Council members Larry Klein and Jack Morton, who raised concerns about the loss of commercial and retail centers during the fall election, floated the idea.
"It's about what kind of community you have — whether your model is Atherton, which has never been Palo Alto's model," Klein said. "We like the diversity of residential and commercial and — to use an old-fashioned word — industrial."
It would be the second action in a year to limit housing from trumping other zoning designations. In October, the council voted to prohibit housing in general manufacturing zones east of El Camino Real.
Monday night, the council voted 7-1 (with Councilwoman Dena Mossar absent) to have city staff return in 60 days with a plan for short-term measures. The change would not affect land that is on the city's state-mandated list of future housing sites.
Councilman John Barton worried the move was an attempt to "put the brakes on housing." He was the sole opposing vote.
"I don't see a crisis," Barton said.
To emphasize his point, Barton asked Planning Director Steve Emslie what new applications have been submitted in the past six months to convert commercial sites to housing.
"Nothing comes to mind," Emslie said.
However, Emslie pointed out that some older projects are working their way through the city's process, including a 96-unit housing development on West Bayshore Road that would replace offices. Neighbors have appealed that project to the council, and it is scheduled for a hearing later this month.
Another application, which has also drawn complaints from neighbors, would replace vacant industrial space on East Meadow Circle with a 75-unit condominium complex.
For Morton, the new study is primarily about dollars and cents, since the city gets relatively little revenue from new housing units but receives sales tax from retail and commercial centers.
"We can't shut down everything and replace it with housing or we won't have the kind of revenue stream to support our services," Morton said.
Some wonder if circumstances might be changing, making a need for the council's action less urgent. The once-boiling-hot local housing market appears to be cooling.
"The trend is moving back to the city's favor, in that regard," Councilman Bern Beecham said.
Still, Beecham supported the motion. "We need to have a discussion on that issue."