Three years after it suffered a stinging rebuff from Palo Alto voters, the city's leading affordable-housing developer is preparing for a resurgence.
Palo Alto Housing, a local nonprofit that develops affordable-housing projects and manages the city's below-market-rate program, has been largely missing from the city's development scene since the 2013 referendum in which voters struck down its approved housing complex on Maybell Avenue. Instead, the nonprofit shifted its sights to the neighboring communities of Mountain View, where it is about to start construction on 67 units, and Redwood City, where it is designing a 60-unit complex.
But on Monday, in a presentation to the City Council, members of Palo Alto Housing made a case for bringing new units of affordable housing to its hometown, where the phrase has become a virtual oxymoron. Specifically, it is looking to add about 45 units to a site that it owns next to the California Avenue Caltrain station and to explore another development at a site on El Camino Real.
Both plans are still in early conceptual phases and are facing numerous financial, political and zoning obstacles. But on Monday, the council gave its strongest indication since 2013 that it is willing to change zoning rules to accommodate the affordable housing that everyone acknowledges is sorely lacking.
Though they didn't take any votes, council members generally agreed that the city should consider new zoning designations that would enable construction of below-market-rate housing developments. One option on the table is reviving the “planned-community” (PC) zoning project, which was used to build the vast majority of existing affordable-housing projects and which Palo Alto Housing tried to use for its Maybell proposal that featured 60 units for low-income seniors and 12 single-family homes.
Shortly after that project was knocked down in a divisive 2013 referendum, the council voted to suspend PC zoning, which allows developers to exceed zoning regulations in exchange for negotiated public benefits.
Now, the council is looking to rethink this decision, at least as it pertains to below-market-rate housing. In addition to a revamped PC process, the council also expressed interest in exploring a new overlay zone that would allow the type of density that would make affordable housing possible.
The council discussed these zoning reforms after hearing from Palo Alto Housing (formerly known as Palo Alto Housing Corporation) staff about its history in Palo Alto and its ongoing projects in neighboring communities. Though it's still a Palo Alto nonprofit, the organization went into a self-imposed exile of sorts after the 2013 referendum, pursuing new projects in other communities for the first time since its birth in 1970.
On Monday, Palo Alto Housing officials indicated that after a period of post-Maybell trepidation, they want to shift its focus back to Palo Alto.
"I think it's time to put Maybell behind us," Candice Gonzalez, CEO of Palo Alto Housing, told the council Monday.
The council largely agreed. In considering the zone changes, the council recognized the desperate need for affordable housing in the local community, as evidenced by citizen comments, survey results, a packet of letters from residents and data from Palo Alto Housing itself.
The nonprofit's 22 properties are filled to capacity, with a vacancy rate less than 0.5 percent, and the average waitlist between five and seven years. Gonzalez noted that in June 2016, when the nonprofit opened its waitlist at the Sheriden Apartments -- its only senior-housing development -- more than 500 people received applications and more than 50 camped out overnight in hopes of getting on the list.
The housing crisis, Gonzalez told the council, is real.
So, however, are the challenges. In most cases, construction of affordable-housing complexes requires density bonuses and other zoning concessions to make the financing possible. In the past, almost all of Palo Alto Housing's affordable-housing projects relied on the PC zone, Gonzalez said, with affordable housing being accepted as a public benefit.
Other communities, she noted, have zoning tools to encourage affordable housing. In Mountain View, the preferred mechanism is a “precise plan” that the community formulates to determine desirable uses for particular parts of the city, in this case an area along El Camino Real.
Gonzalez said her organization had initially proposed building about 45 units of affordable housing on the 0.5-acre site but was encouraged by the Mountain View council to raise it to 67.
Palo Alto, by contrast, does not have such plans along its stretch of El Camino. A 0.42-acre site that Palo Alto Housing hopes to build on would only accommodate 11 units, Gonzalez said.
“As we go forward, you have to start thinking about what kind of affordable-housing zoning we can put in place to make affordable housing feasible,” Gonzalez said. “We also need community support and will to make this happen.”
Whether or not the community gets behind Palo Alto Housing remains to be seen, but on Monday night the council offered some words of encouragement.
Councilwoman Liz Kniss, who is running for re-election this year, spoke for most of her colleagues when she highlighted affordable housing as an important priority.
“As a candidate, I can tell you that running with 11 of us, I haven't heard anyone say they weren't in favor of affordable housing,” Kniss said. “I think that's encouraging.”
Her council colleagues agreed and offered largely positive words about the California Avenue project, which would include about 20 units for adults with development disabilities and would be eligible for density bonuses because of its location in the “pedestrian- and transit-oriented” overlay next to the Caltrain station. The new units would be next to Palo Alto Housing's existing 45-unit apartment complex, California Park Apartments.
The location is particularly suitable, several council members noted, because the residential neighborhood around the site is scheduled to adopt a Residential Preferential Parking program, which would presumably alleviate residents' anxieties about parking spillover from existing and new developments.
Planning staff expects to return to council in December with the perimeters of the new parking program for the Evergreen Park neighborhood near California Avenue.
“We have traffic and parking concerns,” Councilman Cory Wolbach said. “If we can get a plan moving forward to deal with parking and traffic concerns before we get more housing, that's the ideal scenario.”
Councilman Marc Berman urged his colleagues to “really approach different proposals with a really open mind” and noted that one of the housing developments proposed by the nonprofit sits “practically on top of the California Avenue station.”
“These seem like real opportunities for our community to add affordable housing,” Berman said.
Not everyone, however, was excited about the type of project-specific evaluations that have come to characterize planned-community projects.
Councilman Eric Filseth made a case for creating a “standard process that gives us good projects,” rather than evaluating projects on a case-by-case basis. The best way for the council to prevent neighborhood pushback on affordable-housing projects is to establish a process that gives neighbors a clear idea of what to expect, he said.
Mayor Pat Burt, meanwhile, said he was open to reviving planned-community zoning for affordable housing and pointed to the city's long history of using the otherwise controversial designation for this purpose.
“The notion that we should no longer consider PCs for affordable housing when we have so many examples of how successfully that's been done in the community over the decades is really misguided,” Burt said. “And I think the council needs to reconsider that.”