Palo Alto formally adopted on Monday, May 8, its plan for accommodating more than 6,000 new dwellings over the next eight years, an effort that leans heavily on transforming industrial sites into residential communities, building apartment buildings on public parking lots and loosening density limits in residential zones.
In a rare joint meeting, the City Council and the Planning and Transportation Commission each scrutinized and ultimately approved the city's new Housing Element, a state-mandated document that was two years in the making and that paves the way for a host of revisions to the city's zoning code, design rules and review processes for residential projects. Both bodies voted Monday to adopt the new Housing Element, with the planning commission acting unanimously and Mayor Lydia Kou casting the sole dissenting vote from the council.
In approving the document, council members and planning commissioners endorsed a long list of revisions that city planners added in recent weeks in response to the state's Department of Housing and Community Development (HCD), the ultimate arbiter of the plan's legitimacy. Until the state agency certifies the document, Palo Alto will remain on a list of more than 100 Bay Area municipalities that are out of compliance with the Housing Accountability Act.
Once a largely academic exercise, the adoption of a Housing Element has become increasingly complex, ambitious and consequential. The city's housing allocation of 6,086 new dwellings in the new eight-year cycle is more than three times the number in the prior cycle. This means that to meet its quota, the city needs to adopt a more expansive inventory of housing sites and a more extensive list of housing programs than in past cycles.
At the same time, the punishment for failure has become more significant thanks to recent state laws that streamline approval processes and loosen development standards for residential projects in cities that fail to meet their housing quotas. Cities stand to lose grant funding if they fail to get their Housing Elements certified.
They are also vulnerable to "builder's remedy," a provision in the state code that makes it possible for developers to advance projects that violate zoning standards in cities that don't have a certified Housing Element. Palo Alto, which has been out of compliance since Jan. 31, has already received two such applications: a 45-condominium development proposed for 300 Lambert Ave. and a 350-apartment project proposed for 3997 Fabian Way.
Like almost every other Bay Area city, Palo Alto fell short in its first attempt to get approval from HCD, which in March 23 responded with a detailed letter requesting a host of revisions. These included a deeper look at local laws and processes that constrain housing development; a broader analysis of regional and local trends that contributed to the creation of "racially concentrated areas of affluence" in Crescent Park, Old Palo Alto and other wealthy areas; and formal commitments for more community outreach and annual status reports.
The Housing Element that the city adopted this week and that will be forwarded to HCD seeks to address all these comments. It includes more information about the viability of nonvacant manufacturing sites around San Antonio Road to accommodate housing; a broader analysis of housing constraints; and a new program that would relax zoning standards for projects that rely on Senate Bill 9 to split their single-family lots to create additional dwellings. For resulting lots with three dwelling units, the modification will allow new SB 9 residences to have up to 1,200 square feet of space, up from the current limit of 800 square feet, A 1,200-square-foot residence could accommodate one- and two-bedroom units, making it more desirable to develop.
Planning Director Jonathan Lait said the dwellings would provide "a lower entry point for ownerships" than the city's current housing stock.
"It gives someone a chance to build equity and achieve that goal. Because it will be a lower price point for entry, we're hoping it will also help advance some of our AFFH (affirmatively further fair housing) interests as well as increase diversity in some of our neighborhoods," Lait said.
Despite the nearly universal consensus that the Housing Element should be adopted as soon as possible, the document elicited a wide range of emotions among council members, commissioners and residents. On one end of the spectrum are those who see the plan as a critical tool for addressing Palo Alto's housing shortage and promoting more diversity and housing affordability. On the other are those who see adoption of the Housing Element as a necessary evil, a burden foisted upon the city by Sacramento.
Michael Alcheck, a former member of the planning commission, fell squarely in the former camp. He urged the council to be more aggressive in encouraging housing development by raising the density and height limits in residential zones where multifamily projects are already allowed.
"This city has been skating by doing the bare minimum for decades and it's finally catching up to us," Alcheck said. "That said, this is such an important piece of local governance and its inadequacy should mean more to this governing body considering that housing is the root of every issue facing our community."
Doria Summa, chair of the Planning and Transportation Commission, took the opposite view and suggested that implementing the Housing Plan will hurt the community more than help it. While legally required, the plan does not address the issue of housing affordability and some of its programs will be deleterious to the environment, she said. Nearly a third of the total housing quota is eyed for industrial, commercial and mixed-use zones along and around San Antonio Road, near the U.S. Highway 101.
"That being said, what are we supposed to do? We're not scofflaws. We've all taken the oath to uphold state laws," Summa said.
Kou echoed these criticisms but went even further, arguing that the recent housing bills that relax zoning standards and punish cities for failing to meet their quotas are "flawed beyond logic" before she voted against the revised Housing Element.
"Right now, we're just sitting back and reacting to these unfunded state mandates," Kou said.
Others, however, saw the document as an adequate — if imperfect — compromise. Vice Mayor Greer Stone raised concerns about whether many of the new homes that the Housing Element envisions — including accessory dwelling units — would actually be affordable to people making less than area median income. Council member Ed Lauing, who had worked on the document as a member of the Housing Element Working Group and who reviewed it as a planning commissioner before joining the council, lamented that the plan does not include any housing for the central downtown site around 27 University Ave.
Both panels, however, stressed the need to adopt the document as quickly as possible and, if needed, revise it at a later date based on HCD's feedback and the council's evolving plans over the course of the eight-year cycle.
"We're in jeopardy now and we have to get a Housing Element passed — or at least try to get it passed," Lauing said.
The revised Housing Element includes a fuller discussion of policies and regulations that create constraints to housing. This includes the city's retail preservation law, its recently adopted tree-protection ordinance and the impact fees that Palo Alto charges developers.
It also considers development standards that may hinder housing development, including the city's height limits, daylight plane regulations and landscaping requirements. The existing rule that requires landscaping in at least 20% of the ground floor of new developments poses a "coverage limitation in the commercial mixed-use districts and represents a constraint to housing production at densities identified in the Sites Inventory," the revised document states.
The new Housing Element also includes an expanded section on the city's plans to "affirmatively further fair housing" by addressing past patterns of discrimination and historic practices such as redlining and blockbusting that made it difficult for non-white residents to purchase homes in Palo Alto. Senior Planner Tim Wong, who is leading the Housing Element process, said the new document includes "much more proactive measures ... than in any previous Housing Element."
Council member Julie Lythcott-Haims suggested that the new document does not go far enough in pledging the city's commitment to acknowledge and address the discriminatory practices of the past. The document, she said, should include a "declarative statement about our problematic history with zoning, redlining and restrictive covenants and an avowal to undo these vestiges by intentionally creating truly inclusive communities going forward." This includes a more explicit acknowledgement that redlining against non-white individuals was a key contributing factor to the establishment of today's "racially concentrated affluent areas."
"I feel that this is a missed opportunity to tell a clear truth about our city's history and our intention in this era to be the people who will do better," Lythcott-Haims said. "I'm certain if we can't name it, we can't tame it."
Council member Pat Burt acknowledged the region's historic patterns of discrimination but pointed to another factor that is keeping the city from being more diverse: the high cost of housing. It's hard to discern how much of the city's current racial pattern is a legacy of old practices versus a function of modern "economic barriers," he said.
Burt lauded a program that commits the city to exploring affordable-housing preferences for historically disadvantaged populations. Staff would issue a report about the feasibility of such a policy by June 30, 2024, and then update it annually, according to the document.
"We have a lot of ways that we talk about zoning having impacts and there are very few ways that we can redress those past practices," Burt said. "This is one opportunity. If we can do it, it would really be significant. It hasn't been done to our knowledge in many places, if any, but I really think it could be meaningful."