Monday night's 4-3 decision to repeal a decades-old downtown growth policy designed to trigger a one-year pause on non-residential development when a cap is reached, as it will be this year, is a setback for both housing advocates and those concerned about traffic congestion and parking.
The action only benefits commercial developers and property owners, whose profits are maximized when they develop uses other than housing. The council majority has bought into the idea, promoted by developers, that housing will only be built if the city allows a substantial office component that "subsidizes" a few housing units.
There is no evidence for this supposition. The so-called "mixed use" projects that combine ground floor retail, one or two floors of offices and one or two floors of housing have provided so little housing — and none of it remotely affordable — as to make it meaningless. The housing doesn't even provide a full offset to the employees that work in the offices below. With every such project, we actually lose ground in the fight to lessen our housing-jobs imbalance.
But even worse, repealing the downtown cap removes another barrier to the conversion of the President Hotel apartments back into a hotel, since the square footage of the conversion would have exceeded the cap. It is one of the actions that the new owner of the President, A.J. Capital, demanded of the city in secret communications last fall so it could proceed with its plans. By its vote Monday night, the council is enabling the elimination of 75 apartments that are among the most affordable on the rental market in downtown Palo Alto at a time when each council member has publicly advocated for more aggressive policies to encourage such housing. It would take 10 new mixed-use office buildings with five housing units each to simply replace these 75 apartments with high-priced condos or apartments.
Significant affordable housing will only be built in Palo Alto by nonprofit housing agencies or if the city offers density bonuses and height exceptions that create incentives for developers to pursue residential-only projects. Those options should be the focus of policymakers. But they won't work if the city doesn't close off the opportunity for developers to build office buildings with a few very expensive housing units that do nothing to address our housing needs.
The deciding vote to do away with the downtown non-residential development cap came from the council's new member, Alison Cormack, who along with Councilwoman Liz Kniss and Vice Mayor Adrian Fine characterized the one-year moratorium as an effort to "freeze downtown as it exists today." (Councilman Greg Tanaka, who didn't utter a word during the discussion, was the fourth vote to repeal the cap.)
Cormack's vote was especially disappointing because it contradicted the position she took just four months ago in the election campaign, when she told the Weekly that although she needed to do more study on the issue she "didn't see any reason to remove" the downtown cap and that growth caps "have served us well."
Proponents of repealing the downtown cap argued that another cap — which limits office development each year to 50,000 square feet in the downtown, California Avenue and El Camino corridor — effectively renders the downtown cap unnecessary. They ignore the fact that not covered by the 50,000-foot cap are any non-office uses, such as hotels, financial institutions, fitness centers, restaurants and others. Following the council's action on Monday, it's now open season for unlimited downtown development of anything other than offices, plus up to 50,000 square feet of office space each year.
Mayor Eric Filseth was right when he questioned how long the council majority could continue to ignore the majority view in the community that city policies should strongly discourage any new development other than affordable housing.
What the council majority did Monday is the opposite of smart pro-housing policy. The fact that the downtown cap will be reached later this year was a fortuitous opportunity because it offered a simple way to slam the door shut on the conversion of the 75 apartments at the President and reassess what new limits should be established going forward.
Instead of seizing that opportunity, the council put flexibility for property owners above the community's desire to tightly limit non-housing development in downtown Palo Alto.