A new Palo Alto law that allows developers who provide affordable housing to build more densely will get its first test on Monday night, when the City Council considers approving the demolition of four homes and construction of new three-story building on a busy and rapidly changing stretch of Page Mill Road.
Designed by the local firm Stoecker and Northway Architects, the mixed-use development at 441 Page Mill Road would include retail on the ground floor, offices on the second floor and 10 apartments on the third floor. Because three of these apartments will be offered at below market rate, the development is eligible to take advantage of both state and city laws that provide density bonuses for affordable-housing projects. In the case of 441 Page Mill, the developer is in part asking to build nearly 11,000 square feet more of office space than the zoning would allow.
Palo Alto’s ordinance, which the council adopted last year, specifies the types of concessions and zoning exceptions a developer can request and lays out a process for developers who wish to request “off menu” concessions. This includes submitting a financial analysis for the project that justifies the concessions as necessary for making the development economically feasible.
The proposal by property owner Norm Schwab is part of a sizable crop of recently approved developments around the transit-rich and increasingly busy area near El Camino Real and California Avenue. Others include the block-long proposals at 2180 El Camino Real, which includes the former JJ&F Market, and 3159 El Camino Real, by Equinox Gym. Stanford University is preparing to move ahead with construction of a recently approved housing development at 2500 El Camino Real, which will entail 70 affordable-housing units just north of the Page Mill intersection. At the same time, the city is evaluating a plan to rezone the former parking lot at 2755 El Camino to enable the construction of a four-story, mostly commercial building near the chronically congested intersection of Page Mill and El Camino.
So far, the proposal at 441 Page Mill Road has encountered little resistance from local commissioners, the public and council members. In recent public hearings, just about everyone agreed that its location, on a largely commercial block that also includes the Kelly Moore Paint Store, an animal hospital and the AT&T Store, is more suitable for a mixed-use development than for the four single-family homes that currently occupy it. Its inclusion of affordable housing is another bonus, even if it comes with strings attached.
During the Planning and Transportation Commission’s review of the project last June, then-Chair Mark Michael lauded the proposed development as much more appropriate.
“I think the project is very thoughtful, it’s attractive, it meets the need and in many way surpasses my expectation for what can be done with the site,” Michael said.
Commissioner Michael Alcheck agreed and stressed the need for affordable housing in Palo Alto.
“There are aspects of this proposal that should be examples to all proposals,” Alcheck said.
Others weren’t so sure. Though former commissioners Arthur Keller and Carl King lauded certain aspects of the proposal, they had major reservations about the concessions sought by the applicants in exchange for the three units of affordable housing. The three concessions are all “off menu” items, which means that the developer had to commission a pro forma justifying the requests. The requested concessions are a 19 percent increase in lot coverage (current code permits lot coverage of 50 percent, or 13,463; pushing it up to 69 percent would allow 18,520 square feet) ; an increase in allowable commercial density to allow an extra 10,770 square feet of office space; and an increase in the overall floor-area-ratio to permit an extra 8,595 square feet of building space.
The three concessions were proposed by the applicant well before the city adopted its density bonus ordinance. The city’s menu of concessions includes such things as parking exemptions, a relaxing of the height limit and the ability to build closer to the front or back property line.
King suggested that three units of affordable housing in exchange for more than 10,000 square feet of additional office space “doesn’t seem like a great tradeoff to me.” Keller argued that the city should analyze exactly how much extra zoning it should allow so as to match the project’s economic return.
The city’s consultants, meanwhile, concluded that the cost of building the affordable housing units actually exceeds the value of the three concessions being requested. Consulting firm Keyser Marston Associates estimated that the net cost of the additional housing units would be about $1.85 million. The net value increment from the concessions is projected to be $1.28 million.
“Since the cost of the BMR housing exceeds the value increment, and since each of the three concessions independently contributes to the value increment, it is concluded that all three of the requested concessions are needed to address the BMR housing costs in the proposed projects,” the Keyser Marston analysis concludes.
Thus, the project satisfies the city’s requirement that the concessions result in “identifiable, financially sufficient and actual cost reductions” that allow the applicant to provide “affordable rents or affordable sale prices,” the report states.
The planning commission ultimately voted 4-2 in favor of the proposal, with King and Keller dissenting. The Architectural Review Board followed suit in October by voting 4-0 (with Lee Lippert absent) to approve the building’s design, which had undergone numerous revisions.
Now, it’s the City Council’s turn. In addition to allowing the city to test drive its new density-bonus ordinance, the Jan. 26 hearing will also offer newly elected council members their first chance to weigh in on a major development. During last year’s election, candidates running as slow-growth “residentialists” consistently criticized the council for approving too much development downtown and for allowing too many exemptions to existing zoning laws and design guidelines. The proposal at 441 Page Mill Road requests plenty of both, which means the council’s new residentialist majority (which includes Mayor Karen Holman, newcomers Eric Filseth and Tom DuBois and council veterans Pat Burt and Greg Schmid) should have much to discuss.
In addition to the three zoning concessions, the applicant is also asking for various exemptions, including one for parking.
Though the building’s underground garage will include 91 spaces, that’s 19 fewer than what the city would normally require. The state law that offers density bonuses for affordable-housing projects provides for a reduction of three spots. The reduction of 16 more parking spaces is based on the planning staff’s determination that the peak demand for parking by residents and by workers will happen at different times of the day.
The project is also requesting two “design enhancement exemptions.” One would increase the building’s setback from the curb to 17 feet (the code currently requires a 14-foot setback), making the design more responsive to the council’s often-stated concerns about massive new buildings going up too close to the street. A report from planning staff notes that this would “permit a wide sidewalk, street trees and the County’s planned improvements to Page Mill Road at this location”
Another exemption would allow a driveway ramp into the underground garage to encroach into a landscape buffer at the rear of the property.
Traffic will be interesting. It’s a mess there at rush hour as it is with traffic backing up onto Park Blvd from the Page Mill on ramps. Biking in that area is a can be nightmare as well. Someone out there thinking about this? I support “affordable” housing but as someone who lives near this area, I”m a little concerned about traffic not being studied
The PA City Council seems likely to rubber stamp yet another project that will make Palo Alto more and more densely populated and bring more and more traffic onto already-congested local streets. If someone replies that “it’s only ten units of housing!”, the additional retail and offices on the first two floors will bring most of the additional traffic, adding further to the gross congestion already besetting Palo Alto streets. Moreover, the 10 apartments will likely house more people than the 4 houses that are being destroyed to make way for this project. That difference is not substantial in itself but when one adds up a lot of such increases, the gain in population is significant, as is the aggregate traffic increase. Look at the new Lytton Gateway building, built right up to the street, if you want to see what happens when a new behemoth replaces a modest structure. More and more cars and traffic, more frayed nerves, etc. all for the benefit of the insatiable developers with the citizens bearing the brunt of the negative consequences. Nauseating even if predictable given the alignment of special interests in this city.
Yeah — traffic is just going to get worse and worse. Just imagine when they allow another building on the current parking lot at the corner. Yikes!
But at least you can still get across El Camino at Embarcadero. No, wait! That’s all crapped up because of the screwy stoplight situation at Town and Country!!! Well, hope springs eternal that the traffic moguls will figure that one out this decade…
I am looking in this article for any evidence that it’s truthful to equate the terms “BMR” with “affordable” in this project. I wish the Weekly would start calling this developer boondoggle by its real name.
Much BMR housing isn’t all that affordable here. Below market-rate essentially equates to some people winning the lottery instead of having to share housing or live somewhere less desirable when they first get here, as most of us did.
If the differential cost of 3 BMR units is indeed almost $2million, and worth it for the City to make concessions equal in value, it seems to me we have set the value of that amount of affordable housing at Buena Vista. With 108 larger units at Buena Vista, that means that amount of affordable housing is worth just under $70million to the community.
Naturally, people are going to scream at me for making that analogy. And I’m not making a sincere analogy anyway, because 3 units of lottery-winning for people who aren’t truly low-income, off on their own on a busy intersection, is in no way an equivalent benefit to the City as a coherent community of actual affordable housing for existing long-term low-income Palo Alto residents at Buena Vista.
We should be prioritizing the existing affordable housing we have, trying to strike a deal with Jisser for the sale of it. And in such a development, we should be asking for the actual cost of overdevelopment on an already too-busy intersection. Not all costs are incremental, when you have to open a new school, build a new road, etc, those units suddenly become a lot more expensive to the community than they are worth.
Elections have consequences. Just say no.
In the name of affordable-housing, the city seems to approve projects that provide more property tax revenue. How much more affordable as compare to neighboring cities?
It is under parked. Just say no! And if you cave on that, get them to pay for grade separation on the electric railroad. BRM is basically a gimmick cooked up by the developers to break building codes and bury us in cars and people. The real BRM is getting bulldozed out of town because the developers can’t make any money on it unless they build new stuff. Four acres is a terrible thing to waste.
Why does the city need to provide a density bonus when the state already provides it. Awful that this project goes forward with 11,000 more office space for only THREE units of affordable housing. It is obvious that we need a regional affordable housing plan, 3 units is nothing! The location is a nightmare, backed up with long wait times to get onto Page Mill or El Camino. Just say NO to PC zoning and stop this developer give away! Why does the Planning and Transportation Commission even vote on these developments. City Council Members, stand up and say NOOOOO!
The proposed increase in lot coverage from is a 38% increase in lot coverage, not a 19% increase.
BMR units are not lottery based. There is a waiting list.
Also there are a wide variety of BMR units… some very affordable such as the older units that can resell from 100K to 150K; the new ones comparatively less so, starting at 200k and up, depending upon the family size.
Before commenting about affordability and BMR housing, it’s a good idea to do some research.
Affordable can really vary. In a city where housing costs are easily one million dollars plus, what is affordable and for whom?
“In a city where housing costs are easily one million dollars plus, what is affordable and for whom?”
Housing costs are one million dollars plus because people are voluntarily paying one million dollars plus for housing. They can afford it, therefore it is affordable housing.
Below market rate (BMR) housing costs a bit less to buy for those in the select class who are allowed to buy it (not teachers, firemen, city employees, and the other showcased classes, who in reality make too much to qualify), and it gets the developer a very lucrative overdevelopment allowance. If you want to know what benefit the select class of permitted BMR purchasers offers to justify the impact of their housing to our city’s character, well, you need to ask somebody else.
>”Since the cost of the BMR housing exceeds the value increment, and since each of the three concessions independently contributes to the value increment, it is concluded that all three of the requested concessions are needed to address the BMR housing costs in the proposed projects,”
This is one major reason why I oppose subsidized housing. It will always be used as an excuse to increase zoning.
While we will hear from neighborhood advocates (like me) that we need to oppose increased density, some of the same people will insist that we need even more BMR units (but definitely not me). It doesn’t pencil….
Palo Alto has caved into developers’ schemes to make huge amounts of money on the back of our quality of life far too many times. The last election was supposed to send a clear signal that the City Council needs to protect Palo Alto citizens from unbridled commercialism. Construction policies and regulations that were designed to protect the community should not be sold away. They were created for a reason, to protect the community we call home. Unless the City Council can start showing some backbone to developers’ schemes and stop selling our quality of life for bargain basement prices, there won’t be much of a Palo Alto left to protect.
No more BMR housing. What does Los Altos Hills, Los Altos, Los Gatos, etc. do to find places for these folks. Just build and use units in East Palo Alto and the land along 101 and the power plant. Palo Alto is already too crowded with hotels, condos, people, etc. to have any more construction.
The residents don’t want it. Just make downtown and the area around California ST. safer, focus on car and home break ins and provide parking downtown. That’s what residents have said they wanted for years.
Right now, I know what affordable housing in this town looks like, and it is inhabited by residents at the mobile home park.
We seem not to have the backbone to do anything about ACTUAL affordable housing, please let’s not pretend anymore that this charade to give away our town’s zoning for the benefit of a few developers has anything to do with affordability, frankly, it has driven up costs of older properties and encouraged the eviction of people in actual affordable housing.
3 affordable units for 10,000 sf of office space – at 100 sf per person, that brings 100 people to Palo Alto and houses 3 of them. Yup … a quick solution to Palo Alto’s housing problem.
@Jeff, actually looks like there’s supposed to be 7 more market-rate apartments on the third floor, so that’s 10 units total. They should all be affordable if rent is split ten ways, so there’s your 100 additional people. Just need to be imaginative!
Another big building built to the edge of the sidewalk…the city is strict with residential setbacks but when it comes to commercial everything goes out the window!
Yeah, I didn’t understand near the end of the article it says
>> The project is also requesting two “design enhancement exemptions.” One would increase the building’s setback from the curb to 17 feet (the code currently requires a 14-foot setback)
I couldn’t find in the code anything about a 14 foot maximum setback.
17 feet doesn’t sound too bad for that expressway block. Not exactly a pedestrian magnet.
I hope they turn down the reduction in parking spots. Joining the transportation demand program should be a requirement for any zoning change. I don’t think they need to further reduce parking requirements to do that. How can adding to the parking deficit possible help? The TDM is supposed to improve the current deficit in parking – not make it worse. I think the CC should increase the required number of parking places to one per every 150 sq. ft. of office space, so that there is some hope the parking will match the usage.
I like the idea of live-work buildings but the proportions are wrong. Until we meet ABAG requirements for work/housing balance, only projects that include more housing than anticipated workers, and affordable to the anticipated workers, should be approved. Wishful thinking I know but I can dream….
Stop this development craze in Palo Alto.
We don’t have the water to support this, They are now predicting a 15 year drought.. Stop the building..
My son and his wife have been on the waiting list since 2008!!!!!
I think a quick one-question survey would give valuable information about the state of support for affordable housing in Palo Alto.
A large piece of land becomes available near a major roadway in town. A long-established and respected provider of affordable housing construction and management expresses an interest in buying it. An attractive feature is that it is next door to an existing affordable housing project which has an excellent reputation. A competitor for the property is a tech company executive who pans to build a residence there.
Question: Which would be a better outcome, purchase for affordable housing or for a private residence?
BTW: Just such a situation occurred in the recent past.
Jerry,
A much better thing to do is to have a binding secret ballot vote by the neighborhood in which you seem to want to stack even more subsidized housing. What neighborhood was it (“in the recent past”).?
FWIW, I much prefer the single high tech home…much less demands on city services and a much better property tax yield.
Craig,
You’ve guessed right about which one I’d choose, but there really are strong arguments to be made for each choice. If you value affordable housing as a public benefit for the city as well as a personal benefit for those lucky enough to be affordably housed you’d like to see that option win out.
If your top priority, even if you don’t oppose affordable housing, is density reduction or least no increase in density, you’d want the private residence to win out. Your financial arguments also make sense.
How people answer the question and the reasons for their answers would, I think, tell us a great deal. Oh, yes, the neighborhood was University South. (Squishy disclaimer: I’m not sure if a single private residence and outbuildings are all that is planned to go in there. Optimally, from a density perspective, you’d have a single family home with great landscaping and amenities to go with it.
Can’t a referendum be put on the next ballot in Palo Alto to cap development?
The city council doesn’t listen to the residents. So why can’t the residents just vote on this issue?
And why doesn’t the school board and PIE take a stand on this unrelenting housing expansion? Parcel taxes don’t have to increase or continue if we would stop the unplanned cramming of more kids into our schools.
Almost 11,000 sq ft. of office space could house from about 40 to over 100 new office workers depending on the math. Of course these extra workers will all use mass transit or live in the 3 extra living units this project provides. They certainly will not add to the city’s traffic, parking and overall congestion problems, that threaten to extinguish the vibrancy in the city.
Craig,
I see some parallels to the Maybell property, but I’m not suggesting subsidized housing there. On the contrary, I’m suggesting that a personal estate covering the whole property might be attractive to someone with the money to buy it from Golden Gate and realize their dream and not face the residential resistance that has pushed against even a revised plan that would include 20 instead of 30 homes.
It would eliminate the intractable problem of choosing between Maybell and Arastradero for adding traffic. A single household could be free to use either or both without affecting traffic.
It would more than meet the current demand that there be no increase in density in Barron Park/Green Acres. And it would leave open the option, not requirement, of orchard landscaping. It would not, barring an act of great generosity, result in a community center. That would require a plan B, C, or D.
The community meeting two weeks ago with Golden Gate was lively and very well-attended. The corporation is working hard to meet residents demands and still make a profit. Possibilities range from the perhaps fanciful single-family estate to condominiums. I hope The Weekly will keep us posted.
Jerry,
Re Maybell: The minimum is to not change the original zoning (same with BV, btw). Sure, if you can find some person of means to make it into a private (or even semi-private) park-like setting, then all the better. Just don’t INCREASE the zoning in order to provide subsidized housing.
I am somewhat more open to up-zoning, very carefully, in commercial districts…however, NOT in the neighborhoods.
Since subsidized housing is the one palpable and consistent excuse to break the zoning rules, we should just agree that all such housing is banned, going forward (city-wide referendum, if necessary). That way the CC will not have an excuse to break the zoning rules.
Craig, you say “Just don’t INCREASE the zoning in order to provide subsidized housing.” but the density bonus law is a state law. you would have to have a statewide referendum to repeal it.
I wonder if we couldn’t find ourselves in a situation where people who want to support the BV community have to bend their principles for a successful outcome. For some that would mean accepting subsidization of what’s already there. For others it would mean accepting redevelopment, changing the form of the housing while somehow retaining the BV community.
Correct me if I’m wrong, but I believe an absolute prohibition of any upzoning to include affordable housing would preclude “saving BV.” If that is the majority view in the city BV is gone. Before Measure D failed, there was an assumption that residents would continue to support affordable housing as they had in the past. It failed, but then people argued that the vote wasn’t about affordable housing at all, it was only about inappropriate zoning flexibility.
So we haven’t had a clear test of the extent of public support of affordable housing. The BV debate might be the test we’ve been waiting for.
“Which would be a better outcome, purchase for affordable housing or for a private residence?”
It is very, very unlikely that a high-tech exec would build a mansion next door to an affordable housing project.
@curmudgeon
“It is very, very unlikely that a high-tech exec would build a mansion next door to an affordable housing project.”
Would have seemed unlikely a few years ago when executives were building estates in Los Altos Hills where they could look down over residences and offices of the worker bees. Back then it was a pretty easy trip downhill to work each day and then retreat to the bucolic splendor of the hills.
Not so much now. Traffic is a mess that’s not likely to get better anytime soon. Arastradero is exhibit A for my neighborhood near Maybell. Might not an executive with abundant assets and a creative spirit be tempted to build an estate in the flatlands if the land became available, even if it is next-door to an affordable housing project? Take a look at Webster Wood (a PAHC project) downtown, where a property that came available was purchased by an individual who could make a better offer than PAHC could.
Perhaps the answer to the Maybell/Clemo property challenge could be a similar development. Right next to a beautiful park, 2.4 acres to work with, two blocks from El Camino Real, half a block from Arastradero, around the corner from the Tesla, Volvo, McLaren luxury car center.
> I believe an absolute prohibition of any upzoning to include affordable housing would preclude “saving BV.” If that is the majority view in the city BV is gone.
Jerry, you are correct. The only exception I can think of is if private money bought the BV site and kept it as a mobile home park. However, any such sale must be conditioned upon an upgrade to city housing standards. Highly unlikely, but not impossible.
Put it to a vote, both city-wide and in Barron Park…that is the only way to determine the actual majority view.
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