Palo Alto's elected officials and land-use watchdogs rarely walk in stride on zoning issues, but as the City Council approved a series of revisions to the city's zoning code Monday night, the two sides found themselves united against a common foe -- state bureaucrats whose housing mandates are creating massive planning headaches for the city.
With much discussion and little enthusiasm, a reluctant council revised its zoning code to create a new menu of incentives for developers of affordable housing and to codify some of the policies in the recently adopted Housing Element. The policies include increasing the number of housing units that could be built at certain commercial zones and planning for a homeless shelter on an industrial parcel east of Highway 101. But in an overture to resident critics, the council also agreed to scrap the most controversial proposal on the table: one that would have given council members the leeway to approve design concessions beyond those in the code to developers whose projects consist entirely of affordable housing.
In approving the changes, council members stressed again and again that their action is an attempt to make the best out of what they all see as a terrible situation. Under the state's Density Bonus Law, the city is already required to adopt a local density-bonus ordinance and to offer "design concessions" to builders of affordable-housing developments -- concessions that could include added density, greater heights or smaller setback requirements. Traditionally, the city's negotiations with developers have proceeded on an ad hoc basis, with the developer requesting and the city generally assenting. The city's newly approved law seeks to add some predictability to the process by creating a menu of concessions for developers to choose from, including the relaxing of daylight-plane requirements, height exemptions and less stringent side-yard setback requirements.
Planning Director Hillary Gitelman said having a local ordinance in place will "hopefully steer developers toward concessions and design exceptions that we think are less objectionable and less problematic than others." Without such an ordinance, she added, "the field is wide open" for developers to request any concessions they can think of and the city has a very limited ability to say no.
"There's an opportunity that we leave on the table if we don't adopt a local ordinance," Gitelman said.
The council ultimately agreed and voted 8-1 to enact the local density-bonus law. The only vote of dissent came from Councilman Larry Klein, who strongly objected to having the city cater to a state process it so vehemently opposes. The city, he said, is already forced to comply with state law. By approving a local density-bonus ordinance, the city is "implicitly going along" with the state agenda, he said. He characterized the state's requirement for a local density-bonus as a bureaucratic "loyalty oath."
"I'm really scratching my head and trying to think of another example where the state says, 'You shall include in your ordinance laws that we, the state, have already passed,'" Klein said.
Klein called the housing-allocation process (which is driven by the regional Association of Bay Area Governments with the goal of encouraging housing construction near job centers and transit hubs, thereby reducing traffic and decreasing greenhouse-gas emissions) as a "bureaucratic nightmare" and treats local council's like rubber stamps.
"I just can't believe that we have a legal system in California where a Legislature can say to a City Council that it has to vote for a particular item," Klein said.
His colleagues generally agreed. Mayor Nancy Shepherd said the state-driven process is "clearly in violation of everyone's democratic values," and Vice Mayor Liz Kniss said it's "tempting to just say no" before she voted yes. Both were convinced by Gitelman's arguments that time is of the essence. Failing to comply with state mandates, Gitelman said, could leave the city vulnerable to lawsuits and subject to new state restrictions on housing policies.
Gitelman said staff is facing stiff time pressures to implement the policies of the existing Housing Element, a state-mandated document that lists the city's housing policies and its strategies for addressing the state's housing mandate. The Housing Element that the council adopted last June after years of delay has a planning horizon of 2007-14, which makes for a very short shelf life. This means the city has to approve a new Housing Element within a year or face possible lawsuits and "significant penalties." These include a requirement that the city submit a Housing Element every four years rather than every eight.
"All of this would cost a lot of time and energy, in addition to taxpayer dollars," Gitelman said.
Codifying the existing Housing Element policies now will give staff more time to work on the next version of the document, she said. The revisions that the council approved include an increase in the number of affordable-housing units a developer can build in certain commercial zones from 15 to 20 per acre; and the designation of an industrial site east of U.S. Highway 101 as a possible site for an emergency shelter.
The former policy proved particularly controversial, with several residents urging the council not to enact any new laws that encourage densification. Joe Hirsch, a Barron Park resident who was one of the most vocal opponents last year of a proposed housing development on Maybell Avenue, cited the "extremely strong sentiment in this community against high-density development" and its impacts and asked the council not to enact any new ordinances that would support such development.
The proposal to increase density in "commercial neighborhood" zones from 15 to 20 units per acre would apply to 32 local parcels (mostly along El Camino Real) and is expected to yield an additional 64 units citywide, according to a report from city planners. Not everyone was thrilled about this revision. Cheryl Lilienstein, president of the citizens group Palo Altans for Sensible Zoning, said she was "puzzled" by the city's decision to encourage more density on El Camino Real, which she said is not a transit hub and offers little neighborhood-serving retail.
But Lilienstein, who led last year's successful "No on Measure D" campaign, also said that while she understands that the city is responding to a state mandate in raising the number of units allowed on El Camino, she would like a "remedy" to help neighborhoods deal with the impacts of densification. In response to concerns about increased density, the council voted to direct staff to explore reducing the "floor-area-ratio" FAR) requirements in commercial zones, an action proposed by Councilman Pat Burt.
"While it's true that we have to go from 15 to 20 (units), we're not bound to the FAR that we have in our current zoning," Burt said.
He also observed that while the changes the council was considering are in response to state mandates, changes, most are "actually favorable to our community." Burt and his colleagues also agreed that the most contested part of the local density-bonus ordinance -- one that gives the council discretion to go beyond the menu of concessions for affordable-housing projects -- is far too broad and should be scrapped.
Councilwoman Karen Holman called the provision "way too open-ended," thanked the community for flagging it and suggested deleting it. The city's new density-bonus law, she said, pushes against the state mandate.
"While we'd all like to have local control, we just don't have that right now," Holman said.
Councilman Marc Berman agreed.
"This is a bad state law but we're doing our best to make it better," Berman said, summing up the view of both the council and its fiercest critics.