Laura's cottage was an absolute dream come true for us. It's essentially a tiny, beautifully furnished little house - a sitting area, kitchen, and bathroom on the first level, and then a wooden stairway up to the bedroom in the loft. Sunlight comes in through the skylights; the garden outside is lovely.
The location is also fantastic - a block to the beach, and a block to a little business district with breweries, restaurants, and coffee shops.
For the price, I can't really imagine a better place to stay in Santa Cruz.