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New state laws add urgency, complexity to Palo Alto's housing vision

As City Council prepares to launch Housing Element update, pressure builds to add affordable housing

The Palo Alto City Council and Planning and Transportation Commission are scheduled to finalize the process for crafting a new Housing Element document on May 10, 2021. Photo by Olivia Treynor.

As Palo Alto launches its high-stakes effort to develop a new vision for housing, city planners, elected leaders and citizen volunteers are preparing for a complex mathematical exercise with deep political implications and conflicting notions of what constitutes success.

The city is required to submit by January 2023 its plan to accommodate more than 6,000 new residences between 2023 and 2031, a heavy lift for a city that has struggled to even come close to meeting the far more modest targets of its current Housing Element document. The planning task will require the city to launch new programs for affordable housing, find new sites for housing in a city that planners and City Council members often describe as "built-out" and demonstrate that these sites can realistically accommodate an influx of new homes and apartments.

And thanks to recently passed state laws, the city also will face new restrictions when it comes to identifying housing sites — as well as new consequences for a failure to do so. These range from mandatorily streamlined approval processes for new housing projects to the loss of local power to approve building permits and zone changes.

Updating the city's Housing Element will be the chief focus of a special joint meeting between the council and the Planning and Transportation Commission on Monday night, when the two bodies are expected to finalize the process for crafting the new document.

One major change that all municipalities are required to make in the next Housing Element is that the identified housing sites must be both available for development and "suitable" for housing. Because of this requirement, which was included in Assembly Bill 1397, all sites that aren't currently vacant must be shown to have a "realistic and demonstrated potential for redevelopment" as housing.

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That means that any non-vacant site put in the city's housing-site inventory must have zoning that accommodates at least 20 units per acre. Cities would also have to adopt programs that allow housing construction by right within the first three years of the planning period, provided that at least 20% of the units in the new housing developments are affordable to lower-income households.

The law makes it much more difficult for Palo Alto to rely on large, underdeveloped sites like 340 Portage Ave., former home to Fry's Electronics, for housing. Though the city's current Housing Element states that the parcel has a "realistic capacity" of 221 residential units, the city in the next Housing Element would have to demonstrate that the campus will be ripe for redevelopment because existing leases are set to expire, an application for a new development is in the works or market conditions make the new housing development likely.

In its next Housing Element, the city of Palo alto will have to demonstrate that a Portage Avenue site, which previously housed Fry's Electronics, is ripe for redevelopment. Embarcadero Media file photo by Veronica Weber.

Authored by Assembly member Evan Low, D-Campbell, the bill also makes it more difficult for the city to designate small parcels for low-income housing. If it were to include a site that is smaller than half an acre, it would have to provide examples of "realistic capacity" by pointing to other small sites that have been developed for high-density affordable housing over the past planning period.

A similar requirement will apply to sites that are greater than 10 acres. According to a new report from the city's Department of Planning and Development Services, about 78% of the housing-opportunity sites listed in the current Housing Element fall either below or above these thresholds and, as such, would require further analysis before they could be included in the next housing document.

Other recent state bills further complicate the city's planning effort. Senate Bill 166, a 2017 law that was spearheaded by Sen. Nancy Skinner, D-Berkeley, includes a "no net loss" requirement, which means that if the city identifies a site with a capacity for 50 residences but only approves 30 residences, it would have to spread the remaining 20 units over other sites — and rezone those sites to accommodate these units — within 180 days of approval.

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And AB 686, which became law in 2018, requires cities to adopt strategies that "affirmatively further fair housing," which includes analyzing historic patterns of segregation and disparities in areas of opportunities.

The bill, which was authored by Assembly member Miguel Santiago, D-Los Angeles, specifically requires cities to take "meaningful actions, in order to combat discrimination, that overcome patterns of segregation and foster inclusive communities free from barriers that restrict access to opportunities based on protected characteristics."

The new report from the city's Planning and Development Services notes that while the requirements of AB 686 may not directly affect the city's selection of sites, the law means that the city "must approach the site inventory with an 'affirmatively further fair housing' lens."

"While Palo Alto comprises mostly areas of high opportunity, our site selection must ensure the selected sites do not lead to further segregation or greater disparity in fair housing opportunities," the report states.

The city's debate over which housing sites are suitable for new developments is expected to get louder in the coming weeks, as the Housing Element Working Group begins its deliberations on the new document (its introductory meeting is scheduled for Thursday evening) and the council considers two housing projects with significant implications for future growth.

On May 18, the council will consider proposals for a mixed-use project with 36 microunits (with an average size of 342 square feet) at 955 Alma St., as well as a proposal for a 24-apartment building at 2239 Wellesley Ave., a single-family zone in College Terrace.

The College Terrace project, which is being proposed by Cate Investments, is already creating a stir, with dozens of neighborhood residents rallying against the project, which they say does not belong in a neighborhood zoned for single-family homes. Housing advocates, meanwhile, maintain that the type of projects being proposed by Cato is precisely what the city needs to do to make housing policies more equitable.

Kelsey Banes, executive director of the advocacy group Peninsula for Everyone, made that point at the council's April 12 meeting, just before the council determined that its new "planned home" zone, which aims to encourage more residential development, should not apply to R-1 districts.

"I think all of our neighborhoods have room for affordable homes and we should be thinking creatively to make it happen and not precluding our options before we even get to see them," Banes said at the April 12 meeting.

Cato Investments has proposed building a 24-apartment building at 2239 and 2241 Wellesley St., where two homes currently stand, in Palo Alto. Photo by Magali Gauthier.

Even the Sierra Club, which had endorsed several council members who favor slower city growth, wrote in an April 29 letter to the city that the organization is "greatly concerned that the City Council has decided to make it significantly harder or impossible to build affordable housing in the vast majority of Palo Alto's neighborhoods."

"If Palo Alto wants to continue to be seen as a champion of climate action and positive social change, it needs to be more flexible in the types of housing it allows in many of its neighborhoods," wrote Gladwyn D'Souza, conservation chair of the Sierra Club Loma Prieta Chapter. "The ability of people who work in Palo Alto to live in Palo Alto would make a huge difference in their carbon footprint, to say nothing of their enjoyment of life and access to clean air, good schools, and a walkable/bikeable lifestyle."

Despite the new state mandates, the council indicated last month that it has no plans to densify single-family zones. Council member Eric Filseth said at the April 12 meeting that when the city agreed to use planned-home zones, no one had considered the idea that they would apply to R-1 zones.

"What I thought I was voting for was a mechanism to relax design standards for larger projects in already dense areas in exchange for higher below-market-rate inclusionary rates. … I'm surprised it should be conflated with this issue of whether we should have R-1 zoning in Palo Alto or not," Filseth said.

Mayor Tom DuBois also strongly pushed back against Sierra Club's assertion that the city made it harder to develop affordable housing by prohibiting the use of the planned-home zone in single-family residential (R-1) neighborhoods.

The zoning "was never intended to be used in R-1 neighborhoods; those who claim otherwise are mistaken, which should be obvious: Palo Alto has never allowed apartment buildings in R-1 neighborhoods to begin with," DuBois wrote in response to D'Souza's letter. "So, the notion that introducing (the planned-home zoning) has somehow reduced the available space for affordable housing in Palo Alto is simply absurd; in fact, the opposite is true."

The root cause of the area's housing crunch, DuBois maintained, is "unsustainably faster job growth than housing growth." He cited Palo Alto's recent efforts to address this trend by restricting commercial growth by adopting caps on new office development.

"We are working to manage both supply and demand," DuBois wrote. "Our objective is to be a net annual new housing supplier to the region — to balance our own jobs and housing growth, while shifting as much of our housing mix as we can to the affordable side."

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New state laws add urgency, complexity to Palo Alto's housing vision

As City Council prepares to launch Housing Element update, pressure builds to add affordable housing

by / Palo Alto Weekly

Uploaded: Thu, May 6, 2021, 5:00 pm

As Palo Alto launches its high-stakes effort to develop a new vision for housing, city planners, elected leaders and citizen volunteers are preparing for a complex mathematical exercise with deep political implications and conflicting notions of what constitutes success.

The city is required to submit by January 2023 its plan to accommodate more than 6,000 new residences between 2023 and 2031, a heavy lift for a city that has struggled to even come close to meeting the far more modest targets of its current Housing Element document. The planning task will require the city to launch new programs for affordable housing, find new sites for housing in a city that planners and City Council members often describe as "built-out" and demonstrate that these sites can realistically accommodate an influx of new homes and apartments.

And thanks to recently passed state laws, the city also will face new restrictions when it comes to identifying housing sites — as well as new consequences for a failure to do so. These range from mandatorily streamlined approval processes for new housing projects to the loss of local power to approve building permits and zone changes.

Updating the city's Housing Element will be the chief focus of a special joint meeting between the council and the Planning and Transportation Commission on Monday night, when the two bodies are expected to finalize the process for crafting the new document.

One major change that all municipalities are required to make in the next Housing Element is that the identified housing sites must be both available for development and "suitable" for housing. Because of this requirement, which was included in Assembly Bill 1397, all sites that aren't currently vacant must be shown to have a "realistic and demonstrated potential for redevelopment" as housing.

That means that any non-vacant site put in the city's housing-site inventory must have zoning that accommodates at least 20 units per acre. Cities would also have to adopt programs that allow housing construction by right within the first three years of the planning period, provided that at least 20% of the units in the new housing developments are affordable to lower-income households.

The law makes it much more difficult for Palo Alto to rely on large, underdeveloped sites like 340 Portage Ave., former home to Fry's Electronics, for housing. Though the city's current Housing Element states that the parcel has a "realistic capacity" of 221 residential units, the city in the next Housing Element would have to demonstrate that the campus will be ripe for redevelopment because existing leases are set to expire, an application for a new development is in the works or market conditions make the new housing development likely.

Authored by Assembly member Evan Low, D-Campbell, the bill also makes it more difficult for the city to designate small parcels for low-income housing. If it were to include a site that is smaller than half an acre, it would have to provide examples of "realistic capacity" by pointing to other small sites that have been developed for high-density affordable housing over the past planning period.

A similar requirement will apply to sites that are greater than 10 acres. According to a new report from the city's Department of Planning and Development Services, about 78% of the housing-opportunity sites listed in the current Housing Element fall either below or above these thresholds and, as such, would require further analysis before they could be included in the next housing document.

Other recent state bills further complicate the city's planning effort. Senate Bill 166, a 2017 law that was spearheaded by Sen. Nancy Skinner, D-Berkeley, includes a "no net loss" requirement, which means that if the city identifies a site with a capacity for 50 residences but only approves 30 residences, it would have to spread the remaining 20 units over other sites — and rezone those sites to accommodate these units — within 180 days of approval.

And AB 686, which became law in 2018, requires cities to adopt strategies that "affirmatively further fair housing," which includes analyzing historic patterns of segregation and disparities in areas of opportunities.

The bill, which was authored by Assembly member Miguel Santiago, D-Los Angeles, specifically requires cities to take "meaningful actions, in order to combat discrimination, that overcome patterns of segregation and foster inclusive communities free from barriers that restrict access to opportunities based on protected characteristics."

The new report from the city's Planning and Development Services notes that while the requirements of AB 686 may not directly affect the city's selection of sites, the law means that the city "must approach the site inventory with an 'affirmatively further fair housing' lens."

"While Palo Alto comprises mostly areas of high opportunity, our site selection must ensure the selected sites do not lead to further segregation or greater disparity in fair housing opportunities," the report states.

The city's debate over which housing sites are suitable for new developments is expected to get louder in the coming weeks, as the Housing Element Working Group begins its deliberations on the new document (its introductory meeting is scheduled for Thursday evening) and the council considers two housing projects with significant implications for future growth.

On May 18, the council will consider proposals for a mixed-use project with 36 microunits (with an average size of 342 square feet) at 955 Alma St., as well as a proposal for a 24-apartment building at 2239 Wellesley Ave., a single-family zone in College Terrace.

The College Terrace project, which is being proposed by Cate Investments, is already creating a stir, with dozens of neighborhood residents rallying against the project, which they say does not belong in a neighborhood zoned for single-family homes. Housing advocates, meanwhile, maintain that the type of projects being proposed by Cato is precisely what the city needs to do to make housing policies more equitable.

Kelsey Banes, executive director of the advocacy group Peninsula for Everyone, made that point at the council's April 12 meeting, just before the council determined that its new "planned home" zone, which aims to encourage more residential development, should not apply to R-1 districts.

"I think all of our neighborhoods have room for affordable homes and we should be thinking creatively to make it happen and not precluding our options before we even get to see them," Banes said at the April 12 meeting.

Even the Sierra Club, which had endorsed several council members who favor slower city growth, wrote in an April 29 letter to the city that the organization is "greatly concerned that the City Council has decided to make it significantly harder or impossible to build affordable housing in the vast majority of Palo Alto's neighborhoods."

"If Palo Alto wants to continue to be seen as a champion of climate action and positive social change, it needs to be more flexible in the types of housing it allows in many of its neighborhoods," wrote Gladwyn D'Souza, conservation chair of the Sierra Club Loma Prieta Chapter. "The ability of people who work in Palo Alto to live in Palo Alto would make a huge difference in their carbon footprint, to say nothing of their enjoyment of life and access to clean air, good schools, and a walkable/bikeable lifestyle."

Despite the new state mandates, the council indicated last month that it has no plans to densify single-family zones. Council member Eric Filseth said at the April 12 meeting that when the city agreed to use planned-home zones, no one had considered the idea that they would apply to R-1 zones.

"What I thought I was voting for was a mechanism to relax design standards for larger projects in already dense areas in exchange for higher below-market-rate inclusionary rates. … I'm surprised it should be conflated with this issue of whether we should have R-1 zoning in Palo Alto or not," Filseth said.

Mayor Tom DuBois also strongly pushed back against Sierra Club's assertion that the city made it harder to develop affordable housing by prohibiting the use of the planned-home zone in single-family residential (R-1) neighborhoods.

The zoning "was never intended to be used in R-1 neighborhoods; those who claim otherwise are mistaken, which should be obvious: Palo Alto has never allowed apartment buildings in R-1 neighborhoods to begin with," DuBois wrote in response to D'Souza's letter. "So, the notion that introducing (the planned-home zoning) has somehow reduced the available space for affordable housing in Palo Alto is simply absurd; in fact, the opposite is true."

The root cause of the area's housing crunch, DuBois maintained, is "unsustainably faster job growth than housing growth." He cited Palo Alto's recent efforts to address this trend by restricting commercial growth by adopting caps on new office development.

"We are working to manage both supply and demand," DuBois wrote. "Our objective is to be a net annual new housing supplier to the region — to balance our own jobs and housing growth, while shifting as much of our housing mix as we can to the affordable side."

Comments

Local
Registered user
Stanford
on May 6, 2021 at 10:42 pm
Local, Stanford
Registered user
on May 6, 2021 at 10:42 pm

I am really looking forward to having increase noise, congestion, pollution and reduced access to public services with all this additional housing.

I am sure that once it is build housing prices will drop by 75% to make this area affordable. Thankfully our area has bad weather, no jobs, lots of crime and terrible schools, so not many people want to move here - thus building a few extra housing units will push prices down.

And areas with dense housing, like city centers, are really cheap so building this extra housing will obviously make the area more affordable.


Palo Alto native
Registered user
Old Palo Alto
on May 7, 2021 at 8:20 am
Palo Alto native, Old Palo Alto
Registered user
on May 7, 2021 at 8:20 am

I wonder if all these new laws will apply to San Rafael, Sausalito, Novato, Sebastopol and even upscale cities all over LA. I never voted for ABAG, why do they have any power. This will just increase residents moving out of the area and to other States without these onerous housing regulations and requirements. We scraped together to live in R 1, now we no longer will have our rights to live as we intended. Political strongholds in our state legislature do not represent the will of the people!


Resident
Registered user
Another Palo Alto neighborhood
on May 7, 2021 at 10:16 am
Resident, Another Palo Alto neighborhood
Registered user
on May 7, 2021 at 10:16 am

Also if it’s an L-shaped parcel between one-half and two-thirds of an acre, it can only be subdivided on a Tuesday. But somebody else will have another bill next year to improve that.

Sacramento has lost touch with the real world, and local reps like Berman just go along with it.


Resident 1-Adobe Meadows
Registered user
Adobe-Meadow
on May 7, 2021 at 11:09 am
Resident 1-Adobe Meadows, Adobe-Meadow
Registered user
on May 7, 2021 at 11:09 am

The governor has to sign these bills. The buck stops with him. He is losing round here just on the housing issue. He is allowing a government agency to run amuck . Who is ABAG and can they be sued and investigated for fraud - getting funded by developers?

Then we have to figure out why PA is suppose to be the "Champion" for every scheme that comes along. Is Los Altos concerned? Is Sunnyvale concerned? Is EPA concerned? Is Menlo Park concerned? they never claim to be the "champions" of anything - they play their cards better - this is serious poker and you have to keep your cards quiet..

Why PA? Every city has a different tax base and available land to fit the requirements. Many surrounding cities have more land available for housing. yet somehow do not get thrown into the controversy with such outside vigor. Where is the refinement in the ABAG algorithm that measures available land owned by the city or county? SU is the biggest landholder with an abundance of available land. Is SU on the hook here?

But maybe now we can clean up all of those buildings on ECR which are empty and do not even try and put up a For Lease sign. They are not up to spec. Focus the housing enrichment schemes in that direction.


Paly Grad
Registered user
Leland Manor/Garland Drive
on May 8, 2021 at 10:54 am
Paly Grad, Leland Manor/Garland Drive
Registered user
on May 8, 2021 at 10:54 am

With California losing population in 2020 it might be time to revisit the need for new housing. New housing is needed, but the projections may need to be recalculated.


Resident 1-Adobe Meadows
Registered user
Adobe-Meadow
on May 8, 2021 at 3:22 pm
Resident 1-Adobe Meadows, Adobe-Meadow
Registered user
on May 8, 2021 at 3:22 pm

People are not leaving because of housing - they are leaving because of outrageous taxes at the state level - and the perception that the current political regime is driving the state into the ground. Manufacturing jobs are going out of state. What you are left with a bunch of people plinking on their computers. Meanwhile the cost of housing in the destination cities like Austin is going up at a very fast rate. Housing is equaling out. You have to look at the cost of living here vs other states.


Annette
Registered user
College Terrace
on May 8, 2021 at 6:16 pm
Annette, College Terrace
Registered user
on May 8, 2021 at 6:16 pm

Every time I read about what is happening in Austin I have the same thought: poor Austin. Hopefully some smart group of people there is paying attention to the mistakes made here vis-a-vis our development policies and exerting influence on decision makers to do things differently so that they do not end up with the sort of jobs:housing imbalance we have.


Online Name
Registered user
Embarcadero Oaks/Leland
on May 8, 2021 at 8:08 pm
Online Name, Embarcadero Oaks/Leland
Registered user
on May 8, 2021 at 8:08 pm

There was an excellent article a few months ago about economic imbalance and the national jobs migration and what it's done to housing prices in places like Boise, Montana, Arizona etc. I remember the first two because the prices in both places had more than doubled in less that a year, causing all sorts of local angst and conflicts.

The resentment over the haves vs the have nots also led to the $10K SALT (State And Local Taxation) Cap whereby high-tax states like CA, CT, NY, NJ etc. end up "subsidizing" the poorer states. Efforts to repeal Trump's $10K cap on deductions are being stymied.


Resident 1-Adobe Meadows
Registered user
Adobe-Meadow
on May 9, 2021 at 3:28 pm
Resident 1-Adobe Meadows, Adobe-Meadow
Registered user
on May 9, 2021 at 3:28 pm

In the SJM/BAN 05/09 - "$1.7 Billion for local transit relief goes unspent". The Metropolitan Transportation Commission (MTC) which funds VTA, BART, Caltrain and other bus, train, and ferry operations is hoarding the funds resulting in the delay of returning all systems to NORMAL and providing employment to the transit workers and people who depend on transit for their jobs.

All topics here are like a 4 leg chair - each dependent on the other to proceed with programs. One agency is beating on cities to build, build, build, while another agency is hoarding the funding that the housing algorithms are dependent on. If any city has an excuse to not start building - lacking funds being primary - than proximity to a transit system for the workers is another. -

Another example of top level incompetence. How do agencies get funding then not spend it for the purpose provided? The transit employees union should sue the state agency for incompetence. And cities should sue ABAG for incompetence - how much money are they sitting on?


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