Housing report

The mix of for-sale housing at UCSC includes Hagar Meadow Townhomes.
Photo: Chris Myers

November 27, 2006

New report proposes higher-density housing on campus

Denser on-campus housing for faculty and staff and creation of a nimble, semi-autonomous housing entity are among recommendations in a new report analyzing campus housing options.

Compiled by consulting firm Brailsford and Dunlavy at the direction of Campus Provost and Executive Vice Chancellor David Kliger, the nearly 200-page report also observed that employee for-sale housing has become “permanent” rather than “transitional,” as designed. The report states that the campus would have the maximum benefit if its for-sale housing program returned to a "transitional" approach. Currently, for-sale owners are reluctant (or unable) to move off-campus, the report notes.

Other proposals and observations in the report include:

• “Building densely could make housing more affordable to a wider range of potential faculty and staff…new developments will likely have higher density for the successful creation of affordable and sustainable projects.”

• “Mortgage payments accompanying exceedingly under-priced units are too attractive for many to leave,” the report said. “Combined with the lack of equity gain, owners do not sell frequently. This, in turn, clogs unit turnover, thereby preventing the program from serving its mission to provide transitional housing.”

• “The program’s deep discounts have become a permanent large-scale benefit for a few rather than a smaller-scale benefit for many.”

• “Move the management of the Employee Housing Program to a unit which is more appropriate for the mission, if such a unit exists on campus, and consider forming an independent 501(c)3 special-purpose entity as noted above to acquire and manage the assets of the existing program, and utilize this vehicle moving forward."

Now working its way through the Academic Senate committees and being considered by top campus administrators, the report comes as groundbreaking nears for the first phase of the 84-home Ranch View Terrace development.

“The report was comprehensive, and clearly identified some of the major challenges facing our housing program,” said Kliger. “The administration and the Academic Senate both acknowledge that if we are to continue to be successful in recruiting and retaining excellent faculty and staff, we will need to address the issue of affordable housing.”

A project team including planners, housing administrators, and faculty worked with the consultants over the spring and summer on the analysis.

“The report recommendations and the local response to those recommendations will both be considered in the continuing process of developing a master plan,” Kliger said.

Senate Vice Chair Quentin Williams, who acted as a Senate liaison with the project team, was impressed with many of the proposals. “It is a framework for improving our housing on campus,” he said. “If the recommendations are OK’d it will change the way UCSC handles housing." Williams called the suggestion of a special-purpose entity on housing “a very valuable proposal.”

One area of some concern to him, though, was the proposal for denser housing. “I think the campus has to be careful it isn’t making housing people don’t want. There is a tradeoff between density and desirability.”

Theodore Holman, one of three Academic Senate representatives on the project team, also favored the creation of a separate entity. Holman was pleased that the report put more emphasis on lower-priced units. “I agree 100 percent,” he said.

Information on the UCSC Faculty and Staff Housing Program is available online.

REPORT EXCERPTS:

• “The Employee Housing Program should set a standard below-market rate for all unit types owned by UCSC. When a property is sold, prior to putting it back on the market for the next university buyer, the property should be internally appraised to reflect what the below-market rate standard for that property is with the difference inuring to the University for future development of that unit or as an off-set for future development.”

• “Although employees have been reluctant in their acceptance of multi-family unit configurations, especially for for-sale tenure, the employee housing portfolio may benefit from the provision of smaller, densely constructed, less expensive units.”

• “The existing and soon expanded (Phase I of Ranch View Terrace opening in 2008) UCSC inventory of houses and rental units represent a significant hedge against the escalating real estate market in the immediate Santa Cruz area. At the expected higher price point of the Ranch View Terrace range (now predicted at over $600K), the more expensive units would still represent a rate of 20 percent below market compared to the median-priced house in the Santa Cruz area. This is especially notable as Ranch View Terrace houses will be significantly larger than the mean-sized Santa Cruz home.”

• “The regional and campus culture generally imparts upon employees expectations for larger, suburban-scale housing. Larger homes are more expensive to construct, discourage unit turnover, and providing affordable housing using larger homes, although clearly achievable (e.g. Ranch View Terrace homes, priced at about 70 percent of market rate, have proven this), is very difficult. Providing affordable housing for the majority of employees, faculty included, considering household income limitations, would not be achievable using this approach. This is not to say that Ranch View Terrace is inappropriate, rather, the campus should simply focus on smaller units types after their delivery.”

• “Lacking relevant restrictions and disincentives, the program presently has numerous residents who do not intend to move into the off-campus market. Disincentives to encourage employees to use housing for transitional needs rather than permanent housing include building smaller units, having the campus capture equity from under-priced units and reselling these units at predetermined rates with sustainable price caps, and incremental financial disincentives. Building smaller units is advisable as this would serve those most in need as well as providing a home for those with more funds at their disposal, but without providing a home encouraging long-term residence. Capturing equity, aside from securing capital for running the program, would ensure unit pricing cheap enough to provide a recruitment and retention incentive but not cheap enough to encourage long-term residence.”

• “… it would be helpful to improve streamline {sic} the off- as well as on-campus processes which must precede the delivery of any new units. Off-campus, this would include improving the efficiency of the construction review and entitlement process as well as the University’s relationship with municipal officials and bodies. On-campus, this would include the presently required but burdensome process of consulting with various campus constituencies such as the University administration and the faculty senate. The future Employee Housing Program must be more nimble in order to function successfully. The off-campus situation should be addressed by continued efforts/attempts to partner with the City. The on-campus situation should be addressed by the creation of a specialized University – Employee Housing liaison body. This body would be empowered to make necessary decisions and approvals on behalf of the University.”