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About this blog: I grew up in Los Angeles and moved to the area in 1963 when I started graduate school at Stanford. Nancy and I were married in 1977 and we lived for nearly 30 years in the Duveneck school area. Our children went to Paly. We moved ...  (More)

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Bay Area and Palo Alto RHNA

Uploaded: Jun 30, 2020
The California Department of Housing and Community Development (HCD) has released the Regional Housing Needs Allocation for the Bay Area,.

The total for the 8.5 year period is 441,176 units, which I believe is approximately 135% (more than double) higher than the current target.

Almost 60% of the units are targeted at low and moderate income households while 40% are for HH making more than 120% of the area median income

About half of these units are for the projected growth in population and half are to "catch up" on existing shortages: to reduce the number of overcrowded and cost-burdened households and to target a normal supply of vacant units. These catch up requirements are the result of recent state legislation to relieve housing challenges for current low and moderate income residents and are new to this round of RHNA allocations.

Palo Alto should expect to get a higher % increase as goal. The ABAG RHNA allocation committee criteria (not final yet) target above average allocations for 1) cities that are high opportunity areas and 2) cities that have an abundance of jobs relative to housing. I expect Palo Alto would score high on both of these criteria.

Whatever allocation Palo Alto ultimately gets will need to be planned for in the Housing Element update due in 2022. This will be a major work element for staff and the council in 2021. The Housing Element needs to contain credible and feasible sites for housing as well as an array of policies to meet state goals.

This is where local control can come into play as Palo Alto can adopt its own plan to meet the targets though it has to be credible and feasible.

Current and future housing proposals should be considered with this knowledge about Palo Alto's upcoming RHNA goals.

A final note.

The HCD determination was not based on the ABAG job and population growth forecast. If it had been, the target likely would have been 100,000--150,000 housing units higher.
We need your support now more than ever. Can we count on you?


 +   12 people like this
Posted by mjh, a resident of College Terrace,
on Jun 30, 2020 at 4:00 pm

mjh is a registered user.

Palo Alto has far far too many jobs for the size of the city, probably because a good portion of the city is Stanford's job rich Research Park. We need to amortize office zoning where it makes sense to replace it with zoning for housing.

 +   8 people like this
Posted by ABAG Not Believable, a resident of Crescent Park,
on Jun 30, 2020 at 4:50 pm

While ABAG may be projecting huge growth, here's what Doug Kuczynski, a demographer at state's Department of Finance said recently:

“The Bay Area is slowing in growth. We don't see a point in time in the future where that's going to increase dramatically, It's kind of the new norm for California."

No company I talk to plans to keep growing here. Rather, they are looking at employees working remotely from less-congested communities.

Office vacancies were widespread even before the pandemic.

So who is behind ABAG's gigantic projections of growth? Some people say it's land owners who want huge extra profits by convincing local governments to let them build more on their properties.

I've even heard it's Steve Levy himself. Is that possible?

 +   4 people like this
Posted by stephen levy, a resident of University South,
on Jun 30, 2020 at 5:20 pm

stephen levy is a registered user.


What you suggest could help if 1) it is legal rezoning and not tied up in court and 2) the housing zoning is credible and feasible---meaning someone would actually be able to make a proposal that pencils out.

Other opportunities might better focus on retail lands that are no longer profitable with the shift to online shopping.

@ABAG is

It looks like you did not read my blog. The last line is

"The HCD determination was not based on the ABAG job and population growth forecast. If it had been, the target likely would have been 100,000--150,000 housing units higher."

HCD actually did use the lower DOF population projection and not the ABAG forecast that was developed by staff after my work was done.

And the ABAG forecast that you rant at works out to 0.6% job growth per year versus the 3.0% annual growth before COVID.

 +   11 people like this
Posted by mauricio, a resident of Embarcadero Oaks/Leland,
on Jun 30, 2020 at 6:01 pm

mauricio is a registered user.

Covid19 has taught us that density kills, and it's doubtful we'll ever be able to get rid of this virus, as Americans are too immature, self centered and selfish to do what it takes to eliminate the spread of the virus. The last thing Palo Alto and the Bay Area need is a population increase. It would literally be deadly. Working from home is already the new norm, there is no gong back to the the office model, and new additional housing is a totally anachronistic idea, highly unnecessary and extremely dangerous.

 +   3 people like this
Posted by mjh, a resident of College Terrace,
13 hours ago

mjh is a registered user.

Perhaps it is time for another citizen's initiative for a second moratorium to further restrict office growth rather than allow commercial developers to keep digging our jobs-housing hole ever deeper. If there is currently less demand for office space this would be the time to do so and an opportunity to actually begin making a dent in Palo Alto's jobs-housing imbalance.

When the city divied up the zoning map thirty years ago it was with the traditional assumption that there would be one office worker per 250 square foot. Using that calculation, the division between commercial to residential zoning appeared reasonable at the time. However, that calculation went out with the dodo.

For years older offices have been updated to accommodate up to triple or quadruple the number of employees the buildings were originally designed to hold, with the original amount of parking remaining unchanged. New office builds are designed to hold triple or quadruple the number of employees per 250 sq ft., but the original ratio of 250 sq ft per employee is still the standard used to calculate the number of parking spaces required. All of which vastly increases the productivity of the space and thus the dollar amount commercial landlords can lease their buildings for.

Perhaps it is no coincidence that serving on the council has been so popular with commercial real estate attorneys and others who indirectly benefit from approving dense and profitable commercial real estate development at the expense of encouraging less profitable residential development that would actually improve the jobs housing imbalance

In addition, Prop 13 contains sweetheart deals with loopholes for transferring ownership of commercial property without triggering new property tax assessments, as occurs with residential property sales. Which adds to the profitability of and incentivizes commercial real estate development. As a result, while 1975 Palo Alto's revenue from commercial property was fairly evenly divided between commercial and residential real estate, it has steadily decreased to 25% today, a number that continues to go down year on year.

 +   2 people like this
Posted by mjh, a resident of College Terrace,
13 hours ago

mjh is a registered user.

Regarding "penciling out" I have yet to be convinced that a developer would admit that a residential property would "pencil out" if the council can be persuaded that only a commercial development will "pencil out" given that this would be in the developer's best interest.

 +   3 people like this
Posted by Greg Schmid, a resident of Palo Verde,
11 hours ago

Greg Schmid is a registered user.

Steve, The share of the 441,176 new housing coming to Palo Alto and the other cities of Silicon Valley will be overwhelming given we have the highest housing costs in the country. Where do these numbers come from? From an aggressive jobs based model that targets job-growth in jobs-rich priority development areas. You mention that some of the new housing units are for 'catch-up'. But that merely reflects the fact that ABAG completely missed the concentration of jobs in Silicon Valley over the last decade: 3.3 jobs for every new employed resident in Silicon Valley; 6 jobs for every new employed resident in Palo Alto/Mt View/Menlo Park. Have these huge imbalances being taken into account by ABAG--despite government codes that require them to address "intra-regional jobs-housing imbalnces" they did not. In fact, without discussion they decreed in December that they would not look at limiting their local jobs projections and in May that COVID would not affect underlying job growth. Public discussion that included any of this data? Zero. And you push for zoning to meet these housing needs without any discussion of a better job distribution. What kind of planning is that?

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