A five-story housing project with 253 below-market-rate apartments in Soquel is set to break ground this January and finish construction in 2028. The new units are a significant bump for the county to achieve its housing goals.
The project at 41st Avenue and Soquel Drive received more than $115 million in tax credits and a $105 million low-interest loan from the state last month. Developers are now working to secure building permits.
“We are thrilled to progress the project and make a substantial contribution to Santa Cruz County’s affordable housing,” said Pacific West Communities development partner Lauren Alexander.
The apartments are set to be available to lower income households. Income and affordability limits are set annually by state housing authorities. In 2025, an individual that makes $41,550 or less before taxes would be considered extremely low income.
Ninety-one homes are expected to be filled from the Housing Authority of the County of Santa Cruz’s Section 8 waitlist. That waitlist is closed, but could open in 2026, Jenny Panetta, director of the housing authority, said in July. Interest lists for the remaining units are expected to become available closer to the completion of construction.
The project represents about 12% of the county’s goal for extremely low income homes and roughly 15% of the target for low income homes. The project comes as the County of Santa Cruz lags behind on housing goals set by the state. By the end of 2024, the county had issued about 1% of its goal for extremely low income homes and roughly 9% of its goal for low income homes.
Every eight years, state housing authorities require local governments to make a plan for permitting enough housing in every income category to meet local housing needs. In the County of Santa Cruz’s current housing plan, approved in 2024, its target is to permit 4,634 new homes in unincorporated areas — outside the cities of Watsonville, Scotts Valley, Capitola and Santa Cruz.
By 2032, the county is supposed to issue building permits for:
- 746 extremely low income homes.
- 746 very low income homes.
- 976 low income homes.
- 586 moderate income homes.
- 1,580 above moderate income homes.
With cost estimates of more than $200 million for the project as a whole and around $770,000 per unit, the development will contain 20 studios, 100 one-bedrooms, 71 two-bedrooms and 65 three-bedrooms.
For a household earning 70% of area median income, proposed rents in 2025 dollars range from $2,423 for a studio to $3,599 for a three-bedroom. Affordable housing costs are considered to be roughly 30% of a household’s income before taxes.
Santa Cruz-based Linc Housing and Idaho-based Pacific West Communities proposed the project in July 2024. The project includes 258 parking spaces, a community room, fitness center, outdoor courtyards, playground, and could include other amenities such as a computer room and laundry facilities.
Proposed rent by unit type and income category are shown in 2025 dollars. (California Tax Credit Allocation Committee)
-Tyler Maldonado, Santa Cruz Local September 4, 2025
