Seeking to comply with state law and encourage more housing for low-income residents, Palo Alto officials will on Monday consider revising a local law that grants incentives to developers who build affordable housing.
The City Council will consider on Monday a revision to the city's Density Bonus Ordinance, which allows developers who offer affordable housing to exceed normal density regulations. If adopted, the revised law would limit the types of "concessions" builders can request from the city to a menu of exceptions deemed by the city to have "minimal adverse impacts." A developer who asks for a concession that is not on the menu would have to provide financial information demonstrating why this concession is necessary for affordable housing, according to a new report from the Department of Planning and Community Environment.
Menu items include an increase in height limit and a 25 percent reduction in side-yard requirements (provided, in both cases, that the project is not next to a low-density residential zone); and additional density.
The report notes that because of the state law, the city has "very little discretion to deny concession requests." One goal with the new law is to limit the impacts of these concessions by steering developers toward pre-vetted concessions. Another goal is to promote affordable housing and to make it easier for the city to meet a state mandate that it provide zoning for more housing units.
"Without a local ordinance, builders and developers have broad flexibility to request concessions and the City has limited flexibility to deny them," the staff report states.
The granting of incentives to affordable-housing developers is far from new. A state law first adopted in 1979, developers may already receive a 25 percent density bonus if they meet certain affordable-housing requirements (the bonus depends on the income level being served and the percentage of units devoted to affordable housing).
The State Density Bonus Law was further beefed up in 2004, when lawmakers instituted a sliding scale of density bonuses from 20 to 35 percent, depending on the number of units. To sweeten the deal for developers, it also enabled them to receive three "development concessions," a heretofore vague concept that Palo Alto's new ordinance aims to clear up.
Thus far, the city has been granting developers concessions largely on an ad hoc basis. When Eden Housing applied to build the housing development at 801 Alma St., the concessions it received included permission to and encroach into required setbacks, density bonus and the waiving of a requirement to provide private open space. A developer at 195 Page Mill Road requested as a concession an addition to the density bonus he would have already received.
The revised law will not apply to "planned community" projects, which grant developers zoning concessions in exchange for negotiated public benefits, which have ranged from tiny public plazas and funky statues to affordable housing units and cash contributions toward parking programs. The designation, which was used by developers of the new Lytton Gateway building and which the Palo Alto Housing Corporation applied for in its ultimately doomed quest to build affordable housing on Maybell Avenue, has been widely criticized in the community in recent years, prompting the council to talk about reform.