Seeking to end Palo Alto's yearslong drought in producing affordable housing, city officials agreed early Tuesday morning to create a new zoning tool to help developers create this rare commodity.
By a 7-2 vote, with Karen Holman and Lydia Kou dissenting, the City Council agreed to create an "Affordable Housing Combining District," a new zoning designation that will loosen development standards for affordable-housing projects, granting them greater density, higher heights and less stringent parking regulations. The vote followed months of spirited debate, including hundreds of public comments and two long hearings of the Planning and Transportation Commission, which could not reach a consensus on the new district.
On Monday night, the debate moved to the council, which heard from more than 40 residents and received a packet of letters and emails on the topic. Most urged the council to move ahead with the new zone, which they argued is deeply needed to prevent displacement of residents who cannot keep up with the city's soaring rents. Others urged caution and asked the council to make sure the projects won't burden neighborhoods with inadequate parking and excessive heights.
Just about everyone in the crowded room agreed that affordable housing is an important priority, though there was some disagreement about what exactly this means. Some favored a relatively expansive definition that would apply to residents who make up to 120 percent of area median income; others advocated for a more restrictive zone that would be limited to those who make below 60 percent of area median income.
After a discussion that stretched past midnight, the council voted to go with the broader definition, which was recommended by planning staff and heavily favored by Mayor Liz Kniss and Councilman Adrian Fine. In explaining her support for the new zoning tool, Kniss hearkened back to the 1970s, a period when she said Palo Alto enjoyed more diversity in occupations and income levels.
"The diversity in our community is so important," Kniss said. "It's important for our kids, it's important for you and it's important for those people who are here. Without production, you no longer get that diversity."
The proposal for the new zoning district was inspired by two sources: Palo Alto's dismal record in creating new affordable-housing projects and a recent proposal by the nonprofit Palo Alto Housing to construct a 57-unit affordable-housing development on El Camino Real, near Wilton Avenue.
While the council and the planning commission have each expressed support for the Palo Alto Housing proposal, members in each body sharply disagreed about the best way to get there. Some favored the new affordable-housing district; others recommended negotiating a "planned community" (PC) zone for the Wilton project and taking more time to refine the ordinance establishing the new affordable-housing district. The PC zone, which the city hasn't used since 2013, allows developers to negotiate with the city over zoning concessions and "public benefits" on a project-by-project basis.
Fine, whose memo last November sparked the creation of the city's new Housing Work Plan, made a case for moving ahead with the zone change and to make the new district applicable to residents making up to 120 percent of area median income: up to $102,000 for a two-person household.
"Our community is speaking loudly and clearly about the need for affordable housing," Fine said. "This overlay is aimed at 100 percent affordable housing. It doesn't get much better than that."
Many agreed. More than 300 signed a petition circulated by the citizens group Palo Alto Forward in support of the affordable-housing combining district. Elaine Uang, co-founder of the group, said the new zoning tool would create a "structured process for approving projects."
"We need a more predictable tool and a better set of project requirements for affordable housing," Uang said.
The PC zone, which was last used by Palo Alto Housing for a housing development on Maybell Avenue (a project that faltered after voters overturned the PC zone in a referendum), is a "waste of people's time and money," she said.
Some took a different view. Karen Holman and Lydia Kou both championed the approach favored by the majority of the Planning and Transportation Commission, which wasn't sold on the new affordable-housing zone and which recommended the PC-zone approach and further refinement of the new district. On March 14, the commission voted 4-3 not to create the new district just yet, prompting the three dissenting members to draft a minority opinion, urging the establishment of the affordable-housing zone.
Holman argued Monday that allowing the new zone to apply to anyone who makes below 120 percent AMI would put those projects who target the lowest-income levels at a disadvantage. She also objected to a provision in the motion that would allow properties that currently allow office space to continue to do so.
"The people developing up to 60 percent AMI will be in direct competition with those developing more expensive housing," Holman said.
Some speakers Monday agreed and said the new zone should be laser-focused on those in the lower stratum of the "affordable housing" spectrum. Resident Jieming Robinson said the zone should only apply to those with incomes of up to 60 percent of the area median income and urged the council not to relax the parking standards too much. The standard initially proposed by staff -- 0.5 spaces per unit -- is not reasonable, she said.
Becky Sanders and Sheri Furman, co-chairs of the umbrella group Palo Alto Neighborhoods, rejected the premise that many people in affordable-housing complexes won't drive as "wishful thinking."
"There is no data to support the claim that people who live in apartments will ride the bus and not own cars," Sanders and Furman wrote. "It is misleading that ECR (El Camino Real) and Cal Ave are transit rich when frankly there is only one significant public bus route and not enough trains to meet peak hour demand."
The council largely agreed. Fine's proposal raised the parking requirement to 0.75 spaces per unit, while allowing the planning director to modify the standard based on a parking study showing that fewer spaces would be needed. The council also agreed to set a requirement of no more than 0.3 spaces per units for housing projects aimed at residents with special needs.
The council made a few other refinements to the ordinance. It directed staff to explore including moderate- and high-density residential zones, RM-15 and RM-30, respectively, in the new combining district. This would be an expansion of the staff proposal, which only made commercial zones eligible for the district.