Part II: SB Housing: A Crisis of Our Own Making?

Everyone has a perspective and Peter Lewis, who completed our newest 82-unit complex, Soltara Apartments, is no exception. That said, Peter has lived here for 47 years and understands the complexity of creating new SB housing. So we chatted a bit and this is what I learned.

In 2024, the state approved our Housing Element Plan which required us to build 8,001 units by 2031. To accomplish this, the city vowed to “remove unnecessary city constraints that impede housing development.” City Manager Kelly McAdoo likely appreciates the aggressive targets because she was recently quoted, saying: “Most cities have about 20% of their downtown as residential. In SB, we only have about 5% as residential.” 

According to global citizen and UCSB Economist Peter Rupert, between 1980 and 1990, 2,301 new units were built in the city. Over the next 30 years, we stuck our finger in what is now a bursting dike, building just 25% (1,983 units) of what our eight-year Plan now requires. In a study conducted by NYU’s Housing Solutions Lab across 502 small cities, vacancy rates averaged 8% (“healthy”) while here in SB we are at a very unhealthy low of 1.7%. Note: Austin TX has shown that the “Supply Effect” is real, because their increased inventory resulted in competition (Obviously!), resulting – in 2025 – in a 21% rent decrease in certain categories.

First adopted in 2013 to encourage new construction, our Average Unit-Size Density Program (AUD) is based on our 2011 General Plan. While it allowed more density it provided a 63 unit per acre cap which, according to Mr. Lewis is far too thin – especially given the added 10% (affordable) inclusionary rule – to be broadly energizing or feasible. Indeed, many scaled projects are building at much greater densities than the AUD purports to allow. As Peter pointed out, “when the exception becomes the rule, it’s time to change the rule.”

Soltara, for example, sits on three contiguous/merged lots which made the project financeable by allowing greater density based on the combined lot size—a full 82 units, twice what the AUD allows, built on just 2/3 of an acre leaving Reid’s Appliances untouched. 

Similarly, the new and thankfully approved 233-unit Paseo Nuevo projectwillbe built on approximately 1.5 acres (only Macy’s will be razed) across the total 10-acre mall. It was this density, 240% more than the AUD allows, together with a $35M land grant and healthy tax incentives that made this transformative project business viable. 

The recently approved 90-unit Milpas Project, which sits on just under an acre, boasts 90-units; 50% more than the AUD allows, based on the State’s Housing Crisis Act/ Bonus Density program. Whether you like the project or not, it does include six more affordable units than is required and is state law mandated as a “matter of right,”  because in passing the Act (By 90% in the Assembly) the state understood the words “housing crisis.” Perhaps the three Councilmembers who voted “NO” (Kristen Sneddon, Oscar Gutierrez, and Wendy Santamaria) don’t grasp the severity of the crisis nor understand state law, because had this project been denied, our self-insured, financially strapped city would have been on the losing end (Take my word!) of a lawsuit with up to $50k in per unit penalties ($4.5M!) and prevailing party fees. So, to those who risked an embarrassing public beatdown to build LESS housing I must ask: Was your vote performative? Or, was it just irresponsible? Councilwoman Meagan Harmon said it best: “I think the message we would be sending (with a “no”) is essentially to tell the legislature that they were right not to trust us to enforce our own housing rules.” Counselor, I agree.

In order to grow supply, we must increase density and encourage smaller SB-compatible projects – perhaps through “Floor Area Ratio” – just like our city staff recommended in February of 2022. In Part III we’ll explore certain innovative steps the city and others are taking regarding affordable housing. Yes, there will be some well-deserved positivity! 

Jeff Giordano,
SB County Resident