Driving into Santa Cruz on Highway 1, it’s hard to miss the bright yellow banner that exclaims: “Congratulations … 950 people housed!”

It’s even harder to miss the long row of tents winding past the banner and down the side of the road, a stark reminder of the many, many people left to house.

Santa Cruz is struggling with a homelessness crisis which, in proportion to its size, is more extreme than that of major Bay Area cities including Oakland, San Jose and San Francisco, where the problem has drawn far more attention. Now, Santa Cruz officials plan to ban daytime camping throughout the city, an aggressive move that has many in the free-spirited beach community up in arms.

Johnna Isaacson advocates for the homeless during a rally outside Santa Cruz city hall where the City Council considers the tent-restrictive Temporary Outdoor Living Ordinance, Tuesday, March 9, 2021, in Santa Cruz, Calif. (Karl Mondon/Bay Area News Group) 

“I don’t know where to start in saying how cruel this ordinance is,” said local activist Johnna Isaacson, speaking during a protest that drew more than 100 people outraged over the proposal that would require people to pack up their tents each morning.

But the city has to act — it’s inundated with complaints, said Lee Butler, director of planning and community development.

“It is a real challenge,” he said, noting the city plans to set up safe sleeping sites and storage facilities. “We have experienced some significant costs in terms of environmental cleanup and trash removal. We’ve really tried to balance the needs of unhoused individuals with an approach that can address those behavioral and quality of life issues.”

The new ordinance comes as Santa Cruz is fighting a lawsuit over its largest homeless camp, and the county is setting ambitious new goals to curb homelessness.

Shorty, a homeless woman living in a tent encampment alongside Highway 1 in Santa Cruz, Calif., Tuesday, March 9, 2021, is preparing for a Caltrans street widening project that will force the clearance of the camp later this month. (Karl Mondon/Bay Area News Group) 

Santa Cruz reported nearly 1,200 unhoused residents in its last count, meaning almost 2% of the city’s population was homeless in 2019. Oakland, San Jose and San Francisco reported less than 1% of their populations were homeless.

“We are a smaller county in terms of population, and the city is relatively small as well,” said Tom Stagg, director of programs for Housing Matters, Santa Cruz County’s main homeless services nonprofit. “And we see a big city level of the problem.”

But homelessness and housing programs in the Santa Cruz area get proportionally less federal funding. The U.S. Department of Housing and Urban Development awarded Santa Cruz County and the cities of Santa Cruz and Watsonville $3.7 million in grants in 2019 — or $1,690 per unhoused resident reported at the time. That compares to $2,962 per unhoused person in Santa Clara County, $4,514 in Alameda County and $5,514 in San Francisco.

Santa Cruz County, which supplies much of the city’s homelessness funding and resources, has expanded its shelter capacity during the pandemic, and this month set a goal of reducing the number of people living on the street by 50% in the next three years. Housing Matters plans to break ground on 120 new apartments for homeless residents next year. But local leaders agree it’s not enough.

“We have no money, we have basically no long-term path to get out of this and make major inroads, we don’t have adequate shelter space,” said Robert Singleton, executive director of the Santa Cruz County Business Council. “So what can you do?”

After Oakland passed an encampment management policy in October that prioritizes the removal of camps near homes, businesses, schools and parks, Santa Cruz this month moved forward with an even stricter “Temporary Outdoor Living Ordinance.” The measure, which likely won’t go into effect until May or June, would ban camping downtown, on beaches, in parks and near homes and businesses. Unhoused residents could camp only in certain industrial areas.

The plan would replace an old rule banning all camping, which was suspended in 2019 following a federal court ruling that cities cannot punish people for sleeping outside if they have no other option.

Some activists expect the city to face more lawsuits if it enforces the new encampment policy. A group of homeless residents and activists sued the city in December when it tried to close a large encampment at San Lorenzo Park, citing fires, damage to the park and crime. In January, a federal judge ruled the city cannot close the camp while COVID-19 remains a threat. Both sides are set to return to court March 30.

Greg Bengtson talks about the homeless encampment established at San Lorenzo Park, Friday, March 5, 2021, in Santa Cruz, Calif. The city is considering a Temporary Outdoor Living Ordinance that would rid the city of homeless tents, at least during the day time. (Karl Mondon/Bay Area News Group) 

Greg Bengtson, 55, is one of about 100 people who live in tents and make-shift structures scattered throughout the park, under the shade of redwood trees and beside a picturesque duck pond. He recently got a spot at a county-managed encampment behind the National Guard Armory but returns often to sleep at San Lorenzo Park with his friends.

Bengtson remembers how good it felt to win the legal right to stay.

“Everybody’s spirit just lifted, because we actually had a place where we didn’t have to be worried that it was going to be bulldozed over,” he said. “Suddenly, we were allowed to be living human beings.”

The city’s other major encampment stretches along the shoulder of Highway 1, directly in front of the main campus of Housing Matters. The yellow banner on the side of the building proclaims 950 of the county’s most vulnerable people have been housed since 2012.

The encampment likely won’t be there much longer. Caltrans has deemed it a safety hazard because of its proximity to high-speed traffic, and work is expected to start soon to widen that section of Highway 1, Butler said. The city intends to disband the camp within the next month, a move that is sure to spark pushback.

Where will its dozens of residents go? Butler hopes to find them another place to camp.

“Obviously if there were housing options, that would be ideal,” he said. “But that is not likely.”

A tent encampment lines Highway 1 in Santa Cruz, Calif., Tuesday, March 9, 2021. Caltrans plans to clear the camp later this month for a construction project even as the city Santa Cruz proposes the Temporary Outdoor Living Ordinance, aiming to rid the city’s streets of homeless tents, at least during the day time. (Karl Mondon/Bay Area News Group) 
Keith McHenry (second from right), co-founder of Food Not Bombs, helps homeless residents living in San Lorenzo Park, Friday, March 5, 2021, in Santa Cruz, Calif. (Karl Mondon/Bay Area News Group) 
Keith McHenry, co-founder of Food Not Bombs, sets up a lunch giveaway for the homeless, Friday, March 5, 2021, in downtown Santa Cruz, Calif. (Karl Mondon/Bay Area News Group) 
Cooper De Angelo is photographed outside her tent at a homeless encampment at San Lorenzo Park, Friday, March 5, 2021, in Santa Cruz, Calif. (Karl Mondon/Bay Area News Group) 
Homeless tents rest on the banks of the San Lorenzo River, Friday, March 5, 2021, in Santa Cruz, Calif. (Karl Mondon/Bay Area News Group) 
Greg Bengtson’s jacket art speaks of the “San Lorenzo Riverlution,” referencing the homeless camp filling San Lorenzo Park, Friday, March 5, 2021, in Santa Cruz, Calif. (Karl Mondon/Bay Area News Group) 
Homeless advocates gather, Tuesday, March 9, 2021, outside city hall in Santa Cruz, Calif., for a rally protesting the proposed Temporary Outdoor Living Ordinance that would rid the city’s streets of homeless tents, at least during the day time. (Karl Mondon/Bay Area News Group) 
Abbi Samuels, a homeless advocate with Santa Cruz Copwatch, criticizes the city’s proposed Temporary Outdoor Living Ordinance during a outside city hall in Santa Cruz, Calif., Tuesday, March 9, 2021. (Karl Mondon/Bay Area News Group) 
Homeless people work on the Streets Team cleaning litter from an encampment at San Lorenzo Park, Friday, March 5, 2021, in Santa Cruz, Calif. (Karl Mondon/Bay Area News Group)