Real Estate

Packing the suburbs

While local residents turn backyards into rentals, city considers easing 'granny unit' requirements

A careful observer of Palo Alto city politics, and this election season for that matter, might have noticed that the term "granny units," or "second dwelling units," has been dropped a few times of late.

The latest Housing Element making its way towards the City Council counts expected second dwelling units for the first time towards the state-mandated Regional Housing Needs Allocation (RHNA) -- through which the city must prove it has sufficient zoning to accommodate future housing growth. This inclusion was suggested by a community panel of local housing stakeholders, convened in March, to discuss the document.

In addition, the Housing Element Community Panel has proposed that the city examine its current planning requirements for second dwelling units and consider whether they should be amended to encourage the construction of more such units. The latest draft of the Housing Element for 2015-23 includes a program (H3.3.5) that asks for the city to do just that.

"Whether we implement some of that, we shall see," said Tim Wong, interim advance planning manager for the City of Palo Alto. "But the first step is to review what those requirements are and what the public would think about relaxing some of (them)."

At the moment, the city only approves about four second dwelling units each year, with a slight uptick to six this past year, according to Wong. Thus, the proposed Housing Element anticipates 32 new second dwelling units in the next eight years, a small contribution to the 1,988 units the RHNA calls for in Palo Alto.

Wong explained that state law allows Palo Alto property owners to build second dwelling units "by right," meaning that it requires no "discretionary review" from a city commission or the council. However, for the Planning Department to sign off on a project, the property must meet a laundry list of conditions, some of which might rule out projects on smaller lots.

For instance, the property must exceed a certain minimum lot size, which varies depending on the zoning. Also, square footage added by the unit (which maxes out at 900 square feet) counts towards the total Floor Area Ratio (FAR), which limits the total square footage taken up by buildings on the property.

Other stipulations include that the property have additional parking spaces (two uncovered, two covered in total one of each for each unit), that the units be separated by at least 12 feet, that the second unit be "architecturally compatible" with the main home, and that it should be only one story tall, with a maximum height of 17 feet.

Just a few weeks ago, David and Edda Whitton completed a second dwelling unit just under 800 square feet on their Ross Road property, a process that took them about two years.

The couple got the idea from a neighbor down the street who had built a second dwelling unit. The pool the Whittons previously had in their backyard was not easy or cheap to maintain, and they decided to fill it in and build an "in-law cottage." From the beginning, they envisioned the new unit as a rental that could produce some extra cash flow, which they could use to finance vacations, for example.

"We are both retired; it would be nice to have a little additional income," Whitton said.

Quiet and well-appointed, the unit would be ideal for a student or staff member from Stanford University, they thought. They spoke with a friend who is a real-estate agent, and after making a few changes, set the rental rate for the unit at $3,850 per month, with utilities paid separately. They have had listings up on Craiglist for a few months and have talked with some interested people, though they have not yet found a permanent tenant.

A few years down the road, Whitton said that they may move into the second dwelling unit themselves while they update their main home, originally built in 1959.

Though they are happy with the results, the project did not come without its headaches, among them difficulties with a manager they hired, unforeseen utilities costs and a number of approvals. In addition to the above planning requirements, the project had to be in compliance with the city's building codes.

"We're in that sort of buyer's remorse thing now," Whitton said. "These things are a major, major event."

During the process, the Whittons discovered that the fire department requires the installation of fire sprinklers in all new units, which necessitated the placement of some "ugly back-flow prevention devices" in their front yard. Whitton also explained that, if they could do it over, they would make the unit an all-electric dwelling; it was a struggle setting up a new gas line and meter, he said.

Though he described the process as "a lot of work, a lot of detail, a lot of bureaucracy," Whitton was happy with the assistance he had received from the city in jumping through all the various hoops.

"The folks in Palo Alto Utilities and Palo Alto building office have been very helpful and kind to us," he said.

Editorial Intern Benjamin Custer contributed reporting to this story. Editorial Assistant Sam Sciolla can be emailed at

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Like this comment
Posted by Douglas Moran
a resident of Barron Park
on Nov 1, 2014 at 3:19 pm

Douglas Moran is a registered user.

Before someone comments on this being a good way to provide "affordable housing", run the numbers.

A rent of $3850/month translates into $46,200/year. The generic advice for housing costs is that it should be one-third of income, but in this area it is often 40%. But housing costs include not just rent (or mortgage+property tax) but utilities, insurance, ... So we are talking about a housing cost of roughly $50K/year for this small unit. At 33% of income, that is $150K; at 40%, it is $125K. So depending on what you mean by "affordable" ... And that is the expected rent for *this* year.

Like this comment
Posted by Robert
a resident of another community
on Nov 1, 2014 at 4:57 pm

Whats your point Doug? That rent is at the low end of the spectrum in Palo Alto, and a $125k salary is nowhere near enough to actually buy any type of housing here.

1 person likes this
Posted by Douglas Moran
a resident of Barron Park
on Nov 1, 2014 at 5:08 pm

Douglas Moran is a registered user.

The point is that many housing advocates portray second units as providing rents *substantially* below "the low end of the spectrum in Palo Alto" (eg in the $50-90K range).

Also recognize that roughly half the housing units in Palo Alto are rentals (the counts tend to vary in the range 46-56%, varying by date and data source). Palo Alto has one of the highest (often the highest) proportion of rentals of cities in the county. So you aren't comparing renting one of these units to purchasing, but also to renting.

1 person likes this
Posted by Douglas Moran
a resident of Barron Park
on Nov 1, 2014 at 5:19 pm

Douglas Moran is a registered user.

For those interested in the official definitions of "affordable housing" for Palo Alto (actually Santa Clara County):

I realize that a second unit is unlikely to be rented to a family of four, but I couldn't find numbers for different household sizes. However, these give you a sense of the range.

Using the numbers from 2008 (the first I could find), a family of four is regarded as:
- "extremely low income" for a household income up to $32K (30% AMI)
- "very low income" up to $53K (50% AMI)
- "low income" up to $85K (80%)
- "moderate income" up to $105.5K

AMI is Area Median Income. Here the "Area" is defined to be the county (Santa Clara County). This may not make a lot of sense for an economist or demographer, but for a bureaucrat it is easy to compute and administer.

Like this comment
Posted by Herb Borock
a resident of another community
on Nov 1, 2014 at 5:48 pm

Here is a link to the income limts for subsidized housing from the Housing Authority of Santa Clara County web site: Web Link

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Posted by Robert
a resident of another community
on Nov 1, 2014 at 6:41 pm

"The point is that many housing advocates portray second units as providing rents *substantially* below "the low end of the spectrum in Palo Alto" (eg in the $50-90K range)."

And somehow this single example (which according to the article they haven't been able to rent at that price) demonstrates that second units can't provide housing in that range? It's important to have a range of housing options, which these provide, its certainly not going to hurt affordability.

1 person likes this
Posted by Douglas Moran
a resident of Barron Park
on Nov 1, 2014 at 7:00 pm

Douglas Moran is a registered user.

RE: "Robert" : "And somehow this single example (which according to the article they haven't been able to rent at that price) demonstrates that second units can't provide housing in that range?"

I never said that.

If you want to understand why the consideration of affordable housing is so contentious, it is because despicable people like Robert routinely lie about those who bring up anything that they don't like.

1 person likes this
Posted by A not quite lot
a resident of Another Palo Alto neighborhood
on Nov 1, 2014 at 7:14 pm

The calculation using people's salary is not a realistic way of looking at the regional housing market. It's never been the case that expensive areas are the place to get affordable start homes. Usually people buy in more affordable spots — and there are not so far away, including East Palo Alto where

When did things change so that it was a human right to buy a home in Palo Alto? First of all, we are not the center of the universe, there is a large metropolitan area around us. Most people I know who own a home here and are not Zuckerberg et al, bought in wherever and however they could, and worked their way up. Living in different parts of the Bay Area has been a very interesting and healthy thing I never would have done otherwise. You want to know a secret? Oakland and Berkeley are way nicer and the people more diverse and friendly. More cultural attractions and better food at the affordable end of the spectrum. Most microclimates are nicer and it's easier to get to open water.

We moved away because of other priorities. But once you buy in somewhere, expenses are much more stable (if painful for the first years, that's an inevitability). When the market heats up, you move up. It's been the way of the Bay Area, and all areas. I can't afford my house, I doubt many of my neighbors could afford theirs. Not many of them bought their starter homes here. You first buy something substandard, somewhere cheaper, work on it, work your way up, and build equity. Jobs are all over the Bay Area and they change, so even if one's job is in Palo Alto, it might not be here a few years later. We have friends who own homes all over the Bay Area, from HMB to Felton to San Leandro to Evergreen to San Carlos to SF and SJ. Everyone made their choices based on a number of factors, but you know something? They're happy with their choices. Not a one has said, the only way I can be happy is if I get to live in Palo Alto and it's my human right to get a starter home there.

One way to work this to be affordable housing is if people get loans or small grants to build their second units in exchange for making the rent more affordable for a set period of time. Usually things are most unaffordable when new, if the properties could also get some tax breaks as a result, that might also help. If I had a 2nd unit and could get a smaller tax bill instead of a higher rent, I'd be plenty happy for that. If maybe the law made allowances for an alternating market value rent (paying the normal tax rate during that period so people could choose), it might make a whole range of new housing choices available.

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Posted by Robert
a resident of another community
on Nov 1, 2014 at 8:08 pm

Excuse me Doug if misunderstood your post, but it sounded to me like you were pooh poohing the idea because it wont be affordable to making $50-90k... to which I would say, so what? It's not like people making $125k don't need housing?

2 people like this
Posted by STOP!!!
a resident of Duveneck/St. Francis
on Nov 2, 2014 at 12:32 am

How many ways can one ruin a beautiful city. Palo Alto residents are already struggling with increased airplane noise, now we are considering another self-inflicting harassment. Most lot sizes are so small in Palo Alto. If restrictions are loosened and a second dwelling is placed in a back yard, this can be a wind fall for realtors who can buy and advertise the option to split properties. It will be a disaster for most residents. The quality of living of the neighbor behind the fence from or next door to a granny residence will be greatly impacted.

How can we even consider this change in the laws that protect our privacy and quality of life. Almost none of us live on half acre lots. We are so close to each other already. Would anyone be happy with a house just feet away from the garden where they seek solitude in a small back yard. People living in a granny residence come with the lives they live(as anyone should in their home). They come with, lively voices, home living noises, personal music, dogs that bark, and enjoyment of outdoor living in their own small yard. This is all their right if they rent a granny apartment, but the smallish space we have between our houses right now at least make happy and friendly neighborly relations. Jamming more houses in can only cause problems for all.

Other solutions for our housing problems can be found. One solution I suggest is lets concentrate on nice, affordable independent living senior housing complexes with resources. We are all growing older and seniors come to neighborhoods without children to crowd our schools. Please don't change our Palo Alto lifestyle that includes outdoor living in our back yards by having homes build behind our backyard fences.

1 person likes this
Posted by common sense
a resident of Midtown
on Nov 2, 2014 at 4:59 am

Modification of zoning to allow in-law units on smaller lots has been proposed before by staff, in either 2005 or 2006. It was not changed back then because the feedback was that the parking & traffic in R-1 zoned neighborhoods would change the character of those neighborhoods.

Essentially it changes the R-1 neighborhood into a multi-residential neighborhood. If on-site parking requirements are kept the same, the layout for the additional parking on the typical 6,000 square foot lot will give a much different appearance to the neighborhood.

The other issue will be that some of the in-law cottages will be used as short term rentals, which again is changing the R-1 neighborhood into a pseudo commercial/low density hotel district, when enough homes in a neighborhood add an in-law cottage.

1 person likes this
Posted by Resident
a resident of Another Palo Alto neighborhood
on Nov 2, 2014 at 7:42 am

I would genuinely have no objection per se to a neighbor of mine building an extra bit of space so that an elderly granny could live with their family. In fact as a teenager, my parents took in my granny when it was time that she could no longer live on her own.

However, and this is a big however, it is a slippery slope. What starts as a small room with perhaps a bathroom to house an elderly relative can soon turn into a monster. Then it snowballs and turns into a secondary residence with a separate entrance, another car or two, and who can tell if it is a relative or even someone elderly.

Dangerous ground. Dangerous precedent.

1 person likes this
Posted by R-1 losing
a resident of Fairmeadow
on Nov 2, 2014 at 8:50 am

@common sense, you are so right, but city staff has a different view. Neighbors have complained to code enforcement about a house on our block that rents two or three to a room and also couches, and has around 16 adults in a R-1 home. Some tenants have multiple cars and there are about 15 cars belonging to this one home. Code enforcement says that's ok you can do it! We are baffled that this is allowed in a R-1 neighborhood and essentially it is a boarding house with a lot of turnover. This should be in a different zone.

Like this comment
Posted by Barron Park resident
a resident of Barron Park
on Nov 3, 2014 at 12:55 pm

Pave in the bay south of Dumbarton bridge. Build your megacity there. Relieve pressure in existing cities.

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

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