s particularly challenging. We generally cannot charge much over “market rate” simply because of the cost of living. At one point I briefly considered Portland as a viable alternative, but they are now on a lagged but similar Silicon Valley path, with the same kind of problems we have here.

Don’t get me wrong, I’m glad we collectively participated in changing this town, what an awesome time to have been in Santa Cruz. Let’s face it though; we’ve got some pretty significant issues that impact our business’s ability to function here. While it’s great that Amazon (citing one example – I’m not throwing shade here) decided to setup shop here, this trend can only add to our housing crisis. I feel like we’ve kinda shifted from one extreme to the other.

In a recent article by the Chamber of Commerce, there was a clear call for the tech community to participate in the city planning process. I suppose that as our sector  may have added to the severity of the current challenges, we are now expected to find solutions to many problems that have been historically managed by the city planning department. While I’m personally happy to participate in the discussion, and I generally consider myself to be an optimist and problem solver, I’m really struggling to conceive of a solution that will fix the mess we find ourselves in.

We live in an area where has construction has intentionally been limited in order to preserve the natural beauty of the area. In my younger years I was critical of this, and in my wiser years I’m thankful for it. I grew up in Silicon Valley and walked to grammar school through a walnut orchard. During the dot-com, Silicon Valley really reached beyond its reasonable capacity, and when the bubble burst, things returned to some sense of normalcy. With this second tech boom, things have gotten completely out of control, never to return many towns to their former charms. Many Silicon Valley city planners have ignored the warning signs that Los Angeles provided decades earlier, and as far as I can tell the primary goal was increased tax revenue to play their Monopoly® game.

So here we sit at a critical fork in the road. Santa Cruz is at a maximum population capacity, and the biggest problem we seem to be facing is housing inventory. So sure, we can build more housing, but we will forever change the face and charm of Santa Cruz. We can’t expand our highways, and while the rail trail is a great idea, I just don’t see that as a solution to our infrastructure problems. Certainly few will ride their bikes in the winter months, but hey I don’t want to get too far off topic. I know we are trying to address the low income housing issue with several developments in town which thankfully are nearing completion. We need that for all of the service workers who work in retail, food service, etc.

If we could build more housing (not sure where that’s possible), it’s likely to get gobbled up quickly by those folks riding the Google/FaceBook/Yahoo/LinkedIn buses, and by employees who relocate to Santa Cruz for the new tech jobs. As for the mid-range housing, we are generally talking about high density apartments and condos, and I believe it takes about 2-4 years for those projects to go from concept to completion. None of this is going to do anything to help us in the foreseeable future.

In the economic outlook forecast presented at the recent State of the City address, our city manager warned that we are currently seeing a “slowing of the economy”, and the city is anticipating an economic downturn (worst case a recession) over the next 3-4 years. I’m certainly not an authority on the economy, but I take it seriously when those responsible for running an entire municipality express concern about the financial outlook in the middle of a boom.

On one hand we need new housing now which we are not likely to obtain in less than three years, and on the other hand by the time we have the housing, we may no longer need it. If we build it, we change Santa Cruz forever. That’s a pretty big quandary we find ourselves in. Also timely is the “downtown recovery plan” which will allow us to build taller buildings for housing, which at this point is probably unavoidable. My fear is that in the next three years while I’m trying to grow our business, this will do nothing to provide affordable housing to our workers now.

At this point it’s likely most of us will have to move elsewhere in retirement, simply because we won’t be able to afford to live our days out here. We could simply say “well it doesn’t matter what happens here, I’m going to live somewhere else anyway”. I was raised to leave things better than I found them, and up to now the Santa Cruz community has sought to keep our quaint little town preserved. Is Santa Cruz in jeopardy of finally losing its soul? How can we generate creative approaches to preserve the community and natural environment that we cherish, while enabling housing inventory increases and high wage employment growth?