Palo Alto Weekly
Spectrum - August 16, 2013
A wasteful referendum
Maybell neighbors and City Council talk past each other, squandering opportunity for a better outcome
Perhaps it was too much to expect the Palo Alto City Council to demonstrate they understood why many neighbors of a proposed senior housing project on Maybell Avenue across from Briones Park are upset, suspicious and feeling disrespected.
And similarly, the upset neighbors may be too angry to accept that a more dense and objectionable outcome is possible if they are successful in a city-wide vote this November.
Had both groups, along with the Palo Alto Housing Corporation, been willing to take the time to focus on repairing past mistakes, building trust, and compromising a bit more, we could have avoided what will now be a confusing, divisive and expensive election debate this fall.
Thursday night's unanimous decision by the City Council to let voters decide on the housing project is but the sad, final result of a process that should never have gotten to this point. It should not have been so difficult to see the points of view of both sides of this issue, but neither the Council, the Housing Corporation, nor the objecting neighbors seemed truly interested in doing that.
While the City Council responded back in June with some helpful reductions in the size of the development, they did not do what was needed to repair relations with the neighbors. They had an opportunity last week to show they at least understood the neighbors' continuing objections.
Instead, exasperation was the tone of the evening. Several Council members went out of their way to express their frustration with opponents and the passion with which they waged the referendum petition drive, and in doing so came across as defensive and insensitive to how emotional the debate had become.
And for their part, instead of focusing on the substance of the issue, neighbors used the meeting to hurl new charges against both the city staff and Housing Corporation for not accurately communicating with state authorities regarding the status of the zoning change. That was a foolhardy strategy.
It is true that the city and Housing Corporation moved ahead to secure grant funding from the Tax Credit Allocation Committee prior to a July 3 deadline by asserting the PC zoning had been approved. It was premature, given that the council hadn't had its official second reading of the zoning ordinance, and a referendum against it was likely to qualify. (The referendum has now suspended that zoning.)
But to describe these and other actions as "fraud," as if they could have had any effect on the zoning or the rights of opponents to qualify a referendum, is unnecessarily inflammatory and unproductive.
We were disappointed that not a single Council member addressed the option of rescinding the June zoning decision that led to the referendum petition, which would have provided an opportunity for negotiation and compromise.
Instead, perhaps reflecting their frustration with the demeanor of the opponents, there was no real discussion at all. Each Council member made statements in support of affordable senior housing, the Housing Corporation and expressing their hope that both sides of the debate temper their emotions and engage in a respectful campaign. And they each explained that they favored putting the referendum on a special election ballot this November, at a cost of over $600,000, instead of next year because it would be unfair to the Housing Corporation and merely prolong debate.
One problem with this outcome is that it pits a known development proposal against an unknown alternative development, potentially of greater density and impact. If the referendum is successful and the special planned community zoning adopted by the Council is defeated, then it is possible that the Housing Corporation would sell off the land to a developer who would build large, single family homes that would bring far more traffic than the currently proposed development. It is highly unlikely that voters will want to risk this, nor is it really in the neighborhood's best interest.
A far better move, in our opinion, would have been to allow for a cooling-off period by not being pressured to act by Friday's deadline for placing the referendum on a November ballot. Just as it was rushed to take action on the zoning change in June in order for the Housing Corporation to apply for the now-moot grant money, the Council rushed again to meet the deadline for the November election. If emotions were allowed to subside, we think with the help of a mediator both the neighbors and the Housing Corporation could have worked out a rational compromise. With neither side benefiting from delay and there being risks to both sides of an up or down vote on a referendum, there would have been a strong incentive for a resolution.
Opponents have had some good reasons to feel betrayed by the city and a have a good case for further modifications to the development. But ironically, it is impossible to see how any good can come to the neighborhood or the broader community by being successful with a referendum.
Posted by it was a done deal,
a resident of Green Acres
on Aug 16, 2013 at 5:13 pm
This editorial misses the point.
Neighbors tried for months to get PAHC to bring the project more in scale with the residential neighborhood. PAHC planners would not because they have planned the project to their tax credit application point system (with millions of dollars at stake), as well as a financing scheme that depends on that $1.5 million in lieu fee which is the difference between the amount the City disclosed to the public that they were loaning PAHC, $5.8 million, and the amount the City staff told the government they were loaning PAHC, $7.3 million.
Any developer who builds over 5 units in Palo Alto has to put at least 15% of the units into the BMR program administered by PAHC. For 12-15 units, that means 2 homes. The ordinance in this case requires the developer to instead pay $1.5 million to the City in in lieu fees to avoid having to put one of those homes into the BMR program. (Let's hope it's just for one, and not for both of them, that would be an even more blatant giveaway to the market-rate developer. Remember that more than half of the parcel will be developed as market-rate houses, upzoned for the benefit of the for-profit developer.)
Thus, PAHC never could reduce the number of market rate units to anything comparable to the surrounding residential neighborhood, because they would have lost the extra BMR housing units which they are leveraging to get more money in loans from the City. The ordinance is written to make that building/payment "binding" -- in other words, the neighborhood is essentially being asked to bear this long-term cost burden, and the City has actually inserted a requirement for it in the ordinance.
When Larry Klein said he'd never seen so much "stonewalling" from an applicant (PAHC), he was failing to remember that the ordinance and financing situation that the CITY participated in from the beginning, by virtue of the loan agreement, preordained PAHC's inability to make meaningful compromise.
The other essential point this editorial misses is that the outcome being waived around by the City is a scare tactic that the City has absolute power to prevent. Unlike in other developments where a private owner has control, and the City can do little -- because the City loaned $7.3 million to PAHC, they protected themselves in the loan agreement -- City staff reports point out that the City has first right of refusal and can buy the property in a non-competitive situation. The City could simply turn around and place simple deed restrictions on the property and resell it, probably at a profit (if proponents of the rezoning are to be believed about land values). Problem solved.
So for little or no cost, THE CITY HAS COMPLETE CONTROL TO AVOID THE WORST SCENARIOS IT KEEPS ADVERTISING TO SCARE PEOPLE. The City Council and staff have not been neutral in all of this (understatement), and liability lawyers will see that in the future should such scenarios be allowed to just happen despite the Council's ability to prevent them, and a child is hurt or killed. The fact that the City has studiously avoided responding to neighbors' calls for them to ensure, as is in their power, that burdensome development of that parcel never happens, is another way the neighbors feel their voices are being utterly unheard by the City.
There is another alternative that this editorial misses. The rezoning ordinance is "binding" for the market-rate developer, but weak in regards to ensuring the property is used for the purposes it's being sold on. The ordinance itself says on page 2, that it "PROVIDES THE ABILITY TO DEVELOP SPECIFIC LAND USES FOR THE PROPERTY, BUT DOES NOT ASSURE AVAILABILITY TO SENIORS AND/OR AT AFFORDABLE RATES." The regulatory agreement provides no recourse for neighbors should the property be converted to market-rate rentals.
It's far more of a nightmare for neighbors to contemplate 60-unit market rate rental apartments with 12 dense tall skinny houses (5 of them 3-stories) at that location, than even 35 within-existing-zoning houses that the City claims could go there (which a former planning commissioner for Palo Alto disputes, but it's irrelevant since the City has total power to prevent it if it thinks it's such an unsafe scenario and PAHC wants to sell). It's perfectly cynical for the editorial to bring up Alma Plaza as look-what-you-will-get-if-you-stop-what-the-City-wants, as Alma Plaza houses could not be built under existing zoning, as the existing zoning sets limits on height, setback, parking, daylight plane, etc. But Alma-plaza-like houses WILL be built under the rezone. Alma Plaza was also a PC rezone.
So in the case that the high-density development is built -- so out-of-scale with the surrounding R-1 neighborhood that the PC zoning had to exceed RM-40 restrictions (per the ordinance) -- if the 60-unit-affordable-rental apartments were converted to market-rate rentals, the neighborhood and City would have little ability to stop it. PAHC could do so for any number of legitimate reasons -- they've had to convert BMR properties in the past to market-rate units when things didn't quite go for them as planned. After all, even the ordinance touts the need as because many Palo Alto seniors live below the poverty limit, but the stated income range of 30-60% of area median income doesn't even come close to including one single senior with income below the poverty limit.
Lastly, neighbors charges at the last meeting were neither irrelevant nor unnecessary. Having zoning in place is a fundamental requirement of the Tax Credit application, which is a competitive situation in which PAHC and Palo Alto, if they misrepresented their application requirements, will be taking money away from other deserving projects, and likely communities with fewer resources, who were willing to play by the rules.
If PAHC can't meet their deadline for this round because they falsified their basic requirements, it really matters less if the vote is delayed because they can't start building anyway, so they shouldn't be asking the City to spend yet more hundreds of thousands for their interests (and there's a legitimate CEQA suit and other challenges on the table besides). It spoke to both waking up the City to their extreme bias in this matter, as well as meaninglessness of pushing to have a near-term election.
If Council wanted meaningful discussion, they should have set aside the rezoning. Neighbors really, truly do support affordable housing - their being maligned by proponents of the rezoning haven't helped build trust or take advantage of that fact - and would be interested in working out something that is a true compromise, without the restrictions that made the current impasse a done deal.
After all, it was just such community involvement that resulted in our having Terman Middle School now plus the Terman apartments (one of the large affordable housing developments in the neighborhood), rather than Terman MS being sold off way back when.
The zoning affirmation is made under penalty of perjury and requires it's own separate form in the application. If it wasn't necessary to falsify the information for the application, why did the City and PAHC do it? Why didn't they just state, as would have been accurate, that they zoning would be valid as of July 26 or 28 (I forget the exact date, but their deadline was July 3)? The fact that the City staff was willing to so blatantly misrepresent the information also evidences the extreme bias they've displayed to rezone and push this project as it is through the neighborhood from day one.
City Council has ignored the neighborhood's interests, children's safety, and neighborhood input. It's made us feel like the City Council works for PAHC and developers. The so-called "compromises" were already on the table, not substantive, and PAHC was never in a position to really make any substantive compromises under this plan. The Council continues to ignore the neighborhood in stonewalling on our call to ensure they prevent any of the nightmare development scenarios they wave around to scare us, as is completely within their power. They won't even discuss it.
And the ordinance itself is weak and unenforceable by the neighborhood should PAHC even wish to sell it to a market-rate rental developer in order to use the money better elsewhere. After all, it is a rule of thumb in affordable housing that concentrating affordable housing in on area as this does (there is an affordable development next door to that parcel) is not a good thing. The parcel has no adjacency of services and amenities for seniors, like affordable grocery or medical. (Despite PAHC's application touting a "Planned Parenthood" location within a mile away, that location really isn't near medical seniors need.) The neighborhood really has no recourse under the ordinance if the land use changes after the high-density development is built.
I wish this editorial hadn't assumed so much of the City's position, too, ignoring us as well.
Posted by It was a done deal,
a resident of Green Acres
on Aug 17, 2013 at 3:42 pm
@fact check (which I wish you would do, because you keep getting your facts wrong):
The Moldaw BMR units ARE in fact in PAHC's program, not in another low-income housing operator's portfolio.
The fact that 20 out of 24 senior BMR units at Moldaw went unfilled for 3 years is a demonstration of PAHC's poor management, and shines a light on their claim that the need for housing seniors is so urgent, they have to violate even RM-40 zoning rules in an R-1 neighborhood, without proper environmental or safety review.
In March of this year, probably because of the publicity surrounding the Maybell rezoning, the City finally amended the agreement between Moldaw and the City. The agreement described the reasons for the vacancies - the entry fee cost was not among them, in fact, the MAXIMUM asset limit was cited as a reason interested people were disqualified.
If the need was so urgent, and the solution was renegotiating the terms, could they not have done this, oh, two-and-a-half years ago when it became clear the units were going chronically unfilled?
FYI, too, the entry fee amount is far less than the cost of building an affordable housing unit to the City (when they actually pay it, as opposed to foisting the cost burden on the neighborhood as at Maybell), if the need was so great, you would think they might have advocated for such a reallocation for the very low-income .
The Maybell apartments are just rental apartments, it's not going to be a low-income senior center. Half the housing at Moldaw is assisted living, and the half that isn't can transition to be assisted living. (That costs, but often there are other ways to pay for that for the very low income. The BMR buy in is actually a really good deal compared to any assisted living in the area, now that it's been renegotiated.) By contrast, the Maybell senior rental apartments are going to cost a lot per month, without nearby medical or grocery, or really anything seniors needs. It's not a senior center, it's just rental apartments.
The majority of Palo Alto seniors, even those on fixed incomes, own their own homes and don't pay very much for them, having bought them years ago. The problem for many of them who want to downsize is the equity in the homes makes them ineligible to qualify for local housing based on their low incomes. Some don't have so much equity that they could afford to live off of that equity, which would soon be gone. The Moldaw situation would actually be good for some of them, but they have too much equity.
The Maybell rental apartments are better for people who still have a good income, as they will be for people at 30-60% of AMI, well above the poverty limit that PAHC touts as the reason for the rental apartments' need, but that monthly income is exactly what many Palo Alto resident seniors lack. Is the property really going to serve the low-income? Is the community going to be protected from it's being converted to market-rate high-density apartments as is happening at the Terman Apartments?
PAHC's lack of planning and management at Moldaw is disturbing in light of their similar almost complete lack of analysis at Maybell. They have been in the BMR business in this town for decades, yet they had 20 out of 24 BMR units at Moldaw go unfilled for THREE YEARS without pushing for the situation to be analyzed, solved, or renegotiated. In the past, they've had to put BMR units on the market at market-rates because of miscalculations about the need.
There is a huge need for affordable housing in this area, we should be at least spending some time analyzing how to best fill that need, rather than building whatever they can get away with and figuring it will all work out. It doesn't always all work out, and the cost to the neighborhood in this case is just too high.
Posted by It was a done deal,
a resident of Green Acres
on Aug 20, 2013 at 12:54 am
"But building affordable housing in Palo Alto appears to require PC rezoning. Perhaps there are other ways that PAHC, a non-profit corporation whose sole function is to produce and manage affordable housing, can compete for developable properties, but no one so far has shown us how."
First of all, the city requires developers to put 15-20% into its BMR program run by PAHC. They don't have to compete, the affordable units get added every year. PAHC isn't a builder, they manage the program. The maxim in affordable housing - and HUD policy - is to spread out low-income housing, not concentrate it in one area as they are doing at Maybell, among other things, it creates a stigma for the residents.
Second of all, if the PC rezoning at Maybell had been more comparable in scale to the existing zoning, there would have been no arguments. Not abusing PC zoning?! This rezoning required violating even RM-40 zoning restrictions, on a seriously substandard street, surrounded by R-1.
PAHC had to pack in so many residents to increase their point total on their funding application for utter lack of adjacency to things seniors need at that property, since the government actually seems to care about those things, too, and assigns points for them in the competition. (Unless PAHC misrepresented those things in their application, too. Didn't they list Planned Parenthood as a medical facility for the seniors within a mile?) If they simply chose a better location actually nearer to services, they could "afford" to build a smaller property. But they don't want to build a smaller property, they want to show the City they have the experience to run a big one. (Still smarting from losing the management of 801 Alma.)
If even close to as much per unit was paid at Maybell as at 801 Alma, PAHC could afford to build nice units at Maybell under the existing zoning. Seniors deserve to live in decent housing, not stack and pack just because they are low income. Greg Schmid said the City paid only a quarter as much per unit at Maybell as at Alma -- by essentially foisting the costs onto the neighborhood through the financing scheme.
Any developer who puts up more than 5 units in Palo Alto has to put 15% of them into the BMR program or pay in lieu fees to the City. If the lots were more in keeping with existing zoning for the market-rate part of the parcel (which makes up more than half the development) and sold to individual builders, no $1.5 million for the City in in lieu fees for the market-rate part of that development. Do you understand that part of the scheme? The City loans the money to buy the property, then shakes cash out of it by rezoning for the benefit of a for-profit developer at the expense of the neighborhood. Then like some kind of sick assailant, says we should like it because otherwise we'll get worse.
If PAHC decides to sell, the City has first right of refusal by virtue of the loan agreement (remember the $7.3 million they have in this? they made sure to tell us they had a lot of rights to protect our public funds). If after all this, the City - which has publicly disclosed its concerns about anyone developing the property to that extent, as well as the opinion that the situation on Maybell is not safe -- does not do its duty by placing deed restrictions on the property before reselling, you can bet this neighborhood will not take it lying down. There IS recourse -- and if the City exposes the taxpayers just to the liability of "negligent design, construction, maintenance, signing, operation [or] control of the roadways," by ignoring its duty, you can bet more than just the Maybell neighbors will hold their feet to the fire.
Maybell already went through a six-figure traffic "improvement" recently. The unsafe conditions you see today are after attempts to fix it ALREADY. We have hit the limits of the infrastructure. The City must deal with that before approving massive rezonings and development at such locations.
If you are serious about seeing affordable housing in Palo Alto, help PAHC to get off this course where it is alienating a big segment of the citizenry, over a BAD PLAN, and move on to putting their energy into their mission again. The Terman Apartments, just a few blocks away, and after only 20 years, are being converted from affordable housing to market-rate rentals. PAHC tried to buy it once and decided it was too expensive. I and most of my neighbors would rather that $7.3 million and other funds went into maintaining the Terman apartments as affordable. It's already in the comprehensive plan as a goal. The apartments already exist in the neighborhood. As long as PAHC is putting energy into fighting rather than working with the community, they will be trying to win for themselves rather than for affordable housing in Palo Alto. If they fail to understand that the neighbors' concerns are legitimate and keep trying to portray us as clueless or worse, they will continue to hurt their own reputation in the community, and the fight will continue.
They chose a bad location for such massive upzoning, and it's a bad plan with weak protections against the property being converted to market-rate just like at Terman.