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https://paloaltoonline.com/blogs/p/print/2022/07/09/the-benefits-of-selective-height-increases-for-housing-projects


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By Steve Levy

The Benefits of Selective Height Increases for Housing Projects

Uploaded: Jul 9, 2022

The staff report for the PTC June meeting on Housing Element update programs suggested and PTC adopted some proposed height limit increases for housing on the Stanford campus and along El Camino. Staff will bring other height and other housing incentive programs after completing their housing feasibility analyses. By selective sites I mean downtown, Cal Ave area, along El Camino and on some Stanford owned land on campus and in the city.

These selective height limit increases will be effective and are almost certainly necessary to meet the city’s Housing goals and legal requirements.
But the benefits go well beyond effective and necessary.

I am looking for the most efficient, feasible and least intrusive way to meet our housing goals while helping the regional environment, equity and local prosperity goals. I realize that not everyone wants to meet our housing goals but if that is so for you, you can skip the rest of the blog.

Background

1. The city’s RHNA goals and comparison to recent trends is shown below.

5th Cycle Permits 6th Cycle
Allocation Approved Allocation
for Permits 2015-21 for Permits

Very low Income 691 218 1,556
Low Income 432 60 896
Moderate Income 278 42 1,013
Above Moderate 587 636 2,621
Total 1,988 956 6,086

A couple of points are worth mentioning. The largest goal for the 2023-2031 RHNA cycle is for housing affordable to above-moderate income residents and it is the largest increase (4 ½ times) over the past cycle goal. Though PA met the 5th cycle goal for this income group, we averaged fewer than 100 units a year versus the new goal of 300+ units a year.

The worst performance comparing the first two columns for 2015-2021 is for the moderate-income group, too much income to be eligible for most subsidies and not enough income for most market-rate housing.

2. Palo Alto along with Menlo Park, Mountain View, Sunnyvale and Cupertino were designated by the ABAG RHNA methodology group as both great places for low-income families to be able to live and great places where housing can help reduce regional commutes.

The Environmental Benefits of Selective Housing Height Increases

Besides making more sites feasible for non-profit and market-rate developers, height increases will allow us to meet our housing goals with fewer construction sites and the accompanying disturbances and environmental harm.

Height increases that make sites more feasible, particularly for housing targeted at lower-income groups either as stand alone 100% BMR projects or market-rate projects like the recently approved W. Bayshore project that has 20% deed restricted units, will reduce commutes for at least some low and middle wage earners who are commuting an hour or more each way.

The Equity Benefits of Selective Housing Height Increases

The staff has promised to meet with non-profit developers to understand constraints to bringing projects forward as sees much easier in places like Mountain View and other cities. For my understanding of the economics, additional height can increase the likelihood of getting BMT units either as alone projects like Wilton Court or as a condition for extra height in market-rate projects. Since there is broad agreement on the importance and benefits of increasing this housing, extra height seems lie a no-brainer.

I consider increasing the ability of middle-income residents (the oft-mentioned many teachers, nurse, public safety employees and others) to live nearer where they work is a huge benefit for them and for our diversity. I and many, many others who could afford to live here when we were younger now live in a city where that is not possible for younger families like we were then.

That, to me, is a loss in diversity every bit as important as having a place that more low-income families can find housing in.

The Economic Benefits of Selective Housing Height Increases

This one seems obvious to me as an economist. Work from home will continue at some level and the loss of daytime employee customers is an ongoing burden for many small businesses. More customers who live nearby must help and could be the difference between having a vital and a struggling downtown or Cal Ave area for example.

Here the benefits of removing constraints to meeting our substantial market-rate housing goals are two-fold. One they bring in customers with resources to shop and dine in our expensive community and two, if extra height can help produce more housing for low-income residents at the same time, we have what looks to me like a win-win scenario.

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