Teachers, techies, corporate attorneys and advocates for seniors don't always speak with the same voice, but when Palo Alto officials convened in May for their latest discussion of the state of the city's housing, the public's message was clear: We're in trouble and we need help.
Jessica Clark, a licensed daycare provider and third-generation Palo Altan, said her family's quality of life has "drastically plummeted in just the past few months," with nearly 80 percent of her family's income now going to housing. Earlier this year, rent for her three-bedroom home went up by 20 percent, or $1,000, and she worried about the ability of her family of five to remain in the city.
"After bills, there's just nothing left in the bank," she said at the May 16 meeting.
Clark told the council she can no longer afford after-school sports for her children and has "cried more in the last few months than I have all my life." She said she has spoken to other people struggling to pay for housing, many of whom are ashamed to talk publicly about their experiences. Clark said she was not afraid to speak out because she believes the shame doesn't rest with hard-working families who are just trying to make ends meet.
"The housing crisis has spiraled into this situation and forced many into the place of need," Clark said. "The shame lies with accepting the status quo: sitting idly by, year after year, allowing this nightmare to present itself."
Young professionals have offered similar stories. In October, Jane Huang, who graduated from Gunn High School in 2005, was one of dozens of residents who attended a council meeting to call for more housing. Huang said she works in tech and shares an apartment in Barron Park with three other people. Other former classmates have either been priced out or are forced to live with their parents in order to stay in the area, which makes it difficult for them to establish themselves as independent adults.
"I think our right to live here is as good as anyone else's," Huang said.
Daniel Camp, a tech worker and a renter, said he is getting "completely screwed by the shortage of housing" in the area and urged the council to build at least double the amount of housing included in its most pro-growth housing scenario for the future. The median home price today, he told the council on May 16, is about 20 times the annual median income (which is $122,000), making the prospect of owning a home nearly impossible for even the well-off.
"That's a problem. That's criminal. That needs to stop," Camp said. "We're seeing a lot of population growth, a lot of job growth, but we haven't been doing anything to accommodate new workers. They either come here and move to where it's far away and they have to drive, or they drive the rents up here and existing residents are priced out and then have to come from far away."
It's a message that has been repeated over the years as the city's housing market has sizzled and its housing stock remained relatively flat. But whereas in the past, housing advocates have been lonely voices in the political wilderness, this year they have taken on a new and collective force. With the median home price at around $2.4 million and the median monthly rent at around $6,100, according to the real estate website Trulia, few can dispute the notion that Palo Alto -- long known as an expensive city -- is now completely unaffordable for all but the very few.
At one meeting after another this spring, the Council Chambers was packed with residents urging the council to "Go Big!" on housing. On May 16, as the council was preparing to discuss the city's long-term housing plans, Vice Mayor Greg Scharff noted that he had received about 100 emails from people urging the council to "choose a large number" as a housing goal.
Among the leading advocates was Kate Downing, an intellectual-property attorney who in November 2014 won an appointment to the city's planning commission and who also co-founded the citizens group Palo Alto Forward, which takes a friendly stance toward development. Downing told the council on May 16 that all four of the scenarios that the council is considering for Palo Alto's long-term future fall far short of what's needed to meet its housing obligations, as directed by the regional Association of Bay Area Governments.
Last week, Downing made national headlines when she published a stinging letter of resignation from the commission in which she accused the council of ignoring the desires of the "majority" of the public by failing to build more housing. The letter, which was picked up by Slate, Huffington Post and the New York Times (which last week sent a reporter to do a three-part Facebook Live video with Downing), reiterated the anxieties of many recent speakers about the changing character of Palo Alto. She and her husband, a software engineer at the software giant Palantir, said they are departing to live in Santa Cruz.
"I struggle to think what Palo Alto will become and what it will represent when young families have no hope of ever putting down roots here, and meanwhile the community is engulfed with middle-aged jet-setting executives and investors who are hardly the sort to be personally volunteering for neighborhood block parties, earthquake-preparedness responsibilities, or Neighborhood Watch," Downing wrote. "If things keep going as they are, yes, Palo Alto's streets will look just as they did decades ago, but its inhabitants, spirit and sense of community will be unrecognizable. A once-thriving city will turn into a hollowed-out museum."
The resignation letter also had some strong words for the City Council's alleged failure to plan adequately for the future.
"This Council has ... charted a course for the next 15 years of this city's development which substantially continues the same job-housing imbalance this community has been suffering from for some time now: more offices, a nominal amount of housing which the Council is already laying the groundwork to tax out of existence, lip service to preserving retail that simply has no reason to keep serving the average Joe when the city is only affordable to Joe Millionaires."
City takes aim at housing shortage
While Downing's letter channeled the frustrations and anxieties of housing advocates throughout Silicon Valley, its allegation that the council is "ignoring the majority of the residents" who are alarmed by the housing crisis is, at best, simplistic and, at worst, untrue. Since the year kicked off, housing has overtaken traffic as the hottest and most time-consuming discussion topic at City Hall, with even the staunchest "residentialists" stressing the need to address the city's jobs-housing imbalance and create new, affordable places to live.
In February, the council designated housing (and mobility) as a top priority for 2016. Since then, city officials have labored to preserve the Buena Vista Mobile Home Park (an effort toward which the council has already committed $14.5 million), discussed raising "impact fees" that developers have to pay to support affordable-housing programs, and began exploring zoning changes that would restrict the development of office space, with the idea that doing so would avert traffic problems caused by additional commuters and encourage builders to construct housing. The idea of allowing "microunits" for young professionals and seniors now has broad council support, and the idea of piercing the city's 50-foot height limit for buildings -- which would have been considered political sacrilege just two years ago -- is now increasingly seen as an acceptable alternative for areas near to public transit.
Nor are Downing's ideas for encouraging housing entirely new (or, for that matter, entirely Downing's). The proposal to spur the construction of more small homes on properties where there are already single-family houses (known as accessory-dwelling or granny units) was prompted by a 2015 memo from council members Cory Wolbach, Greg Schmid and Greg Scharff. And the notion of creating "minimum density" requirements -- the city currently only has rules spelling out maximum densities -- for residential projects is something that Mayor Pat Burt and other council members have agreed needs to be explored. A minimum density in an R-15 zone, for instance, would require a developer to build at least 15 residential units; currently, the "15" refers to the maximum of units that can be built.
Even the council's tone when discussing housing has shifted markedly in the past year. Now when council members Wolbach and Marc Berman talk about the city's "housing crisis" they are, increasingly, not alone.
It's not just rhetoric. In reviewing new development proposals, the council has largely been united in demanding that developers focus less on building offices and more on creating housing. That was the case in September, when Pollock Financial Group proposed building an office-and-retail complex at the busy intersection of Page Mill Road and El Camino Real. The council swiftly rejected the proposal, with Wolbach urging the developer to add as much housing as possible. The project is about to return to the council, and instead of the commercial space that was previously envisioned, it now features 60 small apartments.
The council made another call for more housing last week, when it struck down a development at 411 and 437 Lytton Ave. that had won the city planning director's approval. Though members offered various reasons (including potential traffic problems and architectural incompatibility), several indicated that one of its major flaws is the lack of sufficient housing -- despite the project's two penthouses and separate single-family home.
"I think you'd get more support from the council and the community if there was a greater amount of units than the current proposal has," Berman said during the Aug. 15 discussion.
Citizens brainstorm ideas for creating housing
Behind the scenes, the most significant and potentially transformative pro-housing pivot is taking place in the abstract world of long-range planning: The city's effort to update its land-use bible -- the Comprehensive Plan -- is approaching its most critical stage. Once adopted, the document will help shape the city's land-use policies until 2030 and lay the foundation for future housing regulations and sites.
To help with the update, the council appointed a 22-member committee to go over each chapter of the Comprehensive Plan and to propose new goals, programs and policies. The committee, which includes renters, homeowners, neighborhood leaders, housing advocates and members of both Palo Alto Forward and the slow-growth group Palo Altans for Sensible Zoning, has been meeting for the past year and is now in the midst of revising the chapter that many agree is the most critical of the Comprehensive Plan: the Land Use Element.
On Tuesday, in its latest discussion of this chapter, members struggled to reach consensus on a key question when it comes to the city's growth: Should Palo Alto continue to limit new non-residential development? Or should the city allow growth more liberally, provided new developments meet a set of performance measures (these measures have not been developed yet, but they would ostensibly include things like ways to ease traffic, the provision of affordable housing and tree preservation)?
The residentialists on the committee favored the former approach; the housing advocates lobbied for the latter.
Bonnie Packer, a board member for the Palo Alto Housing Corporation, the nonprofit that manages the city's affordable-housing program, called a development cap "a non-analytical political sledgehammer" that isn't based on any data. The city should solve its traffic and parking problems through innovative transportation programs, she said, and rely on performance measures before considering a long-term development cap.
Economist Steve Levy, who is affiliated with Palo Alto Forward, likewise argued that the city should take a "flexible" approach and use performance measures to mitigate the impacts of growth.
But those who favored a cap, including College Terrace neighborhood leader Doria Summa, argued that relying on performance measures alone is not enough.
"I do want to regulate growth," Summa said. "To me mitigating impacts is not enough because growth itself is an impact."
Ultimately, the committee majority coalesced around a hybrid approach that would use both a cap and performance measures, which would be established later.
Everyone also agreed that growth overall should be carefully monitored. Resident Lydia Kou, who is also a candidate for City Council this fall, proposed the city should monitor the impacts of residential developments, including both market-rate and below-market-rate housing, not solely commercial projects.
However this issue is decided, the revised Comprehensive Plan chapter is expected to take more of a pro-housing approach than the existing one. One new policy in the draft Land Use Element, for instance, would create a new designation that would allow buildings with a mix of retail and residential space but forbid offices.
Another would set conditions for allowing buildings of up to 65 feet, with criteria including affordability of the residential units, sensitivity to context and avoidance of adverse traffic and parking impacts. Yet another calls for encouraging a mix of housing types such as "micro-units, studios, co-housing, cottage, clustered housing and secondary dwelling units, to provide a more diverse range of housing opportunities."
Some of these policies have plenty of dissenters on the Comprehensive Plan's Citizen Advisory Committee, which agreed Tuesday not to vote on divisive issues like building heights but to instead forward to the council the various options the committee explored.
Can new policies make a dent?
No one is arguing that these policies, in and of themselves, will solve the city's -- much less the region's -- housing crisis. Nor are they expected to help Palo Alto come anywhere close to meeting its regional "fair share" obligation of adding 1,988 new housing units between 2015-2023. (Despite that housing goal, few on the council are concerned about not meeting it because, by law, the city has merely to plan for these units and not actually build them.) Collectively, however, the potential policies represent a shift of direction for Palo Alto, where the city's most recent zoning changes have taken aim at curtailing growth.
The council, for its part, is preparing to make its own major Comprehensive Plan decision on Aug. 22. That's when council members are expected to direct planning staff to move ahead with new planning scenarios that will be analyzed as part of the Comprehensive Plan update.
The most ambitious of the six scenarios -- known as Scenario 6 -- would add 6,000 housing units between now and 2030. It would allow higher densities for residential projects in downtown, around California Avenue and along El Camino Real; and consider creating new housing sites along the El Camino frontage of Stanford Research Park and Stanford Shopping Center, as well as near the Stanford University Medical Center. The city's zoning code would also be revised to lower the density permitted for commercial development, raise it for residential projects and create incentives for building small housing units.
Even if the council adopts Scenario 6, the city would continue to have the worst jobs-housing imbalance in the county, which is evidence of the seemingly intractable nature of Palo Alto's housing crisis. With about three workers in Palo Alto to every employed resident, this imbalance is widely viewed as the underlying cause of the city's worsening traffic congestion and chronic parking shortages. Even under this most aggressive, pro-housing proposal, the imbalance is not going away any time soon.
A city staff analysis shows that if the city retains all of its current growth policies, the ratio of jobs to employed residents would be 3.2 to 1 by 2030. If it moves ahead with those scenarios that limit commercial growth and encourage some new housing (between 2,720 and 4,420 units), the ratio would remain at around 3 to 1. Scenario 6, which represents the city's best hope for expanding the housing supply, would only lower the ratio to 2.71.
To be sure, the scenarios currently being analyzed do fall far short of the type of aggressive housing policies promoted by Downing, members of Palo Alto Forward and council members like Wolbach (who lobbied unsuccessfully for exploring 7,500 housing units in Scenario 6) and Berman. Despite the city's aging population -- the number of residents 65 and older went up by about 50 percent between 1980 and 2010 -- the city has no plans in place for constructing large-scale senior developments like Channing House, an 11-story building that opened 52 years ago and whose construction would be unthinkable in today's political climate.
Housing advocates have scored a few small victories in recent years. In 2009, the council approved two moderate-sized affordable-housing projects: the 35-unit "Treehouse" development on West Charleston Road and the 50-apartment building at 801 Alma St., which serves low-income families (it was originally envisioned as a 96-unit development with senior housing but was downsized after neighbors opposed the plan).
Since then, getting new affordable-housing projects approved has become all but impossible. In 2013, the council unanimously approved a zone change that would have enabled a 60-apartment complex for low-income seniors and 12-single family homes at a former orchard site on Maybell Avenue. The vote ignited a political firestorm, leading to a citizen referendum that overturned the project in November of that year (among the city's few voting precincts that supported the Maybell project was one in downtown that includes Channing House) and a 2014 election that tilted the council majority to the slow-growth "residentialist" wing.
Not surprisingly, the new council has proceeded with caution on housing, choosing small zoning tweaks over large housing projects. Wolbach continues to make the case for building all types of housing units, including market-rate, below-market-rate, granny units, microunits, and small apartments that would have deed restrictions prohibiting occupants from owning cars. There is a regional housing crisis, Wolbach argued on June 6, and while Palo Alto can't solve it alone, it has a role and a legal obligation to do its part.
In a recent interview, Wolbach compared the city's housing conundrum to the national debate over climate change.
"In each case, it's a collective-action problem that Palo Alto can't solve on its own, but in both cases, we're obligated to take steps to do our part and work closely with others," Wolbach said. "In both cases, there's often resistance from people who are either denying the research demonstrating that there is a problem or denying that the problem can be solved. In both cases, we hear arguments that addressing the problem may damage our quality of life and, in both cases, if we're smart about it, people will recognize that we can address the issue without impacting our quality of life."
On the other end of the council's spectrum is Eric Filseth, who opposed the Maybell project in 2013 and who is affiliated with Palo Altans for Sensible Zoning. Filseth argued over a series of several meetings last spring that rather than a "housing crisis," the city has a "housing affordability" crisis that will not be solved by the indiscriminate construction of more housing. The city, he argued, should focus specifically on below-market-rate housing that would help service workers and other low-income employees -- not attorneys and software engineers who have plenty of other housing options in the Bay Area.
"The demand is so high in Palo Alto that in practice, no amount of market-rate housing is likely to bring prices down so that even middle-income people can afford it, much less low-income people," Filseth said at the May 16 meeting.
"It will just bring us more of the same expensive housing. We will not build our way out of the affordability problem unless we take really radical measures."
During discussions of the Comprehensive Plan, both he and Councilman Tom DuBois have called for planning scenarios that would bring about transportation improvements and top sustainability policies without necessarily adding a large amount of housing. DuBois has referred to this model as a "smart suburb" approach.
In recent months, the two sides have reached consensus on several housing policies. The entire council, for instance, agreed to take a look at restrictions that have been hindering the development of second dwelling units. And more recently, the council's Finance Committee recommended significantly raising the development-impact fees that fund future affordable housing in the city, which developers must pay. The proposal won support from both Filseth and Wolbach.
Some housing advocates call those very same proposals either insufficient or counterproductive. Downing, for instance, blasted the proposal to charge the higher impact fees, arguing that the change would simply deter developers from building in Palo Alto. On July 27, in her final meeting of the planning commission, Downing characterized the proposal as a cue for developers to "not build any more housing ever again in Palo Alto."
She said she doubted that the council would actually spend these funds on affordable housing anyway.
"We have a City Council that trembles at the thought of a four-story apartment building," Downing said. "Even with all the money in the world, I do find it incredible that we'll spend it on affordable housing."
She also lamented the fact that during her tenure on the commission she hadn't seen a single development that was 100 percent housing (which is technically true, but only because she was absent from the May 25 meeting in which the commission approved a revised housing proposal for the Maybell site, which included 16 homes and which weeks later won the council's endorsement).
Housing dilemma rife with paradoxes
The idea of Kate and Steve Downing, a corporate attorney and a Palantir engineer, becoming national poster children for Palo Alto's displaced population is one of many paradoxes of the city's housing debate.
Palo Alto is a city where voters in 2013 struck down the original Maybell project that included low-income apartments for seniors; it's also a city where the senior population grew by 50 percent between 1980 and 2010 (from 13 percent to 17 percent) and where more than three-quarters of Palo Altans who responded to a spring survey ranked "cost of housing" as a "very serious" or "extremely serious" problem -- a higher proportion than for any other issue.
It's a city where residents routinely appeal and oppose new developments; it's also one where only 20 percent give high ratings to the city for "variety of housing options" (down from 27 percent in 2014). People accuse new developments of exacerbating the city's traffic and parking problems and impacting their "quality of life," but many are also anxious about rising rents and a shortage of places for empty nesters to live. Troublingly, the percentage of Palo Alto residents who have ranked the city as a "good" or "excellent" place to retire slipped from 68 percent in 2006 to 52 percent in 2015, according to the annual citizens survey.
Palo Alto is also a city that council members and staff routinely describe as "built out" (the phrase is even used in the city's Housing Element, its guiding document for the development of more housing), despite the fact that 59 percent of its land is open space.
Indeed, only about 0.5 percent of the land in the city's urban core is vacant, according to the Housing Element. But as the construction cranes and bulldozers around California Avenue amply demonstrate, that doesn't mean there's no room for growth. Commercial builders apparently didn't get the memo about Palo Alto being "built out." Neither has Stanford University, which is completing two major housing developments for faculty -- a 70-unit project on El Camino and a 180-home development on California Avenue -- while also preparing to increase the housing stock on campus, at Escondido Village.
Geographical limits notwithstanding, Palo Alto does have another potential frontier for development -- upward. Iconic, and tall, downtown buildings like the Hotel President on University Avenue and 261 Hamilton Ave. (formerly occupied by University Art) are routinely cited by residents as among their favorites. Yet residents and council members are equally attached to the city's 50-foot height limit for new buildings, a restriction that was adopted more than four decades ago and that has remained a political sacred cow ever since. Over the years, some council members (most notably former Councilwoman Gail Price) have suggested relaxing the limit for development within transit corridors, particularly if these projects include affordable housing. No proposal has gotten very far, however.
How council election could impact housing
For all of the ideas and hand-wringing, much about the city's housing efforts could change in the coming year. The council election is now three months away and, unlike in 2014, most of the candidates running are now calling housing their top priority.
The 11-person field includes more renters than in past elections and fewer people tied to fixed ideologies. While Lydia Kou is aligned with the slow-growth Palo Altans for Sensible Zoning and Arthur Keller is popular with the residentialist crowd (as a planning commissioner, he was known for his hyper-critical approach to evaluating new projects), most of the other candidates reject the divide that has gripped the city's political sphere since the Maybell controversy.
Greg Tanaka, who is now the longest-serving member of the Planning and Transportation Commission, is known for his cautious, project-by-project approach to new developments, an approach he hopes to bring to the council. Though he isn't considered a "residentialist," he was a dissenting vote for both the Maybell project and for 101 Lytton Ave., rejecting both applications because he believed there wasn't enough community support.
"Just having a strong ideology one way or another is not productive," Tanaka said, when asked about how he seeks to tackle the housing crisis. "You can't look at the problem through just one lens. If you try, you'll get a stalemate. You have to be able to get everyone to buy in."
Don McDougall, who is also seeking a council seat, takes a similar stance and said the next council will need to have major community conversations before it determines the best course of action on housing. Like Kou and Keller, McDougall serves on the Citizens Advisory Committee.
Candidates Greer Stone and Adrian Fine, who are both renters, have more specific proposals for addressing the housing crisis. Stone, who chairs the Human Relations Commission, says the city should increase the percentage of below-market-rate units that new housing developments would have to provide, from the current level of 15 percent to 25 percent. Fine, who currently chairs the planning commission and also serves on the Citizens Advisory Committee, supports creating new "specific area plans" for downtown, California Avenue and other sections of the city where housing will be most appropriate.
However the council is configured next year, just about everyone in the race agrees that providing more housing options will remain a top priority in the years ahead. The big question is whether -- and how much -- new housing will actually get built. Fine and his fiancee currently rent a home in the College Terrace neighborhood -- a situation that he describes as a "tenuous place to be" in the current real estate market. He said he would like the city to offer more housing choices. He also observed that between 2007 and 2014, the city constructed only 13 percent of its regional housing allocation. No wonder, he said, the city is experiencing a housing crisis.
"When you have 70 percent of Palo Altans saying we need more housing and we're not producing housing, that's a shame," Fine told the Weekly.
Facts about Palo Alto's housing
When it was built
Seventy-six percent of Palo Alto's existing housing stock was built before 1980. A major growth spurt occurred after World War II, with about 29 percent of all housing going up between 1950 and 1960. Only 11 percent of the city's housing was built between 2000 and 2012.
Trends in growth
Between 1970 and 1980, the city produced 240 units of housing per year. Over the next two decades, the number dropped to 144 and 96 units per year, respectively, before climbing to 173 units annually between 2000 and 2012.
Types of housing
There were 17,614 single-family homes in 2013, or 62 percent of the housing stock. Multi-family units comprised roughly 38 percent. Mobile homes, trailers and other forms of housing, which in 1990 made up 4 percent of the stock, only accounted for 0.35 percent in 2013.
Source: City of Palo Alto Housing Element