In its latest bid to curb the traffic impacts of new developments, Palo Alto has more than doubled the fees it charges builders for each new car trip that their projects would generate during busy commute hours.
At the same time, the City Council voted at its April 22 meeting to scuttle two existing fees that it introduced about 30 years ago to help manage transportation in the neighborhoods around San Antonio Road and Stanford Research Park. The city has been using these fees to implement traffic improvements in these two specific areas.
The new fee structure, which the council approved by a 5-2 vote, with Councilman Tom DuBois and Councilwoman Lydia Kou dissenting, creates a citywide $7,886 fee for each new peak-hour trip, which is more than twice the current level of $3,700. As such, it creates a new incentive for builders to create programs and install amenities that encourage transit use, bicycling and other alternatives to driving cars.
The new fee was inspired by the city's recently revised Comprehensive Plan, which requires developers to create "transportation demand management" (TDM) programs aimed at reducing car trips by providing building occupants with transit passes, adding bike amenities and encouraging ride-sharing programs. The city is now preparing a new law that would require developers in the downtown area to use such programs to reduce car trips by 45%. In the California Avenue area, they are required to achieve 35% reductions. In Stanford Research Park and on El Camino Real, the required reduction is 30%, while elsewhere in the city it's 20%.
City officials project that the new fees would raise about $17.2 million by 2030, enough to pay for about 4.4 percent of the city's capital costs.
The city's approach to collecting these fees differs markedly from that of many other jurisdictions, which often assess fees based on square footage of new developments. For office projects, these fees vary widely, with Menlo Park charging $4,547 per 1,000 square feet of office space, Los Altos charging $9,994 and Mountain View charging $23,260 for new projects in the North Bayshore area.
Though Palo Alto is taking a different tack by linking its fees directly to new trips, staff estimate that the new fee would rate the city at the higher end. Based on rates these projects typically generate, offices would be assessed about $9,069 per 1,000 square feet while a residential development would pay about $4,416 per unit.
While the council agreed that the city should update its fee to pay for traffic improvements, members had different opinions when it comes to methodology. DuBois argued that Palo Alto should follow the example of others in adopting a fee based on square footage. Basing the fee on peak-afternoon commute times, he said, could result in traffic "spreading out over more and more hours," DuBois said.
He cited the ongoing discussion over Stanford University's proposed expansion, which is currently being reviewed by Santa Clara County. As part of that discussion, the county has proposed shifting how Stanford calculates the success of its "no net new commute trips" policy. Rather than just looking at one peak hour in the morning and in the afternoon, the county would consider traffic levels during three-hour "peak periods."
"There's some intellectual satisfaction in saying that what's driving our peak traffic is what we attach the fees to," DuBois said. "But I think when you go from theory to practice, we've seen some issues."
While Kou agreed his proposed approach, most of his colleagues backed the staff proposal, which emphasizes trips over building area. The council agreed to add exemptions for public facilities, including schools. It also supported exempting accessory-dwelling units, despite Kou's assertion that without adequate mitigation these buildings would have a negative impact on neighborhoods.
"With every exception you make there is consequence and always, it impacts the residents in their neighborhoods," Kou said.
The council majority agreed that the adoption of a new fee is well overdue. Vice Mayor Adrian Fine noted that the council had considered adopting it last year but delayed the action to focus on a citizen initiative to reduce office space. Staff's proposed approach, which focuses on trips, is "more supportive of our TDM initiatives," he said.
Mayor Eric Filseth agreed and said that while he's not opposed to having staff take a fresh look at its methodology, that should not delay the council's adoption of the fee.
"If the answer is, 'We ought to take a look at square footage in the future,' then certainty ... but I think we should pass something tonight," Filseth said.