A proposal to build 59 apartments for low-income residents and adults with developmental disabilities in the Ventura neighborhood received a boost late Monday night when the Palo Alto City Council contributed $10 million in public funds for the project known as Wilton Court.
By a unanimous vote that underscored the recent emergence of affordable housing as a high City Hall priority, the council authorized the expenditure, which will be funded from fees collected from residential and commercial developers. Both of these funds are earmarked for the creation of affordable housing.
The contribution from the city to the nonprofit Palo Alto Housing will help fund a 59-unit complex at 3705 El Camino Real, near Wilton Avenue. The project is Palo Alto Housing's first in its hometown since 2013, when it won the council's approval for a development on Maybell Avenue for 60 units for low-income seniors and 12 single-family homes. Voters subsequently struck down that development in a referendum.
The Wilton Court, by contrast, is proceeding with strong council support and without any significant neighborhood opposition. In April 2018, the council approved a zone change to create an "affordable housing combining district" for residential developments that offer 100% affordable housing. The district decreases parking requirements, provides density bonuses, relaxes height limits and allows developers to get exemptions from the city's ground-floor-retail requirement.
The council then approved in January the proposal from Palo Alto Housing to use the new district in its proposed development, which will include 56 studios and three one-bedroom apartments. It will also include 21 units for adults with developmental disabilities.
The units will be restricted to individuals making no more than 60% of area median income. Monthly rents will range from $659 for $1,442.
The council's Monday action will help move the project from concept to reality. Palo Alto Housing estimates that the development will cost about $46.1 million to construct. Sheryl Klein, chair of the nonprofit's board of directors, said the nonprofit will now seek other funding sources to supplement the local contribution. Its expected funding sources include $16.6 million in low-income housing tax credits, $10 million in state funding and $4 million from Santa Clara County.
Klein thanked the council for its contribution, which she said will help Palo Alto Housing seek other funding sources.
"We're going to build on the funding you've given us hopefully to fund the whole project," Klein said.
Councilwoman Liz Kniss, a strong supporter of the project, pointed on Monday at the city's dismal recent history in creating affordable housing, with numbers dwindling in recent decades. In the 1980s, she said, Palo Alto supported 30 affordable-housing projects. In the 1990s, the number fell to 18. In the 2000s, there were 16. Since then, the city provided funding for nine such projects.
"The number of low-income affordable housing units has fallen way off," Kniss said.
Councilman Tom DuBois countered that while the number of recently generated units is low, the council did just adopt a series of zone changes that will make much more land available for new apartments. This included rezoning of San Antonio Road sites for housing, the creation of new incentive programs that provide density bonuses for residential projects and the loosening of rules around the construction of accessory-dwelling units.
With these changes, DuBois said, the city has almost doubled the number of units that local zoning can accommodate.
"We need some time to let that work," DuBois said. "But that is truly an amazing number of housing and we should congratulate ourselves for making progress."