News

New 'density bonus' law put to immediate test

Palo Alto to review request for 'off-menu' concessions from developer of 441 Page Mill Road

Just weeks after Palo Alto officials adopted a law that creates a menu of zoning perks that developers of affordable housing can request, the new policy is being put to the test.

A development proposed for 441 Page Mill Road, between El Camino Real and the Oregon Expressway underpass, would replace four existing single-family homes with a three-story mixed-use development. The building would be 40 feet high and include retail use on the ground floor, offices on the second floor and 10 apartments on the third, three of which would be sold at below market rate.

By offering three units of affordable housing, the project -- by local architecture firm Stoecker and Northway on behalf of Norm Schwab -- has become a test case for the city's "density bonus ordinance," which the council adopted on Jan. 13. The ordinance offers zoning perks in exchange for construction of affordable housing.

The ordinance creates a menu of specific zoning concessions the developer can request and automatically receive without further council review. A developer who wants concessions that are not on the menu is now required to provide the city with a financial analysis showing why these exceptions are necessary.

However, the project was pitched before this menu existed, and the concessions it is requesting are "off-menu items," which means the developer has to go through the more extensive process of providing financial data. Senior City Planner Russ Reich told the Weekly the applicant has submitted the pro forma, and the city is seeking a consultant who would help staff analyze the numbers.

"They have submitted a pro forma very recently," Reich said. "What the council adopted (in terms of concessions) was not what was in the draft of their proposal. They kind of have to take a step back and provide that pro forma to explain why they requested these concessions."

The proposed 35,000-square-foot development was scheduled to undergo a review in front of the Planning and Transportation Commission this week. But because of the extra step, staff is recommending moving the hearing to a different date so that it has time to consider the concessions.

In this case, the developer is seeking permission for added density (1,513 square feet more than would be allowed under the concession in the city's new menu). Another request is to devote more of the development than would otherwise be allowed to commercial use. While normally, this use would be restricted to about 10,770 square feet, Schwab is proposing to have more than 21,541 square feet.

In the past, the applicant would probably have little trouble getting these concessions. State law entitles developers of affordable housing to seek exemptions from the city and gives local jurisdictions little leeway to deny these requests. City Planning Director Hillary Gitelman noted at the Jan. 13 meeting that without a local ordinance, "The field is wide open for people to request whatever concessions they think of" and the city has a limited ability to say no.

By instituting the menu earlier this month, the council was hoping to steer applicants toward those concessions deemed to be least harmful to the community. The menu includes such concessions as an increase in height limit and a decrease in side-yard requirements, provided the new development is not adjacent to a low-density residential zone. The project proposed by Stoecker and Northway, on a block that also includes the Kelly-Moore Paint Store and the AT&T store but backed by homes, is adjacent to such a zone.

Reich said the review of the pro forma will likely take about a month. The project is now expected to get its review in front of the planning commission in late February, he said.

"This is the first one and we don't have a consultant lined up to do that kind of work," Reich said. "We're looking to find a firm that can do that level of review."

Compared to other recent developments proposed (and, in one case, approved) for this neighborhood, the Schwab project is in many ways a modest proposal. For the past two years, Palo Alto officials have been debating an ambitious "planned community" application submitted by developer Jay Paul Company that would have added two office buildings totaling 311,000-square-foot of commercial space to a nearby site at 395 Page Mill Road, a debate that came to an abrupt end last December when Jay Paul withdrew the application, citing the city's "political climate."

The only other "planned community" proposal currently on the table in Palo Alto is for a four-story commercial building at the corner of El Camino Real and Page Mill, on a parking lot that was formerly owned by the Santa Clara Valley Transportation Authority and stands less than a block from the Stoecker and Northway proposal.

One block south of the VTA lot is the site of 3159 El Camino Real, a 74,122-square foot mixed-use project that the council approved in November that would include retail, offices and 48 small apartments, built around Equinox gym.

The building proposed by Stoecker and Northway would be less than half the size of the 3159 El Camino. And much like that approved development, the proposed one would be consistent with the underlying zoning -- a key point at a time when "planned community" proposals (which can dramatically exceed zoning regulations in exchange for negotiated "public benefits" that the developer negotiates with the council on an ad hoc basis) continue to stoke community rage.

Comments

Posted by curmudgeon, a resident of Downtown North
on Jan 28, 2014 at 9:21 am

Does anyone else see a strong resemblance between this jumble of blocks and Osama bin Laden's last residence?


Posted by musical, a resident of Palo Verde
on Jan 28, 2014 at 10:08 am

Any word on extending the westbound Page Mill double-left-turn lane? That was supposed to eat the existing parallel parking in front of this new building.


Posted by Resident, a resident of Another Palo Alto neighborhood
on Jan 28, 2014 at 11:09 am

Karen Holman said it very well last night. The root issue the city to deal with is "carrying capacity, basically density."

There's not a lot of need in Palo Alto for continued massive office space buildup, which brings traffic, congestion, parking woes, and pressure to bring in high-density housing with its own issues.

This kind of case is exactly what the density bonus reform was intended for.

Not only should this one conform to the new law, but the City should go farther by selectively downzoning areas to return to the intended density even after the remaining density bonuses are applied.


Posted by Midtown, a resident of Midtown
on Jan 28, 2014 at 11:46 am

So I did not see the word "PARKING". Yet another under parked commercial property?


Posted by Another tired PA resident, a resident of College Terrace
on Jan 28, 2014 at 11:47 am

Sigh . . . it's a big ugly set of cubes smack up against the street. Where is the parking? How big are each of the living spaces on the roof? Can't they at least design it so the housing units have peaked roofs so they can be well insulated? Would you want to live up there? The commercial space obviously has high ceilings and balconies and decent windows. The living space on the top looks like a set of match boxes.

And the city should start mandating the installation of solar panels on all new construction.


Posted by Silly, a resident of Embarcadero Oaks/Leland
on Jan 28, 2014 at 1:23 pm

Same Page Mill/El Camino congestion problem, different developer. Who's paying to review the study? The city?

What were they saying about wanting our input?

Mine is NO MORE DENSE UGLY DEVELOPMENTS until they've solved the traffic mess. Silicon Valley added 11,120 jobs last month. That's more commuters and more traffic and more gridlock.

There. You can pay me for my review.


Posted by Garrett, a resident of another community
on Jan 28, 2014 at 1:52 pm

Need to building housing, we keep adding jobs, jobs being producing by companies selling products and services to the public. Public keeps buying so companies expand, hire more people, people come here to take jobs, not enough housing in area so they move further and further away. Further away from their work place means commuting, commuting means driving more. More commuters driving means more traffic.

Need to expand highway system to handle traffic, costs to much, public transit systems needs to be built, transit systems needs to cover a very large area. Driving is still the best option.


Posted by anon, a resident of Green Acres
on Jan 28, 2014 at 2:50 pm

Does anyone have any information about legal challenges to the state density bonus laws on which our Council's menu of concessions is based? It seems like an unfunded mandate from the state that sweeps away zoning with serious consequences to local communities could be challenged in court, especially since the incentive to destroy existing housing stock in favor of new building is really more a developer giveaway and works against retaining existing affordable housing (and local quality of life).

This property is using three units of BMR as its reason for concessions, yet we have more than 3 units of vacant BMR across the system. We're very good at generating these units, but not so good at looking at what the needs are and meeting them.

Right now, the biggest need we have for affordable housing in Palo Alto is to save the existing affordable housing of hundreds of long-time Palo Altans at Buena Vista mobile home park. Nothing anyone could build new, especially 3 units, will replace what is lost there if the City continues to do nothing but talk out of both sides of its mouth about affordable housing. The City could save that property with a relatively small investment (a secured loan to the nonprofit representing the owners) that it would ultimately receive back and more.

Stop allowing the selloff of our zoning for a dubious benefit. Priorities, people!


Posted by Craig Laughton, a resident of College Terrace
on Jan 28, 2014 at 3:20 pm

>In the past, the applicant would probably have little trouble getting these concessions. State law entitles developers of affordable housing to seek exemptions from the city and gives local jurisdictions little leeway to deny these requests. City Planning Director Hillary Gitelman noted at the Jan. 13 meeting that without a local ordinance, "The field is wide open for people to request whatever concessions they think of" and the city has a limited ability to say no.

This is the logical outcome of welfare housing mandates, either from the state or from the city. Nobody should be surprised. The developers will use every possible legal clause to maximize their footprint.

Yet, our city council and their supporters continue to genuflect at the notion of welfare housing. Why are we doing this to ourselves? Is it liberal guilt? Global warming alarmism? If the welfare housing element were to be removed, the citizens of Palo Alto could begin to have a rational discussion about the type of growth that makes sense.


Posted by Garrett, a resident of another community
on Jan 28, 2014 at 4:07 pm

Lets not use the word welfare housing, sounds like the projects. How about workers housing, we need housing that people can afford not market based housing.

While most of us come in contact with worker, any kind of worker who is paid to provide a service. All types of workers, low income, middle income, public or private workers. Educated or non educated, we haven't really built enough housing. Don't forget the senior citizens, disabled persons, college kids, singles, families or young couples.


Posted by Just ask, a resident of Palo Alto Hills
on Jan 28, 2014 at 4:40 pm

Ask anyone on the insurance industry: high density housing creates high risk of crime. That's why it costs more to insure a condo than a single family,dwelling.


Posted by Craig Laughton, a resident of College Terrace
on Jan 28, 2014 at 6:18 pm

>Lets not use the word welfare housing, sounds like the projects. How about workers housing, we need housing that people can afford not market based housing.

All subsidized housing is welfare housing. It doesn't have to be pure "projects" housing, although there are some elements in common. BMR housing is one of the worst elements of welfare housing, because it pits one neighbor against another. BTW, the BMR units are not available to essential city workers (teachers, fire, police), as originally promised. It was, and is, a bait-and-switch operation, from the beginning.

Low wage workers should not be low wage workers...they should be paid a decent wage, and it should be the cost of doing business in Palo Alto. However, there is no way that workers should be guaranteed welfare housing in PA. All workers who cannot afford to buy a residence in PA, will need to commute...get used to it. The essential issue is how accommodate that commute.


Posted by Robert, a resident of another community
on Jan 28, 2014 at 6:27 pm

Garrett, he uses the term "Welfare Housing" precicely for that reason, the image he wants you to have. In Craig's world, someone living in a 2 million dollar house, paying $500 a year in property taxes is perfectly fair, they deserve that subsidy. However, if a developer makes a business descision to rent some of their units at a below market rate, because in turn, the city will allow them to build more units, thats welfare. Think about it this way, the former is more likely to be inhabited by a "long time" "established" Palo Alto resident, while the latter may attract gang bangers from East Palo Alto (see, you can't be racist if you don't mention race). Craig knows what he's saying.


Posted by Mama, a resident of Crescent Park
on Jan 28, 2014 at 6:47 pm

CityCouncil...if you want to stay in office, think parking, parking, parking. Why do you still not get it???


Posted by Speculators, a resident of Green Acres
on Jan 28, 2014 at 7:00 pm

No more planned communities, period.


Posted by Sunshine, a resident of Barron Park
on Jan 28, 2014 at 10:03 pm

In my opinion welfare housing is the appropriate term for this housing. It reminds me of the projects in NYCarec. Huge chunks of concrete for housing. These soon became overrun with an element that sold drugs and other things usually illegal soon the responsible people in the project moved out if they could.
It's time to call a halt to all this development to please ABAG. Each time we build more low income housing, ABAG wants more. There is nothing wrong with not living in the town where you work.
P,ease don't talk about city workers wanting and needing to live in palo alto. They all make enough to afford local rents.


Posted by glad to demolish ugly houses, a resident of Palo Verde
on Jan 28, 2014 at 10:49 pm

people! Right now, on that land, are four, run down, horrifically ugly houses that are an eyesore on a very prominent, now commercial, street. A mixed use building is HIGHLY appropriate for that spot. And ten residential units, which are sorely needed, is way more than any other developer has bothered putting into a 'mixed-use' building. All the money is in office space. Developers have put as few as ONE residential unit in a building and called it 'mixed-use'. As for Buena Vista, if you had read the history, the problem was that the infrastructure was falling apart. It is dangerous for its own ihabitants.


Posted by Michele, a resident of Greenmeadow
on Jan 29, 2014 at 9:33 am

No mention of parking, right next to a very busy intersection that is always backed up at rush hour. . . The answer is NO!


Posted by curmudgeon, a resident of Downtown North
on Jan 29, 2014 at 9:50 am

"ten residential units, which are sorely needed, is way more than any other developer has bothered putting into a 'mixed-use' building. All the money is in office space."

The money's in office space alright, and that's why promised residential units tend to wind up as luxury office suites, with wet bar, catering kitchen, and plush private restroom(s). By touting them as "residential units," the developer ensures the support of chronically gullible citizens.


Posted by jardins, a resident of Midtown
on Jan 29, 2014 at 2:48 pm

@glad to demolish ugly houses, those 4 houses were kept up just fine when they were occupied. They look awful now because the residents were all evicted two years ago, ready for the developers to move in!

I'm very disappointed in the design and the sheer size of the proposed development--a few years ago its architect, John Northway, insisted that he was going to design a building that would meet with approval of the neighbors in back of the building. What happened to that good and principled approach?

If this project gets city approval, and if the proposed up-to-the-sidewalk monstrosity across Page Mill Road (next to Sunrise, where the parking lot currently is) also gets approved, then there will be over-high buildings looming over that part of Page Mill Road--like downtown San Jose!

How about joining Palo Altans for Sensible Zoning??


Posted by anon, a resident of Green Acres
on Jan 30, 2014 at 2:17 pm

To all above: Buena Vista Mobile Home Park is NOT subsidized and is the last patch of truly affordable housing in Palo Alto. Market-based, affordable housing, for over 400 long-time Palo Alto residents, whose children make up 10% of the local elementary school population and are an integral part of our community.

Because of the nature of our tax structure and the cost of building, real affordability can only be achieved by paying some attention to saving existing housing stock. Making incentives to demolish existing affordable housing in favor of high-denisty EXPENSIVE housing with a handful of subsidized "affordable" units is a travesty.

The sale of BV has nothing to do with the infrastructure, which the non-profit representing the residents have formed could apply for grants to update. The real reason is that Prometheus (for whom our last mayor was former head of acquisitions) thinks it will be able to get approval to build a dramatically higher density project of luxury apartments there similar to the monstrosity it built on San Antonio. So they made an offer and now the residents are being evicted.

The property is RM-15, though. I wonder if Prometheus understands this is the same neighborhood as the Maybell project, and if they evict the BV residents, the neighbors will be even madder than they were over the upzoning at Maybell? And this time it will be ALL the residents, those who were for and against Measure D.


Posted by anon, a resident of Green Acres
on Jan 30, 2014 at 2:17 pm

To all above: Buena Vista Mobile Home Park is NOT subsidized and is the last patch of truly affordable housing in Palo Alto. Market-based, affordable housing, for over 400 long-time Palo Alto residents, whose children make up 10% of the local elementary school population and are an integral part of our community.

Because of the nature of our tax structure and the cost of building, real affordability can only be achieved by paying some attention to saving existing housing stock. Making incentives to demolish existing affordable housing in favor of high-denisty EXPENSIVE housing with a handful of subsidized "affordable" units is a travesty.

The sale of BV has nothing to do with the infrastructure, which the non-profit representing the residents have formed could apply for grants to update. The real reason is that Prometheus (for whom our last mayor was former head of acquisitions) thinks it will be able to get approval to build a dramatically higher density project of luxury apartments there similar to the monstrosity it built on San Antonio. So they made an offer and now the residents are being evicted.

The property is RM-15, though. I wonder if Prometheus understands this is the same neighborhood as the Maybell project, and if they evict the BV residents, the neighbors will be even madder than they were over the upzoning at Maybell? And this time it will be ALL the residents, those who were for and against Measure D.


Posted by Craig Laughton, a resident of College Terrace
on Jan 30, 2014 at 2:39 pm

>if a developer makes a business descision to rent some of their units at a below market rate, because in turn, the city will allow them to build more units, thats welfare

Yep. The city says to the developer, "We want welfare housing in your project"; the builder says, "OK, but that will cost you an increase in density and FAR and traffic allowances". Some neighbors complain, but the city just disses them (until the Measure D debacle). The next time the city wants to include BMR, and other welfare units, in a project, it should have a binding secret vote of that neighborhood.


Posted by Robert, a resident of another community
on Jan 30, 2014 at 2:51 pm

Craig, you're really starting to stretch it. I suppose because the national government wants to promote home ownership and gives mortgage interest as a tax write off, that locks in my claim that Craig Laughton lives in welfare housing.


Posted by Craig Laughton, a resident of College Terrace
on Jan 30, 2014 at 6:25 pm

>I suppose because the national government wants to promote home ownership and gives mortgage interest as a tax write off, that locks in my claim that Craig Laughton lives in welfare housing.

Not exactly. If people want to buy/rent housing in Palo Alto, at market rates, then your argument makes some sense. The mortgage tax deduction is a sop to the realtors not, necessarily, to the home buyers...market prices would adjust downwards, without the deduction. I know I would not have had to pay a premium price for my place, without the mortgage deduction...my realtor continued to emphasize that the mortgage interest rates were deductible, thus the seemingly high price of my house was no big deal.

However, welfare housing means that some people in Palo Alto are not paying market rates. This is a double whammy, because others have to pick up the slack, and those units are locked into property tax exemptions that hurt our city services, especially our schools.

Look, it doesn't really matter what I think, but it does matter what each neighborhood thinks. That's why it is so important to leave the decision about major welfare projects up to the neighborhoods, in a secret vote. Measure D should be a harbinger of future votes, even if many of the anti-D voters/promoters claimed that they were all for welfare housing (hint: That is probably not true).


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