Capitola Moves Forward on 52 Affordable Homes
(Tyler Maldonado — Santa Cruz Local file)
Affordable housing is workforce infrastructure.
That is why the latest news out of Capitola matters. According to Santa Cruz Local, a long-planned project at 1098 38th Ave. is now fully funded and expected to break ground in November 2026.
Led by nonprofit developer MidPen Housing, the project will bring 52 below-market-rate homes to the former convalescent home site near the Santa Cruz Branch Rail Line. The development is expected to include studios, one-bedroom, two-bedroom, and three-bedroom homes for renters earning 60% of area median income or less.
The project recently secured roughly $34 million in tax credits from the California Tax Credit Allocation Committee, clearing one of the biggest hurdles that keeps affordable housing from becoming actual housing: funding.
For Santa Cruz County, this is about more than buildings.
Every local employer knows the challenge: you can recruit great people, build a strong team, and grow a local company — but if workers cannot afford to live here, the whole system starts to break. Commutes get longer. Hiring gets harder. Young talent leaves. Companies that want to grow here run into a housing math problem.
Fifty-two homes will not solve the crisis alone. But they are 52 chances for workers, families, and future local leaders to stay connected to the community they help power.
Housing, transportation, and workforce development are all part of the same conversation. If we want a stronger local economy, we have to make it easier for people to live, move, work, and grow here.
Capitola’s 38th Avenue project may not be flashy. But it is exactly the kind of quiet infrastructure Santa Cruz County needs.