News

Analysis of Stanford's growth leaves unanswered questions

Cities called for more information about Stanford traffic programs, contributions to local schools

Palo Alto is hoping Stanford University will help pay for the realignment of Caltrain rail crossings so that tracks and roadways will no longer intersect.

Menlo Park is requesting that the university consider creating new satellite lots with new shuttles or a "gondola" moving people from these lots to the university's growing campus.

Mountain View is calling for the university to pay its "fair share" for future improvements to local intersections.

These transportation-centered requests, as well as dozens of others pertaining to housing, schools and more, were submitted by Peninsula cities, agencies and residents as part of a new environmental analysis for Stanford's proposed expansion. The Final Environmental Impact Report, which Santa Clara County released on Dec. 21, pertains to Stanford's application for a "general use permit" (GUP), which would allow the university to build up to 2.275 million square feet of academic space, 3,150 new housing units or beds (this includes 550 that would be available for faculty, staff, postdoctoral scholars and medical residents), and 40,000 square feet for child care centers and transit hubs by 2035.

Publication of the voluminous document marks a key milestone for the county's review process of a project that Joe Simitian, president of the county's Board of Supervisors, has described as the largest development application in the history of the county, which has jurisdiction over land not governed by the cities. But while the new analysis devotes hundreds of pages to analyzing traffic impacts (as well as everything from noise and water quality), it is unlikely to satisfy city leaders who for months have been calling for the county to require stronger action from Stanford to mitigate the consequences of its growth.

The thorny issue of traffic

In the new report, the county is noncommittal on most proposed solutions, including requiring Stanford to chip in for Caltrain improvements or to roll out more Marguerite shuttles. County officials have also rejected calls to encourage more satellite parking lots and to revise Stanford's existing "No Net New Commute Trips" policy, which currently applies only to campus-related trips in the commute direction during peak hours (8-9 a.m. and 5-6 p.m., the busiest hours of the morning and afternoon commutes).

The policy, which was introduced under Stanford's last GUP in 2000, has been the county's strongest tool to ensure Stanford's growth would not result in overwhelming traffic. It has spurred Stanford to, among other things, expand its Marguerite shuttle program, increase parking fees and introduce car- and ride-share programs. As a result, Stanford's rate of solo drivers has dropped from 69 percent in 2003 to 43 percent today, according to the county.

But while Stanford's traffic-reduction programs are generally viewed as a gold standard in the region, many are skeptical that the policy will continue to hold up in the face of millions of square feet of new development.

Palo Alto and East Palo Alto are among those cities that have argued in favor of a more expansive definition of "peak hours," which they say does not currently reflect actual travel patterns. A letter from East Palo Alto, signed by former Mayor Ruben Abrica, states that the city is "gravely concerned about traffic," especially given that 84 percent of the peak-hour traffic on University Avenue are commuters and that Stanford's proposal would add about 5,000 new jobs.

"Off-peak traffic is a concern, given that East Palo Alto residents are experiencing significant traffic at all times," the letter states.

Palo Alto expressed similar concerns and pointed to "a recent trend of peak spreading," the tendency of Stanford commuters to drive just before or just after the "peak period." To support this position, the city hired a consulting firm, Hexagon, to review data from Stanford's cordon counts. The consultant noted that even the county's environmental analysis uses the broader "peak period" times of 7 to 10 a.m. and 4 to 7 p.m. in analyzing intersection counts.

Hexagon cited its own count data as evidence that the morning peak hour frequently occurs after 9 a.m. and the afternoon peak frequently occurs after 6 p.m.

"One of the likely reasons why there appears to be a disconnect between Stanford's achievement of the 'no net new trips' standard and the community's experience of increasing level of congestion may be that there are higher levels of Stanford-related trips throughout the day or during much longer periods during the morning and evening than was true in 2001," the Hexagon letter states.

The county, however, was not swayed. It offered its own data, measured twice yearly, which showed the number of cars entering and exiting Stanford during the 8-9 a.m. and 5-6 p.m. hours decreased between 2012 and 2016. The data also showed that in every year since 2014, the pattern of traffic during the broader peak hours remained consistent, directly contradicting the Hexagon assertion.

"Focusing the no-net-new-commute-trips standard on the peak hour has not pushed trips to the shoulder hours or encouraged peak hour spreading," the county's response states.

Palo Alto has also urged the county to demand more details from Stanford about how it plans to ensure traffic does not get worse. The FEIR, the city had argued, should "explicitly identify the current and future transit and TDM (transportation-demand management) programs that will be relied on to meet the No New Net Commute Trips goal."

Accountability without the specifics

The new analysis does no such things. Instead, following the theme of "flexibility with accountability" that was the bedrock of the 2000 permit, county officials have indicated that they are generally amenable to Stanford establishing its own programs, provided that they meet the goals of not adding new commute traffic during peak hours.

"This framework gives Stanford the flexibility to change the TDM program to meet the no-net-new-commute-trips standard as the campus population changes and technology advances."

That said, the FEIR identifies several transportation-related programs that Stanford has proposed to implement as part of its growth plan. These include new dedicated bus lanes and express bus services, dynamic real-time carpooling apps like Scoop, the use of parking rates to discourage driving, financial incentives for non-drivers and increased use of telework and flexible work schedules, according to the FEIR.

Mountain View, for its part, requested assurances that Stanford would contribute its "fair share" of funding for improvements to "any intersections under the jurisdiction of our city" affected by Stanford's growth. The FEIR does not go that far, though it identifies as mitigations Stanford's contributions of funding toward the proposed closure of Castro Street near the rail tracks and toward the creation of a second southbound left-turn lane from Central Expressway to Moffett Boulevard.

These improvements are part of a broader list of infrastructure improvements that Stanford would be required to make if it does not meet the goal of no net new commute trips.

The one change that the county did institute in response to community concerns was a requirement that Stanford pay a "fair share" for improvements at intersections that are expected to see an increase in reverse-commuters. These include the El Camino Real and Ravenswood Road intersection in Menlo Park and the Alma Street and Charleston Road intersection in Palo Alto. The precise share is based on the number of reverse-commute trips that would be attributable to the Stanford project.

County pushes for support of housing

While the county analysis did not go as far as some cities had wanted in considering Stanford's impact on traffic, it has been largely responsive to concerns related to housing. In June, the county released two new alternatives that would go well beyond the 3,150 housing units Stanford proposed. One would include 5,699 units, while the other calls for 4,425.

The county Board of Supervisors has also been aggressively pursuing new policies, independent of the environmental-analysis process, aimed at requiring more contributions of money from Stanford for housing. These include a new policy that raises the "affordable housing fee" that Stanford pays for each square foot of new development from $20 to $68.50, effective July 1, 2020. The other requires Stanford to designate 16 percent of new units to affordable housing.

Stanford last month filed lawsuits in federal and state courts challenging the new inclusionary-zoning requirement, which it argues violates the "equal protection" clauses of the U.S. and California constitutions. It also plans to legally challenge the new impact fee.

Palo Alto argued that the county should go further and require Stanford to actually build housing and transportation improvements before it constructs new academic space. The environmental analysis does not propose such a policy, noting that the issue is better suited for a policy debate than an environmental analysis.

"Whether development under the project should be contingent upon (i.e., linked to) the implementation of certain transportation solutions is an issue for the county Board of Supervisors to consider when it determines whether, and under what conditions, to approve the project."

Contributions to the school district

One topic on which the new analysis is bound to disappoint many Palo Alto residents is Stanford's responsibility when it comes to Palo Alto schools. In recent months, Palo Alto Unified School District board members, staff and parents became increasingly vocal about the need for Stanford to commit funding to educate the additional students who would result from the university's expansion.

During a community meeting in late November, then-school board President Ken Dauber was one of many residents to request Stanford contributions to local schools, noting that the district is funded based on property taxes and does not get state funding on a per-student basis.

Dauber called the financial impact of accommodating new students from Stanford's population growth without any funding from Stanford "an existential threat to the quality of education in Palo Alto."

The school board also passed a resolution in November asking the Stanford be contractually required to pay the district on a per-student basis and to set aside 4 acres or more near the Sand Hill Road/Quarry Road corridor for an elementary school. It also asked that the university contribute to the cost of building the school.

The final EIR makes no such recommendations. Instead, it states that existing district schools could accommodate the new students.

Furthermore, it asserts the district has "multiple options to explore before building a new school, including reactivating existing school sites such as Cubberley, Greendell and Garland, and utilizing properties currently leased to private school providers."

"Given all these circumstances, construction of a new PAUSD elementary school appears to be speculative."

In addressing school impacts, the final EIR recognizes its own limitations: The county "does not have authority to require Stanford to pay additional fees, dedicate land or comply with any other requirements associated with increased school enrollment."

That said, supervisors have one tool that they can use to require Stanford to contribute to local schools. The board recently kicked off negotiations with Stanford on a first-of-its-kind "development agreement," which is giving both sides the opportunity to request concessions and amenities that fall outside the purview of the environmental-review process.

Simitian last month told the Weekly that the school district will be a key topic of negotiations.

"In the development agreement we can have the opportunity to say, 'Can you help in this or that way?'"

Stanford staff lauded the new analysis, which the county Board of Supervisors expects to review and approve by this summer. Catherine Palter, Stanford's associate vice president for land use and environmental planning, said the FEIR confirms that "almost all environmental impacts of new academic and residential facilities can be appropriately prevented or mitigated."

"The result of that process is a proposal that balances the needs of the university and the community while addressing potential impacts over the life of the permit," Palter said in a statement that Stanford released just after the report was issued.

Related content:

Hear an update about the Stanford University general-use permit in this webcast with county Supervisor Joe Simitian. The discussion can also be found on our new podcast (Dec. 7, 2018)

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Comments

13 people like this
Posted by Online Name
a resident of Embarcadero Oaks/Leland
on Jan 4, 2019 at 10:09 am

Online Name is a registered user.

The phrase in the report "flexibility of accountability" says it all.

Not that Stanford tries to game the system with their definition of "peak traffic times" -- ie one hour in the morning and one in the evening -- that ignores reality in the same way Palo Alto traffic "studies" do.


20 people like this
Posted by Time to milk the cow
a resident of Another Palo Alto neighborhood
on Jan 4, 2019 at 10:59 am

As usual Stanford has done what palo alto cannot do-- reduce single drivers, implement a vibrant shuttle system etc and of course greedy palo alto wants Stanford to pay for this and that. Pablo alto sees Stanford as a cash cow to be milked by the city to pay for their incompetence and mismanagement . And of course the weekly as seen in this article will wholeheartedly support palo Altos claims. Palo alto and the weekly both love money that they do not have to work for.


4 people like this
Posted by Bill H
a resident of University South
on Jan 4, 2019 at 10:59 am

The only reason PAUSD does not receive funding on a per-student basis is that PAUSD has a small number of students but a high property tax base. No matter how many students enroll, PAUSD will always be guaranteed the state minimum in per student financial resources. A lot of the opposition to the Stanford project is from parents who believe that their children deserve better public schools than other students from less affluent communities.


26 people like this
Posted by Paly parent
a resident of Downtown North
on Jan 4, 2019 at 11:28 am

Stanford wants to get the benefit of paying no taxes on housing for its faculty and staff, and to lay off the costs of that on Palo Alto residents. That's the definition of greed and irresponsibility.


15 people like this
Posted by Stanford is not just a school or a business. They are an adjacent jurisdiction.
a resident of Duveneck/St. Francis
on Jan 4, 2019 at 11:55 am

Stanford is not just a school or a business. They are an adjacent jurisdiction. is a registered user.

The Stanford GUP Development Agreement should require upfront, fair share payments to the City of Palo Alto to support grade separations. They are not just another local business or non-profit. They are an adjacent jurisdiction that heavily depends on Caltrain.

The Draft EIR says that Stanford’s growth under the proposed GUP will create demand for the majority (or all) of new train capacity that will be created by electrification. ”…the Governor’s Office of Planning & Research advises that ‘lead agencies generally should not treat the addition of the new (transit) users as an adverse impact.’”

What this means is that fair share funding for grade separation will not be required as a mitigation in the FEIR, so fair share funding for grade separations should be included in the development agreement.

Grade separations will enable electrification and added train capacity that Stanford needs to grow. Further, Stanford commuters who use other modes of transportation rely heavily on existing at-grade and grade-separated crossings in Palo Alto. Stanford traffic, autos, bicycles and pedestrians, using our rail crossings will increase, exacerbating gridlock caused by train preemption if grade separations are not implemented. This will create untenable delays for commuters who cross the tracks city-wide—for everyone, including Stanford commuters.

Although grade separation design and costs will not be determined before the EIR and development agreement are finalized, a fair share contribution should be required of Stanford. The development agreement should include language that would define how these costs would be shared between Stanford and the City of Palo Alto.


6 people like this
Posted by The Public Interest
a resident of Charleston Gardens
on Jan 4, 2019 at 1:55 pm

Stanford is being criticized by many for its expansion --- that it will send students to PAUSD w/o corresponding property taxes to pay the cost of their education --- currently $20k/student/year for PAUSD. Agreed, this is costly for PAUSD's budget. However, whether we like it or not, Stanford is part of the PAUSD district. It projects sending 275 students to PAUSD over 17 years --- with no corresponding property taxes. Yet interestingly there is no outcry over the cost of > 200 out of district students who don't bring any corresponding property taxes either, who are currently attending PAUSD right now.


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Posted by The Public Interest
a resident of Charleston Gardens
on Jan 4, 2019 at 1:57 pm

And no, they aren't the VTP students, as those are judged to be our students ---


12 people like this
Posted by jh
a resident of Evergreen Park
on Jan 4, 2019 at 2:21 pm

jh is a registered user.

"But while Stanford's traffic-reduction programs are generally viewed as a gold standard in the region"

Stanford can rightly claim that as a single employer, which Palo Alto is not, they have the power and the money to provide many alternative forms of transport for its employees.

However, what happened after Stanford's last GUP contract and their guarantee of no new net commute trips? Stanford appears to have negotiated an "out" in the fine print that has allowed them to pay an inconsequential fine to make those excess numbers disappear. Those excess numbers are never counted and the public is none the wiser. And Stanford can continue to claim no new net trips.

Why should we believe Stanford's traffic projections when they appear to have been able to skewer the data all these years?


8 people like this
Posted by jh
a resident of Evergreen Park
on Jan 4, 2019 at 2:31 pm

jh is a registered user.

"there is no outcry over the cost of > 200 out of district students who don't bring any corresponding property taxes either, who are currently attending PAUSD right now."

I believe that the agreement has been that every year the University pays a fixed sum to the school district. Over the years there has not been a huge variation of school age children on campus. To date nothing has upset that applecart. However, if there is a large increase in housing construction on campus then PAUSD enrollment from campus is projected to increase significantly. Therefore PAUSD is asking for an increase to cover those additional students.


10 people like this
Posted by Resident
a resident of Community Center
on Jan 4, 2019 at 4:29 pm

@jh
You are sort of right about Stanford University pays the same dollars each year to PAUSD. Unfortunately, that dollar amount is zero. No kidding.
What is different about this GUP is that Stanford is expected to add far more kids to the district than ever before due to them adding much more housing on campus due to the regional housing shortage resulting from the massive tech job growth.
BTW, those big tech companies are also paying exceptionally low local taxes, but that’s another story.


4 people like this
Posted by Stephen
a resident of Duveneck/St. Francis
on Jan 4, 2019 at 8:27 pm

A few comments re the various continued mis-statements concerning Stanford, property taxes, and schools:
(1) Property taxes are paid on all of the Stanford residences that are owned by Stanford faculty/staff - the rates are the same as for any other property.
(2) An agreement could be made to pay property taxes on any family rental residences that Stanford builds. Stanford currently pays property taxes on Stanford West, albeit at a relatively low rate thanks to Prop. 13 (the taxes are based on the original assessment).

I would be very interested in seeing data on two things:
(1) Fraction of PAUSD funding that comes from residential as opposed to commercial property taxes - my hypothesis would be that the $20K.child that PAUSD can spend (nearly 2x the state average) is in large part possible because of taxes paid on commercial developments;
(2) The number of PAUSD students that live on the Stanford campus now vs how many lived on the Stanford campus in years past. For example, I might think that there were more students on campus in the period immediately after the Pine Hill development was built in the '60s than there are now since many of the original purchasers of those homes still live there but their children are long gone.

I agree that the a fair solution has to be worked out between PAUSD and Stanford, but it would be good if it was based on facts and data.


5 people like this
Posted by jh
a resident of Evergreen Park
on Jan 4, 2019 at 11:46 pm

jh is a registered user.

Approximately 75% of property tax is paid by residents. The percentage of property tax paid on commercial properties is continuing to decline due to a) on average commercial property changes hands much less frequently than residential property and b) loopholes written into Prop 13 allow commercial land transactions to be structured in a way that doesn't trigger a new property tax assessment. Also, few companies produce a product for which a Palo Alto sales tax can be charged.


Like this comment
Posted by Update
a resident of Menlo Park
on Jan 5, 2019 at 2:01 pm

The Menlo Park idea of gondolas was suggested by two council members who were voted out of office in November. Need I say anything more?


15 people like this
Posted by Quit Bullying Stanford
a resident of Evergreen Park
on Jan 5, 2019 at 2:18 pm

Stanford does enough for the Palo Alto community. Palo Alto would be nothing, nada, zilch without Stanford. No one comes to visit Palo Alto because it is Palo Alto. People come to visit Palo Alto, because Stanford is in the vicinity. Remember this folks. Go extort all the billionaires who live here, and stop extorting Stanford. Or try doing something to support Stanford, just because they are a good neighbor, and have provided way too much funding to this ungrateful city.


Like this comment
Posted by Stephen
a resident of Duveneck/St. Francis
on Jan 5, 2019 at 2:44 pm

@jh: Thanks - where did you find the 75% number?


13 people like this
Posted by Stanford Grad
a resident of Stanford
on Jan 5, 2019 at 2:51 pm

> Palo Alto would be nothing, nada, zilch without Stanford. No one comes to visit Palo Alto because it is Palo Alto. People come to visit Palo Alto, because Stanford is in the vicinity. Remember this folks.

Absolutely! Leland Stanford only chose Palo Alto because the town of Mayfield refused to ban liquor. Back in those days, Palo Alto was NOTHING but a small neighborhood.

This factor is also reflected in its hotel/motel occupancy rates. With the possible exception of an 'at home' Saturday Stanford football game or various weekday business conferences and seminars held outside of but within close proximity, nobody comes to Palo Alto as a vacation or tourist destination. Why would they?

The only other 'claim to fame' of note is Palo Alto's early connection to the semiconductor industry and Hewlett-Packard...but those days are long gone.

Funny how so many Palo Alto people seem to think that the world revolves around them. Guess what...it doesn't.


9 people like this
Posted by R.Davis
a resident of Crescent Park
on Jan 5, 2019 at 5:43 pm

R.Davis is a registered user.

QUOTE: Funny how so many Palo Alto people seem to think that the world revolves around them. Guess what...it doesn't.

It's probably the main reason why so many people opt (and wish) to reside here.
Being the center of one's own universe has certain privileges...and delusions.


3 people like this
Posted by jh
a resident of Evergreen Park
on Jan 6, 2019 at 6:32 pm

jh is a registered user.

@stephen
"@jh: Thanks - where did you find the 75% number?"

An ex council member who is an expert on Palo Aalto's budget and sources of funding


7 people like this
Posted by Tax analysis
a resident of Adobe-Meadow
on Jan 6, 2019 at 7:35 pm

Confirming jh's number and adding a little:

75% of PAUSD net assessed value is residential - about $28.8B out of $38.4B total NAV.

An additional $11.5B of assessed value property is exempt. Of that, 88% ($10.1B) belongs to Stanford. Other large exempt property owners are the JCC and related senior housing (~$560M) and Sutter/PAMF (~$210M). No one else over $100M.

Source: analysis of county tax records obtained from County Assessor's office


3 people like this
Posted by Stanford Resident
a resident of Stanford
on Jan 6, 2019 at 9:09 pm

How many campus kids attend PAUSD? I own a home on campus and my kids are in private school, and my back of the envelope tally comes up with more campus kids in private than public, at least in the 6-12 grouping in part of campus, which feeds into Gunn.

Perhaps there are more kids going to public school from Peter Coutts or from Stanford West?

I think knowing that number would help in discussions. I suspect that between the number of kids in private and the number of homes without school age kids, that the actual number of campus kids in PAUSD is lower than many realize.


5 people like this
Posted by Resident
a resident of Downtown North
on Jan 6, 2019 at 11:51 pm

@stanford resident, pausd is asking for a per student payment related to tax exempt rental housing only. It would be based on the actual number of students attending. So whether the actual number is more or less than what anyone "thinks," or how it changes in the future based on what housing Stanford builds becomes irrelevant - they would pay for what they actually use, which seems pretty fair.


7 people like this
Posted by common sense
a resident of Midtown
on Jan 6, 2019 at 11:58 pm

The Santa Clara County Assessor's annual report says

City of Palo Alto stats

Single family residences total $23.2 billion, for 18,175 parcels
Office, Retail, Manufacturing total $9.2 billion for 1,070 parcels
Miscellaneous/Agriculture is .43 billion (does not specify what falls into miscellaneous)

Exemptions is $5 billion (churches, hospital, Palo Alto Medical foundation, etc).\

PAUSD Stats
Multiresidential is $2 billion for 857 parcels
Single family residences is $26.8 billion for 19,999 parcels
Non-residential is $4.86 billion for 1,693 parcels.

Note: the PAUSD single family is 1,824 more parcels, which would be Stanford and Los Altos Hills properties.

A big chunk of assessed value is exemptions, of which Stanford Hospital & PAMF is a major piece. The other piece would be BMR housing. It's an exemption on the order of $50 million in property taxes fpr all these exemptions.


4 people like this
Posted by Crescent Park Resident
a resident of Crescent Park
on Jan 7, 2019 at 2:24 pm

@ Paly parent. Faculty and staff who own their homes pay property taxes to PAUSD - the same as Palo Altons do. And, they have a higher turnover in housing than Palo Alto does. They cannot pass their homes to their spouses or children. Most homes fall under a 35 or 50 year lease and then they must sell to make room for new professors. Here in Palo Alto, because of Prop 13, people hang onto their homes and pass to their children or rent them. Did you know that 83% of property tax revenue comes from homes sold in the last 18 years (From Santa Clara County Assessor's Annual Report)? Guess what percent of residents rent in Palo Alto? 46%. How many rental properties do you think were transferred in the last 18 years? Seriously. Think about it. Because of Prop 13, PAUSD relies on recent home sales. Also, Stanford Commercial Lands generate property tax revenue that is 30% of PAUSD's budget. In the 1950's Stanford and Palo Alto worked together to generate income for both Stanford and Palo Alto. Stanford annexed lands and they were incorporated into Palo Alto so that the property tax and sales tax would go to the City. Rents would go to Stanford. These lands include Stanford Research Park and the Stanford Mall. That's an enormous amount of revenue in taxes - and in jobs and in general supporting the area. So, who isn't paying their "fair share?" If people think Stanford is abusing the PAUSD school system, then they should petition the County to annex the Research Park and Stanford Mall back to Stanford and let them set up their own school system. If Palo Alto doesn't want Stanford to be part of the community then they should let them - and all of their revenue generating property - separate from the City.


3 people like this
Posted by Crescent Park Resident
a resident of Crescent Park
on Jan 7, 2019 at 2:35 pm

@ Tax Analysis. What is your point? Property tax exemption for non-profit entities is enshrined in the CA Constitution. I'm curious as to why it's even noted in the County's Annual Report. And, how can the County put a value on the land? Do they assume that PAMF would house high tech companies? Does the County list what Mitchell Park Library "costs" the County in lost revenue if it were say, a condo complex? Are churches valued as if they were nightclubs (like a few in NYC are now)? And, our public schools - they're tax exempt as well. How much tax revenue is "lost" because Nixon Elementary is a school and, not, oh, a for-profit private jail? No one can lose what they never had or were "entitled" to. Non-profits are property tax exempt because they provide community benefits. It is so interesting to me that people seem to resent non-profit's property tax exempt status. I wonder if Palo Altons will band together and lead the charge to end property tax exemption for non-profits? Email Marc Berman or Jerry Hill since it needs to be done at the state level. Can you imagine? One of the wealthiest communities in the country is complaining about property tax exemption for non-profits!


3 people like this
Posted by Resident
a resident of Downtown North
on Jan 7, 2019 at 4:02 pm

@Crescent Park wrote: "If people think Stanford is abusing the PAUSD school system, then they should petition the County to annex the Research Park and Stanford Mall back to Stanford and let them set up their own school system. "

Well, since Stanford is part of PAUSD, it makes no difference to the schools if those properties are part of the City or not. If Stanford's residents want to create their own school district, they can petition the County office to do so.

"What is your point?"

Stanford is not just the district's largest non-profit and employer (by a huge margin) - they are also the district's largest landlord, and expected to become significantly bigger still. Not many (any?) non-profits are also large rental landlords. When your largest source of students doesn't provide funding for them, that's a big challenge, and people need to be aware of it.


5 people like this
Posted by Crescent Park Resident
a resident of Crescent Park
on Jan 7, 2019 at 4:21 pm

@Resident. "When your largest source of students doesn't provide funding for them, that's a big challenge, and people need to be aware of it."

Stanford is not the largest source of students. Why do you think that? They make up about 6% of the student body at PAUSD. And, that includes all the students who live in faculty owned homes. I think the school district put out a flyer that showed about 325 students live in rental housing. And, Stanford pays taxes on Stanford West Apartments, so deduct those students from the total that "Stanford doesn't provide funding for."

I'm fine with Stanford paying some amount per student who lives in a rental unit, but then it should be the same for Palo Altons. Why would it be different? Rental prices go up, but the property taxes do not. Or maybe Stanford should pay per rental unit whatever PAUSD is taking in per rental unit in Palo Alto.

I'm a longtime Palo Alton and support every school measure that is put on the ballot. But, good grief, we need to be equitable and honest about the funding sources! The mis-information out there is incredible! And, we've got highly educated people spreading it!

I didn't say that Stanford wanted their own school system. I attended the public meeting in December and was absolutely horrified by how members of my community spoke about Stanford and taxes and schools. It was pretty clear to me that the people at this meeting did NOT want Stanford affiliated children at their schools. I'm saying if Palo Altons don't want them, then okay, annex them out of the schools. But, then, Palo Altons must not want the sales tax revenue from the Stanford Mall or the property taxes from it as well as the ones from the Research Park buildings. Way to bite the hand that feeds you!


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Posted by Wayne Martin
a resident of Professorville
on Jan 8, 2019 at 12:28 pm

> Rental prices go up, but the property taxes do not

This is not true. Prop.13 insures that all property in California has it's assessed value increased yearly by 2%, unless it's exempt from taxation.


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Posted by Wayne Martin
a resident of Professorville
on Jan 8, 2019 at 12:36 pm

Just for the record--

The sources of students in the PAUSD are:

Palo Alto City
Los Altos Hills (PAUSD side)
East Palo Alto (VTP--about 460 students)
Stanford Student Housing
Stanford Staff Housing
Non-resident PAUSD Staff Children

There are also a potential source of students that could addend via inter-district transfers authorized by the so-called Allen Bill. The PAUSD has not allowed very many of these transfers over the years.

Notice that there are two distinct sources of students from Stanford. One from Staff housing--which pays property taxes, and the other from student housing that currently is exempt from property taxation. The children originating from Stanford West are considered Palo Alto residents because they live in property that is subject to property taxes, and are really no different from children living in other PA rental properties.


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Posted by Wayne Martin
a resident of Professorville
on Jan 8, 2019 at 12:38 pm

@Common Sense:

Thanks for posting the info from the Assessor's Report. This is not only an excellent source of information, it is the ONLY source of this sort of information that is easily accessible to the public.


2 people like this
Posted by Crescent Park Resident
a resident of Crescent Park
on Jan 8, 2019 at 1:09 pm

@Wayne Martin. Stanford pays property taxes on Stanford West! Regular old taxes just like everyone else with the same annual percent increase capped at 2%. This point keeps getting dropped! They do so voluntarily since when they applied for the permit, they did not foresee the need to house Stanford affiliates there and when the application was considered, an increase in property tax revenue was anticipated by the City. So, Stanford voluntarily honors that commitment. They could apply for an exemption, but they don't. I learned this when I was tracking down the information from the "Fair Share" Flyer that a School Board Member put together.

And, yes, having bought our house in 1984, with one major remodel five years later, we are very aware of how Prop 13 impacts our property taxes. Prop 13 has been fantastic in that it allows people like my husband and myself to be able to stay in our home - in our community - one that we could not buy into now. It ensures that older people are not taxed out of their communities like is common back east. But, it has been devastating for the schools since their primary funding source is property taxes. From Palo Alto Partners in Education's website:

"When Proposition 13 slashed education funding in California, these programs fell out of the funding equation... Prop 13 limited property tax rates and increases and set assessed values at 1976 levels, unless a property has been sold or expanded through a remodel. Prop 13 effectively cut funding for public schools in California in half."

I really think people are afraid if they talk about Prop 13 and school funding, their taxes are going to skyrocket. It's like avoiding the elephant in the center of the room.


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Posted by jh
a resident of Evergreen Park
on Jan 8, 2019 at 1:19 pm

jh is a registered user.

My understanding is that the faculty houses on campus do not fall within Palo Alto boundaries and therefore pay the county gets their property tax, not Palo Alto. Does the county return a portion of the campus property taxes to the PAUSD?


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Posted by Crescent Park Resident
a resident of Crescent Park
on Jan 8, 2019 at 1:27 pm

@jh. We all pay taxes directly the county. There is one county assessor for all cities within the County. Stanford residences are assigned to the PAUSD school district - just like Palo Altons are - and PAUSD gets the same portion from Stanford and Palo Alto homes. This past election, Stanford residents got to vote for School Board candidates (Ken Dauber is married to a Stanford professor though I don't know if they live on campus or elsewhere). But, Stanford residents did not get to vote for Palo Alto's City Council. I have learned an incredible amount since I started following this funding issue!


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Posted by Wayne Martin
a resident of Professorville
on Jan 8, 2019 at 1:40 pm

Wayne Martin wrote:

> The children originating from Stanford West are considered
> Palo Alto residents because they live in
> property that is subject to property taxes

Crescent Park Resident wrote:

> Stanford pays property taxes on Stanford West!

How are we NOT saying the same thing?

Crescent Park Resident wrote:

> They could apply for an exemption

Not sure that this exemption would be granted. Kind of an open question in my mind.

> But, it [Prop.13] has been devastating for the schools since their
> primary funding source is property taxes.

Comments like this are really difficult to justify, given that the revenues of the State have risen every year but one since 1978 when Prop.13 took effect. Prop.98 ensured 40% of the State's budget to school funding (for ADA schools), and property value increases have sent revenues for Basic Aid schools skyrocketing since 1978. Prop.39 sidestepped Prop.13's two-thirds majority for school bond voter approval.

It's abundantly clear that school funding and student performance are not directly linked. However, this argument generally evokes all sorts of hysteria, so no reason to go down that rabbit hole in this thread.

What's needed is a well-crafted operational/capital plan for the PAUSD that looks out at least thirty years, and provides not only the PAUSD Trustees, but the public, what costs are going to look like in the future, so that funding sources can be rationally determined.




The PAUSD's budget is currently over $200M, and growing at about 7% a year.


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Posted by Wayne Martin
a resident of Fairmeadow
on Jan 8, 2019 at 1:46 pm

> But, Stanford residents did not get to vote for Palo Alto's City Council

True. The PAUSD is an independent jurisdiction that has nothing to do with Palo Alto, although Palo Alto Schools was originally created by Palo Alto City government before the State took over administration of the schools.

This lack of knowledge pops up time and again when various issues confront the City/District/Stanford. My research into these matters has caused my to come to the conclusion that the PAUSD is one of the most complicated school districts in California to understand--particularly from a funding point-of-view.


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Posted by Stephen
a resident of Duveneck/St. Francis
on Jan 8, 2019 at 2:00 pm

(1) Hopefully, the very inaccurate and misleading myth that taxes are not paid on properties on the Stanford campus has been laid to rest. In this light, I would assume that the GUP could be structured to require that property taxes are paid on any rental housing that is likely to have PAUSD students, as would be the case with any residential construction in PA. Admittedly this would be subject to the same problem as Stanford West in that the Prop. 13 limits mean that property tax growth does not keep up with the growth in PAUSD spending per student.

(2) The issue of how our schools get paid for seems moderately complex in that it involves several different factors that change in time:
(a) Most people's property taxes don't cover their children's education while they are in school - $20K/kid-year (almost 2x the state average) = $40K/kid year of property taxes. So, for example, the property taxes required to cover directly 2 kids in school these days would be $80K/year = $8M house, something that is not all that common in Palo Alto.. Thus our $15K/year or the ca. $8K/year of property taxes of the nearby school board member didn't come close to covering the costs of each of our sets of 2 PAUD students, at least when they were students.
(b) Residential property tax funding of schools works because people stay in their houses for much longer than their kids are in schools - so how about PAUSD doing an analysis of the interplay of time with and without kids, i.e. how many years would one need to live in one's residence before one has actually paid for one's children's education? One could do this calculation for different current assessments going forward in time using current rates of increase in per student spending by PAUSD and the 2% per year increase in taxes permitted by Prop. 13


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Posted by Wayne Martin
a resident of St. Claire Gardens
on Jan 8, 2019 at 2:18 pm


> Most people's property taxes don't cover their children's education
> while they are in school - $20K/kid-year (almost 2x the state average)
> = $40K/kid year of property taxes.

While this is true, people don’t stop paying property taxes just because they no longer have kids in school. In order to model costs this way, one needs to look at the property taxes paid over all time. In other words, for any parcel, how much tax will be generated per decade and per century.

> so how about PAUSD doing an analysis of the interplay of time with
> and without kids

Yes. I have tried to make this point to various school district officials in the past, but none seemed interested in doing this sort of work. This is something that a Board of Trustees could force, if they wanted to. These calculations are not easily performed without a lot of data—but the data does exist.


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Posted by Marie
a resident of Midtown
on Jan 8, 2019 at 2:22 pm

Marie is a registered user.

Most proposals suggest Stanford pay in-lieu fees for children coming from rental housing that is owned by Stanford and thus excluded from property tax, not for children coming from residences that are subject to property tax. In addition, AFAIK, homes that do pay property taxes on Stanford land are not taxed on the value of the land, just the buildings. So sales of equivalent homes in Palo Alto outside of Stanford, generate more property tax. Given that we are still talking about homes greater than $1M, this doesn't bother me very much. But Stanford homeowners definitely get a deal.

If indeed the projections of 300+ kids coming from Stanford West is correct, then, PAUSD would like a school within walking distance, rather than having more children transported one way or another miles to another school, making traffic even worse. Generally speaking, it has been Palo Alto policy to have an elementary school within walking distance of most students. Between choice schools and the increasing size of Palo Alto's elementary schools, this does not seem as important to PAUSD as in the past.

When I moved here in 1989, PAUSD's general goal was 350 students per elementary schools for many theoretical reasons, not the least of which was to facilitate children walking to school. However, as the school population has rebounded - the choice has been made to enlarge existing schools rather than add the administrative expense of opening new elementary schools and lose the rental income from closed elementary schools.

There are many who believe larger elementary schools are better. I instinctively disagree from personal experience but I am not a researcher. In reality, today, decisions on the size of schools, and whether sixth grades are at elementary schools or junior high schools, are made primarily on financial data, not pedagogical ones. And, in the end, good teachers and smaller classes probably are more important.

While true that non-profit owned low income housing in Palo Alto (of which there is a lot but not enough) does not contribute financially to PAUSD, there is no way one can argue that Stanford needs any subsidy, given the third largest endowment of any university in the US.

In conclusion,IMHO, if Stanford's increased population, results in more children living in residences that pay no property taxes, then I strongly believe Stanford should pay in-lieu fees to the school district. As an owner-occupier of a duplex, I guarantee you property taxes are paid for both my portion and that of my tenant with school-aged children.


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Posted by Crescent Park Resident
a resident of Crescent Park
on Jan 8, 2019 at 2:27 pm

@ Stephen. Your suggestion completely negates a core philosophy surrounding public schools - we all support schools whether we have one, two, seven or in my husband's and mine's case - zero children that we send to the schools. My best friend sends her child to a private school, yet she pays into the system. Because we value education as a society. We do not put a dollar amount on each child. And, BTW, nonprofits that are property tax exempt try to find some way to generate revenue for the city in which they reside. For example, a museum may have a store and the sales tax goes to the City. Stanford in cooperation with the City of Palo Alto, created the Research Park and the Stanford mall which generates enough taxes to cover 30% of PAUSD's budget. 30%! What other institution has done that for its public schools? Everyone says it doesn't count. Why not? The land was annexed to Palo Alto so that the City could get tax revenue because nonprofits don't pay property tax as a matter of public policy. I can't support saying Stanford - or any other non-profit - should pay property taxes because it's not in line with the public policy of the State of California. We need to think about larger policy issues and look beyond our own community borders. We have become too myopic here in Palo Alto.


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Posted by Crescent Park Resident
a resident of Crescent Park
on Jan 8, 2019 at 2:36 pm

@ Marie. " In addition, AFAIK, homes that do pay property taxes on Stanford land are not taxed on the value of the land, just the buildings. So sales of equivalent homes in Palo Alto outside of Stanford, generate more property tax"

WHY DO YOU THINK THAT? It's not true! Faculty owned house are assessed on the value of the land (which is crazy high) and the improvements. I looked up the taxes for a professor I know on Stanford just to verify this.

In lieu fees are fine. But what should they be? More or less than what the average rental unit in Palo Alto brings in? More or less than what the average Palo Alto home brings in? How do we determine that number?


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Posted by Wayne Martin
a resident of Professorville
on Jan 8, 2019 at 2:43 pm

> The land was annexed to Palo Alto so that the City could get
> tax revenue because nonprofits don't pay property tax
> as a matter of public policy

While this is true, there were other issues driving this decision. Fire and police protection was Stanford’s responsibility as long as these areas of its campus were outside the PA city boundary.

Stanford did contract with Palo Alto for Fire Department coverage, and has paid handsomely for that service. While Palo Alto police are not the primary agency for police support, Palo Alto Police are involved in virtually every Stanford athletic event. There also was the matter of storm water drainage—much of which ends up in Palo Alto.

The Stanford/Palo Alto/Menlo Park “interface” is not simple.


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Posted by Crescent Park Resident
a resident of Crescent Park
on Jan 8, 2019 at 2:56 pm

@ Wayne Martin. It was complicated. I looked up the history of it. The decision - made in 1951 with the first tenant at RP coming in 1953 - was made primarily for financial reasons. Palo Alto gets the tax revenue. Stanford gets the rent (and a tech research park). If Stanford just wanted the rent, they could have kept the lands on County land and all revenue would go to the County. They wanted - and needed - Palo Alto buy-in. A win-win. Stormwater was a problem in the 1950's but not regulated until 1987. I used to do work in stormwater.

"In 1987 the U.S. Congress mandated the U.S. Environmental Protection Agency (EPA), under amendments to the Clean Water Act, to control certain stormwater discharges under the National Pollutant Discharge Elimination System. In response to this federal legislation, a permitting program was put in place by EPA as the Phase I (1990) and Phase II (1999) stormwater regulations, which together set forth requirements for municipal separate storm sewer systems and industrial activities including construction."


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Posted by Wayne Martin
a resident of Professorville
on Jan 8, 2019 at 3:14 pm

> Palo Alto gets the tax revenue

Thanks for the information. But this thread is about schools. Was there any consideration at the time of this annexation about the current, and future, impact of Stanford growth, or land use, on how it would affect schools?

At the time you are talking about, this was pre-Serrano-Priest, pre-Prop.13 and pre-Basic Aid school districts. Property tax generation in the 1950s was very small. I asked someone in the Assessor's Office once to provide data on property taxes for Palo Alto around 1970. Was told that that data didn't exist, but eventually someone provided a number of about $20M for Palo Alto. *Can only provide this numbers as a possible datapoint for discussion about financing schools and City from property taxes. Remember, Eichlers were selling in the $15K-$20K range in the 1950s.)

It's hard to believe that anyone was very forward thinking in those days. While we are forced to accept our history, not clear that our history will help us forecast the future.


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Posted by Stephen
a resident of Duveneck/St. Francis
on Jan 8, 2019 at 10:32 pm

@Crescent Park Resident: I agree with what you write about community financial support for schools. That stated, the PAUSD demographers find that the "average" single family residence in PA generates 1.5 PAUSD students, so there must be a fairly high fraction of residences that have children in PA schools. For reference sake, condos and townhouses generate 0.6 students/unit, so presumably constructing these will have less impact on school finances than do single family residences. In any case, the point I was trying to make was that it is difficult to directly connect property tax revenues from any particular residence with the costs of educating the students that might live there.


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