Capitola planning commission asks staff to refine multifamily zoning proposals, consult legal and return with revisions

Capitola Planning Commission members on March 3 received an update on proposed amendments to the city's residential multifamily (RM) zoning and directed staff to review public comments, consult the city attorney and return with a draft ordinance and formal rezoning hearing with mailed notice.

The work session centered on Program 1.6 of the city's adopted housing element, the consultant Ben Noble told the commission, a program that calls on the city to "review and revise as appropriate requirements such as the minimum unit size, setbacks, parking requirements, and height restrictions to ensure they are necessary and pertinent and do not pose constraints on the development of housing." Noble said staff had developed a map identifying seven RM "housing opportunity areas" and draft development standards that would accommodate up to 30 dwelling units per acre (with 40 units per acre previously considered).

Why it matters: the City must keep its housing element certified by the state's housing agency to avoid penalties that can include the loss of state grants or limits on local approval authority. Commissioners stressed that any changes must both address state requirements and respond to neighborhood impacts.

Staff and consultant presentation Ben Noble, the city's consultant on the zoning amendments, summarized past work: nine meetings in 2024 addressing housing element implementation, including three focused on RM zones. He said the city currently divides RM into three subzones ' RML, RMM and RMH ' allowing about 10, 15 and 20 dwelling units per acre respectively. "This includes assessing the maximum density allowed in the RML and RMM zones to determine if higher densities can help facilitate multifamily development in the city," Noble said.

Using criteria that included ownership patterns, physical suitability, financial feasibility and neighborhood compatibility, staff narrowed an initial list of about 37 candidate properties to seven RM areas that, in staff's view, are more likely to be realistically redevelopable and where increasing allowed density might meaningfully change development potential. Staff also proposed objective development standards intended to address resident concerns about massing, usable open space and building materials.

Public comment and major concerns More than a dozen residents spoke during public comment. David Fox, a resident since 1977 and a retired builder, urged the commission to consider zoning tools that require a portion of new units be affordable: "...we're gonna let you have this density, but you're gonna put 40% low income on them," he said, urging the commission to examine options that preserve affordability when upzoning.

Other recurring themes from residents included: - Traffic and parking impacts, particularly on Park Avenue and nearby streets. - Neighborhood compatibility and building heights next to single-family homes (Turner Lane and adjacent neighborhoods were cited repeatedly). - Concerns about outreach and notice; several speakers said mailed notices or larger outreach would reach more neighbors than postcards or online postings. - Requests for phased redevelopment to reduce displacement and construction impacts on existing residents.

Janine Roth, representing Santa Cruz EMB, urged the commission not to cap the proposal at 30 units per acre and to return the staff proposal that included both 30- and 40-unit options. "Program 1.6 is a constraint reduction program," Roth said, asking commissioners to direct staff to pursue the higher-density option as well.

Commissioner deliberations and direction to staff Commissioners described the issue as a balancing act between meeting state housing law obligations and protecting neighborhood character. Several commissioners said they wanted to preserve objective development standards (daylight plane, setbacks, landscape/open-space minimums and parking requirements) so redevelopment would include usable open space and not create sudden, outsized structures next to single-family homes.

On specifics, commissioners expressed mixed views on the draft densities for individual sites. Some commissioners supported allowing higher density on transportation-oriented or commercially adjacent sites (for example, the Landings at Capitola), noting those locations would better absorb added units. Others expressed caution about raising densities on sites directly adjacent to single-family neighborhoods or where transit connections are weak (for example, the 600 Park Avenue site).

Formal direction and next steps The commission did not adopt any ordinance or rezone at this meeting. Instead commissioners directed staff to: - Review and respond to the public letters and workshop comments received in recent days; - Consult with the city attorney on legal questions about the chosen site-selection criteria and whether selectively applying new RM subzones complies with state housing-element law; - Return to the Planning Commission with a revised proposal and a recommended ordinance and zoning-map changes for a noticed public hearing; - When the matter is scheduled as a rezoning, use mailed notices (green cards) to directly notify adjacent property owners and residents; and - Continue outreach to housing advocates and other stakeholders.

Staff said the next meeting will include additional legal review and any adjustments recommended after that review. Staff also noted that the city's housing element previously identified a sites inventory that staff said would meet the state target and that the Capitola Mall site remains a major source of potential capacity.

Community context and caveats Commissioners and staff repeatedly emphasized two caveats: first, the city must remain in compliance with state housing-element law and maintain its certification; second, any changes must rely on objective standards and findings. Staff said some nonconforming properties that already have higher built densities could be addressed by code language that allows redevelopment at their built density without rezoning.

The commission scheduled follow-up work rather than a final decision, and staff will return after legal review and additional outreach.

Ending The commission's action was procedural: no zone changes were approved at the March 3 meeting. Members asked staff to bring back a draft ordinance and to increase direct notice to neighbors before any formal rezoning hearing.