As the housing crisis continues to befuddle Palo Alto's planners and elected officials, glimmers of hope are starting to emerge in backyards and garages throughout the city, where new accessory-dwelling units are popping up at a faster pace than in the city's recent history.
Spurred by recent changes in state and local laws, which relax zoning requirements, the trend is particularly strong in south Palo Alto, which produced about 60 percent of the applications that the city has received since Palo Alto revised its laws in early 2017, according to the city. And while the new structures won't be nearly enough to help the council reach its adopted goal of producing 300 new housing units annually, they represent for Palo Alto a rare — if modest — improvement on the housing front.
Historically, the city has issued only four permits for new accessory-dwelling units (ADUs) per year. But since the beginning of 2017, planners have approved 25 applications and are reviewing another 29, according to a new report from the Department of Planning and Community Environment.
Of the 29 applications, 20 were submitted between April 1 and June 30 of this year, the report states. They come in different shapes and sizes, ranging from 175 square feet to 900 square feet (the average size is 650 square feet). Seven of the 20 are for units separate from the main house; one is for an attached ADU; the rest were conversions of garages or other spaces, according to the report.
Among the biggest changes the council made in March 2017 was the elimination of the "minimum lot size" requirement, which historically limited ADUs to only lots that exceed the "minimum lot size" in their zoning district by 35 percent or more. The council also decided to allow conversions of existing structures into ADUs and waived parking requirements for ADUs near public transit, in compliance with recent state legislation — namely, Senate Bill 1069 and Assembly Bill 2299.
On Monday, the council will attempt to maintain the momentum when it considers further revisions to the city's laws on ADUs, which are also commonly referred to as "granny units" or "secondary dwelling units."
Among the most significant changes on the table is a proposal to reduce — or even waive — the steep permitting fees that the city charges for ADU permits, which in some cases add up to nearly $10,000. One option is to waive or reduce fees if the homeowner were to agree to dedicate the ADU as affordable housing for a period of time, according to planning staff.
The topic of affordability came up repeatedly during the Planning and Transportation Commission's hearings on the city's ADU ordinance. Resident Amy Sung, a realtor who last year served on the citizen committee that helped the city updated its Comprehensive Plan, flagged permit fees as a big issue for some homeowners. The city currently charges more than 10 times what other cities do, she told the planning commission at its March 28 meeting.
Sung, who is working with the pro-housing group Palo Alto Forward to organize an event about ADUs on Aug. 29, urged the commission to look into "dramatically reducing" the fees.
Linnea Wickstrom, who attended the commission's January meeting, said people building ADUs pay the same kind of fees as developers of new homes.
"I would especially like to see the planning and permit fees reduced to something reasonable and something that reflects the impact, rather than being in accordance with being impacted for developing a whole huge new residence," Wickstrom said.
Planning Commissioner Michael Alcheck is among those who favor the waiver of fees when the ADU is designated as affordable housing. The waiver, under his proposal, would apply to those who rent their ADUs to an individual who is currently on Palo Alto's waiting list for below-market-rate housing.
Another approach, which planning staff have identified in the new report, calls for the city to partner with a nonprofit to offer low-cost loans to homeowners who, in exchange, would commit to renting the ADUs to low- and middle-income earners. That's the model that the San Jose-based nonprofit Housing Trust Silicon Valley is now in the process of developing, according to staff.
Some of the other proposed changes to ADU law that the council will consider are minor clarifications of aspects like setback requirements for ADU basements (the basement, like the ADU itself, should not encroach into the six-foot setback area) and ADU eaves, which would be allowed to encroach into the daylight plane, the angle that affects neighbors' privacy and exposure daylight.
A somewhat more significant change pertains to an existing density bonus, and whether it should apply to new developments or only to existing homes. The bonus to build up to 175 square feet is for homeowners whose lots aren't large enough to accommodate ADUs under the zoning code.
Some property owners, however, have tried to take advantage of these bonuses by using a two-step process: First building a new main home at maximum square footage; then, once their development becomes an "existing home," applying for an ADU and requesting the additional 175 square feet of development space.
It will be up to the council to decide if this bonus should apply to homes that existed prior to a specific date (most likely Jan. 1, 2017, when the state's ADU regulations took effect) or to new developments.
While the recent ADU construction is a huge change for the city, local housing advocates like John Kelley believe the city can — and should — do much more. He would like the city to set a goal of more than 100 accessory dwelling units annually. He said he and his wife are now thinking about building an ADU in their backyard.
One thing that would help builders, he told the planning commission at the March meeting, is having the city develop "prototype designs" for ADUs that residents can utilize during the permitting process. Those residents choosing the designs would be able to get their permits approved more expeditiously.
Kelley also suggested at the commission's April meeting that the city consider eliminating an existing requirement that the homeowner occupy either the main residence or the ADU. A substantial number of single-family homes in Palo Alto are currently being rented, Kelley said. "To have an ADU ordinance (that) ... at the very outset excludes some sizable proportion of the inventory just doesn't make sense to me," Kelley said.