After years of sluggish residential growth, Palo Alto officials are preparing for a significant revision to the city's zoning code with the goal of lowering some of the highest hurdles facing housing developers.
The changes, which the City Council will consider and could potentially approve this year, touch on everything from parking standards and density limits to open-space requirements and new "minimum density" standards for zones that allow multi-family housing. The Planning and Transportation Commission, which has been discussing the rule changes over a series of six meetings, on Wednesday gave its seal of approval to the zoning reforms, voting 5-1, with Doria Summa dissenting and William Riggs absent, to forward them to the council.
Among the most significant new initiatives is what staff is calling the Housing Incentive Program, which would grant housing developers significant density bonuses. The goals of the program are two-fold: to encourage builders to develop housing rather than commercial projects and to provide an alternative to Senate Bill 35, a state law that created a "streamlined" process for builders of affordable housing but which local officials have opposed. The state law allows these developers to move ahead with the project with no discretionary review from the city and waives all parking requirements for projects near transit services.
The Housing Incentive Program, by contrast, would still require developers to meet all the applicable parking requirements. Unlike SB35, the new program would not force developers to dedicate 50 percent of their projects to affordable housing (they would still have to designate 15 percent of their housing units for affordable housing, in keeping with the city's inclusionary-housing law). Nor would it waive the requirement for a review in front of the city's Architectural Review Board.
The local program would, however, offer developers something that SB35 does not: the right to build at far greater density. Those opting to use the Housing Incentive Program in downtown Palo Alto would allow a floor-area-ratio (FAR) of 3.0. That's more than twice the density that would be allowed if one were to build under SB35 (downtown generally allows residential FAR of 1.0; under another state program that offers density bonuses, that could increase to 1.35).
The policy would also apply to areas around California Avenue (where FAR for residential projects would be increased from 0.6 to 2.0 for those participating in the new city program) and along El Camino Real (where it would be raised from 0.5 or 0.6 to 1.5)
Parking standards would also be adjusted downward citywide. Currently, the city requires 1.25 parking spaces for studio apartments, 1.5 spaces for one-bedroom units and two spaces for apartments with two or more bedrooms. Under the proposed revisions, the city would require one parking space for studios and one-bedroom apartments and two spaces for units with two or more bedrooms.
The new ordinance would also lower the requirement for housing within half a mile of a fixed-rail station (that is, Caltrain), with parking requirements in these developments ranging from 0.5 spaces for a microunit to 1.6 spaces for apartments with two or more units.
The revised zoning ordinance would also reduce parking requirements for senior housing (0.75 spaces per unit) and for affordable-housing developments, where reductions would range from 20 percent for buildings targeted toward "low-income" residents to 40 percent for housing for "extremely low income" residents.
Another proposed change is to allow more density in some multi-family residential zones. The RM-15 zone, which allows 15 dwelling units per acre, would be turned into an RM-20 zone, which allows 20 units.
The commission, which has been debating the zoning changes for months, on Wednesday characterized the final product as a compromise. Commissioner Michael Alcheck and Vice Chair Susan Monk both argued that the city can do even more on the zoning front to encourage housing construction. In considering the long list of recommendations, Alcheck said there is "virtually nothing in these suggestions that I don't think is worth trying."
Monk called the reforms a "modest proposal" and said she hopes the council will actually move even more aggressively on adopting pro-housing policies. She cited the needs spoken of by various residents who have told commissioners of their challenges in finding housing in Palo Alto.
"We're at risk of losing an entire generation of people if we don't take a more liberal approach to our housing-production needs," Monk said.
Others on the commission were more cautious. Summa said that while she supports the city's goals for encouraging affordable housing, the proposals to reduce parking requirements for affordable-housing developments have not been sufficiently vetted and are not supported by data.
In addition to the list of pro-housing zoning revisions, commissioners also expressed support for eliminating a policy that allows downtown's commercial developers to pay "parking in-lieu" fees to avoid constructing parking. Because this fee program is not available to housing developers, staff felt it has provided an incentive for builders to choose commercial projects over residential ones.
"We have an in-lieu program that isn't working very well and that puts a thumb on the scale in favor of office development," said Commissioner Asher Waldfogel, one of four commissioners who voted to remove the program (Monk dissented and Alcheck abstained because he felt the process was flawed).
In a separate amendment, the commission voted 4-2 (with Summa and Ed Lauing opposed) to remove the requirement that housing developers who apply under the new affordable-housing combining district undergo hearings before the commission and the council. Rather, their projects will approved by right.
The revision to the zoning code is Palo Alto's most significant response to date to a colleagues memo penned in fall 2017 by Councilman Adrian Fine, with collaboration from Mayor Liz Kniss and Councilman Cory Wolbach. The memo alluded to the regional housing crisis and encouraged new zoning rules to encourage housing near transit and jobs.
The council has also adopted a goal earlier this year of generating 300 housing units annually, though it is almost certain to fall short of that goal in 2018.
"While Palo Alto may never be a truly affordable place to live, the City Council has an obligation to current and future residents to explore policies that expand housing choices for people of different incomes, generations, and needs," the memo states.
The memo prompted the city to create a Housing Work Plan, which the council adopted earlier this year. The plan proposes many of the revisions that the planning commission officially endorsed when it voted to send the zoning ordinance to the council.
"Many, if not most, of the things in Housing Work Plan have some place in the ordinance in front of us," Lauing said. "We also have state laws that changed the rules in the state and in the community. The bottom line is: all of this intending to get more housing in the state and in Palo Alto."