Is the fact that there has been little new proposed commercial office development in Palo Alto over the last two years a sign that the city's 50,000-square-feet-per-year cap on new office construction is succeeding — because it has slowed the number of proposals — or failing because there haven't been enough proposals made by developers to test the competitive approval process?
That, in essence, was the speculative discussion Tuesday night at a City Council meeting in which all nine members can claim they voted to make the cap "permanent," but five of them did so only after voting to significantly weaken it.
Those votes, particularly the ones cast by Cory Wolbach, Tom DuBois and Eric Filseth, whose current terms end in 2018 and therefore may run for re-election, are destined to be issues in the next year's already unusual campaign — when the size of the council will shrink from the current nine to seven and only three seats will be open.
Wolbach voted with the 5-4 majority (made up of Mayor Greg Scharff, Vice Mayor Liz Kniss and Councilmen Adrian Fine and Greg Tanaka) in support of two changes to make the cap less restrictive, while DuBois and Filseth voted with Councilwomen Karen Holman and Lydia Kou to keep the cap as is.
The two changes don't gut the cap, but they undercut its effectiveness in two important ways: by allowing the rollover of any unused portion of the 50,000-square-feet annual allowance to the following year and by doing away with the competitive review process of all proposals submitted and instead shift to a first-come, first-served system.
Both changes were important to developers (although they would prefer that the cap be eliminated altogether), and it is disappointing, but hardly a surprise, that — with the exception of Wolbach — those candidates who supported these changes have received political and financial support from development interests.
These five council members tried to argue that the cap, which was adopted two years ago in response to community concerns about the negative traffic and housing impacts of unbridled commercial development, was discouraging developers from making proposals in Palo Alto and that the cap imposed arbitrary limits without regard to development and economic cycles. If the intent was to meter growth, they argued, then the cap should have more flexibility over longer periods of time by allowing unused square footage to accumulate for use in future years.
And without any evidence, they surmised that developers might be shying away from making proposals because the competitive process puts them under pressure to enhance their projects in hopes of getting placed at the top of the list. In arguing to kill off this unique feature of the office cap ordinance, Wolbach said he lacked confidence that the council could be fair in assessing the best proposals in front of it, a startling admission given the council is routinely required to make such judgments.
These arguments attempt to paint the current cap as flawed, while we think the community should be delighted with the results so far.
Where are the voices wishing for more office-building construction? We don't hear them and we challenge the five council members to point them out.
The original intent of the annual 50,000-square-feet office cap, unanimously adopted by the council, was to slow new commercial development in downtown Palo Alto, in the California Avenue district and along El Camino while the city's Comprehensive Plan was completed or after two years, whichever came first. The assumption was that some form of office-growth limitation would continue at that time after gaining some data and experience with the temporary cap.
The concept was responsive to strong community concerns about the increasing negative effects of big new office projects, and voting for the cap at the time was a political necessity for all council members. But as often happens, development interests have ever since been looking for ways to undo this restriction, and with the shift in political majority on the council with the 2016 election, the votes are now there to roll it back.
The irony and hypocrisy of this is that the same majority that voted Tuesday to make more commercial development easier has been advocating repeatedly for more housing. If there is one documentable result of the current office-cap restrictions, it is that it has led to more housing projects where office development would have otherwise been likely.
It is not hard to imagine voters becoming cynical about candidates who say their focus is on increasing the supply of housing while voting to make new commercial development, the major driver in demand for housing, easier.