Judge backs Palo Alto's affordable-housing law

Sterling Park developer John Mozart loses legal challenge against city's below-market-rate housing requirement

Developer John Mozart, who sued Palo Alto over its affordable-housing program, lost his case this week after a judge upheld the legality of the program and ruled that the developer waited too long to file the lawsuit.

Mozart argued that the city is unfairly requiring him to devote 10 units in his 96-unit Sterling Park development to below-market housing. In his lawsuit, Mozart called the requirement "arbitrary and capricious" and that it essentially amounts to a "special tax."

Santa Clara Superior Court Judge Kevin McKenney disagreed and granted the city's motion for summary judgment, dismissing the case.

Mozart's development, located on West Bayshore Road, was approved in 2006. The developer's lawsuit, which was filed late last year, is thus "barred by the 90-day limitations period," McKenney ruled.

McKenney also upheld the legality of the city's program, which has been producing about 7.5 below-market-rate units of housing per year. Palo Alto has a recognized shortage of affordable housing and city planners are now trying to identify possible sites for affordable housing as part of the city's ongoing Housing Element update.

McKenney ruled that the city's below-market-rate (BMR) housing program, which allows developers to pay "in-lieu fees" to reduce the affordable-housing requirement, does not violate the state's Mitigation Fee Act, which sets limitations for developer fees.

The BMR program, "does not impose fees to defray the cost of public facilities related to a development project," McKenney wrote. "Rather, the BMR Program encourages and promotes the development and availability of affordable housing for families and individuals whose incomes are insufficient to afford market rate housing by requiring developers to provide BMR units in their developments, or alternatively, to make payments to Defendant's Housing Development Funds."

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Posted by chavey
a resident of Fairmeadow
on Sep 23, 2010 at 8:48 am

While the BMR program is an excellent idea, its implementation leaves room for improvement. From a brief survey of BMR units around where I leave, I am not sure I understand why those are given to people that could afford renting. I thought that those units where reserved for Palo Alto Civil Servants. I know some BMR tenants and they work for private sector companies that are not even located in Palo Alto. How is that fitting within the program ?

Like this comment
Posted by Miss-Piggy
a resident of Fairmeadow
on Sep 23, 2010 at 10:29 am

> I thought that those units where reserved for
> Palo Alto Civil Servants.

With more than 400 people at City Hall making more than $100K, and some now making more than $200K, the taxpayers should be making reserved housing available to City Hall employees, why?

Like this comment
Posted by Just the facts please
a resident of Meadow Park
on Sep 23, 2010 at 10:50 am

There is no such reservation. Developers and advocates often throw smoke in the eyes of the public by talking about housing for teachers or firefighters but there is no legal way to do that. It promotes a phony argument.

Like this comment
Posted by Frank
a resident of Ventura
on Sep 23, 2010 at 11:38 am

I lived in a BMR unit some years ago. It was my first home (Condo) after I moved out of my parents house. At the time I worked for the Palo Alto Unified School District although your employer being public or private sector has nothing to do with qualifying.

You can see the rules and information about the program at: Web Link

As I recall you had to live or work in Palo Alto and have a qualifying income - if you look at the sale prices these are moderate income, not really low income.

The idea of the program was to keep a stock of housing for folks in this income range because we have a richer city if not everyone in it has to be rich (my paraphrasing of the goals of the program).

In my case I was able to work for the Schools for several years at a salary that maxed out at $24k. When I went into private industry I doubled that within the first year. Shortly after that I bought a house where I still live.

I think it's a good program - there might be some room for improving it but the thing I like about it is if you mix the lower income units with the rest of the housing you avoid the "housing projects" feel.

Like this comment
Posted by Immigrant myself
a resident of Another Palo Alto neighborhood
on Sep 23, 2010 at 4:31 pm

There is one area of low cost housing largely occupied by Russian immigrants. I always wondered how that happened, how did they qualify?

Like this comment
Posted by Paul
a resident of Downtown North
on Sep 24, 2010 at 4:52 pm

"I thought that those units where reserved for Palo Alto Civil Servants."

That's developer propaganda, used to promote huge condo developments that contain their minimum BMR requirement. Happens every time and it works every time. I wonder if any PA teachers or firefighters or police officers actually live in any Palo Alto BMR unit.

Sorry, but further commenting on this topic has been closed.

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