Commission continues proposed "local tenant preference" after debate over residency rule and school-district exemption

The Planning Commission on Wednesday held a public hearing on a proposed local tenant preference ordinance (Title 21.04) intended to give priority for affordable units to county residents, workers and other local groups, but continued the item to allow staff to refine the text after legal concerns about a durational residency requirement.

Senior planner Stephanie Rex presented the draft ordinance and the commission’s April recommendations. The ordinance would apply to projects with four or more units that are affordable or that receive county development assistance. It lists a set of preference categories — displaced households, neighborhood residents, county residents, workers employed by county employers, households with high housing cost burdens, households with children in local school districts, and agricultural employees as defined in county code — and proposes that each qualifying preference carry one point toward unit allocation.

Rex said the commission had asked staff to consider removing weighted bonus points, to authorize the planning director to implement the preference, and to gather public input. She told the commission that the suggested one‑year durational residency preference was not recommended by county counsel because it could be legally challenged and may conflict with the privileges and immunities clause and fair-housing constraints. “County counsel does not recommend including a durational preference in the code,” Rex said, and she cited Santa Cruz’s experience, where a one‑year preference was included in policy but not codified because of legal concerns.

County counsel advised the commission that a durational residency requirement is legally risky. “The privileges and immunities clause may conflict with that too,” counsel said during the hearing.

Public commenters included Jeff Small, representing the San Benito High School District, who urged an exemption for school districts that want to build workforce housing for educators. “We are seeking an exemption for school districts, to be able to provide affordable housing for our educators and our staff,” Small said. He said a district survey found interest from 87 teachers and argued that teacher housing would help recruitment and retention.

Commissioners debated the legal risk and the practical enforceability of residency verification. Commissioner Robert Gibson said he was skeptical that a short durational requirement would be meaningful because residency can be established quickly with a paycheck or lease. Seth Capone, who had earlier commented on a separate agenda item, raised implementation concerns about verification paperwork. Legal counsel and staff noted implementation difficulties and the potential for litigation.

After a lengthy discussion about scoring, residency duration and a specific request from the high school district, the commission directed staff to return with revised language in August. The commission’s motion — which the board approved 5-0 — asked staff to remove any one‑year durational residency requirement, add seniors as an additional preference category (65+), and draft an exemption for school‑district‑funded housing with direction to return the item to the commission in August with specific language for the exemption.

The commission did not adopt the ordinance on Wednesday; it continued the item so staff can prepare refined code language that responds to counsel’s legal concerns and the commission’s instructions.

Key next steps: staff will draft the requested revisions (no one‑year duration), add seniors as a preference, craft school‑district exemption language and return the item at the commission’s August meeting for further action.