|Fall Real Estate 2002
Publication Date: Wednesday, October 16, 2002
Affordable housing or urban sprawl?
by Harold A. Justman
The dearth of affordable housing in California has created a plethora
of bold solutions. In Sacramento affordable housing activists, such
as the Alliance of Retired Americans, and real estate interests,
such as the California Association of Realtors, joined forces to
pass an assembly bill, AB1866, which requires cities to grant a
25 percent housing density bonus -- free of parking, setback and
floor-area-ratio restrictions -- to developers of affordable housing
AB1866 also requires cities to grant permits for second units (granny
units) in residential neighborhoods free from the requirements of
a public hearing. To put teeth in the law, AB1866 provides that
developers can recover their attorneys' fees from a city, if the
city violates the law.
Palo Alto's Assemblyman, the Honorable Joe Simitian, did not vote
for this bill. Palo Alto's Senator, the Honorable Byron Sher, voted
against this bill. Nonetheless, AB1866 passed.
Another assembly bill that passed, AB2292, prohibits a city from
permitting without substantial evidence construction on a parcel
that is less than the residential density that was utilized by the
State Department of Housing Area Community Development in approving
a city's housing element plan. Again, developers can recover their
attorneys' fees from a city, if the city violates this law. Senator
Sher did not vote for AB2292. Assembly member Simitian voted for
Meanwhile, the housing debate in Sacramento is spreading to Palo
Alto. Affordable housing advocates, such as the League of Women
Voters of Palo Alto, are joining forces with real estate interests,
such as the Santa Clara Housing Action Coalition, to support the
construction of 64 condominiums on a one-acre site near downtown
Palo Alto. The city's redevelopment agency is advocating 50 housing
units at the Edgewood Plaza site at Embarcadero and 101. The developer
of the Hyatt project on El Camino is proposing hundreds of housing
units. Also, like the politicians in Sacramento, the city of Palo
Alto is now exploring granny-unit zoning laws that would increase
housing density throughout every neighborhood in the city. As in
Sacramento, the local argument for increased housing density is
that higher density is needed to make residential developments with
below market rate (BMR) units economically feasible.
The idea that greater housing density will produce affordable housing
in amounts sufficient to meet our housing needs is not supported
by the history of the city's BMR program during the last 25 years.
During that time the BMR program has only produced about 170 BMR
Several times that many market-rate units were built in order to
induce the construction of those BMR units. Even more disappointing
is that the BMR program has produced housing units that are not
necessarily affordable to repair. Some of the owners of BMR units
at the Arbitare on High Street have complained that they cannot
afford repairs necessitated by water leaks. A house is not affordable
if the owner cannot afford to repair it.
A policy of increasing housing density throughout Palo Alto is
an unworkable policy for our neighborhoods. Our neighborhoods cannot
afford the consequences of that policy, such as increased traffic.
The Palo Alto Oaks Housing Development at Ramona and Channing points
the way towards affordable housing that our neighborhoods can afford.
A collaboration between the city of Palo Alto and the Palo Alto
Housing Corporation will result in about 53 BMR rental units on
a little more than an acre of land. Building 53 BMR rental units
should make a significant contribution to diversity in Palo Alto.
Moreover, there are other sites where this solution can be implemented.
The Mayfield site, the Hoover Pavilion, and the Fry's site all offer
the potential of direct construction of affordable housing without
urbanization of every Palo Alto neighborhood.
The public is willing to make direct investments in affordable
housing. The Housing Trust of Santa Clara (Trust) is one year old
and the only one in the nation financed by voluntary contributions
of which two-thirds are from the private sector. In one year the
Trust has helped finance 649 affordable apartments.
With direct construction of affordable housing we can make choices
about housing density that are responsive to local neighborhood
needs. Local choices for local needs should also be the policy for
granny units in residential neighborhoods. Presently, each neighborhood
can decide as to whether or not second stories should be permitted
in that neighborhood. Similarly, granny units should be permitted
in single-family neighborhoods only if the neighbors vote in favor
of that type of increased housing density for their neighborhood.
The goal of diversity should include preserving single-family homes
Harold Justman has lived in Palo Alto since 1964. He has specialized in real estate law for more than 20 years and writes a monthly column on real estate law for the Weekly. Send questions to Justman care of Palo Alto Weekly, P.O. Box 1610, Palo Alto, CA 94302 or e-mail firstname.lastname@example.org.