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New numbers, same concerns as Palo Alto challenges housing mandate

Even as city's obligations drop by 39%, City Council asks for further changes in regional allocation process

Palo Alto would have to plan for 6,086 new housing units under revised numbers from the Association of Bay Area Governments as part of Plan Bay Area 2050. Photo by Olivia Treynor.

When Palo Alto's elected officials learned last fall that they may soon be required to plan for more than 10,000 new housing units in the next decade, they quickly denounced the regional mandate as unrealistic, unattainable and deeply flawed.

Last month, however, the Association of Bay Area Governments has revised its numbers in a way that may have significant ramifications for the city and its housing plans. In a bid to better align with Plan Bay Area 2050, a broad document filled with strategies for Bay Area growth, ABAG revised the allocation figures in December.

For most cities, the revisions have resulted in only slight changes. Palo Alto is among the notable exceptions. Its total housing allocation has been reduced by 39% and now stands at 6,086 new units in the eight-year cycle between 2023 and 2031.

But while the numbers have changed, the City Council's concerns have not. On Monday night, during a broad discussion of Plan Bay Area 2050 and Regional Housing Needs Allocations, numerous council members continued to criticize the state's housing-allocation process and to offer reasons for why the numbers are not attainable.

Council member Lydia Kou, a frequent critic of regional housing mandates, called the recent decision to cut the allocations of Palo Alto and Cupertino "divisive" and suggested that the council should continue to oppose the RHNA process, a planning tool that she said has been "weaponized by state legislation."

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"When this planning tool has penalties and also removal of local jurisdictions' land use and zoning, it's actually something we should fight back against and it is also setting us up to fail," Kou said.

Failure, however, would carry consequences. Recent state laws, most notably Senate Bill 35, create a streamlining approval process for residential developments in cities that have failed to meet their RHNA goals, effectively restricting the ability of these cities to reject development applications.

Mayor Tom DuBois said Monday that even with the recent reduction in the allocation, the new numbers represent a "pretty significant percentage of our housing." The new allocation, he noted, would still be about three times greater than Palo Alto's housing allocation in the current RHNA cycle, which is 1,988 units.

"With the new laws, there are now teeth to not hitting these numbers," DuBois said.

Palo Alto's city planners believe the downward revision in the city's allocation can be attributed in large part to three new strategies in Plan Bay Area 2050. One strategy, which calls for building "adequate affordable housing to ensure homes for all," forecasted more housing for San Francisco and the east bay, according to a report from the Department of Planning and Development Services. Another, which seeks to offer incentives to employers to "shift jobs to housing-rich areas well served by transit," moved some of the jobs that were originally forecasted for the south bay to other regions and assigned to those areas additional housing units. And the strategy calling for accelerating "reuse of public and community-owned land for mixed-income housing and essential service" apparently promoted more distribution of housing opportunities, the report states.

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Other neighboring cities have seen only slight changes. Menlo Park would see its household growth move from 24% under the old methodology to 23% under the new one, with its allocation reduced from 3,074 new units to 2,946. Mountain View will remain at 33% growth, with its projected allocation moving from 11,380 new households over the eight-year period to 11,238.

In Palo Alto, the number of units drops from 10,058 under the prior proposal to 6,086 under the new one. Instead of being required to plan for 2,573 units in the "very-low" income category (for those earning less than 50% of area median income) and 1,482 in the "low" income category (those earning between 50% and 80% of AMI) over the next eight years, the city would now see allocations of 1,556 and 896 in the two categories, respectively.

At the same time, the revised methodology shifts more growth to San Francisco and to the east bay. Whereas San Francisco was initially required to accommodate a 19% growth in housing units, the number was raised to 22% in the new draft (this results in 10,760 additional units). The east bay cities of Pleasanton, Emeryville, Lafayette and Orinda have each seen their allocations increased by between 3% and 5%.

Palo Alto's council members had little to say on Monday about the city’s share of the regional allocation, but plenty about the broader process of mandating significant growth. Kou and council member Eric Filseth both maintained that the main problem is the overall housing target that the Bay Area has been told to plan for by the state Department of Housing and Community Development.

The state agency had determined last year that the nine counties that make up the Bay Area need to plan for 441,176 new units in the next eight-year cycle of the allocation process. Filseth emphasized the need to scrutinize the regional projections, given the consequences for cities that fail to meet their allocations and suggested that the city include in its correspondence to ABAG criticism of the HCD number, which both he and Kou argued demands further scrutiny.

"It used to be that RHNA targets were broad and aspirational and under current direction in Sacramento they become explicit quantitative mandates," Filseth said. "The standard for accuracy in projections and rigor is much, much higher for quantitative mandates than if they are aspirational zoning things."

Palo Alto is one of dozens of cities that have submitted letters to ABAG expressing concerns or offering suggestions about the allocation methodology. Some, including Cupertino, echoed Palo Alto's concerns about the HCD's allocation to the Bay Area. Others, including Atherton, argued that their jurisdiction could not absorb the proposed allocations without seeing a significant change in its community character.

Rick DeGolia, Atherton's mayor in 2020, challenged the RHNA methodology for placing too much housing near jobs. Neighboring jurisdictions, his letter stated, "regularly approve large scale commercial developments that result in job growth, demands on local resources, and a demand for new housing in those communities."

"Those communities in turn, also benefit from the resulting tax bases and should be required to provide their fair share of housing and resource amenities to meet a healthy job-to-housing ratio," DeGolia's letter states. "As the Town does not anticipate growth, let alone job growth within the Town limits, this methodology is not applicable to the Town of Atherton."

In Palo Alto, council members approved on Monday a letter that urged ABAG to consider additional factors before determining the final allocations. These include the impacts of the COVID-19 pandemic on the regional growth plan.

"While the plan's time horizon is long, the impacts of the pandemic and recession are also long; no doubt the pandemic and recovery will shape the next generation," the draft of Palo Alto's letter states. "Responsible planning must clearly and easily show how the pandemic is accounted for year by year, especially in terms of job growth, population growth, housing demand, and anticipated viability of various funding streams in Plan Bay Area 2050."

The approved letter also plays up the impact of telecommuting, which "could represent a large share of jobs, and thus a reduction in the number of commuters and a shift in where jobs are located."

"For example, the City anticipates retention of telecommuting for many employees with jobs attributed to Palo Alto employers and the possibility of associated lower demand for housing within the City and nearby," the letter states.

Vice Mayor Pat Burt also suggested that the city includes in the letter actions it has already taken to manage its growth and address the housing shortage. This includes adopting policies that restrain office growth (such as office caps) and to encourage low- to moderate-income housing (such as the creation of the affordable-housing overlay zoning and the "planned housing" zone, which relaxes development standards for residential projects).

The goal, Burt said, is to "put forth our proactive approach to policy changes that we have taken, and those that we intend to take."

Palo Alto's overtures are unlikely, however, to sway state and regional planning officials. Numerous cities had requested last year that ABAG challenge HCD's methodology. After reviewing the methodology, ABAG had concluded that the state methodology adheres to applicable legal requirements, according to a December report from ABAG staff. Last June, the ABAG board decided not to challenge the Bay Area-wide allocation number and the window of appeal of that number has since closed.

Similarly, ABAG does not use existing zoning designation as a basis for limiting RHNA allocations. Gilian Adams, ABAG's project manager for the RHNA process, said at the Dec. 17 meeting that while various cities have expressed concern about not being able to accommodate new housing, ABAG is required to "consider potential for increase of residential development under alternative zoning ordinances and land use restrictions."

She also noted that telecommuting is one of the strategies in the Plan Bay Area 2050 Blueprint and, as such, is embedded in the RHNA methodology.

"The potential impacts of the trend toward telecommuting in the longer term are incorporated in the RHNA through the Plan Bay Area 2050 Blueprint, which includes strategies to expand commute trip reduction programs through telecommuting and other sustainable modes of travel," Adams said.

ABAG's Regional Planning Committee will discuss the draft methodology for RHNA at its Jan. 14 meeting. The agency's Executive Board will review it on Jan. 21.

Berkeley Mayor Jesse Arreguin, president of ABAG's executive board, said at the board's Dec. 17 meeting that given the direction from the state, cities throughout the Bay Area will have to absorb some impact of the projected growth.

"We know that due to recent changes in state legislation that this region does have to accommodate a much larger number than we had to in years past, and every community in the Bay Area is going to be impacted, there's no question about it," Arreguin said. "Our job at ABAG is to not just make a decision on how these units are distributed but provide support to local governments in developing their Housing Elements."

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New numbers, same concerns as Palo Alto challenges housing mandate

Even as city's obligations drop by 39%, City Council asks for further changes in regional allocation process

by / Palo Alto Weekly

Uploaded: Wed, Jan 13, 2021, 9:45 am

When Palo Alto's elected officials learned last fall that they may soon be required to plan for more than 10,000 new housing units in the next decade, they quickly denounced the regional mandate as unrealistic, unattainable and deeply flawed.

Last month, however, the Association of Bay Area Governments has revised its numbers in a way that may have significant ramifications for the city and its housing plans. In a bid to better align with Plan Bay Area 2050, a broad document filled with strategies for Bay Area growth, ABAG revised the allocation figures in December.

For most cities, the revisions have resulted in only slight changes. Palo Alto is among the notable exceptions. Its total housing allocation has been reduced by 39% and now stands at 6,086 new units in the eight-year cycle between 2023 and 2031.

But while the numbers have changed, the City Council's concerns have not. On Monday night, during a broad discussion of Plan Bay Area 2050 and Regional Housing Needs Allocations, numerous council members continued to criticize the state's housing-allocation process and to offer reasons for why the numbers are not attainable.

Council member Lydia Kou, a frequent critic of regional housing mandates, called the recent decision to cut the allocations of Palo Alto and Cupertino "divisive" and suggested that the council should continue to oppose the RHNA process, a planning tool that she said has been "weaponized by state legislation."

"When this planning tool has penalties and also removal of local jurisdictions' land use and zoning, it's actually something we should fight back against and it is also setting us up to fail," Kou said.

Failure, however, would carry consequences. Recent state laws, most notably Senate Bill 35, create a streamlining approval process for residential developments in cities that have failed to meet their RHNA goals, effectively restricting the ability of these cities to reject development applications.

Mayor Tom DuBois said Monday that even with the recent reduction in the allocation, the new numbers represent a "pretty significant percentage of our housing." The new allocation, he noted, would still be about three times greater than Palo Alto's housing allocation in the current RHNA cycle, which is 1,988 units.

"With the new laws, there are now teeth to not hitting these numbers," DuBois said.

Palo Alto's city planners believe the downward revision in the city's allocation can be attributed in large part to three new strategies in Plan Bay Area 2050. One strategy, which calls for building "adequate affordable housing to ensure homes for all," forecasted more housing for San Francisco and the east bay, according to a report from the Department of Planning and Development Services. Another, which seeks to offer incentives to employers to "shift jobs to housing-rich areas well served by transit," moved some of the jobs that were originally forecasted for the south bay to other regions and assigned to those areas additional housing units. And the strategy calling for accelerating "reuse of public and community-owned land for mixed-income housing and essential service" apparently promoted more distribution of housing opportunities, the report states.

Other neighboring cities have seen only slight changes. Menlo Park would see its household growth move from 24% under the old methodology to 23% under the new one, with its allocation reduced from 3,074 new units to 2,946. Mountain View will remain at 33% growth, with its projected allocation moving from 11,380 new households over the eight-year period to 11,238.

In Palo Alto, the number of units drops from 10,058 under the prior proposal to 6,086 under the new one. Instead of being required to plan for 2,573 units in the "very-low" income category (for those earning less than 50% of area median income) and 1,482 in the "low" income category (those earning between 50% and 80% of AMI) over the next eight years, the city would now see allocations of 1,556 and 896 in the two categories, respectively.

At the same time, the revised methodology shifts more growth to San Francisco and to the east bay. Whereas San Francisco was initially required to accommodate a 19% growth in housing units, the number was raised to 22% in the new draft (this results in 10,760 additional units). The east bay cities of Pleasanton, Emeryville, Lafayette and Orinda have each seen their allocations increased by between 3% and 5%.

Palo Alto's council members had little to say on Monday about the city’s share of the regional allocation, but plenty about the broader process of mandating significant growth. Kou and council member Eric Filseth both maintained that the main problem is the overall housing target that the Bay Area has been told to plan for by the state Department of Housing and Community Development.

The state agency had determined last year that the nine counties that make up the Bay Area need to plan for 441,176 new units in the next eight-year cycle of the allocation process. Filseth emphasized the need to scrutinize the regional projections, given the consequences for cities that fail to meet their allocations and suggested that the city include in its correspondence to ABAG criticism of the HCD number, which both he and Kou argued demands further scrutiny.

"It used to be that RHNA targets were broad and aspirational and under current direction in Sacramento they become explicit quantitative mandates," Filseth said. "The standard for accuracy in projections and rigor is much, much higher for quantitative mandates than if they are aspirational zoning things."

Palo Alto is one of dozens of cities that have submitted letters to ABAG expressing concerns or offering suggestions about the allocation methodology. Some, including Cupertino, echoed Palo Alto's concerns about the HCD's allocation to the Bay Area. Others, including Atherton, argued that their jurisdiction could not absorb the proposed allocations without seeing a significant change in its community character.

Rick DeGolia, Atherton's mayor in 2020, challenged the RHNA methodology for placing too much housing near jobs. Neighboring jurisdictions, his letter stated, "regularly approve large scale commercial developments that result in job growth, demands on local resources, and a demand for new housing in those communities."

"Those communities in turn, also benefit from the resulting tax bases and should be required to provide their fair share of housing and resource amenities to meet a healthy job-to-housing ratio," DeGolia's letter states. "As the Town does not anticipate growth, let alone job growth within the Town limits, this methodology is not applicable to the Town of Atherton."

In Palo Alto, council members approved on Monday a letter that urged ABAG to consider additional factors before determining the final allocations. These include the impacts of the COVID-19 pandemic on the regional growth plan.

"While the plan's time horizon is long, the impacts of the pandemic and recession are also long; no doubt the pandemic and recovery will shape the next generation," the draft of Palo Alto's letter states. "Responsible planning must clearly and easily show how the pandemic is accounted for year by year, especially in terms of job growth, population growth, housing demand, and anticipated viability of various funding streams in Plan Bay Area 2050."

The approved letter also plays up the impact of telecommuting, which "could represent a large share of jobs, and thus a reduction in the number of commuters and a shift in where jobs are located."

"For example, the City anticipates retention of telecommuting for many employees with jobs attributed to Palo Alto employers and the possibility of associated lower demand for housing within the City and nearby," the letter states.

Vice Mayor Pat Burt also suggested that the city includes in the letter actions it has already taken to manage its growth and address the housing shortage. This includes adopting policies that restrain office growth (such as office caps) and to encourage low- to moderate-income housing (such as the creation of the affordable-housing overlay zoning and the "planned housing" zone, which relaxes development standards for residential projects).

The goal, Burt said, is to "put forth our proactive approach to policy changes that we have taken, and those that we intend to take."

Palo Alto's overtures are unlikely, however, to sway state and regional planning officials. Numerous cities had requested last year that ABAG challenge HCD's methodology. After reviewing the methodology, ABAG had concluded that the state methodology adheres to applicable legal requirements, according to a December report from ABAG staff. Last June, the ABAG board decided not to challenge the Bay Area-wide allocation number and the window of appeal of that number has since closed.

Similarly, ABAG does not use existing zoning designation as a basis for limiting RHNA allocations. Gilian Adams, ABAG's project manager for the RHNA process, said at the Dec. 17 meeting that while various cities have expressed concern about not being able to accommodate new housing, ABAG is required to "consider potential for increase of residential development under alternative zoning ordinances and land use restrictions."

She also noted that telecommuting is one of the strategies in the Plan Bay Area 2050 Blueprint and, as such, is embedded in the RHNA methodology.

"The potential impacts of the trend toward telecommuting in the longer term are incorporated in the RHNA through the Plan Bay Area 2050 Blueprint, which includes strategies to expand commute trip reduction programs through telecommuting and other sustainable modes of travel," Adams said.

ABAG's Regional Planning Committee will discuss the draft methodology for RHNA at its Jan. 14 meeting. The agency's Executive Board will review it on Jan. 21.

Berkeley Mayor Jesse Arreguin, president of ABAG's executive board, said at the board's Dec. 17 meeting that given the direction from the state, cities throughout the Bay Area will have to absorb some impact of the projected growth.

"We know that due to recent changes in state legislation that this region does have to accommodate a much larger number than we had to in years past, and every community in the Bay Area is going to be impacted, there's no question about it," Arreguin said. "Our job at ABAG is to not just make a decision on how these units are distributed but provide support to local governments in developing their Housing Elements."

Comments

Jem
Registered user
Ventura
on Jan 13, 2021 at 6:02 pm
Jem, Ventura
Registered user
on Jan 13, 2021 at 6:02 pm
10 people like this

Thank You, ABAG. Palo Alto is woefully behind in building affordable and other housing options. Rents are sinfully high, even with the pandemic. I, as a City employee, have been on the waiting list for the BMR purchase program since 2009, and I am nowhere near the top of the list. I have lived 3.5 of the past six years in my mini-van, trying to hang on to my down payment money , in seemingly futile hopes that a BMR condo will come through for me. I am nearing 60 years old. It seems likely I will be dead before I am settled.


Anonymous
Registered user
Fairmeadow
on Jan 13, 2021 at 8:49 pm
Anonymous, Fairmeadow
Registered user
on Jan 13, 2021 at 8:49 pm
7 people like this

I am really glad to see that the state government is finally doing something about California's rampant NIMBY problem. Perhaps my kids will be able to afford to buy a house in Palo Alto some day.

Council member Lydia Kou will certainly not get my vote in the next election.


Resident 1-Adobe Meadows
Registered user
Adobe-Meadow
on Jan 13, 2021 at 9:07 pm
Resident 1-Adobe Meadows, Adobe-Meadow
Registered user
on Jan 13, 2021 at 9:07 pm
9 people like this

We need to see the whole county numbers. San Jose is the biggest city in the county and has continual building of new housing. You can see it in the weekend papers - places, prices. Sunnyvale is the second biggest city in the county. It includes all of the new development in Moffett Circle. We need to see all of the cities in Santa Clara County because the information presented is like loading the deck with unrepresentative numbers. Menlo Park if the home of FB so why are their numbers so low? Fb is one of the biggest companies in the bay area and employees the most people, exclusive of Google and SU. Someone has thrown us under the bus here. Housing is tied to JOBS. The JOBS are in San Jose - a major metro city. Palo Alto is not a metro city and does not have a big band width of job types. This whole situation needs to be investigated by an outside auditor - ABAG needs to be investigated.


Resident 1-Adobe Meadows
Registered user
Adobe-Meadow
on Jan 13, 2021 at 9:22 pm
Resident 1-Adobe Meadows, Adobe-Meadow
Registered user
on Jan 13, 2021 at 9:22 pm
3 people like this

Many Companies are now leaving the state, and the bay area for areas in the central state areas. The algorithm has to be flexible enough to recognize the increase and decrease of job opportunities. Growth is occurring in Menlo Park for Fb and other companies-there is going to be whole new Willow Village for FB. They cannot print low numbers for MP when in fact is is growing very fast in the commercial section off 101. They all have to be able to describe how they are updated their information as businesses both grow and depart. Palo Alto is not the dumping ground for every other cities' tax base issues. If the people in PA making up numbers do not understand that then replace them with people who do understand that.


Longtime Resident
Registered user
Old Palo Alto
on Jan 14, 2021 at 4:26 am
Longtime Resident, Old Palo Alto
Registered user
on Jan 14, 2021 at 4:26 am
1 person likes this

[Post removed.]


Resident 1-Adobe Meadows
Registered user
Adobe-Meadow
on Jan 14, 2021 at 8:24 am
Resident 1-Adobe Meadows, Adobe-Meadow
Registered user
on Jan 14, 2021 at 8:24 am
2 people like this

This county in general has a big problem. Look at the issues at the county level because a problem in one location appears to get solved in some other location - move the chairs around from place to place. People in MV keep appearing because they think we are suppose to solve their housing problems. Worse - they have talked ABAG into supporting this. Developers have a say in all of this at the state top level so the playing field is not equal. And we have opinion members in the city who have worked at Google so are pushing an agenda that supports their ultimate goals. Commissioners and PACC members have to be able to translate what city budgets are based on because we are not able to absorb shortfalls in other city/county budgets. Right now we have had unsuccessful discussions with SU concerning the school system support so within our city budget we have our own challenges.

Housing has to be supported by available and type of jobs an any area. San Jose has a wide variety of job types - low cost to high cost, an airport, hotels, major rail systems, etc. That is where low cost housing needs to be.


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