Palo Alto resists Grand Jury recommendations on housing

City Council agrees to explore RHNA sub-regions but takes issue with most Grand Jury recommendations on producing more housing

Watch Weekly journalists discuss this article on an episode of "Behind the Headlines."


Despite general recognition of the housing crisis, Palo Alto's elected officials took a skeptical stance last week toward a new Santa Clara County Grand Jury Report that criticized jurisdictions throughout the county for failing to adopt policies that encourage affordable housing.

The council last week signed off on a letter penned by interim Planning Director Jonathan Lait that takes issue with many of the report's findings and recommendations. These include the Grand Jury's findings that the county's employers have created a vibrant economy that resulted in an "inflated housing market"; that mass-transit stations create opportunities for below-market-rate housing; and that cities aren't using density-bonus programs aggressively enough in encouraging affordable housing near transit hubs.

In a response letter that several housing advocates had described as "anemic," Palo Alto asserts that transit zones alone may not be a sufficient catalyst to create opportunities for below-market-rate housing, which requires an alignment of "zoning, property values, construction costs and other land use policies."

The response comes at a time when the City Council is trying — and failing — to meet its goal of producing 300 housing units annually. So far, it has only approved one major multi-family development this year, with a total of 57 units geared toward employees. It is also facing the prospect of losing 75 residential units as part of a plan to convert President Hotel into a hotel.

Despite the acknowledged housing shortage, the city disputed in its response the Grand Jury's finding that developers are "less willing to consider below-market-rate developments in cities with the county's highest real estate values because these developments cannot meet their target return on investment." Palo Alto has no evidence to support this finding, the city states in its response.

"While return on investment is a key factor for any developer, there may be other considerations that make housing development less attractive," the response states, noting that office development generates a higher return rate and that "housing policy decisions" may have as much influence as costs on a developer's decision to locate housing in a particular jurisdiction.

The Grand Jury did make one suggestion that the city immediately embraced: the idea that cities should form a "sub-region" to tackle the housing crisis and meet their collective obligations under the Regional Housing Needs Allocation (RHNA). During its Sept. 10 discussion of the Grand Jury report, several council members said they would like to explore working with other cities on accomplishing housing goals.

Councilman Tom DuBois said the "sub-region" approach seems to work well in San Mateo County, which already has a system in place. Councilman Greg Scharff, who has represented the city on the Association of Bay Area Governments board, also praised this approach, noting that it will give the cities and the county a forum for exchanging ideas and collaborating.

In its official response, however, the city is less than gung-ho about the types of collaborations proposed by the Grand Jury. One of the report's recommendations calls for the formation of a RHNA sub-region, including "one or more low-cost cities with one or more high-cost cities" by the end of 2021. In such a sub-region, the Grand Jury report stated, cities would "strike their own alliances depending on mutual needs." It would, for example, allow high-cost cities that build less affordable housing to offer funding for transportation and infrastructure to nearby low-cost cities, who would build more such housing.

Palo Alto's response says this recommendation will not be implemented because it's "not reasonable." Palo Alto, the response states, "cannot accept a recommendation on another jurisdiction's behalf." In addition, Palo Alto's response states, below-market-rate housing "should not be directed to low-cost cities as implied with this recommendation."

"Housing affordability are acute problems in high-cost cities and the city supports equitable distribution throughout the region," the response states.

The council voted 8-1 on Sept. 10 to approve the response. Councilman Adrian Fine, the sole dissenter, agreed with several members of the public, who argued that the response is too feeble and disagreeable. Mark Mollineaux, an advocate for more housing, said he found the council's response to the "sub-region" question laughable, given the city's recent history of now building adequate housing. The city, he said, is basically saying: We don't think it's fair that we only build in low-cost areas. Everyone should do their share.

"That's a fantastic point," Mollineaux said. "The problem is: Palo Alto isn't. You've failed in doing your share. You're saying we shouldn't compensate them because we should do our part but you're not doing your part."

Kelsey Banes, a psychologist at Palo Alto VA, said she is "very disappointed" in her city's response, which reads like the city is really shirking its responsibility for creating and responding to the housing crisis. She also argued that NIMBYism is real that is a "natural human response to new things coming in and change happening."

"I'd suggest that instead of reacting by looking for ways to disagree with this report, staff and the council look for ways to take responsibility for mistakes that had been made that led to this crisis and look for ways we can build more affordable housing and more housing in general to provide for the people who live and work here," Banes said.

Fine agreed and said the response is "anemic" and amounts to "wallpapering over the report." He pointed to Grand Jury data showing Palo Alto far behind other cities in housing productions.

"It came across like we don't treat the problem seriously," Fine said.

But some of his colleagues took issue with the Grand Jury's tone, particularly when it talks about "NIMBY (not in my backyard) mindset" that hinders housing production and recommends that Santa Clara County lead a "unified communication campaign that aims to convert NIMBYs into YIMBYs." Councilwoman Karen Holman encouraged the Grand Jury to move away from using these terms.

"They are both used from my experience to describe extreme views and extreme perspectives, and I think they are absolutely detrimental to having a helpful conversation," Holman said.

Related content:

City of Palo Alto draft response letter to Grand jury report

Webcast: Grand jury's housing report


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13 people like this
Posted by Allen Akin
a resident of Professorville
on Sep 21, 2018 at 8:39 am

Allen Akin is a registered user.

It would have been nice to include a link to the final version of the letter. Here's the best I could find: Web Link It includes the Staff Report, the draft of the letter, and the original Grand Jury report.

10 people like this
Posted by James Hall
a resident of another community
on Sep 21, 2018 at 11:33 am

I disagree with the City staff rebuttal comments about the Grand Jury Report. A positive reaction would be to accept the recommendations as well thought-out suggestions which are unfortunately for "Real Estate Developers" and their minions much more critical than they would prefer. Palo Alto seems to be in a different Universe over the whole housing crisis.

6 people like this
Posted by Edward Wong
a resident of Palo Alto High School
on Sep 21, 2018 at 12:03 pm

PAUSD would benefit from increased socioeconomic diversity.

21 people like this
Posted by Bill
a resident of Barron Park
on Sep 21, 2018 at 12:25 pm

We hear people call themselves YIMBYs. There are YIMBY groups. YIMBYs call home owners NIMBYs. But nobody identifies as a NIMBY. There aren't groups calling themselves NIMBYs.

To me, this is the equivalent of the Pro-life movement identifying their opposition as "baby killers". The grand jury's effort was pretty much ruined by this perspective. Council's response is more than the biased report deserves.

We would love to know who the supervising judge was for this grand jury.

4 people like this
Posted by Duveneck
a resident of Duveneck/St. Francis
on Sep 21, 2018 at 6:31 pm

Stanford should shoulder its responsibilities in this area. They have the land and the money.

5 people like this
Posted by Anon
a resident of Another Palo Alto neighborhood
on Sep 21, 2018 at 6:45 pm

The article uses the term "low-cost cities" wrt to some location(s) in Santa Clara County. Are these "low-cost cities" identified? I -infer- that the following cities are -not- low-cost:
{Campbell, Cupertino, Los Altos, Los Altos Hills, Los Gatos, Monte Sereno, Mountain View, Palo Alto, Santa Clara, Saratoga, Sunnyvale}
but I don't see the low-cost cities actually named. San Jose?

12 people like this
Posted by JR
a resident of Palo Verde
on Sep 21, 2018 at 9:10 pm

Palo Alto elected officials represent the interests of residents of Palo Alto. A Santa Clara County Grand Jury report prepared by a dozen random citizens throughout the county (were any of them Palo Alto residents?) is not meaningful. In this case, Palo Alto elected officials can improve things for ALL Santa Clara residents (except a few developers) by not building any more offices. There are enough offices in South Santa Clara County, Palo Alto doesn't need to build a single sq ft more office space.

2 people like this
Posted by The Dude
a resident of Professorville
on Sep 22, 2018 at 4:48 pm

JR: What exactly not building more office space in Palo Alto will accomplish? Make it more like Los Altos Hills?

I've few friends and acquaintances living in places like Los Altos Hills and Woodside. They very much like to point out a very solid housing policies of their cities, and how they have very healthy residential vs. commercial balance within their communities. As well that there's virtually no new commercial developments going on there. It's all these other places that are out of balance. At the same time, those exact same people making the claim are high-ranking executives in big companies. You know, the very same large companies building new office spaces to house thousands and thousands of new employees annually all over Santa Clara and San Mateo counties (and beyond). I find it rather hypocritical. With Palo Alto becoming more and more of a city where only high ranking executives can afford to buy housing, I don't think anybody living inside city limits has moral right to point fingers to other communities when it comes to housing crisis. It's not big bad companies creating housing crisis. If you live in Palo Alto, it's literally people living on the same street as you that are behind it.

Along the same lines, calling for not building any office space inside city limits to justify not building any housing, you know, you are not fooling anybody.

Sorry, but further commenting on this topic has been closed.

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