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Palo Alto cap on office development threatens projects underway

City Council set to consider details of ordinance to limit commercial growth

Palo Alto's push to limit growth in office space may jeopardize as many as 10 proposed developments, some of which have been going through the city's planning process for more than two years and are now on the verge of final approval.

The fate of these "pipeline" projects is one of the main questions that the City Council will debate on June 1, when it considers next steps for an emergency law capping office growth. The council unanimously endorsed in March a cap of 50,000 square feet for new office and research-and-development space downtown, in the California Avenue area and along El Camino Real.

The urgency law, which would require eight votes to pass, is part of a broad package of initiatives that the city is now undertaking to address the unwelcome consequences of recent office development. These consequences include more traffic, less parking and rising rents that make life difficult for small businesses. City data show that between fiscal year 2001 and today, the city has seen its office and research-and-development space increase by 346,322 square feet. The bulk of this growth, according to the data, took place in Stanford Research Park, the downtown area and around California Avenue. Over the same period, the city has lost 20,172 square feet of retail space, according to a report from the Department of Planning and Community Environment.

While the entire council agreed on March 23 that office growth needs to be curbed and that an annual cap is a good way to do it, the details have yet to be hammered out. Among the most crucial details are the 13 commercial and mixed-use projects currently in the pipeline, 10 of which are located in the three targeted commercial areas. Altogether, the developments would add close to 150,000 square feet of office and research-and-development space, with more than two-thirds going up in the California Avenue area.

Among the more prominent projects on the list is 441 Page Mill Road, a three-story mixed-use building that would replace four dilapidated single-family dwellings on a largely commercial block. After two years of public hearings, the project by Norm Schwab last year secured the blessing of the city's planning commissioners but ran into an obstacle in January, when the City Council declined to grant the developer a requested zone change and requested a new financial analysis. The building, which includes offices and 10 apartments, would add 16,006 square feet of net new development, according to planning staff.

Another long-simmering project that now finds itself in planning limbo is 2555 Park Blvd. The proposal has been in the pipeline since fall 2013 and has just made its way to the final step of the approval process, with the City Council set to make a decision on June 1. The developer, Campbell Avenue LLC, has proposed replacing an existing two-story office building with a new three-story one, adding 13,666 square feet of office space.

Two nearby projects, at 2747 Park and at [3045 Park 3045 Park, were proposed last fall, and each has an application that is currently deemed incomplete. The two developments would add 28,200 square feet and 29,120 square feet of new development, respectively.

If the council agrees on June 1 to go along with a staff recommendation, the new office cap would not apply to projects with pending applications that are deemed "complete" by the end of the fiscal year, June 30, even if they have yet to secure the final vote of approval from the council. This means that the proposed development at 429 University Ave., the former site of the Shady Lane boutique, and the projects at 441 Page Mill, 2555 Park and 3877 El Camino Real (the latter most of which would add a comparatively paltry 4,020 square feet) would all be exempt.

Though it has yet to be implemented, the proposal to cap office growth has already generated plenty of community debate, with some characterizing it as too weak and others saying it's too heavy-handed. The Chamber of Commerce came out strongly against the cap in March, with Chamber CEO Judy Kleinberg arguing it would have a "chilling effect on business productivity, with the possible unintended consequence of forcing businesses that want to grow to move to more business-friendly cities."

"This would mean the loss of the very office workers who now support Palo Alto's vibrant economy and robust retail environment and who are a major source of revenue for the City's General Fund," Kleinberg said in a statement before the council's earlier discussion.

Several high-tech giants, including Hewlett-Packard Co., SAP, Google and VMWare also issued letters slamming the proposed cap. Their concerns were largely addressed, however, when the council decided that the cap should only apply to three commercial areas and not to Stanford Research Park, where most high-tech campuses are based.

Others have argued that the cap doesn't go far enough and urged the council to adopt a moratorium on office growth. Local resident and land-use watchdog Jeff Levinsky called a moratorium the "simplest approach of all" and one that would give the city the needed "breathing room" to develop solutions to the problems of excessive growth. Barron Park resident and recent City Council candidate Lydia Kou made a similar point and said a temporary moratorium is needed to "close all the development loopholes and clean up zoning."

The council, for its part, has taken a hard line when it comes to new office developments. Last November's election brought a slow-growth "residentialist" majority to the council, which is now taking an increasingly skeptical and at times adversarial stance toward commercial proposals. In one of its first land-use actions, the council demanded a new financial analysis for the 441 Page Mill application. More recently, it upheld a citizen's appeal of a four-story mixed-use project at 429 University and mandated a host of design changes for the project.

In addition to deciding which way to go with the pipeline projects, the council is set to consider the exact boundaries of each commercial area where the cap would be in effect; the commercial uses that would be governed by the cap; and the criteria that the council would use in choosing between competing office projects.

If the council formally adopts the criteria that were proposed on March 23, applications would be judged based on their intensity of use, their parking and traffic impacts, quality of design, environmental quality and the "monetary and/or non-monetary value of public benefits offered."

Related content:

Despite Stanford objections, Palo Alto prepares to cap office growth

Comments

41 people like this
Posted by kattiekhiba
a resident of College Terrace
on May 29, 2015 at 10:51 am

"Chamber CEO Judy Kleinberg argued it would have a 'chilling effect on business productivity, with the possible unintended consequence of forcing businesses that want to grow to move to more business-friendly cities.'"

YES, YES, YES! This is EXACTLY what many people in Palo Alto want. I do not know anyone who wants more office space to be built except for businesses that want to be able to say they have offices in Palo Alto. Sure, keep an office in Palo Alto. But there is NO REASON they need every staff person working here.

These businesses need to take a lesson from other hot commercial real estate markets, in particular New York. Years ago, most of the big financial institutions saw that it was not realistic and, more importantly to them, not cost-effective to keep every single staff person in Manhattan. They opened "back offices" for non-client facing roles (IT, etc.) across the river in Jersey City and other places and it is absolutely wonderful for all involved. The companies save money and the workers, who can't afford to live in Manhattan anyway, have much shorter commutes.

This MUST start happening here. Google wants to add tens of thousands of workers in Mountain View. Apple wants to add thousands of workers in Sunnyvale/Cupertino. Facebook wants to add thousands in Menlo Park. People, there is simply not enough land - and not enough housing for said employees. Forcing your lower-paid workers, who cannot afford to live on the Peninsula let alone Palo Alto, to commute 3 or 4 hours a day is outrageous. Open offices in the far East Bay or western Central Valley. It would be a win-win for everyone - companies, workers, communities like Palo Alto that are maxed out, and communities further afield that are desperate for a more vibrant economy.

Why is no one talking about this???


15 people like this
Posted by curmudgeon
a resident of Downtown North
on May 29, 2015 at 11:30 am

The city has missed an important point: a gaggle of geeks writing software is a manufacturing operation, not an office use. Much of downtown is a factory.


21 people like this
Posted by Neilson Buchanan
a resident of Downtown North
on May 29, 2015 at 11:33 am

Dear Kattiekhiba,

We avoid rational problem solving because the city planning professionals do not have metrics to measure the obvious impacts. Whether by design or neglect, we all lack basic planning data. Avoidance of data deteriorates into obvious accumulative negative traffic and parking impacts. Bottom line: Accumulative impact is avoided by every town and city government on the Peninsula. Our economic boom is seductive.

What about impact on job/housing imbalance? On water? On school enrollment? Social and economic consequences of the job/housing imbalance is our greatest collective peril. Go to library and check out Willful Blindness by Margaret Heffernan. She is more insightful than I am.


22 people like this
Posted by All Right
a resident of Old Palo Alto
on May 29, 2015 at 11:47 am

The point developers miss continually is that Palo Alto has no more ground space. Employees, except for the CEOs, cannot afford to live here. Commuting from places with affordable housing is cruel: for the commuter, the family, the vehicle, the environment.

It is so much more practical to put these developments where the employees can live, and the cost of the real estate is magnitudes less expensive. Building on the East Bay or Central Valley is better for everyone, both here and there..... Why insist on building on some of the most expensive land in the country? That should be prohibitive in itself.


11 people like this
Posted by Gale Johnson
a resident of Adobe-Meadow
on May 29, 2015 at 11:59 am

@kattiekhiba

Good points, and yes, let them move to more business-friendly cities, and ones where their employees can afford to live.

"This would mean the loss of the very office workers who now support Palo Alto's vibrant economy and robust retail environment and who are a major source of revenue for the City's General Fund"

Let me play Sgt. Friday for a moment...'just the facts maam'. Offices are killing the retail environment, at least small independent stores/businesses...excluding the scores of restaurants of course. It's called conversion from retail to office space. Owners and developers chase the money and for now offices are the hot ticket items and they're winning out over retail. It's been in the papers you know. You can check it out.

Oh, and about that 'major source of revenue' item, could you please break that down in real dollars or % of revenue, and how it supports the budget?

Thanks!


5 people like this
Posted by Carol Gilbert
a resident of University South
on May 29, 2015 at 12:27 pm

How about doing this:

o Approve the developments in the pipeline that have proper setbacks, height limits, and parking spaces.

o Downtown and California Ave. are not the same environment as Stanford Research Park. Consider them as separate decisions.

o I would have little hesitancy to let Stanford Research Park grow increasingly dense.

o Retail brings in more revenue to the city. We should have fought to keep many of the places we lost. We should be putting effort into keeping Fry's and having auto dealerships.


7 people like this
Posted by curmudgeon
a resident of Downtown North
on May 29, 2015 at 12:30 pm

"Whether by design or neglect, we all lack basic planning data."

By design, it seems. Our local mantra is "build dense housing near transit." A few years ago a councilmember asked the planning director what percentage of the people presently living in multifamily developments near train stations commute using transit. The director replied that no survey had been done, because there weren't enough such people to provide a statistically solid sample.

Translation: if we can't have 24-karat data, we charge ahead with no data at all.

(Spoiler alert: A resident of a condo development near the Cal Ave train station polled her neighbors and told the council the number was 5%.)


13 people like this
Posted by mauricio
a resident of Embarcadero Oaks/Leland
on May 29, 2015 at 12:38 pm

mauricio is a registered user.

Judy Kleinberg got it terribly wrong. Offices should be built in areas that need them desperately and that have land to build them on. This means that Palo Alto is definitely a place where offices should NOT be built anymore.


17 people like this
Posted by Online Name
a resident of Embarcadero Oaks/Leland
on May 29, 2015 at 1:00 pm

Good. It's about time the new City Council started questioning the destruction of Palo Alto.

We're not an office park. If you want an office park, go to Stanford Research park where there's no retail or downtown,


6 people like this
Posted by Kazu
a resident of Downtown North
on May 29, 2015 at 1:20 pm

@Gale Johnson, small businesses are being squeezed out of Palo Alto by high rents, not the mere presence of offices. The rents are skyrocketing because of demand for space. Limiting growth restricts space, thereby ensuring rents will continue to be ridiculously high. That will put additional pressure on small businesses, hastening their departure. Those are the facts, ma'am. If we want to stabilize rents and retain small retail outlets, then we should build ever higher and reserve the ground floor for retail only, no exceptions.

Perhaps the Anti-Growthers should consider how we got into this mess in the first place. When Silicon Valley was starting to take off 35 years ago, people thought that if no new housing was built and roads were not upgraded, outsiders would stay away. They would think "If I move to the Bay Area, I will drive up housing prices and cause traffic jams, so I won't move there". Traffic would remain moderate, housing would still be affordable, and there would be tons of jobs for the locals. Paradise! I actually read that in one of the local newspapers at that time. Not those exact words, but precisely the same sentiments. Gee, didn't that little trip into fantasy land work out great? Even the "Welcome to California. Now go home!" and "When you leave California, please take somebody with you" bumper stickers didn't work. I know, I used to have on on my car.

There are people who will oppose physical change no matter what, even if it is well designed and implemented. Sticking our heads in the sand (some might say somewhere else) did not work 30 years ago. It still won't work, and will just make things that much worse. Again. Will the Anti-Growthers ever learn?


10 people like this
Posted by curmudgeon
a resident of Downtown North
on May 29, 2015 at 2:15 pm

"Perhaps the Anti-Growthers should consider how we got into this mess in the first place. When Silicon Valley was starting to take off 35 years ago, people thought that if no new housing was built and roads were not upgraded, outsiders would stay away."

Total fiction. I know; I was here then.


5 people like this
Posted by Kazu
a resident of Downtown North
on May 29, 2015 at 2:28 pm

"Total fiction. I know; I was here then."

Wrong. I was here then, too, and long before that.


6 people like this
Posted by curmudgeon
a resident of Downtown North
on May 29, 2015 at 2:37 pm

"I was here then, too, and long before that."

If you had been here 35 years ago, you'd know Palo Alto was built out even then, and Prop 13 had just killed off public funds for low cost housing projects anyway.

Learn the facts; don't invent them to slur imaginary strawman foes.


4 people like this
Posted by Robert
a resident of another community
on May 29, 2015 at 2:40 pm

Everyone knows the root cause of this is the huge and increasing number of jobs in Palo Alto, yet no city is actually going limit the number of jobs allowed.


6 people like this
Posted by Gale Johnson
a resident of Adobe-Meadow
on May 29, 2015 at 2:58 pm

I'd like to address several posters here. First of all, thanks to kattiekhiba, the one who kicked off this discussion. I liked Neilson Buchanon's words about 'accumulative impact'. Boy, or girl, I wish others would have thought about that years ago. Thumbs up for Carol Gilbert's insight and input, and mauricio's also.

Sorry, I have to give you thumbs down Kazu. I might have mis-stated it (although I don't think so), but, the fact is, rents are going up for no other reason than companies who want to locate here, and there are many, are demanding space and are willing to pay higher rents for that space. Got it?

Please don't blame us old timers...you call us NIMBY's, I'm okay with that, whatever turns you on, who you think had it all planned out long ago in a devious sinister way on how we could become rich when we bought our houses 40-50 years ago. Do you really think we were that smart then? I didn't have a clue. And I'm not any smarter now! Lucky?...fortunate?...yes, of course, but no smsrter.


2 people like this
Posted by Wondering
a resident of Old Palo Alto
on May 29, 2015 at 3:05 pm

Given that there is so much money sloshing around, it would be enlightening to find out who, besides the developers, is getting rich.


10 people like this
Posted by mauricio
a resident of Embarcadero Oaks/Leland
on May 29, 2015 at 3:26 pm

mauricio is a registered user.

Kazu, you are entitled to your opinions, but not to inventing ridiculous stories that never happened.


4 people like this
Posted by Kattiekhiba
a resident of College Terrace
on May 29, 2015 at 3:39 pm

@Robert, exactly. Cities on the Peninsula need to start talking seriously about job growth. I know it sounds crazy to think about moving jobs elsewhere but it is simply not possible to hold everyone, and it is terrible for workers who have to give up so much of their lives to get here every day. So many people I work with in Menlo Park are miserable. They come from Oakland, Fremont, south San Jose. They would be so much happier if their jobs were closer to home. These people do NOT need to actually sit in Palo Alto to do their jobs well and help their companies grow.

For what it's worth, I am not anti-growth. I am pro-humanity, which includes giving people the opportunity to live healthy, balanced lives and to spend time with their families. This issue is more about quality of life of workers than it is about my quality of life as a Palo Alto resident (a second-gen Palo Altan whose family has been here since the 50s).


4 people like this
Posted by Downtown Worker
a resident of Menlo Park
on May 29, 2015 at 4:44 pm

For everyone who just wants the jobs to go somewhere else, it would be really helpful to know if you are retired and so having a job just doesn't matter to you anymore.

To the rest of us, more jobs are good! If we don't have them, it's hard to pay the mortgage. It's hard to grow in our careers if we don't have a job.

Pushing all the jobs to Fresno only sounds good if you wouldn't have to move to Fresno to get one.

(BTW - startup jobs don't work this way in any case. Tech skills are very scarce outside this area, and you can't just move a company to Fresno and hope to hire there. Factory jobs and knowledge jobs are different, and the model that works for factories doesn't work for knowledge jobs. Restrict jobs in Silicon Valley, and the jobs mostly disappear.)


4 people like this
Posted by musical
a resident of Palo Verde
on May 29, 2015 at 5:25 pm

@Downtown Worker, sounds like the preference is for all the ADDITIONAL jobs go somewhere else. Yes, companies that wish to expand may move their present jobs out, like Facebook and several others before them. Those vacancies are quickly filled by new startups or other businesses itching to locate here.

And I don't understand the part about tech skills being scarce outside this area when the vast majority of our tech workers came from outside this area.


Like this comment
Posted by Robert
a resident of another community
on May 29, 2015 at 5:28 pm

@Downtown Worker

I think we all know that the "no more jobs" manta is a completely empty threat. The deal would be off the minute the city tells a resident they can't hire a gardener house maid or caretaker.


6 people like this
Posted by Jane
a resident of Evergreen Park
on May 29, 2015 at 5:43 pm

@ Downtown Worker. Fresno seems a bit extreme. Many people have horrible commutes from the east bay and south bay. I spend time in the east bay and there are plenty of locations to build offices. Also downtown San Jose needs redevelopment and infill. Areas much closer to where most people live, including those with "tech skills" who can't afford Palo Alto and would love a job without commuting up and down 101 and 880. Last time I heard there are approximately 3 jobs for each resident in Palo Alto.

Yes, I'm retired, a long time resident who bought my house in 1971. Even then we had to save every penny to pay the mortgage on our 950 sq ft home, limiting ourselves to a beer on Friday nights as our weekly treat! But we felt fortunate because even then Palo Alto was more expensive than the surrounding towns. Unfortunately there are fewer and fewer of these little homes left because when they are sold they are torn down and replaced with luxury 4500+ sq ft houses. Before you cry NIMBY, I have three adult children in the area and I am extremely concerned about rents and the availability of jobs closer to where they live.


Like this comment
Posted by Gale Johnson
a resident of Adobe-Meadow
on May 29, 2015 at 6:24 pm

@ Downtown Worker

I hear what you're saying but you might be misinterpreting what others are saying. Of course we don't want you to have to quit your job here and have to find another one in Fresno. We're not trying to kick you out.

I think what is being suggested is that companies, like the one you're working for, look for other areas to locate and set up business...cheaper rents for them and the ability for you and your fellow employees to afford housing. Unless it's so compelling and necessary to locate here, with maybe the benefits of being close to Stanford and in Silicon Valley. I'm not qualified to pass judgment on that, I just don't know.

I don't want to put you out of work, we need you. I got my start here in Stanford Industrial Park, a much different time, town, and situation then. And, yes, since you asked, I am retired.

But, since you live in Menlo Park and are able to afford housing there and not have a long commute, then you are one lucky person, and good for you.


8 people like this
Posted by mauricio
a resident of Embarcadero Oaks/Leland
on May 29, 2015 at 6:48 pm

mauricio is a registered user.

Downtown worker:land and space are a finite commodity. If a million people wanted to get on a San Francisco to London flight, only 250 or so passenger could get on, regardless of how much the rest wanted to get on that flight. Palo Alto, and most of the peninsula are out of space for housing, and for offices as. The solution is for older and new companies to locate to area that have the space for companies and housing, and need the economic boom that would trigger. Under the most favorable circumstance to the pro growth crowd, which are not guaranteed by any means, the SF peninsula, and Palo Alto in particular, would be able to add only a negligible amount of housing and office space-there just isn't any land and space left, and the resident are very unlikely to accept a Manhattaisation of the area. The on;\ly solution is for companies and workers to accept they have to move out of this area.


4 people like this
Posted by Kazu
a resident of Downtown North
on May 29, 2015 at 7:10 pm

"If you had been here 35 years ago, you'd know Palo Alto was built out even then, and Prop 13 had just killed off public funds for low cost housing projects anyway.

Learn the facts; don't invent them to slur imaginary strawman foes."

Curmudgeon, if you had been here 35 years ago, you would know (or should know) that Prop 13 saved many long-time California residents from losing their homes. Not only was Palo Alto built out then, it had started to build up. That is a fact, as can be clearly seen by the few high-rise office tower and apartment complexes. Stalling that natural progression towards urbanization merely resulted in the situation we have now.

I am not the one who is imagining foes. The development monster in the closet isn't really a monster, and the sky isn't falling.

"Sorry, I have to give you thumbs down Kazu. I might have mis-stated it (although I don't think so), but, the fact is, rents are going up for no other reason than companies who want to locate here, and there are many, are demanding space and are willing to pay higher rents for that space. Got it?"

Rents, both residential and commercial, are subject to supply and demand. Restricting the supply will result in higher rents than would otherwise be the case. By the same token, increasing supply will moderate rents. They might still be relatively high, but there is no sense in making a bad situation worse. It does not appear that Palo Alto values its small retail businesses - or small business owners - at all.

"Please don't blame us old timers...you call us NIMBY's, I'm okay with that, whatever turns you on,"

Gale, I never equated old timers with NIMBYs, and have been here over 50 years myself. There is no correlation between age or length of residence and pro- or anti-progress sentiments, at least not that I have seen. NIMBYism is throwing problems over the fence rather than dealing with them, living in a state of denial. Such methods of dealing with change are irresponsible and seldom, if ever, produce positive outcomes. Understand?

"who you think had it all planned out long ago in a devious sinister way on how we could become rich when we bought our houses 40-50 years ago. Do you really think we were that smart then? I didn't have a clue. And I'm not any smarter now! Lucky?...fortunate?...yes, of course, but no smsrter."

That makes no sense at all. Conspiracy theories is it now? Sorry to disappoint, but if you are looking for the tin foil hat crowd, try the anti-cell phone tower folks.

"Kazu, you are entitled to your opinions, but not to inventing ridiculous stories that never happened."

Mauricio, you are partially right. The article was indeed ridiculous, and completely devoid of logic by my reckoning. As for your claim that it was never written, you are incorrect on that count.


9 people like this
Posted by Gale Johnson
a resident of Adobe-Meadow
on May 29, 2015 at 9:08 pm

Oh, Kazu,

You confuse me. Prop 13 saved long-time residents from losing their homes. Yes? That was a good thing, right or wrong? Then in the same paragraph you tied in stalling the natural progression of urbanization. I don't see a link. Now, and be honest, at that time were you willing to see downtown PA become Manhattan west? Thank god I live in SPA so I wouldn't have see those skyscrapers unless I wanted to drive downtown.

And I really don't need a lesson on supply and demand. I have been a proponent of more affordable housing to catch up with the number of office workers who commute here every day and I've even suggested a change to the height limits to allow for that to happen. Please share your thoughts on how rental prices could be lowered. How many new units would it take to make that happen? Here, I'll let you borrow my slide rule to help you out on that. C'mon, I'm teasing with you.

I've also commented on why we're losing retail, and it isn't us Palo Altan's who are causing that, at least not most of us citizens
living here, excluding property owners and developers of course. Rents are higher because companies with office workers can
afford them. Small retail shop owners can't.


3 people like this
Posted by Robert
a resident of another community
on May 29, 2015 at 9:13 pm

Lets think about it this way

"I think what is being suggested is that companies, like the one you're working for, look for other areas to locate and set up business..."

If Google set up shop in Fresno, I'd venture to say facilities costs would be 1/10 of what they are now. Is this not an example of how much more desirable the Peninsula is for an employer? That so many companies are willing to pay that kind of premium to locate here? If price doesn't dissuade them, what on earth do you think you can do that will?


1 person likes this
Posted by Curmudgeon
a resident of Downtown North
on May 29, 2015 at 9:40 pm

"Curmudgeon, if you had been here 35 years ago, you would know (or should know) that Prop 13 saved many long-time California residents from losing their homes. Not only was Palo Alto built out then, it had started to build up. That is a fact, as can be clearly seen by the few high-rise office tower and apartment complexes."

Let's stick to the facts, OK? Those high-rises were built (some right in my n'hood, BTW) 45-50 years ago, not 35. 35 yeats ago, concerned Palo Altans stopped the Clinic's hospital fantasy (saving PAMF from eventual bankruptcy in the process) and the Superblock. Either of these over-massive business developments would have made the current housing/traffic/parking mess much worse much sooner.

P13's real purpose was to cut taxes on commercial properties. Incidental (and short-lived) residential tax cuts were the bait, and the voting rubes bought it. The latter are basically gone, the former live on, but P13 is a religion not a rational policy.

With that settled, what say we get back to the topic of this thread, which is fixing the mess our star-struck former councilmembers got us into?


6 people like this
Posted by Michael
a resident of University South
on May 29, 2015 at 9:49 pm

"I have been a proponent of more affordable housing to catch up with the number of office workers who commute here every day and I've even suggested a change to the height limits to allow for that to happen."

Did you suggest a change in the height limits in your own neighborhood, or in somebody else's neighborhood?


16 people like this
Posted by Local
a resident of Old Palo Alto
on May 29, 2015 at 9:59 pm

Palo Alto is becoming nothing more than an ugly, overcrowded office park. The city is being ruined. Poor city planning will catch up with the city sooner or later, and Palo Alto will no longer be an attractive place to live. Foreign investors are driving up the price of residential real estate in Palo Alto. Many of the foreign investors buy PA real estate as a place to park their money, but they never move into the properties. They leave the homes vacant. The real residents and homeowners in Palo Alto are beginning to wonder if this is a good place to live anymore. Many homeowners are thinking they should sell their homes and take the money and run, before buyers wake up and realize PA isn't such a great place to raise a family.


6 people like this
Posted by Gale Johnson
a resident of Adobe-Meadow
on May 29, 2015 at 10:15 pm

You got me there, Robert. I'm speechless...and I'm sure many of you are saying..."thank God".

I can't explain it. I'm sure CEO's and their bean counters look at all factors involved, including location, and the cost of facilities must not be high on their priority list. Being located where all the action is happening (Silicon Valley) must be the driver. But, what are those companies doing to ease the pain for their employees who have to commute long distances and suffer hours on the road in traffic to get to work because they can't afford to live near their work? If Google can build driverless cars, why can't they also build huge housing complexes with affordable prices for their workers? I think there is still some land available in the Zanker Rd, 1st Street area.

I know Mt. View is starting to take a closer and harder look at more development in their city. We, in PA, are maxed out, unless Kazu has her way. Skyscrapers in my town?...ugh. I'll leave. It's been fun, but maybe I've overextended my stay here in 'my town' and it's time to go. But I'll go with lots of fond memories, however. Turn it over to the newbies to enjoy or destroy. Good luck, you kids!


Like this comment
Posted by Gale Johnson
a resident of Adobe-Meadow
on May 29, 2015 at 10:34 pm

No, of course not, Michael, and you should know that since you know I live down here in SPA in a residential neighborhood. I love it here. But, yes, we do have some houses, rebuilds, going up that are 2 stories. Oh my god, what's happening to my neighborhood? I love my one story bungalow. I'm a 78 year old widower and don't do stairs very well anymore. I was speaking more about the downtown area which was the topic of discussion, unless you forgot.


3 people like this
Posted by Robert
a resident of another community
on May 29, 2015 at 11:13 pm

"If Google can build driverless cars, why can't they also build huge housing complexes with affordable prices for their workers?"

Google would actually like to, but like Palo Alto, the citizens of Mountain View see dollar signs at the prospect of tech demand driving up the value of their homes. They'll put up a token effort to keep offices out (keep in mind Google isn't the only player in this game) but when it comes to new housing pull out all the stops.

"Skyscrapers in my town?"

Obviously not if it might put a dent in the demand for housing.


7 people like this
Posted by Slow Down
a resident of Community Center
on May 29, 2015 at 11:16 pm

Slow Down is a registered user.

What's odd about the pro-growth folks is that urbanization is such a religion to them that they can declare black to be white without flinching. The argument that Kazu is making is that we have congestion due to a lack of development, and to reduce traffic/parking/congestion we should build more offices and housing bring more people and cars into the city. Any rational person can see the problem with that proposition.


1 person likes this
Posted by Rainer
a resident of Evergreen Park
on May 30, 2015 at 2:41 am

Rainer is a registered user.

"secured the blessing of the city's planning commissioners" somebody wrote. Really?

The Planning Commissioners have not not-blessed a single project in many years. And in fact they loudly stated on May 29 that they will only look at each project in isolation, and that effects on neighbors or traffic is none of their business.

Anybody thinks we have traffic problem? The worst traffic problem of any advanced nation has Britain, and therefore they have the most advanced research. They have developed a graphical interpretation of traffic, called Macroscopic Fundamental Diagram”, which in its clarity can only be compared to Feynman Diagrams in Physics. The genius who did this figured out that the only parameter you need to now to estimate the state of your traffic problem, and how soon it will collapse, is the number of cars per mile.

Don’t believe it? Put the MFD thing into Google and you will find half a dozen Wiki articles which help you to understand it. I am always skeptical of Wiki, but in this case a connected 10 articles, which references each other at the bottom under: “look also” does an outstanding job.

Now I understand why Park Ave is congested many times at 5PM, just like El Camino toward San Antonio. Maybe we can take consolation from Mountain View collapsing before us and that the San Antonio shopping area will be inaccessible before the East of California area with 150,000 sqft of office space under construction and another 150,000 approved. Good-bye Police Station, you will not be able to get in or out.

It also explains why the onset of the congestion creeps up in time, and you can guess how many years it will take before traffic collapses. About 2 years present growth rates.

Want to see how trains will help us? Watch the California train station at 8AM. There is not much more space unless we dump the present cars and get people mover cars without steps and no bicycles on board to cut down the dwell time and give up the idiocy of the mini bullet. The mini-bullet does not increase either average travel time nor the flow of people. Maybe a mono rail over El Camino would help along the lines of the mono rail in Wupper Valley in Germany, which was built in 1898, and still runs. The Wupper Valley was a high-tech area for the time, was build out, and had the same problems of Silicon valley.

Not invented here? Well then stay home.


7 people like this
Posted by mauricio
a resident of Embarcadero Oaks/Leland
on May 30, 2015 at 6:24 am

mauricio is a registered user.

The pro growth crowd will make up stuff just to advance their zeal for unfettered development and density. Like one of the posters above pointed out, urbanization is a religion with them. One of their flag false claims is the "smart growth" mantra. According to them, If we just kept building dense high rise housing near public transportation, people will stop using their cars. In reality, people who live near public transportation in Palo Alto are using their cars. Only a negligible number, if at all, are using public transportation, so building the dense high rises Stephen Levy keeps lobbying for, just worsen out problems and add to the t=congestion and pressure on the infrastructure, schools, environment and quality of life.


1 person likes this
Posted by resident 1
a resident of Barron Park
on May 30, 2015 at 11:55 am

I read the papers every day. The cities surrounding us are going through huge growth activity - both in housing and commercial space. MV has the best deal so far as they have a huge tax base to work with due to the number of commercial companies in their city. Companies are fighting to get space there.

Redwood City is building many office and apartments now that exceed four stories. Everyone is growing both housing and commercial space.

San Jose is realistic in that it has to have a certain percentage of business as a tax base to support the city services.

Palo Alto needs to have a compliant web site that has all of the proposed building activities and status as they move through the approval cycle. The Planning Department needs that program to be available to the PACC so that any decisions can be matched against on-going efforts.

Hope that the powers to be update the Comprehensive Plan to incorporate better consolidation of city activities so that no one department is running loose and promising things that will not happen. This leads to law suits.


4 people like this
Posted by jane
a resident of Evergreen Park
on May 30, 2015 at 3:19 pm

Rainer
"The Planning Commissioners have not not-blessed a single project in many years."

Can you tell me what proposed developments that have come before the PTC for approval have been turned down in recent years?


9 people like this
Posted by Gal Johnson
a resident of Adobe-Meadow
on May 30, 2015 at 3:25 pm

Cost of rents? There must be a correlation between commercial rents and rents for housing. I just don't know what it is. But it is clear there are two distinct causes for the the high cost of housing. PA is a beautiful city with excellent schools, great weather, and lots of amenities that make it a very desirable place to live. The causes...first...the new rich young people who got their wealth from tech startups that went public...the second cause...foreign money from people, also rich, who know property here is an almost guaranteed investment, and the excellent schools factors in as well. But some of them buy with no intention of living here and becoming a part of our community. Most of us are afraid to talk about that because of racial/ethnic prejudice implications, and certainly those who pay cash for expensive homes, probably have extra cash to file lawsuits.

We have laws on immigration (people actually wanting to come here to live and contribute), but apparently, or at least as far as I know, we don't have laws on money immigration.


4 people like this
Posted by resident 1
a resident of Adobe-Meadow
on May 30, 2015 at 3:45 pm

My neighborhood is multi-ethnic. Most major companies have offices world wide and employees transition in and out for training and career advancement. SU has a lot of foreign scholars coming and going for their activities.
No one here is afraid to discuss that - everyone if very clear that they are proud that they are here to get advanced training and then go back to the company division in another country to lead that division.
I do not see what everyone is tippy toeing about here - people are here to work and advance in their careers.


5 people like this
Posted by mauricio
a resident of Embarcadero Oaks/Leland
on May 30, 2015 at 6:58 pm

mauricio is a registered user.

-Can you tell me what proposed developments that have come before the PTC for approval have been turned down in recent years?-

My guess would be none.


7 people like this
Posted by Remember When
a resident of Community Center
on May 30, 2015 at 8:54 pm

Many people are too young to remember how, before Prop 13, many elderly people on limited I comes lost their homes because they could not pay the property taxes--even though their homes were paid for in full.


9 people like this
Posted by Robert
a resident of another community
on May 30, 2015 at 10:45 pm

"many elderly people on limited I comes lost their homes because they could not pay the property taxes"

Yes, and rather going after the root cause (it was home values, not tax rates, that were spiraling out of control), they chose to insulate themselves from the symptoms, and pass the burden along to the later generations.


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Posted by Gale Johnson
a resident of Adobe-Meadow
on May 31, 2015 at 3:22 pm

@resident 1

I think we're talking about two different groups of people. I wasn't referring to the SU 'coming and going' folks. I was talking primarily about what's happening in my part of town (SPA) with wealthy foreign buyers driving up prices for single family homes by paying cash in a bidding war frenzy, houses selling for hundreds of thousands over asking price. Madness! I don't know if there is any direct correlation to that and higher rents for housing of all kinds here in PA, but there must be some. And some of those foreign buyers don't live here and might never plan to come here. They just know owning property in PA is a good safe haven/investment. That saddens me. I like to think of my next door neighbors as people I can meet and relate to and who want to assimilate into our community and contribute to it as well as reaping the benefits. The idea of owning residential property in my neighborhood, from afar, with no feelings about our community, just bothers me.

So, I'm not sure if any of the proposed solutions for bringing down rents will work significantly. I've heard several, probably all, but there is never an analysis and numbers presented of how many additional units would have to be built to have an impact. The in-law/granny cottage idea sure sounds good and I bet that will really catch on and yield about...wait a minute, let me stop and count my fingers...oh yeah...10.

I support the relaxation on the height limit. Let it go to whatever height it takes for 5 story projects as long as they're restricted to just housing. That should help the imbalance that we hear about all the time. And location is very important. Don't try to tie that in with retail or office space. Keep those separate. Retail is a separate issue, and I personally believe my idea of small independently owned and operated retail is done, gone forever, here in PA. I know there are some hangers-on, dreamers from the past, and lots of politicians gesturing and appearing to support and offering aid to the situation, but really only wanting to curry favor with voters, but c'mon it's over.

And, I too live in a multi-national/ethnic/cultural neighborhood and love my good caring neighbors, who have, like me, lived here for a long time.

Now @Robert...don't want to leave you out. Since you said spiraling out of control home/property values were the root cause, just exactly what would you have done back then to stop it? I think the free market economy with its supply and demand concept were in force then, and apparently still are. So, what would you have done?

I know, I pose a lot of hard questions...but that's why I do this silly online comment stuff. And my sage advice is free. I always hope to get good answers but they seem to be lacking.


2 people like this
Posted by Resident 1-Adobe Meadows
a resident of Adobe-Meadow
on Jun 1, 2015 at 7:14 am

Resident 1-Adobe Meadows is a registered user.

Gale - you have an agenda. This is not a silly on-line comment stuff - most people are telling what is happening in their area and how that translates into the city total. Not agreeing with your point of view does not mean there is no substance in the comments. It is insulting to say that everyone else is lacking the same knowledge base as you.

You are simply a point of view - if silly then don't participate.


4 people like this
Posted by Downtown Worker
a resident of Menlo Park
on Jun 1, 2015 at 8:06 am

Gale, thanks for asking questions - your voice is always reasonable even when I don't agree!

For the wealthy buyers, there's definitely some people buying up homes as investments. As long as they rent them out, it's OK - there's always been some rentals, and the homes are not being wasted and emptying the neighborhood. It's not a huge part of the run-up - MP and RWC are also up 40% in the last four years and seeing multiple offers over asking, and there's no foreign buyers in RWC - but it's still some homes being wasted by those who don't rent. Some have suggested a fee for home that are occupied less than 6 months of the year (maybe with a one-year exemption for sabbaticals?).

But, from the affordability perspective, it doesn't matter much who is buying $3m homes - it matters who is building $1m condos. At that price point, they are going to be filled by youngish professionals and downsizing seniors.

There's lots of places to build apartments and condos, especially if the city takes you up on relaxing the height limit as an incentive to build housing instead of office. There's downtown and Cal Ave, where there are still lots of one-story buildings. We could look at tying together the Stanford Mall and the 27 University area and making it more a part of downtown while adding housing above the retail.

I do see a role for people starting their own retail businesses. From what I've read, only a third of shops downtown are chains. So while the types of retail has changed, a place like the Chocolate Garage is just as mom-and-pop as a Shady Lane. (Which seems to be doing great at its new home ten minutes away in Menlo Park.)

Anyway, I'm optimistic. I think we can do it, in PA and up and down the Peninsula, we just have to try, and to recognize that things have changed. Housing the next generation is going to be different, just as Palo Alto changed in the 50s when we ripped down orchards to build SPA. This time, though, we don't need to take away the open space or get rid of single-family neighborhoods - just take the commercial and mixed-use areas we already have and make more use of them.


4 people like this
Posted by pa resident
a resident of Evergreen Park
on Jun 1, 2015 at 8:07 am

the headline states "threaten" like that is a bad thing. we prefer to think of it as "prevents" as a good thing. we don't need to have a piece of concrete on every square inch of palo alto. it is refreshing to see a little bit of dirt or vacant spot every once in a while. parks are much more useful than another ugly block of concrete. take for example--the grocery store on Alma and meadow. that is nothing more than a greed project from the city council--there was no need for such a building. it is ugly and whatever goes into that space will not do well. these ugly buildis are everywhere in PA now. thanks to the city council for putting a kabosh on more of these ugly things.


2 people like this
Posted by Ann
a resident of Midtown
on Jun 1, 2015 at 10:31 am

As long as city officials put greed over common sense, the practice will continue of squeezing the maximum number of people into as small a space as possible. Cities can, and have the right, to say No to developers, but like many things in society, the limits have to be pushed to the absolute extreme before people will step back and say Enough. Unfortunately, by then the damage is done and the out-of-town developers have taken their money and gone back home, where they don't have to be accountable to the locals.

I would take comments above a step further and suggest that the Bay Area and western central valley cannot possibly accommodate the tech workers needed in the future and they should consider expanding to the L.A area and even up north to Oregon and Washington. I'm not a big fan of the bullet train but considering the future need for expansion, it would make connections to Southern California easier; not as a daily commute, of course. With the internet, why do tech companies have to be located right next to each other? It's about preserving quality of life and spreading employment out over a large enough area to benefit everyone.


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Posted by Crescent Park Dad
a resident of Crescent Park
on Jun 1, 2015 at 12:52 pm

"But, from the affordability perspective, it doesn't matter much who is buying $3m homes - it matters who is building $1m condos. At that price point, they are going to be filled by youngish professionals and downsizing seniors."

I don't necessarily agree with the downsizing seniors factor in your projection.

First - PA condos sell for more than $1000K.

Very, very simplified example:
Say a senior couple bought a PA home for $600K in 1985. That house would sell for perhaps $3000K+ today. $2400K gain, less the one-time $500K credit, you end up with $1900K taxable income...net probably $1000K. Buy a $1200K condo and you have to finance $200K + monthly HOA fees. All that versus keeping your current roomy home, with private gardens, private garage space, room for visitors and relatively low (if not already paid off) mortgage.

This is why the "senior downsize" theory just doesn't hold water in this town. (Or Menlo Park, Los Altos, Portola Valley, Woodside, Atherton, etc.).

The only senior downsizing you're going to see are seniors moving to extended (or increasing) care facilities - and not all seniors will need to do that if they have already purchased extended care insurance that allows them to stay in their home (like my parents).

And I would also speculate that many of these seniors have children who will acquire the house via a family trust...the house will never hit the market.


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Posted by Crescent Park Dad
a resident of Crescent Park
on Jun 1, 2015 at 12:54 pm

One other comment on senior downsizing. One of the advantages of high equity real estate is that the seniors can borrow against the value of their home. Some do this via a reverse mortgage...so if they are short on retirement funds, they can leverage their homes instead.

Selling your home, paying taxes and then moving to a condo eliminates the flexibility of gaining cash via reverse mortgages.


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