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Santa Cruz moves to renew California Prohousing designation to keep state housing funds competitive
Summary
City staff told council the pro-housing designation improves competitiveness for state housing and infrastructure grants; council authorized staff to submit the city's application renewal to the California Department of Housing and Community Development to preserve access to priority funding streams.
City staff asked the council to authorize submittal of a renewal application for the California Department of Housing and Community Development's Prohousing Designation program, which gives qualifying jurisdictions priority processing and additional scoring points for selected state housing and infrastructure funding streams.
Emily Watkins, management analyst in the city's Affordable Housing Division, explained the designation preserves priority access to programs such as the Pro-Housing Incentive Program (PIP) and can improve competitiveness for ASIC and other state funding. The city's current designation (awarded in 2023) helped secure a $500,000 PIP award in 2024, staff said, and the designation is referenced in the city's adopted 2023-2031 housing element.
City Director of Community Development Lee Butler noted the designation helped Santa Cruz certify its housing element on time and that maintaining the designation strengthens the city's relationship with state housing reviewers. Staff also described changes to the state program that require more explicit public-participation steps and additional documentation concerning outreach and encampment best practices; staff said they can meet the new thresholds and provided templates HCD offers for diligence.
Councilmembers emphasized the designation's practical benefits: greater competitiveness for state dollars and direct local impacts from grant awards (rental assistance, eviction prevention, infrastructure projects) rather than any change to local zoning. Lee Butler provided a recent tally: over the past 2.5 years the city issued building permits for 1,027 units, of which more than 890 were affordable by the city's counting method (staff noted certain student housing units were excluded from housing-element counting rules). Council unanimously authorized staff to submit the renewal application to HCD.
Why it matters: The Prohousing designation does not change local zoning but can materially increase the city's chances of winning state grants that fund rental assistance, affordable housing capital and infrastructure projects; that grant competitiveness is especially important as the state and legislature consider larger housing bond measures.
Next steps: Staff will submit the application to HCD with the supporting documentation and monitor HCD's review timeline. The designation, if renewed, will remain an element of the city's strategy to attract state funding for housing and infrastructure.
