SANTA CRUZ — Aiming for a spirit of compromise, the Santa Cruz City Council shrunk a proposed 40-unit housing development by 20 percent after more than two hours of public comment Tuesday night.

Asked by the council for input on the reduction, Quail Terrace co-developer Craig Rowell said he would accept the compromise “because we really don’t feel that we have alternatives,” but urged the council to reconsider. Jessica Parr, a representative from vocal project opponent Ocean Street Extension Neighborhood Association, said she hoped the development would continue to include lower-cost units, as initially offered.

Vice Mayor Martine Watkins described Tuesday’s vote as a crossroads for the city, as it continues to be ranked internationally among metropolitan areas with skyrocketing housing costs.

“I appreciate this beautiful city, this beautiful town in growing up here, and I am concerned about what it could be if we don’t have our teachers or our nurses, or we don’t have our workforce,” Watkins said.

While the project developers and city staff were backing exceptions to city zoning for development of a 40-unit apartment project, opponents were seeking a scaled-back development and additional neighborhood concessions. The council, at Watkins’ urging, agreed to a smaller development of 32 units — though no clear reasoning was spelled out for the new number. As a result, the project’s so-called affordable inclusionary units also will shrink from as many as seven — if they had been sold as condominiums, down to five, regardless of sale or rental. The original project called for 10 two-story four-unit buildings.

The council voted 5-2 in favor of approving the project, with councilmembers Chris Krohn and Sandy Brown opposed, due to reasons ranging from neighborhood compatibility and development size to desire for higher affordability covenants. Brown said the project didn’t have enough truly affordable units to warrant its impacts on the neighborhood’s peace and quiet. Krohn defended the “Not In My Backyard” concept, saying that Ocean Street Extension was not the right place this level of development.

Councilwoman Richelle Noroyan said she agreed that Ocean Street Extension is “not the most ideal location” for the project, but that “we’re not in an ideal situation, either.” Councilwoman Cynthia Chase said that if the council failed to approve the project, it would have “let the community down.”

According city Planning Director Lee Butler and a developer’s representative, the affordable rental units will be set at about $1,544 a month for studios, $1,776 for one-bedrooms and $2,008 for two-bedroom units. The market-rate rentals would go for about $2,800 a month, officials said.

Butler said Santa Cruz’s housing stock is more than 54 percent single-family detached residences, “not the most affordable housing types.”

“We are in the midst of a housing crisis and the crisis is one of both affordability and availability,” Butler said. “Our ultimate recommendation as a function of this project addressing both affordability and supply.”

The 1930 Ocean St. Extension site, just several hundred feet from the city’s border with Santa Cruz County, is a 2.7-acre field that currently sits undeveloped. Immediately across the street from the property is the Santa Cruz Memorial cemetery. The site also shares a property line with one of the cemetery’s chapels.

NEIGHBORS WEIGH IN

The road to the rental/condominium development has been a long one, at least 11 years in the making, and Tuesday night’s discussion was no exception. Nearly 50 community members spoke at the meeting, with slightly more opposed than in support of the project.

Project proponents said the property is one of the city’s last large undeveloped lots, is close to the downtown commercial core, provides the city comparatively less-expensive housing options and is responsive to city long-term planning parameters.

Ocean Street Extension Neighborhood Association member Lauren Cox, on the other hand, said her group had gathered more than 700 petition signatures in opposition to the project.

“Santa Cruz has a housing crisis, we all know that. But a politics of fear produces hasty, poor or unwise decisions,” Cox said. “The developers are well-liked and they have done good projects, but not every project is a good one, and 1930 Ocean St. Extension is not a good one.”

Tanner Heights resident Sohrab Pimazar said he was concerned about traffic convergence of Highway 1 and Highway 9, plus Ocean Street and Graham Hill Road, near the development site. “Much more serious than a housing crisis, we have a traffic crisis that is going to get worse, regardless of whether this project gets built or not,” Pimazar said.

Other opponents raised concerns about the property’s flooding susceptibility, impact on nearby funeral services, road safety, ambiance impacts and trend-setting for development of the rest of the city.

Speaker Tim Gordon asked the council to consider if any neighborhood in Santa Cruz would say yes to such a development.

“Undoubtedly people will complain about traffic and parking issues, heard tonight,” said Santa Cruz developer John Swift. “To argue that driving on our streets at speeds possible only for the last hundred years in the entire history of mankind between 3:30 and 5:30 p.m. is a greater priority than providing housing is a sad statement of our priorities.”

Santa Cruz City Schools board member Patty Threet, who did not identify herself during her comments, said she supported the project when she thought of her college-aged son, who may be unable to afford returning to Santa Cruz.

“I think of this as the young people have come up, have spoken in favor,” Three said. “I want this town to go forward, for them. When I complain, constantly, about traffic — as I do — I think it was my son that set me straight. He goes, ‘Hey mom, you’re not in traffic. You are traffic.’ It’s never going back.”