Santa Cruz Real Estate  Digest,  Ed. 25
September, 2017 - In This Issue:
In This Month's Issue
In this month's Digest you will find national and local news as well as informational pieces on topics that we have found to be increasingly important in the real estate industry. 

We've created a new, regular section in the newsletter this month. We will keep you aware of legislation that may impact your real estate position. Learn more about AB 71 and how it could lead to the elimination of second-home mortgage interest deductions

When buying real estate, its important to understand the quality of schools in the area you intend to buy. Read all about Santa Cruz County schools below, including information on how to look up a property's school district and analyze the quality of schools throughout the County.

The future of real estate is green. Read about Net Zero 2020, a state wide initiative to make all new residential construction Net Zero waste by 2020, as well as about Tiny Homes and new building codes below.

This Month, Christine's Corner provides valuable information on the Coastal Commission, and what you should keep in mind when buying property in this unique area
Real Estate Market Statistics 
For Santa Cruz, Santa Clara, and  Monterey

The reports contain median home prices, real estate price statistics, valuable information about mortgage rates and much more.

Legislation that May Affect Your Real Estate Position

The following are pieces of legislation that are moving through the State or Federal Government which may affect your real estate position. We have created this section to inform and empower you to protect your rights as an owner and/or investor of California real estate. 

AB 71:

This is a bill that is designed to increase affordable housing in California, at the expense of second homeowners. It calls for the elimination of mortgage interest deduction (MID) for mortgages taken out on 2nd residences. Read the bill here

According to the California Association of Realtors, more than 2000 home sales would be lost in the first year after implementation. The potential impact of the MID elimination is an economic loss of $180.2 million to the state of California in the year following the implementation. Read more about the consequences of this bill here . While we support an increase in affordable housing, doing so through the elimination of 2nd residence MID is misguided.  

The bill is currently ordered to go into a third reading, after which it will be voted on. To protect your MID on your 2nd residence(s), call your Assembly Member today and tell them to vote NO on AB 71.

Santa Cruz County Schools

(click the photo to see a larger map)

Whether you are a parent or future parent looking to buy a home in Santa Cruz or an investor searching for an investment property, its important to understand the quality of schools in the area you intend to buy.

In this article, we will summarize important information about public and private education in Santa Cruz as well as resources that you can use to analyze individual schools. 

Santa Cruz County Public Education:

According to the Santa Cruz County Office of Education, close to 40,500 students are enrolled in Santa Cruz County schools. Overall, the number of students in Santa Cruz County that are performing at an adequate level in the English Language Arts is 40-50%. In math, that number is 34% (measure using grade-dependent standards set by the state). Currently, 54.5% of students graduating from high schools in Santa Cruz County meet the requirements to attend a UC/CSU, which is higher than the state average of 45.5%.

We have 10 School Districts in Santa Cruz County. The table below shows enrollment per district per year:

To determine the district of a given property:
  • Choose the city, type in your house number, and the first few letters of the street name
  • Press tab and choose the correct street
  • You will see a list of information about your property, including the assigned school district.
For some schools, you can visit the district's website to find your assigned schools. In other cases, you will need to call the district directly. Click Here for a list of important contacts in each school district in Santa Cruz County.

Once you've identified your school, you will want to know it's quality and state ranking. In the past, each school was measured using the The Academic Performance Index (API). On March 15, 2017, the State Board of Education (SBE) and the California Department of Education (CDE) launched a new accountability system to replace the Academic Performance Index (API) to better measure our State's educational goals. The metrics used to rate schools  can now be found on the   California Dashboard and the   Five-by-Five Placement Reports. Use these tools to  analyze the areas in which students within your assigned school are performing well and where they are in need of additional support. 

In addition, you can read your district's annual  Local Control Accountability Plan (LCAP) to gain an understanding of the district's overall vision for students, annual goals and specific actions the district will take to achieve the vision and goals. You can find your district's plan here .

Independent websites such as use algorithms and public data to come up with a number-rating for schools on a scale of 1-10. While this rating-system appears to be less complex, these websites do not provide a comprehensive look at a given school's strengths and weaknesses.

Charter Schools

Charter schools are nonsectarian public schools of choice and are accountable to their sponsors. They are not restricted by many of the regulations that apply to traditional public schools and are granted the right to operate for 3-5 years, after which they may renew. In Santa Cruz, close to 5,500 students were enrolled in charter schools in the 2015-16 school year.

The number of Charter schools per a district are as follows:

There are some excellent charter schools in Santa Cruz (one of the best schools in the County is Pacific Collegiate Charter School). Admission to these schools is subject to chance, with most students being admitted through a lottery. However, certain factors can make admission more likely for a student. For example, at Pacific Collegiate Charter school, if a student has a sibling or working parent at the school, is the first to attend college in his/her family, or has a parent that is or was once on the Board of Directors, he or she has a higher likelihood of admission.

Most charter schools have a unique curriculum. Some specialize in the arts and others provide home-school support via online learning and in-person enrichment programs. If you think your child would benefit from an education at a Charter School, call the school directly for more information.

Private Schools

There are 10 private high schools and 29 private elementary schools in Santa Cruz County. The average acceptance rate is 82% and 47% of the schools are religiously affiliated. On average, the student/teacher ratio is 10:1. The average tuition for private elementary and high schools is $8,794-$24,040.

You can learn more about these private schools and read parent and teacher reviews here . You can find a list of private school in Santa Cruz County here .

The Future of Real Estate is Green

The future of real estate in California is green. In part, this will be due to the state-wide initiative to make all new residential, including single-family and low-rise multi-family (3 stories or less) Zero Net Energy (ZNE) by 2020. Here, Net Zero Energy has multiple definitions , depending on the context, however the overarching idea is homes produce the same amount of energy that they consume.

What changes can we expect to see as we move closer to this reality?  

Innovative districts will become more common as local municipalities strive to bring cities and towns into the modern age. According to the Brookings Institute "Innovation districts have the unique potential to spur productive, inclusive and sustainable economic development. At a time of sluggish growth, they provide a strong foundation for the creation and expansion of firms and jobs by helping companies, entrepreneurs, universities, researchers and investors-across sectors and disciplines-co-invent and co-produce new discoveries for the market. At a time of rising social inequality, they offer the prospect of expanding employment and educational opportunities for disadvantaged populations given that many districts are close to low- and moderate-income neighborhoods. And, at a time of inefficient land use, extensive sprawl and continued environmental degradation, they present the potential for denser residential and employment patterns, the leveraging of mass transit, and the repopulation of urban cores."

We will see creative uses of space, such as tiny houses and micro homes, to address the statewide housing crisis. As one would expect, the smaller the home, the smaller the carbon footprint. Unfortunately, the Santa Cruz County Planning d epartment 
has not come to an agreement on  the  regulation of tiny-homes according to this Sentinel Article. While some tiny homes fall into pre-existing granny unit / sing le occupancy unit rules, those on wheels fall into the "temporary housing" category and are subject to state recreational vehicle rather than housing law s. This is a problem for those looking to create tiny-home communities and enjoy the benefits of establishing permanent residence within these homes. Should the regulation change, we would not be surprised to see such communities spring up within the County.

Building codes were updated in June of 2010 to increase energy efficiency standards. According to the California Energy Commission, this change cuts regulated energy in new homes by up to 28 percent and saves consumers $31/month. We may see additional changes to building codes in the future as California moves closer to 2020. Other industry-wide changes will ensue, such as crea ting a systematic way to value ZNE homes. This will to enable underwriters, appraisers and financial institutions to support financing and a strong and affordable ZNE housing market.

What changes do you expect to see? Write us and let us know!

Christine's Corner

In Santa Cruz County, the coastal zone extends about five miles inland from the North Coast. From Natural Bridges to 41st Avenue in Capitola, it extends about 0.6 miles inland. From Capitola to the south County boundary, it extends to Highway One.

Within the Coastal Zone, any person who wishes to do any sort of land development must obtain a Level 5 development permit. Development, amongst other things, includes construction, grading, subdividing land, changing the density of land use, and harvesting of major vegetation (except for agriculture). There are also seven areas along the coast that are subjects to special design standards to preserve their unique qualities. If you are thinking of buying and/or developing property in the Santa Cruz Coastal Zone, visit this website and ensure you understand the rules, regulations, and permitting requirements in this unique area. In addition, we highly suggest you go to the Santa Cruz Planning Department and discuss your project with a planner. 

According to a seasoned land planning consultant with over 10 years working for the County of Santa Cruz Planning Department, working with the Coastal Commission can significantly increase the time and cost to complete a project. One of her more poignant statements was: if you want to buy a beachfront property, either expect to live in that house, or have your children inherit the property after you improve it, because it could take that long to finish the project when the Coastal Commission is involved. Why?

The Coastal Commission is o rchestrating a planned retreat from the ocean over the next 50 to 100 years. The National Research Council (NRC) projects that by Year 2100, sea level in California may rise by 4 to 56 in (10 to 143 cm) for areas north of Cape Mendocino and 17 to 66 in (42 to 167 cm) for areas south of Cape Mendocino (NRC 2012). If you are in what the Coastal Commission considers a future-hazardous zone, you are going to have a very difficult time finishing your project. This is not to say it's impossible to develop property in the Coastal Zone, but thorough research is a must before buying an investment property in this area.

Do you need help with this process? Give me a call.

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