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RPP + ADUs: Winners and losers

Uploaded: Mar 4, 2017
One of the classic mistakes in politics is to become overly focused on the details of official actions at the expense of asking whether those actions support the purported goals and strategies and which interest groups are served, and which aren't.

There are three important items on the agendas for the Council meetings of Monday 3/6 and Tuesday 3/7. Groundwater pumping was discussed in my previous blog. The other two are the downtown RPP--Residential Preferred Parking Permit Program, with two of the P's being silent--and ADUs--Accessory Dwelling Units, aka "Granny Units"--which I will address here.(foot#1)

Note: I don't live within the Downtown RPP--or any other RPP or anticipated RPP. Page 10 (PDF) of Friday's Palo Alto Weekly has an ad on this issue from leaders of the neighborhoods within the RPP.

----Downtown RPP----

There are three basic goals of the RPP. First, reduce the significant negative impact on quality of life inflicted on those neighborhoods by overflow parking from the business district. Second, promote vehicle trip reduction for commuters--if they don't have a place, they will have to find other means. Third, provide appropriate preferences and exemptions to various categories of non-residents, especially resident-oriented businesses--ranging from medical facilities to residential facilities such as Channing House--and employees for whom the alternatives are too difficult, either logistically or financially. The strategy revolves around incrementally reducing the number of permits available, by 20% per year, to give business and people a chance to adapt.

There are three significant interest groups that are roughly: the residents, the resident-serving business (employees, employers, customers), business that are office, R&D... (employees, employer, landlord, developers).

The biggest problem with the Staff recommendation is that it negates the strategy--thereby subverting the first two goals--and does too little on the third goal. When the Downtown RPP was initiated, the estimate was that 2000 employee permits would be needed, however, the maximum number of such permits currently only 1335 (with the maximum having been 1515).(foot#2)(foot#3) The Staff recommendation is to reduce the permit count from the original (faulty) estimate rather than from observed need. Thus, it will take over 3 years before the number of permits being made available to employees comes down to the current level--that postpones any pain or gain until after the next Council election. The winners are the third interest group--office workers, employers, landlords--and the losers are the first interest group--the residents.(foot#4)


The "goal" of this agenda item is to increase the number of ADUs, but this isn't a proper goal because it isn't based on an adequate notion of what why this is good. Without that foundation, you can't have a real strategy, both to achieve positive results and avoid negative ones.

When I have listened to the rationalization for ADUs, the lack of thought in many is troubling. For example, at least one person has testified that they want an ADU for their parents when they come to visit because hotels are so expensive. But construction costs alone for an ADU would be $300-350 per sqft, so a 500 sqft ADU would be $150-175K plus fees, taxes, maintenance ... That is a lot of nights in a hotel. Similarly for the official (Greg Tanaka, now Councilmember, then on the Planning Commission) who suggested that parking impacts for ADUs could be handle by putting it underground (garage or lifts). Basements are very expensive--even without groundwater issues--and if your goal is creating affordable small housing units, this seems to be a non-starter.

There is the claim that ADUs would provide housing for lower-income people, but this often comes from the same people who are arguing that young professionals are seeking smaller units, and sometimes explicitly include ADUs in this. So how are those lower-income people going to compete?

Some have advocated for their having an ADU to help pay for their mortgage, not thinking about the ripple effect on housing prices: The ability to add an ADU, not just have an existing one, could increase housing prices generally. I haven't seen this concern addressed.

Then there is the claim that providing ADUs would decrease competition for other types of housing to the extent that it would result in decreases in housing prices for everyone. I find it troubling that so many take such claims seriously, and don't even ask for a back of the envelope calculation.

Then there are the messy details related to parking. First, State law exempts ADUs near transit from providing parking on the erroneous theory that those residents won't have cars ("In theory there is no difference between theory and practice; in practice there is").(foot#5) More generally, many ADU advocates want to exempt them from parking requirements on a similar theory of them being "car-lite". However, this seems to be entirely aspirational ("Hope is not a strategy"), without any sense of there is a practical and legal means to achieve that.

Then there is the Airbnb problem, and it is a potential big one. San Francisco and other cities have experienced worsening of affordable housing shortages as units, even buildings, have been converted, often illegally, to Airbnb. And transients, including professionals, bring problems to residential neighborhoods. Recent counts of Airbnb listings in Palo Alto were over 1,200 and growing, but only the totals have been provided--no breakdowns or other analyses.(foot#6)

During the campaign, now-Councilmember Adrian Fine advocating going to Airbnb headquarters (in San Francisco) and working with them to come up with fair regulations. This seems rather naive, given how vigorously they fought LA, New York City, San Francisco and others. The LA and NYC analyses found 60-80% of the listings to be illegal (violation of local ordinances on renting) and that provided them with leverage to eventually get some concessions from Airbnb--I speculate that they became worried that their business model could be characterized as having criminal facilitation as a major component (ethically, if not legally). History suggests that City Hall is unlikely to ever develop, much less deploy, such leverage: That history too often finds City Hall working to find arguments and interpretations that favor big-money interests over the residents.

So who are going to be the winners and losers in this? Hard to be specific. But when you have a program that hasn't thought through how to minimize counterproductive actions and outright abuses, you should expect lots of losers.

1. Agenda, March 6
Agenda, March 7
These agendas contain links to the Staff reports.
If you want to send comments to City Council, the email address is "City.Council@CityofPaloAlto.org" (capitalization is optional, that is, irrelevant). You are requested to identify the meeting date and agenda item number of the subject line to help organize the emails so that they can be read more effectively.
The RPP is item #10 at the 3/6 meeting; ADU is item #2 at the 3/7 meeting.

2. "Table 1: Recommended Reduction in Employee Parking Permits by Zone", page 5 in the Staff report.

3. There is only speculation about the causes of difference between the estimated number of employee permits needed and the number purchased. Some people parking in the neighborhoods were not eligible to buy permits, such as Stanford employees and outbound Caltrain commuters. Some shifted to parking in Menlo Park neighborhoods just across the bike/pedestrian bridges. But there aren't even rough estimates for these, and other, categories.

4. The argument that employees have a right to park in neighborhoods seems to be contradicted by a US Supreme Court decision cited by one of the supporters of the RPP who is also a lawyer: "To reduce air pollution and other environmental effects of automobile commuting, a community reasonably may restrict on-street parking available to commuters, thus encouraging reliance on car pools and mass transit. The same goal is served by assuring convenient parking to residents who leave their cars at home during the day. A community may also decide that restrictions on the flow of outside traffic into particular residential areas would enhance the quality of life there by reducing noise, traffic hazards, and litter." - US Supreme Court in ARLINGTON COUNTY BOARD v. RICHARDS, (1977) No. 76-1418.

5. You can easily have residents who don't use cars to get to work, but need them for otherwise, and consequently their cars are parked in the high-demand area near transit during the day. I know of actual examples of this in the Cal Ave area: The residents take the Marguerite Shuttle to work at Stanford.

6. One instance: "Neighbors resolve conflict over potential Airbnb rental: Crescent Park home was to be rented to up to 14 people, but owner has reconsidered", PA Online, 2016-10-07.

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.
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Posted by Curmudgeon, a resident of Downtown North,
on Mar 4, 2017 at 4:55 pm

"The winners are the third interest group--office workers, employers, landlords--and the losers are the first interest group--the residents.(foot#4)"

"That history too often finds City Hall working to find arguments and interpretations that favor big-money interests over the residents."

Says it all.

Posted by True Residentialist, a resident of Barron Park,
on Mar 7, 2017 at 12:43 am

So great to have you back, Doug, offering your always pithy analysis.

Why no mention here of the most obvious solution. Charge everyone a market price for parking anywhere on public streets and let the process sort itself out. Donald Shoup is right about this but you never see the pro-sprawl residentialists endorse this idea, since they're the beneficiaries of the free parking we build for them all over the place. And, just like local housing, they'd rather restrict supply in a way that delivers them all the financial benefits.

Why should residents get 5 RPP passes, more or less for free? You do not have a right not to have other people park in the public parking space in front of your home. Especially when you bought a home *right next to downtown*.

Seems to me that whatever "quality of life" risks were associated with living near an active downtown would have been capitalized into home values when people bought the homes. So why are we giving a huge subsidy to folks who should have known what they were buying into?

Posted by Douglas Moran, a Palo Alto Online blogger,
on Mar 7, 2017 at 2:41 am

Douglas Moran is a registered user.

> "they're the beneficiaries of the free parking we build for them all over the place."

Fallacy. When the typical development is built, the developer builds the streets and dedicates (transfers ownership) them to the city. The construction costs become part of the purchase price of the houses, and the maintenance becomes part of the property tax. When a development is along an existing street, there is provision for impacts fees. So purchasers of new houses were not gifted the streets for free, and purchasers of existing houses had the costs of the streets in the sales price. Are there exceptions? Of course. For example, a politically connected developer can get City Hall to accept an underestimate of impacts that puts it below the level where impact fees are levied. Does this benefit the homeowners? Of course not. The price they pay was determined by the overall market, that is, a price where the impact fees had been leveled. The non-payment of impact fees is a gift from the officials to their loyal supporter, the developer.

> "Charge everyone a market price for parking anywhere on public streets"
This is absurdly naive economics. It is based on assumptions such as a resident being able to choose to forgo a car if the parking prices are too high, or that walking long distances from an affordable parking spot to their home is acceptable (wheelchairs, walkers, multiple children...). Or does it assume that if parking becomes too expensive, the homeowner could easily relocate?

> "You do not have a right not to have other people park in the public parking space in front of your home."
1. The permits are not for "in front of your home", but for a zone in which your home is located. The limit on employee (non-resident) permits for a zone is expected to keep enough open spaces in the zone that a resident can find a space close-enough.
2. For parking in your neighborhood, see the US Supreme Court decision reference in the blog as footnote 4.

> "Especially when you bought a home *right next to downtown*."
1. Gross ignorance. The RPP extends well away from downtown.
2. Gross ignorance. Downtown didn't always have the current parking problems and many of the current residents of the RPP zones bought their houses before the onset of these problems.
3. Nearness to downtown is irrelevant -- the crucial factor is that it is a residential neighborhood (see the Supreme Court decision).

> "associated with living near an active downtown would have been capitalized into home values when people bought the homes."
A repetition of the preceding.

What we have here is someone who thinks that one can show up and take away valuable resources that others have paid for. But when it is based on ignorance and pseudo-economics, what should we call it?

Posted by mauricio, a resident of Embarcadero Oaks/Leland,
on Mar 7, 2017 at 11:11 am

"What we have here is someone who thinks that one can show up and take away valuable resources that others have paid for. But when it is based on ignorance and pseudo-economics, what should we call it?"

We should probably call it Trumpconomics.

To "True Redidentialist": I still remember a time, back in the 1980s and early 1990s, when the word 'problem' was not associated with downtown parking. You could drive downtown on a Saturday evening for dinner and a movie and, gasp, you could find parking even on University Ave, and very easily on one of its side streets. Then came the"vibrancy" craze of Liz Kniss and her fellow travelers: excessive office development, densification and overpopulation, and downtown and parking problems became synonymous. The only beneficiaries of free gifts have been the developers, not home owners.

Posted by Douglas Moran, a Palo Alto Online blogger,
on Mar 7, 2017 at 1:10 pm

Douglas Moran is a registered user.

> "We should probably call it Trumpconomics."

Clarification: When I said "ignorance and pseudo-economics" I was talking about the shilling, not the real decision-making by the officials. In political science, they explain how autocrats (dictators etc) need to reward supporters/buy support and then generalize that to democracies where there tend to be much larger groups of supporters that need to be taken care of. However, as the national discussion of money-in-politics indicates, you can get a situation where big donors dominate.

Posted by margaret heath, a resident of College Terrace,
on Mar 8, 2017 at 2:37 pm


"The only beneficiaries of free gifts have been the developers, not homeowners."

Perhaps not the only "beneficiaries" since developers make big campaign donations to their pet council members.

Posted by Gale Johnson, a resident of Adobe-Meadow,
on Mar 10, 2017 at 3:08 pm

@ Doug Morgan,

Well said. You lost me in some of your comments but your primary message rang clear and true, in my mind. This was truly a rushed thru vote on a subject that should have had more time to review, discuss, and debate with neighbors in the community, that will be affected by it. I hope it will fail dismally, certainly as offered as a way to help our housing shortage (crisis?). I will suddenly get very un-neighborly with neighbors if they erect those cottages next door. CC, do your job in really putting a major effort into solving the housing crisis as you describe it. ADU's aren't the solution. There have been so many violations already, and now you're taking on, tacking on, another opportunity for more violations. There has been no enforcement to date and there won't be any in the future. Time to engage your "what's best for our community" brains on this issue.

Who listens to Tanaka's hairbrained ideas anymore. Underground parking for ADU dwellers?

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