Note: This is a very long article and I have included lots of headings to make it easier find your place if you stop and resume. I suggest that commenters make use of the heading to help their readers.
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A good starting place is the proposition "Palo Alto must build more affordable housing so that our police and firefighters can live here." Every component of this statement is wrong, but its repetition over the years--at least two decades--has made it largely futile to challenge. For example, last fall's City Council campaign saw candidates who knew better feeling they needed to do a me-too. Note: Naming names would almost certainly provoke tangents and digressions, so I will be minimizing that.
Let's start with the ambiguous term "affordable". It is commonly used as a synonym for Below Market Rate (BMR) units. Some BMRs get built as part of projects where most of the units are Market-Rate, while others get build by an affordable housing group using grants. However, "affordable" also is widely used by speakers to indicate their own definition or relative to the situation of favored groups (including themselves). For example, a 2700 sqft single family house in a great location that can be afforded by two HENRY (High Earning, Not Rich Yet) professionals who don't want to skimp on other aspects of their lifestyle (restaurants, vacations,...).(foot#1) And sometimes "affordability" is to be achieved by reducing the size and other features of the housing to reduce the cost to build, but not necessarily the rent charged. These units may be well below what the advocates would accept for themselves.
Point: People need to be clearer about what they mean by "affordable" and be aware that others using that term might be using it in a very different way.
Now assume we are using the BMR meaning of "affordable". Palo Alto's police and firefighters don't qualify because they earn too much, especially when the expected overtime is added in. This was already the case when I first encountered the affordable housing issue in the mid/late 1990s, and it has routinely been pointed out to be false since.
OK, let's assume that there is some other form of subsidized housing at a level that allows police and fire to live here, but the subsidy doesn't create a financial incentive. Would they choose to live in Palo Alto? Over the years, I and others have asked this of both rank-and-file and management of the Police and Fire Departments. The consistent answer has been that few would choose to do so. Police like to live far enough from where they work to minimize the likelihood of intrusions on their personal lives. One example give was that they didn't want encounters in a grocery store with someone who had been the subject of a domestic disturbance call. Firefighters have a different reason: their unconventional work schedule of multiple days on the job and then multiple days off. First, since they have only one commute per "work week", a long commute is routinely traded off for much better value for their housing dollars. Second, they tend to cluster where they can have friends with similar schedules.
Similarly for teachers. The large majority of PAUSD teachers don't qualify for BMR housing.(foot#2) Details in(foot#3). Over the years I have had many interactions--official (citizens committees) and unofficial--with Palo Alto Housing Corporation (PAHC) and other affordable housing advocates. (Note: PAHC recently dropped "Corporation" from their formal name, but I will continue to include it to avoid confusion, especially since Smart Phones have further decreased people's sensitivity to capitalization). I have asked "How many teachers are on the waiting lists for BMR units?" and "How many teachers would qualify for BMR units?" The answer to both was that they didn't know--they hadn't tried to collect that data.
Point: The problem of the purported goals and policies not being backed up by any reasonable analysis is one that I have encountered repeatedly. The goal of providing affordable housing for those who need it is so emotionally appealing that many advocates can't be bothered to consider the difficult matters of effectiveness or efficiency.
Moving on to the "Palo Alto must build". The city government--henceforth "City Hall"--does not build housing, nor can it force housing to be built. This is not a quibble about terminology: It radically shapes policy. At the local level, there are many advocates who talk as if City Hall can wave a magic wand and affordable housing will appear. Trying to work though the details of a practical policy is branded "opposition" and "obstructionism". At the state level, there are strong faction pushing to punish cities for developers not having built the type and quantity of housing desired by the politicians' favored special interests. The result would be to give developers even more leverage over local government: The developers could threaten delays that would lead to punishments for the cities (taxpayers) in order to wring more concessions from the cities (residents).
----How much affordable housing is needed?----
A practical policy on affordable housing would prioritize and target the use of available resources. One of the impediments to formulating such a policy has been the housing advocates: Their approach is often that we should build as much as needed, as if there were unlimited resources available. Consequently, they don't produce the data needed. For example, take Palo Alto Housing Corp which manages many BMR units and properties throughout Palo Alto. Their waiting lists both overstate and understate the need. First, because they have separate waiting lists for different properties, there is a lot of duplicate counting because people routinely sign-up for multiple properties. But PAHC also cuts off the sign-ups when a threshold is reached, so there is no sense of how many would have signed up. Second, PAHC doesn't periodically prune the lists: It waits until people have risen to the top of the list before checking if they still need, and qualify for, a BMR unit. For example, someone who signs up on 10 new lists but gets a BMR unit from a previous sign-up can spend years on those 10 lists (5 years is cited by PAHC as a common waiting time to reach the top of a list).
How much is also relevant to the area under consideration. You could reasonably say that we should prioritize BMRs for people who currently live or work in Palo Alto. Except you can't (largely): Many of the grants that are used to partially fund the building of BMRs include eligibility criteria. A very common one is that all residents of the county be treated equally. Some require treating those working in the county at the same level as residents. For example, a retiree living in the southern part of the county (eg Gilroy) could have the same or higher priority than someone working in Palo Alto and commuting from San Juan Batista (across the county line from Gilroy) or from Tracy. During the Council campaign, it was pointed out that San Francisco had negotiated with HUD (US Dept of Housing and Urban Development, a major source of grants) to allow eligibility criteria be more in line with San Francisco's situation. However, I have heard of no interest among Palo Alto's housing advocates in doing the same. Quite the contrary: Many of those advocates believe that Palo Alto should be providing affordable housing to people from the larger region ("Anyone who wants to live in Palo Alto should be able to do so and at a price they can afford" is a statement I have heard many times).
Then, of course, "affordable housing" may mean more than BMR.
----How affordable (BMR) housing gets built----
There have been three basic ways that BMR housing gets built. First, by what is termed "Inclusionary Zoning", that is including Below-Market-Rate housing units within developments that are predominately Market-Rate units. In a housing development of more than 6 housing units, 15% must be BMRs (roughly 1 in 7). However, the developer may choose to paid an "in-lieu fee" instead of providing BMR units.
Second, an affordable housing developers, such as PAHC, may build a project using funding from City, other government agencies (county, state, federal), and potentially foundations. The City's contribution comes from the accumulated in-lieu fees, but sometimes from a special supplemental allocation.
The third method is to include a few BMR units in an office development in exchange for zoning concessions, such as a larger building, through the Planned Community (PC) designation. This fell into disfavor in late 2013 (after the defeat of the Maybell Upzoning) because the PC process was so routinely abused: The concessions would be outsized relative to the initial public benefit, and the public benefits would be whittled down during the approval process and afterwards, but the concessions would be untouched. With the new Council majority,(foot#4) I would not be surprised to see a return to the old abuses, especially promises of affordable housing that would fade away.
----Inclusionary Zoning and In-lieu Fees----
During the Council campaign, several candidates proposed raising the BMR requirement from 15% to 25% based upon similar proposals/actions in San Francisco and several other Bay-area cities. A (successful) candidate strongly aligned with developers stated that developers had told her that it could be no more than 20%. Because of the limited bandwidth during the campaign, neither of these positions received any real scrutiny.
The philosophy behind Inclusionary Zoning is to avoid concentrating BMRs in (identifiable) housing developments, partly to avoid stigmatizing those in BMR units, and partly for the benefit to the individuals and to the community of having people of all income levels interacting more closely.
One corollary of this philosophy is that BMR units should be indistinguishable from Market-Rate units in the same development. In the current housing market, this results in very large subsidies for those lucky enough to get to the top of the list for purchasing or renting a BMR. For example, a 4-person household with a total income $95,670 would pay rent of roughly $2500/month ($30,000/year) for a 3-bedroom unit (apartment or single-family house). If that was a for-sale unit, they could pay roughly $337,000. Note: This example comes from the tables cited above in (foot#3) and the calculations use 90% AMI, 2015 expenses and other of those tables' assumptions.
Among affordable housing advocates, there is considerable controversy about Inclusionary Zoning. There are some who take the position that it is important to get BMRs built as quickly as possible and they advocate discouraging, even banning, in-lieu fees. The problem with in-lieu fees is that you need to accumulate enough to do a full project, and then there needs to be a way to spend the funds, for example, there needs to be available land to build on. On the other side, projects enabled by in-lieu fees can create many more units: first by the units not being as expensive to build, and second by the in-lieu fees being used as required matching funds for grants from the county, state and federal government and from foundations.(foot#5)
Another problem with emphasis on Inclusionary Zoning is that it produces BMR units primarily for those in the moderate income category, and virtually none for the categories of low, very low, and extremely low incomes. This has been the experience in Palo Alto over the past two decades, and in similar cities. The affordable housing for the lower income categories has been produced by projects enabled by the pool of in-lieu fees.
The organizations that manage BMR units disfavor Inclusionary Zoning for rental units because projects in Palo Alto tend to be small, and thus those BMR rental units are scattered.
Reminder: I have no intention of delving into the details of this very complex topic, but rather to give reader a sense of the complexities and tradeoffs.
----Fair, reasonable and practical fees----
The 2016-12-12 Council meeting folded in-lieu fees for housing projects into Housing Impact Fees for a range of properties: Item 21 on the agenda, Action Minutes (motions and amendments, and video starting with that item. The video is both interesting and painful. Interesting because it gives a sense of the complexities and tradeoffs. Painful because there wasn't adequate preparation to facilitate an efficient discussion. The City Manager's Report (aka Staff Report) is part of the problem--when the Council discussion makes repeated mention of "Appendix G", which starts at page 327, there is a problem.
For example, new single-family detached homes will be charged $95/sqft, but new office/R&D buildings will eventually be charged only $60 (up from $20 in steps). So why does new office space, which increases the jobs-housing imbalance, have a lower impact fee than housing which reduces it? The disparity becomes greater when you consider the density of workers in the typical office: Estimate 80-100 sqft per employee in a software company, even less for some startups, and 150-200 for many other companies (for the new Visa building in the Cal Ave area the calculation is 170 sqft per employee). In the office space equivalent to a 2000 sqft home, you would find 10-25 employees; that for a 400 sqft mini-apartment (same as a small 2-car garage) would have 2-5 employees.
During that Council discussion, then-Councilmember Greg Schmid asked why the typical fees associated with a new resident in a rental unit was 5 times that of a new employee, and for other housing type it was more than 10 times. Schmid asked if this wasn't an incentive to build office space rather than housing. Planning Director Hillary Gitelman dodged the question by saying that the fees were charged to developers, not residents or employees (video).
Another illustrative aspect: Many of those who advocated the need to increase fees in order to rapidly build up the affordable housing fund are also advocates of gradually increasing the fee for office-type building over 5 years.(foot#6) Those advocates say that commercial developers have told them that the $60/sqft fee would virtually halt all commercial construction. My experience over the years has been that affordable housing advocates routinely and credulously advocate for concessions to developers. For example, at Alma Plaza (now Alma Village), Palo Alto Housing Corp supported allowing the developer to both segregate the BMRs and have them be lesser units (apartments above the grocery store, forming a soundwall between Caltrain and the Market-Rate single-family houses).
The overall answer from Staff about the setting of the various fees was that it was based on comparables with other cities (except the fee for detached single family houses which is much, much higher) and on what the consultants thought wouldn't cause significant distortions in what was built (that is, fees based on what the market would bear).
----What gets built where and when----
Coming back to most people wildly overestimating City Hall's control over what gets built. The basic mechanism is zoning which has a number of categories. A particular property may be zoned for multiple categories: an underlying zoning and one or more overlays. For example, a property zoned for retail and services can have a zoning overlay permitting housing. Discussions can be very misleading when existence of overlays is ignored.
The basic philosophy of zoning is that it sets only very broad categories. For example, you cannot zone a property for a grocery store (although grocery stores have been part of the "public benefit" of individual instances Planned Community (PC) zoning). Changing the zoning on a property does not force near-term changes to what is on that property. Typically there is a 30-year amortization period for the existing building and its uses. Of course, the owner can choose to redevelop the property before that under the new zoning.
The residential zoning categories are R-1 (detached single family houses), R-2 (two housing units), and RM-x for multi-family housing. For example, RM-30 allows up to 30 housing units per acre. However, a property being zoned RM-30 doesn't mean that the owner is required to build 30 units per acre--they may choose to build only 15, or 11 or ... Experience has been that developers have found it more profitable to build at well below the allowed density, that is, fewer more expensive units. Consequently, there have long been calls to establish minimum densities--my recollection is that this goes back at least 10 years (for example, when former Mayor Pat Burt was still on the Planning and Transportation Commission). You may well ask "Why didn't this happen?" I will refrain from speculation.
In Urban Design theory, mixed-use development has been promoted as a panacea. It correctly points out that single-use can result in inefficient use of resources, for example, parking lots at office buildings are typically largely unused nights and weekends. The most common examples of mixed-use are some combination of retail, office and housing.
Unsurprisingly, mixed-use is not as simple as its evangelists would have you believe. When you work the details, there are lots of conflicts that need to be dealt with and that reduce the benefits of combined use. As an example, consider a large office building such as you would find in the Stanford Research (and Office) Park. There is lots of noise during the night: deliveries (unloading and beeping during backup), garbage pickup, cleaning the parking lots ... The noise from ventilation systems for larger buildings can be significant. I live two blocks from the edge of the Research Park and when I have my windows open at night, I hear its noise at all times during the night (I am an "owl"). When I walk down street that backs up to two light-manufacturing companies, the ventilation noise can be loud enough to mask low-flying jets directly passing directly overhead. It is an invalid argument to say that people living elsewhere accept in these situations: You need to adjust for who would likely be living in such units here in Palo Alto. Several developers have told me informally that they would expect that the people who bought the housing units to soon start lobbying (and suing) for severe restrictions on the other operations at the site.
Because a range of incentives come with mixed-use development, there as been a history of abuses and attempted abuses of those incentives. For example, when the proposal for the redevelopment of the Rickeys site (now Arbor Real) still included a hotel, there was a claim that the hotel on the front of the site and housing in the back constituted "mixed-use" and that consequently it qualified for a reduced requirement for parking (ignoring that the residents and the hotel guests would both be parking there at night). The rules for mixed-use incentives had failed to include the limitation that the two uses actually be complementary.
For example, the development at 195 Page Mill (between Park Blvd and the tracks) has housing over R&D. The early proposals (circa 2004) claimed reduction in parking--residents driving to work thereby freeing up spaces for employee parking--while claiming that there would be little such turnover to thereby avoid having to pay for traffic mitigation measures. (Aside: Council approved the proposal but it was overturned by the courts. Faced with a Council willing to overlook many glaring contradictions and problems, I couldn't see any point to my following subsequent proposals).
For example, the then-Alma Plaza Shopping Center had its zoning changed to allow mixed-use (retail and housing) with the intention being to allow housing over some of the retail stores, both to provide housing and to financially support redevelopment of the retail portions. However, the developer got City Hall to accept that this was satisfied by a property divided into detached single-family housing on roughly 80% (in the back) and apartments-over-retail on the remainder (currently Grocery Outlet). (satellite view). The Council's acceptance of this perverse interpretation of "mixed-use" had huge financial implications: The developer who had purchased the whole property for $6M made a quick contingent sale of the larger portion for $20.5M.
Summary: When you hear advocates enthusiastically pushing mixed-use, listen for whether they have any notion of how it can, and has, been abused, and whether they are willing to support, much less advocate, for measures to minimize abuse. Please don't confuse my warnings about the difficulties of mixed-use with opposition (although such illogic is a staple of trolls).
----Building affordable housing can make housing less affordable----
The typical building that gets replaced is old but has lower costs (taxes, financing, ...). One of the major concerns about incentivizing developers to redevelop residential properties is that they will choose ones that currently offer more affordable rents. Take a hypothetical example of a building with 100 apartments that gets redeveloped to have 54 (larger) units of which 8 are BMRs (15% of total), and where the BMRs are more expensive than any of the former units. Would you say that the City's stock of affordable housing has been increased or decreased? The developer-oriented accounting would have this be an increase of 8 affordable units. You are probably thinking "This is stupid" and "There must be an easy fix". Right on the former, wrong on the latter -- this has resisted fixing for well over a decade, although there has been some progress.
In previous blogs I have pointed out arguments based upon economic illiteracy and absurdly simplistic formulations. For example, that the price of housing will go down as supply increases regardless of changes in demand ("The Law of Supply and XXXXXX", 2014-06-10).
One instance caught my attention during the 2016-12-12 Council discussion. The rationale for having the fee on construction of new rental units be far less than for-sale units ($20 vs $50-95) was the claim that higher fees would cause higher rents. This is based on the assumption that locally rents are largely determined by costs, not demand. The reverse is argued for by the massive rent increases that many have experienced--far in excess of any increase in costs.
Aside: Then-Councilmember Greg Schmid (an economist) raised the concern that the fee structure would incentivize rentals over owned-housing (such as condos). He pointed out that this is undesirable for the City's tax base because rental buildings get sold very infrequently and thus pay a declining share of property tax (Prop 13). (video)
----Do the math: More office buildings to fund affordable housing?----
There are influential voices, including some on City Council, for enabling the building of more office space to fund the building of affordable housing. The construction for detached single-family housing typically prices out at $300-350/sqft (over $500 if there is a basement). Request: if you know the numbers for other types of relevant construction, please add as a comment. Remember from above that the current fee for office is $20/sqft. Even if building affordable housing could be done at only $200/sqft, you would need 10 sqft of office to fund 1 sqft of affordable housing. Now if that office has 80 sqft/employee and you want to provide 400 sqft/adult in the affordable housing, you now need office space for 50 employees to finance housing for 1 adult. However, this is before using the fees to leverage grants, so it could get it down to 25 new employees per new resident or lower.
Another approach being advocated is to have buildings in downtown have retail on the first floor, office on the second, and housing above. Using the preceding parameters (80 sqft/employee, 400 sqft/adult resident), you would need 5 floors of housing for the number of adult residents to equal the employees in that 1 floor of office. That would be a 7-story building. Recognize that this does nothing to reduce the current deficit, but is merely breakeven for the new office jobs in that building (retail jobs were ignored because I didn't have an estimate).
Of course these parameters are but one of the possible scenarios. But before you pick a scenario as the one that City Hall should mandate, recognize that City Hall has no control over employee density, and has shown little appetite for even collecting data (for example, the Business Registry which was long-delayed, poorly enforced, and understaffed(foot#7)). As to the type of housing units that would be built, the current trend has been to build larger (more expensive) units, not the micro- and mini-apartments that advocates envision (micro is 150-300 sqft; mini is ill-defined, typical in a subrange of 400-800 sqft). Again, City Hall has little/no ability to mandate higher densities other than through something like the suspended PC zoning with its long, sordid history of questionable and vanishing public benefits (such as affordable housing).
----Do the math: How much additional housing?----
One of the slogans is that Palo Alto should build enough housing so that everyone working here could live here.(foot#8) Palo Alto is variously cited as having 30-35,000 housing units (Speculating: The difference may be things like the difference between occupied units and potential units such as "mother-in-law cottages" being used as home offices or studios). That is an average of roughly two residents per housing unit, and my guesstimate is that there is an average of roughly one commuting employed resident per housing unit--factoring out children, retirees, other non-working adults, and home-based workers. For non-resident employees, a common estimate is 65,000.(foot#9)
For the first approximation, use the average of 1 commuting employee and a total of two people per housing unit. We would need to add 65,000 housing units--tripling the number of units in Palo Alto--with a tripling of the population. But remember that you aren't just adding housing units, but all the facilities and infrastructure that goes along with that population increase: schools, parks, community centers ... For parks, the national guideline is 4 acres/1000 residents, or an additional 520 acres (0.8 square mile; visualizations(foot#10)). Aside: Palo Alto already has a deficit of urban park land because it hasn't been able to find space for the recent small increases in population. And how would we triple the capacity of the schools? Recognize that the PAUSD elementary schools are already operating above the recommended enrollments (but within the range regarded as acceptable).
Refining the approximation involves recognizing that currently two-thirds to 80% of employed Palo Altans commute to jobs outside Palo Alto (see above footnote for sense of why this number is so fuzzy). Let's use 67% as the number. In the new 65,000 housing units, we should expect that there will be 22,000 people who formerly commuted into Palo Alto and there will be 43,000 who formerly both lived and worked outside of Palo Alto, that is, 43,000 new outbound commutes and still 43,000 inbound commutes. So adding 65,000 housing units increases the number of inter-city commutes involving Palo Alto by 21,000. How this shift would change the region-wide commute totals and congestion is conjecture (too many arbitrary assumptions).
Note: Since the hypothetical 65,000 new housing units would have to be very different from the current housing stock, the profiles of the new residents would be different, but I know of no one who has attempted to make a credible model.
Warning: If you hear the above slogan, or various lesser versions, and present the advocates with the numbers, be prepared for them to argue that you were wrong, if not malicious, to assume that they meant what they had said.
The problem of outbound commutes (immediately above) creates a conundrum for a practical strategy for housing. You can see this in much of the advocacy: Reducing inbound commutes is the purported goal of building more housing in Palo Alto, but the key factor in where to locate that housing--around transit hubs, meaning Caltrain--makes that housing more attractive to people who work outside Palo Alto. This not only reduces the effectiveness of that housing in meeting the goal, but increases the competition for those units, thereby making them less affordable.
----Is regional cooperation an answer?----
Those advocating regionalism have little sense of history and no credible reason that those patterns won't persist ("Hope is not a strategy"). Regional governments (ABAG, MTC, VTA ...) have been a significant factor in creating the current problems. For example, despite a large deficit of housing, ABAG has treated a continuing large increase in jobs as desirable, necessary and/or inevitable and based its policies on that (projections of what will happen effectively become policies to make it happen). This is nothing new: My first exposure to this came in a 2003 discussion with then-Councilmember Judy Kleinberg (now CEO of the Chamber of Commerce). She pointed out, with incredulity, that the ABAG target for growth in Palo Alto was about 35% over the next 20 years. Even when State agencies subsequently lowered their projections for growth, ABAG kept its projections significantly higher.
These are not the only examples of ABAG embracing the planning fallacy that growth can and will continue at the same rate indefinitely. When Palo Alto met its target for new housing ahead of schedule and then exceeded it, the response from ABAG was to raise the Palo Alto's target while cities that hadn't met their targets got low targets.
For those advocating 1-on-1 collaboration with neighboring cities, consider current events. The Facebook expansion in Menlo Park has a humongous jobs-housing imbalance. Similarly for the Google expansion in Mountain View. And the expansion in and around the San Antonio Center ... When your potential partners seem to operate under "When you find yourself deep in a hole, dig faster", how do you expect anything good to come of it? Although to be fair to them, they are subject to the same powerful special interests that exacerbated the jobs-housing imbalance in Palo Alto.
Another problem with ABAG/MTC/VTA and allied advocates is that they are untrustworthy. Most importantly, when they change policies, they have blamed/penalized Palo Alto for having followed the then-current policies. Why collaborate/cooperate with them when they may well punish you for that? I don't have enough information to speculate on how much of this has been planning ideology/dogma and how much has been special-interest politics.
For example, much of the growth of Palo Alto occurred when urban design theory was that it was good to have concentrations of jobs such as the Research Park because that density was needed to support public transit, carpooling ... Caltrain would be a far less usable choice without transit between the stations and the employment sites (VTA buses, Marguerite Shuttle). Then, for bureaucratic convenience, ABAG jettisoned well-established practice and started treating cities as isolated from each other. Consequently, although many commuted to Palo Alto from nearby cities --Mountain View, Los Altos, Los Altos Hills, Portola Valley...-- those commutes were now treated the same as long commutes, such as from Tracy.
Example: Around 2005-2007, MTC pushed to get the area around California Avenue declared to be a Priority Development Area (PDA) under threat of Palo Alto becoming disqualified for grants. (The designation was made by the then-City Manager without Council discussion and with only retroactive approval). The rationale was that because of the Caltrain station, this was a prime area to build lots of office space (and some higher density housing). Notice that this was long after the recognition that Palo Alto had a large jobs-housing imbalance and that since this new office space was intended for people commuting from elsewhere, MTC was explicitly and knowingly seeking to increase the jobs-housing imbalance.
ABAG/MTC/VTA also pushed for rezoning properties along bus lines for higher density housing on the theory that many of the people in that housing would use the buses. These planners well knew the research about the minimum densities required to support viable bus service, and that that threshold had negligible chance of being achieved. Predictably, those bus lines entered a death spiral: Low level-of-service produced low ridership which in turn resulted in less and less service until the line was eliminated. The housing developments that were supposed to reduce automobile-dependence instead required it.
----Senior Housing: More than small units----
Many discussions of housing for seniors are dominated by the fallacy of generalizing from an unrepresentative sample. For example, based upon some seniors who have chosen to move into smaller housing units in/near downtown, the claim is made that many seniors would choose to do so if only there were more small units. This ignores the range of reasons that seniors have for not doing so. If you have gone through the debate of whether and when to downsize--either for yourself or a parent--you know how complicated a decision this can be. But I have seen virtually none of this reflected in the policy discussion by City Hall and housing advocates. This is a very large discussion and thus I am deferring it indefinitely.
----Politics: Blame shifting----
There are influential factions in both the community and on the City Council intent on blaming residents for the jobs-housing imbalance. Blame shifting impedes reaching agreements and compromises because it demonstrates that the perpetrator is seeking unfair advantage and indicates that it should not be expected to honor the agreement and its obligations.
The increase in the jobs-housing imbalance in recent years had a variety of components, with the most significant being the construction of new office space and the increased density of employees.(foot#11) City Hall's refusal to adapt zoning rules to this increased density indicates where political power lies in Palo Alto. A smaller contributor to the problem has been the conversion from other uses to office space. That City Hall has been slow, if not unwilling, to take enforcement actions in response to citizen complaints about illegal conversions--including housing--again indicates which groups have political power.
For example, there are false claims that Palo Alto largely stopped building housing(foot#12) versus the reality that there have been about 3600 housing units built since the 1997 Comp Plan established a 14-year target of building 2400, a target that was exceeded during that period. This represents a 13% increase in a city that was already regarded as built-out.(foot#13) There are also many properties whose zoning allows them to be redeveloped as housing or as mixed-use including housing. Is it the fault of residents that these property owners haven't yet redeveloped?
Aside: I disagree with policies to "incentivize" (subsidize = welfare for the rich) premature redevelopment because of the environmental impacts (carbon footprint of demotion and construction and the waste materials).
Note: Discussion of the zoning of individual properties is off-topic except as illustrations of policy issues.
A fallacious claim is that Palo Alto homeowners promoted the building of office space instead of housing.(foot#14) Or that they didn't want more housing.(foot#15)
A related bit of ideology is that a city's richest homeowners are using their power to block the construction of affordable housing in order to protect their property values.(foot#16) Can you imagine that the building of 100 studio apartments near downtown would not only affect the value of the house of someone like (billionaire) Mark Zuckerberg but do so to such a degree that it would concern him? I can't.
Instead of on "alternative facts" or an alternate reality part of the blame-shifting is based on a particular philosophy under which it is crucial that Palo Alto provide office and commercial space to any and all companies that want to move here or to expand here. One often hears the argument that Palo Alto will "wither" economically if it doesn't do so. If you confront these advocates with the numbers and consequences, they will reply that they didn't mean what they said and that they are upset, sometimes even angry, that you took what they said seriously. But even after that, those advocates continue to use those arguments. Under this philosophy, it is wrong to try to moderate or limit the increase in jobs and it is not the responsibility of commercial property owners or of the employers to take into account the jobs-housing imbalance. Consequently, it is the fault of residents for failing to provide housing to support however many jobs are added.(foot#17)
----Politics: Demonizing those who don't agree----
Some of affordable housing advocates are among the biggest obstacles to getting something done: They are so unreasonable and untrustworthy that they create opposition to projects. There are multiple variants that may seem trivially different, but sometimes being aware of the distinctions can facilitate containing them.
First, there are those that take on affordable housing with religious zeal. The moral imperative prevents them from accommodating limited resources, competing priorities ...
Second, there are "the enlightened ones" who believe that they should lead the way into the future. They dismiss those that don't agree as being "ignorant", "afraid of the future" ... (Aside: a prominent historical example is that Communist parties cast themselves as the "vanguard" of the revolution).
Third, there are those that impose their broader ideology on this issue. One prominent case is the demand to eliminate zoning for single-family houses because they see it as racist. "How so?" you might ask. Because single-family houses are perceived to be more expensive than multi-family housing (ignore the exceptions) and that price excludes non-whites and immigrants because they are presumed to be poor (ignore the non-whites and immigrants it doesn't exclude and the whites it does exclude).
Fourth, there are the entitled brats, of many ages. They believe that they are the future, or some other variant of being the most important, and expect the larger society to give their preferences priority. They can become very upset, even abusive, when they are frustrated.
Then there are the opportunists.
When you are dealing with a group that demonizes you, you should understand that that group has given itself permission to not deal with you honestly during discussions and to not honor any agreements. Some of this was discussed in an earlier blog.(foot#18)
----The unlearned lessons of Maybell----
Measure D in 2013 was a referendum on Council's approval of the upzoning properties on Maybell Ave intended for a combination low-income senior housing project and market-rate housing, with the senior housing being the smaller part of the property. If you are reading coverage of that debate, the terminology can be confusing: The referendum was to overturn Council's approval, but the ballot measure was stated as being to confirm that approval. Consequently, the defeat of the ballot measure was a victory for the referendum. To minimize this confusion, I will use "defeat the upzoning".
An overview of what happened is useful both as an illustration of some of the points above, but also because misrepresentations of what happened are continuing to be used for political gain by various housing advocates and pro-developer politicians.(foot#19) This is not an invitation to re-fight the decision.
The defeat of the upzoning came as a major shock to the political establishment. The basic alibi is that although it was a good project, it unfairly fell victim to reactions to previous abuses of the PC-zoning (Planned Community). Wrong on both counts. First, it was not a "good" project, but merely a passable one, as witnessed by the contortions required to get approval for grants: In the applications, Walgreens Drug became the nearby grocery store, Planned Parenthood became the medical clinic to serve the seniors, and walkability included a route where the seniors would be walking either on dirt/mud or in the travel lane of a major street. I was involved in many discussions about the merits of the project, and although there were many weakness discussed, no one argued that the senior housing portion of the project was so bad that it should be blocked. On the other hand, it wasn't so good that it warranted accepting the serious problems of the market-rate portion of the project.
Second, it wasn't unfairly a victim, or the proxy for the sins of others. Rather the long history of abuses of the PC zoning process throughout the city made it easy for residents city-wide to understand and empathize with the abuses within this particular process. A decade earlier (2003), a similar referendum to overturn a PC for 800 High Street lost by a whisker to a high-spending campaign by the developer. I suspect that the political establishment was conscious that there would eventually be a day of reckoning but always believed that "Today is not that day."
The upzoning proposal's sponsor created problems for itself from the very beginning. At the very first public outreach meeting (2012-09-12), Palo Alto Housing Corp made a series of statements that turned out to be false under questioning from the audience. Then there were claims that contradicted each other. My presumption was that there was no intent to deceive, but rather poor preparation, and I talked to the PAHC representatives after the meeting about the danger. However, these same, and additional, falsehoods persisted. While this may have been PAHC talking in terms of how they wanted to think of the situation (see "truthiness"), to the audience, it would appear to be deliberate deception.(foot#20)
One of the prominent concerns was the traffic impacts of the project (pattern, not just quantity) because Maybell is a heavily used Safe-Route-To-Schools. Parents were furious that the developer's traffic study ignored the presence of bicyclists, and that City Hall seemed to be OK with that.
The situation became more heated when the supporters of the project characterized these concerns about student safety as being false--fabricated as excuses/cover for their supposedly true objections: That of not wanting minorities in their (supposedly) exclusive neighborhood. The ludicrous nature of such accusations made it clear that the supporters were trying to bully anyone who disagreed into silence.(foot#21)(foot#22) That this was coming from prominent advocates for affordable housing--not just anonymous online commenters--as can be seen by some of those who continue to make such claims.
The next escalation occurred when the proposal went before the Planning and Transportation Commission, where the residents were treated badly and their concerns dismissed. The subsequent hearing before City Council was a mix of more of the same and too little, too late.(foot#23) If the PTC or Council had pushed PAHC to address some of these concerns, the project might have been saved.(foot#24)
The advocates for the project point to the opponents as creating the incivility. The opponents were lied to, lied about, vilified, dismissed and derided, yet somehow those advocates see this as no cause for them to be angry. A few of the most vocal among the opponents claimed a "conspiracy" between PAHC and City Hall. I tried unsuccessful to dissuade them, first pointing out that routine cronyism was a more likely explanation, and second that it was not a persuasive argument, and more likely to be counterproductive. On the other hand, remember that this was shortly after the revelations about improper behind-the-scenes dealings (the scathing Civil Grand Jury report came later).(foot#25) Similarly, some of the opponents saw slipshod practices and corner-cutting by PAHC and City Hall as deliberate dishonesty ("fraud"). Because many of the opponents were new to city politics, they naively had higher expectations of City Hall.
Remember, this is not an invitation to reopen the debate on the Maybell proposal, and this is not intended as a summary, but rather a source of highlights (low-lights?) for my intended purposes. The primary intent is to impress you (the reader) with how easy it is for the process to go so very wrong. It is intended secondarily as a warning that this could too easily happen again (hence the "unlearned lesson" in the section title).(foot#26)
Notice that there has been no attempt here to advocate for any particular policy on affordable housing or housing in general. Instead, this provides some of the background on the complexities of the issue: technical, financial and political. I encourage comments to focus on expanding this background information.
1. The example was inspired by a former Planning Commissioner who made headlines last summer with rants promulgating many "alternative facts" on the housing situation. Her new house is in Santa Cruz, one block from the ocean, and was about half the price of a house of equivalent size in Palo Alto. Although she attacked Palo Alto for housing prices, she offered no idea of where enough houses such as hers could be built in Palo Alto to drive prices down that much.
2. "With new contract, 70 percent of Palo Alto teachers will earn over $100,000", Palo Alto Online, 2016-05-27.
3. Qualification for BMR housing is based on the Area Median Income (AMI) for a 4-person household which is then adjusted for the number of people in the household. For 2015-2016 the AMI for Santa Clara County is $106,300. The current tables for Palo Alto provide typical numbers for the qualifying income categories: very low, low, lower moderate, higher moderate. For a one-person household, higher moderate tops out at less than $89,280 and lower moderate at $74,400.
4. "Editorial: A reckless majority: In stunning surprise, new council majority upends planning process".
"Guest Opinion: When democracy is hijacked" by Tom DuBois (Councilmember).
"Palo Alto council members spar over land-use vision", Palo Alto Online, 2017-01-30 (news article on the Council meeting addressed by the above editorial and Guest Opinion).
5. In support of in-lieu fees: Council testimony by Candice Gonzalez, President and CEO of Palo Alto Housing Corp (2016-12-12)
Part of the immediately preceding comments by Bonnie Packer for the League of Women Voters are also to this point.
6. Give office buildings gradual fee increase contradiction: Example: comments by Bonnie Packer for the League of Women Voters.
7. ==I "Errors undermine data in Palo Alto's new business registry"==, Palo Alto Online, 2016-04-23.
"Palo Alto plans to beef up enforcement of new business registry", Palo Alto Online, 2015-12-26.
8. Example: "We have a pretty good idea what demand is: Every day, the effective population of the city doubles from the number of people who come in just for work. That tells us something about how much housing we need." -- Kate Downing, leader of Palo Alto Forward, in a 2016-08-16 interview "Former planning commissioner says Palo Alto has worst housing policy in U.S." in Curbed SF.
9. The point of this example is to indicate the magnitude of what is being claimed and to give a sense of the complexity. Consequently I don't need precise numbers. This is fortunate because most of the numbers I am using are lacking in source (provenance) and methods (simplifications, assumptions...) and as-of date. For example, is the data based on the 2010 Census or more recent data? For example, the dataset may make no distinction between people who work from home and those whose commute to a job currently located in the same ZIP code (which has the potential to move to a distant location).
10. Visualization of 0.8 square mile (for park):
In northern Palo Alto: Alma to Middlefield, from the creek past Embarcadero to Seale Ave.
For Midtown: Alma to Louis Road, from Oregon Expy to beyond Loma Verde.
11. Increased density of employees: R&D formerly had 250-300 sqft per employee and it now routinely less than 90. Aside: Some of this came from software development requiring far less space than R&D that required labs. Some came from R&D workers no longer having offices, or even cubicles, but working elbow-to-elbow on tables. Some came from the substantial reduction of supporting infrastructure, such as computer server rooms. Some came from the reduced use of paper (printing and storage).
12. Example: "In the 1950s and 1960s we built tract homes and suburbs. Then we ceased building and increased regulation." from an interview with Adrian Fine during his successful campaign for City Council. In "What it will take to make Silicon Valley affordable again" (Vox, 2016-08-23).
13. Elaine Meyer tracks housing developments since 1997 in her spreadsheet that shows details of each project (size, date, location ...).
14. Example: "Over the past 20 or 30 years Palo Alto has really focused too much on office growth which has led in a large way to our office housing imbalance" from the Palo Alto Weekly interview of candidate Fine.
Note: It is not my intention to single out or to "pick on" Fine. Rather his recently having been a candidate made it easy to find concise, carefully considered quotes of the attitude he represents, and his now being a Councilmember demonstrates that those thoughts have substantial support.
15. Another example of an alternate reality by then-candidate Adrian Fine in the previously cited interview "What it will take to make Silicon Valley affordable again": "These regulations are at fault. As is frankly the attitude of folks who have their single family homes. They're happy with them; they don't want more people. Some folks are talking about reducing and limiting jobs."
16. Kate Downing, a leader of Palo Alto Forward and a former Planning Commissioner, made this claim in an interview following her resignation from the Commission. See section "Contrived Scarcity" in my blog "The 'You're despicable' style of politics" of 2016-09-22.
17. A lesser/partial example of this can be found in the Palo Alto Weekly's interview of candidate Adrian Fine where part of his response is "It is worrying to me to say that we want to push off these jobs" in response to publisher Bill Johnson's question about the impacts of commercial development on the jobs-housing imbalance (at 10:00). Note: Fine's apparent failure to understand the question as originally asked may or may not have been a common technique for the interviewee to get more time to think about his answer.
18. Opening sections of blog "The 'You're despicable' style of politics", 2016-09-22.
19. For an example of the wide ranging falsehoods being promulgated by pro-developer politicians, see the section on (Councilmember) Cory Wolbach's Facebook posts in my blog "The 'You're despicable' style of politics", 2016-09-22
20. Appear to be lying: For example, PAHC presented a drawing showing the visual scale of the market-rate houses, but a quick eyeballing versus the dimensions in the text revealed that the drawing egregiously understated the size of the buildings Aside: City Hall has a history of allowing developers to get away with these deceptions--in the earlier 800 High project, a resident plugged the developer's numbers into readily available software to produce an accurate representation to no avail--City Hall used the deceptive drawings.
For example, the advocates claimed that any private developer would put the maximum allowed density of 46 houses on the properties, creating an even worse situation than the proposed project. A little math showed this to be ludicrous. As did reality: The developer who subsequently purchased the property put 16 houses on it--just over one-third of what City Hall, PAHC and the political establishment declared was inevitable.
For example, PAHC declared that they needed the upzoning so that the sale of the market-rate houses would finance the senior housing. However, what was discovered was that PAHC planned to "leave a lot of money on the table": They were going to use the profits from the upzoning of the land itself, but the expected substantial profits from building and selling the houses would belong to the developer. Too often the benefits of government action on affordable housing seem to go more to the developers than to the community.
21. Why claims were ludicrous:
1. Concerns about safety on Maybell Ave had long pre-dated the project proposal.
2. There was no exclusive neighborhood to maintain. There were multiple BMR buildings throughout the neighborhood, including next to the site of the proposed project. Plus the Buena Vista Mobile Home Park.
22. A sad commentary on political discourse is that by 2013 labeling opponents as "racists" was a common bullying tactic. However, for those outside that particular political environment, this is still a vile accusation, one that would like lead to subsequent exchanges being belligerent.
23. "Editorial: A wasteful Maybell referendum", Palo Alto Weekly, 2013-08-16.
24. Failure of the PTC (and Council): See the footnote with Planning Commissioner Eduardo Martinez's assessment in in blog "The 'You're despicable' style of politics" (a blog which is cited several times in this article).
25. "Editorial: The push for 27 University", Palo Alto Weekly, 2012-11-30.
"Palo Alto admits mistakes in negotiations with developer: City agrees it followed a 'flawed' process in 2012 talks with John Arrillaga over property sale, proposed development", Palo Alto Online, 2014-09-04.
26. "Editorial: A bittersweet outcome", Palo Alto Weekly, 2016-07-01. Plus, some of the comments are informative.
An abbreviated index by topic and chronologically is available.
----Boilerplate on Commenting----
The Guidelines for comments on this blog are different from those on Town Square Forums. I am attempting to foster more civility and substantive comments by deleting violations of the guidelines.
I am particularly strict about misrepresenting what others have said (me or other commenters). If I judge your comment as likely to provoke a response of "That is not what was said", do not be surprised to have it deleted. My primary goal is to avoid unnecessary and undesirable back-and-forth, but such misrepresentations also indicate that the author is unwilling/unable to participate in a meaningful, respectful conversation on the topic.
If you behave like a Troll, do not waste your time protesting when you get treated like one.