The second problem is Santa Cruz by the sea is a very desirable place to live and within commuting distance from Silicon Valley, so wealthy tech workers can buy up or build very expensive first or second homes here. However, Santa Cruz since the 70's has been a very environmentally conscious no-growth city that recognized that San Jose style growth would ruin the city. This means demand far outstrips supply.
With the lack of supply, natives and others who work in services and support Santa Cruz's biggest industry (tourism) can't afford to live here. It's a dark joke among family and friends that once you leave Santa Cruz you can never afford to move back. I have family that have moved away and the next generation like my kids and nieces and nephews will never be able to afford to buy a house there like my father did.
Homeless is a problem but Santa Cruz tries to handle it a progressive way, for example, by setting up the homeless camp next to the courthouse and providing it with services
Lastly, long time Santa Cruz residents are generally are not sympathetic to complaints from students that come here from the outside, because they consider UCSC to be a big part of the problem. People considering UCSC would be advised to secure housing beforehand or choose another university. I hear they opened a new nice one in Merced, which has more affordable housing.