Capitola leaders propose increasing housing density to attract developers

The Capitola Planning Commission meeting held on March 3, 2025, focused on addressing the urgent need for housing development in the community. The discussions highlighted the challenges and strategies necessary to attract developers to Capitola, particularly in light of the stalled Capitola Mall project, which represents a significant portion of the city's housing requirements.

Commission members emphasized the necessity of creating a welcoming environment for developers, noting that substantial investments—potentially in the range of $40 to $60 million—are unlikely unless developers feel assured of a supportive community and a streamlined approval process. The conversation underscored the importance of presenting a unified front to potential investors, showcasing Capitola as a cohesive community ready for development.

A key point raised was the need to increase the allowable density for housing projects. Currently, the city permits 15 dwelling units per acre, but there is a consensus that doubling this figure could incentivize developers to invest in the area. The commission acknowledged that the Capitola Mall project alone accounts for 63% of the city's housing requirement, leaving a significant gap that needs to be addressed.

The discussion also touched on the balance between development and community standards. Members expressed the importance of establishing firm guidelines regarding building heights and setbacks to ensure that new developments do not negatively impact existing neighborhoods. This approach aims to protect residents' quality of life while still facilitating necessary growth.

Furthermore, the commission recognized the critical role of affordable housing in attracting a diverse range of residents. There was a proposal to encourage developers to include a percentage of affordable units in their projects, which could lead to benefits such as height exceptions and density bonuses. This strategy aims to prevent the city from becoming a market solely for high-end housing, ensuring that opportunities remain for families and individuals seeking affordable living options.

In conclusion, the meeting underscored the pressing need for a strategic approach to housing development in Capitola. The commission is committed to balancing the interests of developers with the needs of the community, aiming to create a sustainable and inclusive environment for all residents. Future discussions will likely continue to refine these strategies and address the ongoing housing challenges facing Capitola.