Teacher housing project ekes out passing grade

In theory, the proposed development at 3265 El Camino Real has all the qualities and amenities that Palo Alto leaders like to encourage.

It is located in a central corridor in Ventura where the city is hoping to attract more housing. Even though the five-story building would exceed Palo Alto’s 50-foot height limit by 15 feet, it is far shorter, less dense and with less neighborhood opposition than other projects in the area, including the “builder’s remedy” proposals that have been popping up over the past year just south of the site. And it’s a rare example of a 100% affordable housing project that did not require an infusion of public funds.

Most importantly, the 44-apartment project is geared toward a population that does more than most to raise Palo Alto’s youth and property values: teachers. The developer, Half Dome Capital, has signed an agreement with the Palo Alto Educators Foundation to give local educators the right of first refusal on the units, once built.

Yet as the project went in front of the Planning and Transportation Commission for its first review on April 10, some wondered whether the development will achieve its goals of housing teachers or whether it is “affordable in name only,” as Vice Chair Bryna Chang put it.

The commission ultimately voted 5-2, with Chair Doria Summa and Chang dissenting, to advance the project through the development pipeline. As part of the city’s lengthy and highly discretionary “planned home zoning” process, it will next go to the Architectural Review Board before returning to the planning commission and then proceeding to the Palo Alto City Council for final approval.

The biggest concern from Chang and others are the proposed rents. The developer, Jason Matlof of Half Dome Capital, is proposing to offer 20% of the total units at “low” income level, which is 50% to 80% of the county’s area median income and 80% of the units at “moderate” level, which is defined by state law as 81% to 120% of area median income. The developer has also indicated that it will voluntarily cap affordability levels of the higher income units at 110%.

The average rent will be about $3,150, according to the applicants, though the exact amount would vary widely by unit type and affordability category. The building will include 24 studios and 20 one-bedroom apartments. At the lowest end is a studio with a monthly rent of $2,000; at the highest is a one-bedroom apartment with a $4,000-per-month rent, according to current estimates.

But if you build it, will they come? Chang and Commissioner Allen Akin both suggested that the answer might be no. Chang pointed to the salary schedule in the Palo Alto Unified School District, where salaries range from $76,000 to $154,000.

The new apartments, she argued, would only be accessible to a tiny portion of the teacher population.

“My concern overall is that this is being called affordable housing and is technically affordable housing according to our law but in practice, given the area median income and given what PAUSD teacher salary schedule shows, these units are not really affordable to them,” Chang said.

Summa agreed and said that she does not consider the project affordable housing because “the people it’s intended for can’t afford to live there” based on salary schedules and income data.

“I can’t reconcile the good intent of this building with the fact that it’s not doing what (the applicant) said it’s going to do, that it is really, truly market rate, out of reach of almost everybody,” Summa said.

But while Summa and Chang both supported requiring the applicant to perform more analysis before returning for another hearing, their colleagues agreed that the benefits of the project far outweigh its shortcomings. Commissioner Cari Templeton pushed back against the idea that the project is not “affordable housing” and noted that it meets both the technical definition of the term and the city’s own guidelines for projects seeking planned home zoning designation. Palo Alto law only requires applicants to designate 20% of their units as affordable to qualify for the process.

“It is complicated to build affordable housing without grants and outside funding, and I applaud the efforts,” Templeton said. “So I think we should encourage this kind of proposal more and more and not slow it down.”

Commissioners Bart Hechtman and George Lu both said they were enthusiastic about the new proposal. Lu said it’s “generally in line with what we wanted in this area, or exceeds it, in affordability requirements.” Hechtman lauded the developer for its agreement with local teachers but suggested that the addition of housing would be valuable even without this deal.

“This is housing that would be useful to us even without that arrangement,” Hechtman said. “The fact that it’s going to teachers is so much the better. I would be supportive of this concept without it.”

The development received a boost last September, when the city council got its first look at the proposal and liked what it saw. In its informal pre-screening hearing, council members encouraged Half Dome to submit a formal application, which it did shortly after the review. The issue of affordability came up then as well, with Mayor Greer Stone pointing to a disparity between teacher pay and the proposed rents.

“They’ve earned the right to live in the community that they teach if they so choose,” said Stone, himself a public school teacher. “I’m just worried these rents will be prohibitively expensive for a majority of those teachers.”

But teachers and school board members have argued that every bit of housing helps. Teri Baldwin, president of the Palo Alto Educators Association, noted in a letter to the city that most of the union’s 850 teachers “cannot live in the community we serve.” Some teachers commute from Gilroy, Morgan Hill, Aptos and Dublin.

“Palo Alto is known for its excellent schools and education, but the fear is that we are going to lose great teachers and struggle to recruit new ones because teachers can’t afford to live in this area,” Baldwin wrote.

Jesse Ladomirak, president of the Board of Education, and board member Jennifer DiBrienza, called the project an “outstanding opportunity to make a small dent in the thousands of housing units Palo Alto must add.”

“It is housing for some of the hardest workers in Palo Alto, near transit, jobs, and services — which will reduce cars on the road and greenhouse gas emissions,” DiBrienza and Ladomirak wrote in a letter. “It’s a win for all of us. Please fast track this and make it happen!”

Correction: The story had initially misstated the positions of Jennifer DiBrienza and Jesse Ladomirak on the Board of Education.