Places like Santa Cruz have never had any real intentional urban planning, so building a lot of additional housing is going to overload the infrastructure. They would need to upgrade all the utilities, build more schools, and completely revamp the transportation system. Good luck convincing any long-term Santa Cruz residents that they should sacrifice their quality of life and live in the middle of a construction zone for years for the sake of reducing someone else's rent.
For students at UCSC, housing is somewhat cheaper and more available about 20 miles away in the Watsonville area. There are public bus routes. Of course, Watsonville isn't as fashionable. You can't walk to the beach and go surfing before class.
