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Year in Review: Housing shortage takes center stage at City Hall

In 2016, consensus grows around need for more, and different, kinds of housing

"There is a housing crisis destroying our community and Silicon Valley," Palo Alto City Councilman Cory Wolbach proclaimed during a February meeting.

In years past, this assertion could easily be dismissed as a hyperbolic declaration by the council's staunchest housing advocate. But as 2016 progressed, and more residents began to demand solutions to the city's housing-affordability problems, he found himself preaching to a steadily growing choir.

More than any other issue, Palo Alto's housing shortage was the leading driver of City Hall discussions. It was adopted as a City Council priority at the beginning of the year. It was the most divisive issue during November's rancorous council elections and the biggest wildcard the new council faces as it prepares to adopt an updated Comprehensive Plan in 2017.

At the February meeting, Wolbach failed to sway his colleagues to consider a city-growth scenario that would set a high goal for new housing between now and 2030. He had more success in August, when the council agreed to explore a new scenario that includes 6,000 new housing units.

Evidence for the "housing crisis" was particularly easy to find this year. Roughly 400 residents of Buena Vista Mobile Home Park face displacement as the park owner pursues his plan to shutter the park. In June, the council reaffirmed its commitment to spend $14.5 million to preserve the park as part of a broader plan that also includes the Santa Clara County Board of Supervisors and the Housing Authority of Santa Clara County.

Hundreds of people -- including seniors, techies, attorneys, teachers, millennials, baby boomers, architects and former mayors -- have attended meetings over the year, urging the council to "Go Big" on housing.

The citizens group Palo Alto Forward spearheaded a petition in March, signed by more than 1,000 residents (including eight former mayors), that stated a growing number of decades-long Palo Altans are moving out because of skyrocketing rents.

"We are on the path to being a city composed only of longtime landowners and wealthy newcomers," the petition stated.

There was the explosive resignation letter from planning Commissioner Kate Downing, who accused the council of "ignoring the majority of the residents" and who predicted that, unless the council adopts less-restrictive housing policies, the "once-thriving city will turn into a hollowed-out museum."

And various citizen surveys the council commissioned this year revealed it's not just activists like Downing and Wolbach who are passionate about solving the housing problem. In the city's annual National Citizens Survey, just 52 percent of people rated the city as a "good" or "excellent" place to retire (down from 68 percent in 2006 and 60 percent in 2014), while the percentage of those giving the city the top two grades for "variety of housing options" slipped from 27 percent in 2014 to 20 percent in 2015.

And when the council commissioned a survey last year to see if a transportation-tax would be feasible, members were surprised to see 76 percent of the respondents rank "cost of housing" as an "extremely serious" of "very serious" problem, even more than the statewide drought and traffic congestion.

And there was the November election, which swung the political pendulum away from the slow-growth "residentialists" and toward those members more amenable to development. Three of the four candidates who were favored by the Chamber of Commerce (incumbent Liz Kniss, Adrian Fine and Greg Tanaka) won council seats, compared to only one of the four candidates backed by the citizens group Palo Altans for Sensible Zoning (Lydia Kou).

Given the rising prominence of the issue, the council spent much of 2016 exploring -- and debating -- possible solutions. To be sure, a wide range of opinions remain about what kind of housing should be encouraged (some say Palo Alto needs all types of housing; others say "affordable housing" should be the priority), how much new housing is feasible, where it should be located and what it should look like.

But these divisions notwithstanding, 2016 has also been a year of remarkable consensus, as the council agreed to explore zoning changes that would enable the construction of more accessory-dwelling units and "microunits" of several hundred square feet. Mayor Pat Burt was one of several council members who said in November that he would support bringing back "planned community" zoning (a controversial process that allows developers to exceed zoning regulations in exchange for negotiated "public benefits) for affordable-housing projects. And in December, the council agreed to raise the impact fees charged to developers to support affordable-housing projects.

But even as the construction of housing that's affordable remains paralyzed, the council's multi-year effort to fix up outdated city infrastructure has surged. Palo Alto officials this year began work on the long-delayed renovation of the city's municipal golf course. They also ended the year by approving design contracts for new garages in downtown and near California Avenue. The latter would be located near the city's new public-safety building, a project that also charged ahead in 2016 after years of delay.

In Burt's final meeting on the council (he and Councilman Greg Schmid are both termed out after nine years of service), he acknowledged both the benefits and the challenges of the city's recent prosperity. The latter include the need to protect local retail so that much-needed stores don't move away or shutter, relieving traffic and parking congestion and addressing the needs of low-income residents.

But he also struck a hopeful note and urged residents not to lose sight of "what brings us to Palo Alto -- a beautiful and safe city with great parks, open space, exceptional services; a local economy that is the envy of many and that is centered on innovation and ideas for the future; an engaged and educated citizenry who cares deeply about their city, schools and the value of knowledge."

"These are among the reasons people come -- and stay -- in Palo Alto and why, despite our challenges, we value our community and are committed to its well-being," Burt said.

More Year in Review content:

The takeaways of 2016

This year's headshakers

Uplifting stories that topped 2016

School district's unexpected challenges

The 12 stories that Palo Alto Online users engaged with the most


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40 people like this
Posted by staying out
a resident of College Terrace
on Dec 29, 2016 at 11:11 am

Yet another "news" article by Gennedy Sheyner hyping Wolbach and the need for more high-density housing in Palo Alto. As the last election showed, those who read and comment on PAO articles seem to have little influence on the future of Palo Alto; I'm assuming that the new movers and shakers are communicating via other social media. I've given up on commenting on such articles as there doesn't seem to be any point to doing so. No need for more stress in my life.

26 people like this
Posted by Resident
a resident of Another Palo Alto neighborhood
on Dec 29, 2016 at 11:27 am

There may be a housing shortage in Silicon Valley, but there is no evidence that there is no shortage in Palo Alto. There may be a lot of people who want to live here, but there is no reason why they should. We do not have parcels of undeveloped land that can accommodate potential residents and even if we did, there is debate as to whether this would help low income Palo Alto workers live nearer their jobs.

39 people like this
Posted by Donald
a resident of College Terrace
on Dec 29, 2016 at 11:33 am

Is anyone rooting for not increasing housing? Just because everyone wants to live here in PA doesn't mean the city has to accommodate. How about keeping the population growth to a minimum?

37 people like this
Posted by Me too
a resident of Meadow Park
on Dec 29, 2016 at 12:05 pm

I also don't see a reason to increase housing.

It's so crowded here already that, unless you prefer an urban environment, the detriments outweigh the benefits of further increasing population.

I also don't see that it would help those who want to live in Palo Alto to move into increasing density, unless they prefer an urban environment.

It is primarily the local governments, developers, banks, and think tanks funded by these who benefit from increased density.

4 people like this
Posted by Jemaho
a resident of Community Center
on Dec 29, 2016 at 12:36 pm

I absolutely see a reason to increase housing, especially affordable housing (for both rental and purchase). I am thankful that the more progressive voters overcame the vocal monolith of nimby's.

8 people like this
Posted by R Wray
a resident of Palo Verde
on Dec 29, 2016 at 12:40 pm

There is no "housing crisis" in Palo Alto.
Would CC be more comfortable in running a city like say Binghamton, NY where the median home price is $111.9K and down 7.6 per cent for Q3 of 2016?

17 people like this
Posted by Me too
a resident of Meadow Park
on Dec 29, 2016 at 12:47 pm


What is the reason you see to increase the resident population of Palo Alto?

22 people like this
Posted by Missing numbers
a resident of Community Center
on Dec 29, 2016 at 1:31 pm

Other housing statistics in the Citizen Survey are





Why didn't Gennady Sheyner mention these?

1 person likes this
Posted by Robert
a resident of another community
on Dec 29, 2016 at 1:41 pm

@Me too

Why do you feel its other cities' responsibility to house Palo Alto's workers?

40 people like this
Posted by mauricio
a resident of Embarcadero Oaks/Leland
on Dec 29, 2016 at 1:47 pm

mauricio is a registered user.

There was never a housing shortage in Palo Alto. There isn't enough housing for all who desire to live in Palo Alto, which is an entire different proposition. Unless we want Palo Alto to be an incredibly dense town, which means that excluding the name, Palo Alto will cease to be Palo Alto, and become something that's entirely different, and lose the character, lifestyle and quality of life that tens of thousands of residents saved and sacrificed in order to live here, rather than in San Jose, San Francisco, Oakland, NYC, Los Angeles or Chicago, to name a few.

Palo Alto already has at least 10 thousand more residents than it should have, if desired sustainability, town character and quality of life mean anything. Increasing the population further is crazy. Repeating a mantra again and again, as the pro development crowd has been doing make it seem like ra fact, since they never stop repeating it, a very old gimmick.

10 people like this
Posted by Jayson
a resident of College Terrace
on Dec 29, 2016 at 2:51 pm

The problem is that unless your blue collar workers can live close to their work, the places like hotels, shops, restaurants, etc. will not be able to retain workers. Nobody is going to commute 4 hours per day to work for $15-20 per hour. I know of one restaurant that keep their workers past 6 months.

42 people like this
Posted by 6Kjockey
a resident of Green Acres
on Dec 29, 2016 at 3:18 pm

6Kjockey is a registered user.

I agree with Maurico. The fact that more people want to live in Palo Alto does not mean there is a housing shortage in Palo Alto. No amount of additional housing is going to be enough for everyone that wants to live here. No amount of additional housing is going to bring the price down so that lower-paid workers can afford to live here. Yes, we need to build below market housing for those workers by subsidizing the cost with federal, state, and local funding.

The "housing crisis" was brought about because of the increased number of office workers in Palo Alto. The city council has approved too many new office developments in the last decade. Also the existing office buildings are crammed with more workers so that the square footage per employee is a factor of three less than it was 10 years ago. And yet the impact of any new development does not take this into account.

So we now have too many employees, too many cars and too little parking. Building more housing will not help any of these problems.

24 people like this
Posted by jh
a resident of Evergreen Park
on Dec 29, 2016 at 4:01 pm

jh is a registered user.

The new housing development on Park is still not fully leased. If it is too expensive then it's probably wishful thinking by Palo Alto Forward that any other new developments won't be too expensive as well. With the high cost of land plus construction loans is it even financially viable to build and lease or sell housing units that are not so expensive? Every additional office worker being squeezed into offices creates a demand for 750 sq ft of living space.

It's ironic that Palo Alto provides jobs and is demonized for doing so. Why aren't other towns who don't allow jobs and have large minimum lot sizes ever mentioned? Atherton, Portola Valley, Los Altos Hills, Woodside?

25 people like this
Posted by Bay Area perspective
a resident of Duveneck/St. Francis
on Dec 29, 2016 at 4:06 pm

It's ridiculous to confine this to a Palo Alto perspective. We need a Bay Area wide perspective. There is cheap land and housing on the outer rings of the SF Bay Area and improved transit that connects/links efficiently with hubs should be workable in the same time frame as oddball schemes from the PA City Council like maintaining outmoded mobile home parks and not permitting landowners to sell their own land within the limits of the law. Most of us have lived in several cities in the Bay Area not "just" Palo Alto. Most of us have had long commutes, at times. People change jobs, family lifestyles/sizes/needs and mobility is what's needed, not several high-cost taxpayer-subsidized public housing schemes that have to be run by government bureaucracies with the question of patronage: who gets priority? Who gets the most subsidy? Who should get the "best" units? Who should also, perhaps, be given a Mercedes car at my expense (which I don't even have) on some sort of social justice effort? I tend to think friends of those in power (not elected, by the way) to run these housing schemes will benefit. Sometimes people can't afford to live certain places. I wouldn't mind a flat in London, by the way.

24 people like this
Posted by cm
a resident of Downtown North
on Dec 29, 2016 at 9:48 pm

There is no "housing crisis" in Palo Alto or the Bay Area, there is however an over-development crisis with greedy business men, developers and politicians willing to sacrifice residents standard of living and the environment to cram in more office developments and drive workers to come here. The solution is to really look at the number of people who can comfortably live and work in this area and then ask the rest to go elsewhere. There are many areas around the country (Detroit, the mid-west, etc) where there is plenty of space and office buildings and workers would be welcome. We do not have to let every person who wants to build here do so. Especially when many of the developments are ringing the bay and will be under water in the next 50 years or more likely will expect tax payers to build them a wall to keep the waters out. Further it is encouraging to see East Palo Alto take a stand (unlike Palo Alto) and declare the obvious - that Menlo Parks approval of the Facebook expansion will essentially destroy East Palo Alto by driving out the current residents as the new workers gentrify the city. Palo Alto should be joining the fight since we will suffer with more traffic on the freeways and more pollution. Palo Alto however doesn't care about it residents like East Palo Alto does. Palo Alto wants to help with the destruction by continuing to overbuild. Let's hope that reasonable citizens can get organized and one day stand up to the developers and politicians and get them to take a long term view of how to provide for local residents and establish boundaries so that the environment is not destroyed for those who only seek to profit.

28 people like this
Posted by Marc
a resident of Midtown
on Dec 29, 2016 at 9:52 pm

Can anyone calmly and with economic facts show any scenario that there will ever be enough housing in Palo Alto to be "affordable housing (for both rental and purchase)"?

All the housing in Palo Alto is already "affordable" be someone. What people are actually saying is that they want housing to be "cheap" somewhere in the 1/2 to 1/4 of what it currently costs to own or rent in Palo Alto. Except that they don't want anything to lower the value of their property, only someone else's.

I can't conceive of any scenario that that will ever happen. There are no economics that will ever make that happen on any significant numbers. People can keep ranting and raving all they want, it just isn't going to happen.

There is no significant empty land in Palo Alto. If you want cheap housing you need to move to someplace where there is empty land/undeveloped property. You can't build "cheap" housing as a redevelopment. The cost of purchase is just too high.


7 people like this
Posted by Jcs
a resident of Fairmeadow
on Dec 29, 2016 at 10:40 pm

Agree with cm. These were many of the points I was planning to type in. More residents benefit businesses, the chamber of commerce members. Am getting to strongly dislike even hearing the word "developers"
However, I definitely support affordable housing for teachers, police and firefighters, and low income workers! They should not have to commute from Oakland, Tracy, or Modesto just to work in Palo Alto!

31 people like this
Posted by mauricio
a resident of Embarcadero Oaks/Leland
on Dec 30, 2016 at 6:34 am

mauricio is a registered user.

Palo Alto doesn't have a housing shortage crisis. Palo Alto has a crisis of office overdevelopment, perpetrated by greedy land developers and their allies in the city council and city staff over many years. The notion that every person who desires to live in Palo Alto should be enabled to do so is as ridiculous as the notion that every person desiring to own a Ferrari should be helped by the public in his quest.

Palo Also is a very desirable place, for obvious reasons, hence it is very expensive, and nothing short of a catastrophic natural disaster would make it less desirable and less extraordinarily expensive. It is what it is. At any given point, there are millions of people who desire nothing more than to live in Palo Alto. The focus should be to create other desirable areas around the country that have developable land and dire need for economic development-there are already too many such areas already. The Bay area just doesn't have nearly enough land to service its explosive job growth, neither does Palo Alto. Many jobs and companiesmust go elsewhere, it will be good for everybody. This is the only solution.

2 people like this
Posted by Robert
a resident of another community
on Dec 30, 2016 at 12:41 pm

Several posters are correct, Palo Alto itself doesn't have a housing crisis, the entire bay area does. I suppose though it's only in the imagination of those "greedy developers" that we have things like an exploding homeless population or increasingly worse traffic from Palo Alto workers having to drive in from further and further away, not that local residents would have the gall to complain about such things if they existed though...

2 people like this
Posted by Curmudgeon
a resident of Downtown North
on Dec 30, 2016 at 7:45 pm

Home prices are high because real estate transactions asymmetrically favor sellers. Realtors collude to set prices ever higher through their professional association. Thus they and their client sellers have the advantage of organization which buyers do not.

Prices will fall when buyers unionize themselves and collectively refuse to bid excessive amounts.

25 people like this
Posted by No crisis
a resident of Charleston Meadows
on Dec 30, 2016 at 9:12 pm

WRONG. Completely misleading and false. There is NO housing shortage in PA. Agree with mc, Marc, Mauricio, and others. Those claims amplified by some CC members cater only to the developers whose one desire is to keep milking the area.

The ratio of office workers to citizens in PA is about 3 to 1. There is no way the city can fulfill that demand and why should it?

There IS a crisis of out of balance office expansion and a crisis of transportation. The argument that if people live here that will eliminate transportation crisis is false. Public transportation may relieve the crisis somewhat but only when the situation is way out of hand and driving and parking individual cars is way too much pain (soon to come though).

Affordable housing ... sorry but no matter how sweet that sounds ... not going to happen in PA (3:1 ratio!).

2 people like this
Posted by Longtime Resident
a resident of Leland Manor/Garland Drive
on Dec 31, 2016 at 11:46 am

Palo Alto residents can complain all we want. The proverbial 'hand' will listen to us.

This is a regional problem, originating with the whole Bay Area, and it is the Association of Bay Area Governments (ABAG) that calls the shots.

Local city councils dance to ABAG's tune, with all Bay Area residents falling into place.

Why? I don't know. When the ABAG insanity ends, if it ends, only then will we and our nearby city neighbors see at least some relief, and on any front, such as traffic.

2 people like this
Posted by Chris
a resident of University South
on Dec 31, 2016 at 1:53 pm

The commenters here continually throw out 3-1 ratio and then absolve Palo Alto of any responsibility. How ridiculous can you be?

The Bay Area, with the exception of parts of SF, is not densely populated.

Your old-line thinking will get you knocked off your high horse and you will take a nasty fall.

The slow renting is a sign that rents are falling, not a sign that Palo Alto has enough housing. Where do you think the people who serve you should live?

13 people like this
Posted by Read carefully
a resident of Charleston Meadows
on Dec 31, 2016 at 2:14 pm

Chris, unless I misunderstand, who absolves PA of responsibility? The responsibility is to listen to the will of the citizens and keep the balance of office space growing, infrastructure - roads, public transportation, etc, and housing. It is not that hard to maintain. Irresponsible and greed-driven is to keep turning small businesses into office spaces and then throw hands in the air and chant "Look, there is not enough housing".
PA voted for NOT converting the city into Manhattan.

Longtime Resident, agree partially. On the other hand, some towns like Atherton, Los Altos Hills, told ABAG to take a hike and look how much trouble they are in now - dire hardship.

24 people like this
Posted by mauricio
a resident of Embarcadero Oaks/Leland
on Dec 31, 2016 at 2:28 pm

ABAG is the worst thing that happened to the Bay area and to Palo Alto, right along with developers greed and the politicians who enable it. The Bay area towns that have ignored ABAG and for all intent and purposes told it to take a hike, are the communities with the highest quality of life and livability. The best thing that can happen to Palo Alto is to withdraw from ABAG and follow in the footsteps of Woodside, Los Altos Hills, Atherton and Portola Valley.

Like this comment
Posted by YIMBY
a resident of Mountain View
on Jan 7, 2017 at 4:25 am

You selfish, over-privileged Baby Boomers are pulling the ladder up with you on housing. Palo Alto apparently needed housing whenever it decided to build the house you currently reside in, but now that you own your Prop 13 protected investment, there's no longer any need to build housing for others. Things are just fine the way that they are, just ignore the housing crunch and let your house continue to appreciate in value due to artificially restricted housing supplies.

4 people like this
Posted by Resident
a resident of Another Palo Alto neighborhood
on Jan 7, 2017 at 9:11 am


Yes my house was built in the 50s. However, when we bought this house from the original owners, we had been living elsewhere, first in a small starter home and then we moved to Palo Alto where we rented. We used one car until having our second child when it became a necessity to have a second car. Apart from camping trips and visits to stay with family, we had no expensive vacations and eating meals out was an occasional family style restaurant except for special occasions. In other words, we had to be careful with how we spent our money in order to be able to afford to live in the home we now live in.

So YIMBY, why do you think I feel privileged and want to preserve the family style atmosphere of the town I chose to buy into when I could afford it after many years of not being able to do so? Perhaps your parents did the same thing in the town where you grew up? Would you begrudge them the benefits of where they live and being forced to live with newcomers who wanted to move on through expensive taxes so that they could live in their home?

Like this comment
Posted by YIMBY
a resident of Mountain View
on Jan 7, 2017 at 12:04 pm

There's no comparison to housing affordability decades ago to housing affordability now, and that you think this is simply a matter of people not wanting to save and pull themselves up by their own bootstraps shows incredible disconnect on your part. The Bay Area has the highest housing costs in the country, both when it comes to buying and renting. Studio apartments cost $2000+ a month to rent! Every neighborhood of entrenched homeowners in every city across the bay area preventing development collectively inflate housing costs and make it a struggle to live in one of the most economically vibrant areas of the country.

14 people like this
Posted by Land Grab
a resident of Green Acres
on Jan 7, 2017 at 12:44 pm

What is the cost per square foot you estimate as "affordable" for
a) Rental units
b) Home purchase

In this market economy, exactly how much housing needs to be built, and/or old folks driven out, and/or foreign buyers repelled in order to drive the price into the range of "affordability" you estimated above?

If you could repeal Prop 13, what do you estimate the property tax rate would be on current assessed values?

How much do you think the price per square foot or a home purchase would drop if you could repeal prop 13 ?

Like this comment
Posted by Robert
a resident of another community
on Jan 7, 2017 at 1:46 pm

"In this market economy, exactly how much housing needs to be built"

Very simply, enough housing for the new workers moving to the area, and if not allowed they'll just end up displacing someone. Many older people have some level of "protection" due to prop 13, though costs other than property taxes will also continue to rise, all to the detriment of those on the lower rungs of the economic ladder, renters, those on fixed incomes, etc.

12 people like this
Posted by Historical perspective
a resident of Professorville
on Jan 7, 2017 at 2:10 pm

When I first moved to Palo Alto, I rented a 600 sq ft home for about 1/3 my gross income. I was a in tech, with a high paying job in a technical role with four years experience and a famous relevant degree.

That home already existed before I moved to Palo Alto. It's owner had moved to the East Coast.

That degree with four years experience in a high paying job now fetches 130-140k. One third of that is about 45k or maybe 3500/month.

That fetches a bigger house now than when I moved to Palo Alto.

I am not preventing anyone from paying what it costs to live in Palo Alto now.

But I don't see a reason to reduce quality of life for current residents in order to allow the millions of people who want to live here to live here.

Like this comment
Posted by YIMBY
a resident of Mountain View
on Jan 7, 2017 at 5:57 pm

You are contributing directly to the regional housing shortage and increased rents across the Bay Area. Every city is full of people just like you who don't see why their city should be the one to add housing stock to the region. If you're going to block new housing because you want to preserve your individual suburbia then we need to ditch Prop 13 for balance. If you really want to keep a wall around Palo Alto up to keep everyone else out then you need to pay something for it, and those increased taxes cold go to housing projects in other areas of the region.

2 people like this
Posted by JJ
a resident of another community
on Mar 15, 2017 at 6:14 am

If by "town character" you mean the characteristic fact about Palo Alto that it has been made purposefully unaffordable by mandating that each unit of housing take up a ridiculous amount of very expensive land, then, well, no, maintaining that character is not a good thing at all. Palo Alto is full of people who claim to really care about the poor and vulnerable and then turn around and pass exclusionary zoning ordinances that make it impossible to construct any housing that's going to cost less than $2m for a single unit. That's just hypocrisy.

Like this comment
Posted by resident
a resident of Charleston Meadows
on Mar 15, 2017 at 8:46 am

Please stop giving ABAG any credit. The head of ABAG used taxpayer money to buy personal homes, got caught, then they used other taxpayer fund types to pay off the shortage due to the homes. That whole group does not deserve any credibility and should be eliminated as a non-essential group - not voted on by the taxpayers. As to the shortage in homes we have US students graduating who want to stay in the area and the influx of H1B people who are preventing them from getting jobs. Yes - our students are very qualified for those jobs. Time to tackle this problem - this is your children we are talking about.
The companies are sitting on hoards of cash so hiring US people should not be such a problem to them. They will still have a good bottom line.

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