After nearly five years and millions of dollars in preparation, the County of Santa Barbara’s proposed plan for the future of the Eastern Goleta Valley just doesn’t cut it for the state housing department. Not only are there too few properties being rezoned for high density housing, but all of those rezonings must happen by July 2012, or the county might find itself stripped of the power to approve or deny any residential building permit anywhere.

That was the heavy-handed although somewhat cryptic message in a letter delivered to county planners on Monday evening, and it came just one week before the February 21 hearing where the Board of Supervisors will decide — among other community issues — where the next round of development should go in Noleta, the mix of residential, commercial, and agricultural lands between the cities of Santa Barbara and Goleta. As it stands, the Planning Commission-approved plan represents a compromise between those fighting to preserve the area’s semi-rural feeling and those — particularly developers and affordable housing advocates — who’d prefer more and denser housing projects.

The state Department of Housing & Community Development’s letter is “a very serious situation,” said top county planner Jeff Hunt, who’s meeting with legal experts this week to consider options, which range from staying the course to nearly doubling the density of the MTD and/or Tatum properties to considering an additional site for development, such as the San Marcos Growers property. If the state disapproves of the final decision, it would likely decertify the county’s housing element, and any subsequent lawsuit over a denied project could put development approvals in the hands of a judge rather than the community and elected officials.

The option of opening the San Marcos Growers property to development is what’s scared slow-growthers since the community plan update began years ago, as developer Michael Towbes has constantly lobbied Sacramento to turn the site from ag to residential. His efforts have been supported by affordable housing advocates such as California Rural Legal Assistance, which has been fighting for higher densities on behalf of the social justice organization PUEBLO. That lobbying directly resulted in this week’s letter — or as Hunt put it, “The state has taken a keener interest based on pressure from certain groups” — but both Craig Zimmerman of the Towbes Group and CRLA attorney Kirk Ah Tye deny any sort of unholy alliance.

“It’s entirely untrue that they’re a gloved hand and it’s insulting to everyone involved to say that theyre’s some kind of inappropriate relationship,” said Zimmerman. “I would say that we share common objectives and that’s to house local workforce and low income people close to their jobs, their schools, and their community.” Although the CRLA’s letter calls out the San Marcos property as a possible solution, Ah Tye explained, “It doesn’t necessarily mean we’re advocating for that specific parcel. It means let’s look at all the options and try to do this objectively.”

County planners, however, feel that’s exactly what’s been done ever since this process started nearly five years ago. “The frustration for staff is that it feels like HCD has moved the goalposts by interpreting language in the housing element differently than it was originally intended,” said Hunt.

Whatever Hunt and the county’s legal team decides, the next steps will come down to the Board of Supervisors, including Janet Wolf, who represents Noleta and seems ready to stand up for the county. “This process has not been and will not be driven by any one letter — whether from a state agency, an individual developer, or community group,” said Wolf. “At this time I can honestly state that I have read the draft plan in its entirety, and while I may have some minor tweaks or edits, I find it to be a well-thought out, reasonable proposal.”

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