News

Palo Alto places big hopes on small cottages to meet housing shortage

City Council prepares to adopt new laws to comply with state regulations, encourage construction

A studio manufactured by Abodu and displayed in the company's Redwood City showroom is an example of the type of backyard housing units that the city is now trying to encourage residents to build. Photo by Gennady Sheyner.

With Palo Alto's grand plans for housing construction faltering in the face of economic and political pressures, the city's most promising trend is unfolding, quite literally, in residents' backyards.

Accessory dwelling units, once known as granny cottages, are now the city's biggest source of new housing, according to city data. After years of seeing just a few new cottages pop up annually, the city has seen an exponential rise in recent years, with more than 100 applications processed since 2019.

According to a recent report from the Planning and Development Services Department, Palo Alto received just 10 applications for ADUs in 2015 and nine in 2016. But spurred by new state laws and local policies that relax restrictions, the number of applications went up to 75 in 2019, according to the report.

The trend may have implications for both the city's goal of creating 300 units annually and for its ability to meet its regional allocation for housing. The small dwellings, which include converted garages as well as new structures, account for a quarter of the city's allocation for market-rate units for 2015 to 2023, as directed by the Regional Housing Needs Allocation process.

Next month, the City Council will consider new zoning rules to encourage the construction of more accessory dwelling units (ADUs) -- including formally adopting zoning rules to allow two-story ones; eliminating a requirement that the homeowner occupy the main residence; and permitting the construction of junior units, which are carved out of an existing home, without requiring more parking.

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Some of these laws, including one that would allow heights of up to 16 feet for accessory dwelling units, are required to comply with California laws that took effect at the beginning of this year. The council approved them earlier this year on an interim basis and is now set to revise the zoning code to make them permanent.

Others, including relaxing setback rules for homeowners with corner lots, are intended to offer builders more flexibility.

The trend is by no means limited to Palo Alto, according to John Geary, co-founder of Abodu, a company that has manufactured dozens of accessory dwelling units. Before the state adopted new laws to stimulate production of accessory dwelling units, California only saw between 200 and 300 permits for ADUs issued per year. After the state laws were enacted, the number went up to about 6,000, he said.

In some cases, cities are going well beyond state requirements. Last year, San Jose created a program that effectively pre-approves accessory dwelling units. The program allows select builders of detached ADUs to receive approvals for a prototype, allowing subsequent units to get permitted through a swift over-the-counter process. Abodu is one of three builders that is pre-approved under the San Jose program.

Palo Alto does not currently have such a program, though it has seen its famously slow and thorough permitting process speed up when it comes to accessory dwelling units. The average processing time for an ADU permit was about six months in 2018, though it dipped down to 135 days in 2019. So far this year, the city has seen 32 applications, with an average permitting time of 92 days, according to the city's quarterly report.

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In May, when the city's Planning and Transportation Commission discussed relaxing rules for accessory dwelling units, resident John Kelley suggested that the city do more to reduce how long it takes a homeowner to get a permit. Kelley said he and his wife are trying to build a combination of an ADU and a JADU on their property and encouraged the commission to consider rules on sewer lines and electricity, which are slowing down the permitting process for homeowners.

"If you were to take seriously the problems that existing homeowners have in dealing with ADUs and building them — they really come down to money and time," Kelley said. "And what I think is missing here is an orientation that looks at the issues that really confront the construction process."

Geary is hoping to change that. Next month, his company plans to install an ADU on a residential property in the University South neighborhood. His company boasts of being able to construct a unit in 12 weeks, which includes between eight and 10 weeks to build the home at an off-site location and two weeks to install it on the homeowner's land.

Geary said he has been talking to Palo Alto's planners about instituting a master program along the line of those adopted in San Jose and Santa Clara.

"Palo Alto as a city has actually proven to be excited about ADUs," Geary said during a recent interview in the company's Redwood City showroom. "I think they see the value of empowering homeowners to have livable spaces of property without having to make them jump through the same number of hoops as single-family developments."

In August, the company was in the final stages of a three-month process to get a permit for the University South neighborhood project, its first in Palo Alto.

Abodu builds its ADUs in several factories throughout the Bay Area before shipping them to homes, Geary said. Its standard one-bedroom unit, which comes with a $199,000 price tag and which Geary said is Abodu's most popular product, has a floor area of 500 square feet and a kitchen in the hallway that connects the living room to the bedroom, from which one can access the bathroom.

John Geary, co-founder of Abodu, stands in front of the company's prototype studio in its Redwood City showroom. The company is now working on its first project in Palo Alto, which has seen a sharp increase in applications for accessory dwelling units. Photo by Gennady Sheyner.

The company also offers a studio and a two-bedroom unit, for $189,000 and $259,000, respectively.

Palo Alto's planning staff hope and believe the trend will continue. The city has a goal of producing 300 housing units annually and it has yet to come close to meeting that target. While the council approved one affordable-housing complex with a total of 59 units last year, it has also largely abandoned prior proposals to build housing at Cubberley Community Center and at the former site of Fry's Electronics (though it is still considering housing for the area around the former Fry's store as part of a plan that the city is putting together for a 60-acre area in the Ventura neighborhood).

The proposed ordinance, which the Planning and Transportation Commission approved in May and which the council will consider on Sept. 14, proposes additional incentives and streamlines regulations on ADUs, the report states.

The law would make the city's code consistent with state laws that set a 60-day processing timeline for ADU permits and that prohibit cities from requiring builders to provide replacement parking when they convert garages to dwelling units (in the past, parking requirements presented a major barrier to prospective builders).

Laws also now prohibit cities from requiring the property owner to live in the main house or from setting a minimum lot size for properties eligible for ADUs (Palo Alto had both of these requirements in place before striking them in response to state mandates).

City planners are suggesting further changes that are not mandated by state code. These include modifying a provision that allows homeowners to convert existing garages to accessory dwelling units without providing more parking on site. Under the modification, the same benefit would be offered to new units that are not part of a garage conversion. Staff is also proposing other incentives to homeowners to encourage them to build accessory dwelling units, including density bonuses and more relaxed setback rules, particularly for corner lots.

"With the updated ordinance, staff anticipates interest in building attached units and JADUs may increase," the report from Planning and Development Services states.

The city's Planning and Transportation Commission voted 4-2, with Ed Lauing and Doria Summa dissenting and William Riggs absent, in May to recommend adoption of the ordinance. Several commissioners supported providing incentives to homeowners who agree to designate accessory dwelling units for affordable housing.

Commissioner Michael Alcheck supported allowing basements to become accessory dwelling units, while Commissioner Barton Hechtman suggested that the city explore waiving development impact fees for builders who are willing to rent out the units at below market rate.

In explaining her opposition, Summa said that she doesn't know whether the new units are actually being used for rental housing or if many of them are in fact becoming home offices because of the COVID-19 crisis.

"I'm not at all against any of those ideas, but to insist that we are achieving some sort of housing goal — we just don't have the data to prove it," Summa said.

Despite this uncertainty, city staff are eager to speed up the production of ADUs. The city recently received a grant through Senate Bill 2 to develop ADU prototypes and application packages to facilitate expedited approval, the report states. Staff expects to launch that project later this year, according to the report from Planning and Development Services. Once that happens, the city could start approving new units over the counter, saving homeowners time and money, according to the staff report.

"By developing packages that include pre-approved drawings, applicants can show the design on their site plan and have the drawings as attachments," the report states. "This could help applicants to save on the costs for architects/designer services."

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Palo Alto places big hopes on small cottages to meet housing shortage

City Council prepares to adopt new laws to comply with state regulations, encourage construction

by / Palo Alto Weekly

Uploaded: Thu, Aug 27, 2020, 1:52 pm

With Palo Alto's grand plans for housing construction faltering in the face of economic and political pressures, the city's most promising trend is unfolding, quite literally, in residents' backyards.

Accessory dwelling units, once known as granny cottages, are now the city's biggest source of new housing, according to city data. After years of seeing just a few new cottages pop up annually, the city has seen an exponential rise in recent years, with more than 100 applications processed since 2019.

According to a recent report from the Planning and Development Services Department, Palo Alto received just 10 applications for ADUs in 2015 and nine in 2016. But spurred by new state laws and local policies that relax restrictions, the number of applications went up to 75 in 2019, according to the report.

The trend may have implications for both the city's goal of creating 300 units annually and for its ability to meet its regional allocation for housing. The small dwellings, which include converted garages as well as new structures, account for a quarter of the city's allocation for market-rate units for 2015 to 2023, as directed by the Regional Housing Needs Allocation process.

Next month, the City Council will consider new zoning rules to encourage the construction of more accessory dwelling units (ADUs) -- including formally adopting zoning rules to allow two-story ones; eliminating a requirement that the homeowner occupy the main residence; and permitting the construction of junior units, which are carved out of an existing home, without requiring more parking.

Some of these laws, including one that would allow heights of up to 16 feet for accessory dwelling units, are required to comply with California laws that took effect at the beginning of this year. The council approved them earlier this year on an interim basis and is now set to revise the zoning code to make them permanent.

Others, including relaxing setback rules for homeowners with corner lots, are intended to offer builders more flexibility.

The trend is by no means limited to Palo Alto, according to John Geary, co-founder of Abodu, a company that has manufactured dozens of accessory dwelling units. Before the state adopted new laws to stimulate production of accessory dwelling units, California only saw between 200 and 300 permits for ADUs issued per year. After the state laws were enacted, the number went up to about 6,000, he said.

In some cases, cities are going well beyond state requirements. Last year, San Jose created a program that effectively pre-approves accessory dwelling units. The program allows select builders of detached ADUs to receive approvals for a prototype, allowing subsequent units to get permitted through a swift over-the-counter process. Abodu is one of three builders that is pre-approved under the San Jose program.

Palo Alto does not currently have such a program, though it has seen its famously slow and thorough permitting process speed up when it comes to accessory dwelling units. The average processing time for an ADU permit was about six months in 2018, though it dipped down to 135 days in 2019. So far this year, the city has seen 32 applications, with an average permitting time of 92 days, according to the city's quarterly report.

In May, when the city's Planning and Transportation Commission discussed relaxing rules for accessory dwelling units, resident John Kelley suggested that the city do more to reduce how long it takes a homeowner to get a permit. Kelley said he and his wife are trying to build a combination of an ADU and a JADU on their property and encouraged the commission to consider rules on sewer lines and electricity, which are slowing down the permitting process for homeowners.

"If you were to take seriously the problems that existing homeowners have in dealing with ADUs and building them — they really come down to money and time," Kelley said. "And what I think is missing here is an orientation that looks at the issues that really confront the construction process."

Geary is hoping to change that. Next month, his company plans to install an ADU on a residential property in the University South neighborhood. His company boasts of being able to construct a unit in 12 weeks, which includes between eight and 10 weeks to build the home at an off-site location and two weeks to install it on the homeowner's land.

Geary said he has been talking to Palo Alto's planners about instituting a master program along the line of those adopted in San Jose and Santa Clara.

"Palo Alto as a city has actually proven to be excited about ADUs," Geary said during a recent interview in the company's Redwood City showroom. "I think they see the value of empowering homeowners to have livable spaces of property without having to make them jump through the same number of hoops as single-family developments."

In August, the company was in the final stages of a three-month process to get a permit for the University South neighborhood project, its first in Palo Alto.

Abodu builds its ADUs in several factories throughout the Bay Area before shipping them to homes, Geary said. Its standard one-bedroom unit, which comes with a $199,000 price tag and which Geary said is Abodu's most popular product, has a floor area of 500 square feet and a kitchen in the hallway that connects the living room to the bedroom, from which one can access the bathroom.

The company also offers a studio and a two-bedroom unit, for $189,000 and $259,000, respectively.

Palo Alto's planning staff hope and believe the trend will continue. The city has a goal of producing 300 housing units annually and it has yet to come close to meeting that target. While the council approved one affordable-housing complex with a total of 59 units last year, it has also largely abandoned prior proposals to build housing at Cubberley Community Center and at the former site of Fry's Electronics (though it is still considering housing for the area around the former Fry's store as part of a plan that the city is putting together for a 60-acre area in the Ventura neighborhood).

The proposed ordinance, which the Planning and Transportation Commission approved in May and which the council will consider on Sept. 14, proposes additional incentives and streamlines regulations on ADUs, the report states.

The law would make the city's code consistent with state laws that set a 60-day processing timeline for ADU permits and that prohibit cities from requiring builders to provide replacement parking when they convert garages to dwelling units (in the past, parking requirements presented a major barrier to prospective builders).

Laws also now prohibit cities from requiring the property owner to live in the main house or from setting a minimum lot size for properties eligible for ADUs (Palo Alto had both of these requirements in place before striking them in response to state mandates).

City planners are suggesting further changes that are not mandated by state code. These include modifying a provision that allows homeowners to convert existing garages to accessory dwelling units without providing more parking on site. Under the modification, the same benefit would be offered to new units that are not part of a garage conversion. Staff is also proposing other incentives to homeowners to encourage them to build accessory dwelling units, including density bonuses and more relaxed setback rules, particularly for corner lots.

"With the updated ordinance, staff anticipates interest in building attached units and JADUs may increase," the report from Planning and Development Services states.

The city's Planning and Transportation Commission voted 4-2, with Ed Lauing and Doria Summa dissenting and William Riggs absent, in May to recommend adoption of the ordinance. Several commissioners supported providing incentives to homeowners who agree to designate accessory dwelling units for affordable housing.

Commissioner Michael Alcheck supported allowing basements to become accessory dwelling units, while Commissioner Barton Hechtman suggested that the city explore waiving development impact fees for builders who are willing to rent out the units at below market rate.

In explaining her opposition, Summa said that she doesn't know whether the new units are actually being used for rental housing or if many of them are in fact becoming home offices because of the COVID-19 crisis.

"I'm not at all against any of those ideas, but to insist that we are achieving some sort of housing goal — we just don't have the data to prove it," Summa said.

Despite this uncertainty, city staff are eager to speed up the production of ADUs. The city recently received a grant through Senate Bill 2 to develop ADU prototypes and application packages to facilitate expedited approval, the report states. Staff expects to launch that project later this year, according to the report from Planning and Development Services. Once that happens, the city could start approving new units over the counter, saving homeowners time and money, according to the staff report.

"By developing packages that include pre-approved drawings, applicants can show the design on their site plan and have the drawings as attachments," the report states. "This could help applicants to save on the costs for architects/designer services."

Comments

Native to the BAY
Registered user
Old Palo Alto
on Aug 28, 2020 at 11:57 am
Native to the BAY, Old Palo Alto
Registered user
on Aug 28, 2020 at 11:57 am

ADU’s are all well and good. And right on Commissioner Summa for asking the hard questions of who will actually occupy these extra income area of a single occupied home. I am very worried that a charming ADU’s will still encourage red lining zip codes and exclusionary attitudes for those in need —- now living here who are struggling: Families, elderly, disabled, low-wage workers. How does the Fair Housing Act of 1937 and the following amendments 1968, 1982, 1991 and 1998 apply. Palo Alto’s Single family home & property owners systematically deny HUDS Section 8 Voucher holder by raising thier rents way beyond the threshold for reasonable working class folk to participate. This pushes PAHC (Alta) to have a wait list into the next Century.

Housing is a human right and PA should be treating it as such. Instead its treated like a bad itch that won’t go away and is getting worse. Private Commercial and private property owners are granted many many advantages pushing the masses further down.

Cute, well designed tiny homes are a not “a one size fits all solution” to PA’s local housing deficit.

These home owners, whether the build for expanded family space during COVID, us for a home office or a hobby home for personal space “away” from the BIG house is a far cry from the real needs of real people right here. Really. Is a ADU owner going to rent a one bedroom/studio to family of 4? How about a single parent .


S8 Voucher Holder
Registered user
Woodland Ave. area (East Palo Alto)
on Aug 28, 2020 at 12:23 pm
S8 Voucher Holder, Woodland Ave. area (East Palo Alto)
Registered user
on Aug 28, 2020 at 12:23 pm

As a single mother of two school age children, I have had several Real Estate firms including Stanford Real Estate and VRents in Palo Alto deny point blank —with no explaination — that they do not take the Federally backed HUD issued S8 Voucher. How does that stand in the face of our Fair Housing laws ? For a so-called liberal, forward thinking city how will this descrimitory action get righted?


Staying Young Through Kids
Registered user
Old Palo Alto
on Aug 28, 2020 at 12:55 pm
Staying Young Through Kids, Old Palo Alto
Registered user
on Aug 28, 2020 at 12:55 pm


I agree with @Native to the BAY. Housing, and more accurately the cost of housing, is still an issue in Palo Alto. If this will remain as much of an issue "post Covid" remains to be seen. Hopefully things will change.

ADUs are a funny solution to our challenges. Once Palo Alto allowed flag lots, then they didn't.
Now we're building micro-units with absolutely no opportunity for any of these new residents to do anything other than rent. If every one of these ADU's were offered with fractional ownership of the land they sit upon, it could be great for the community. Additional rental units (with or without affordability requirements) are ultimately not as good for our city.

If Covid has taught us one thing, it's that location isn't as important as we once thought.

Hopefully local businesses will reconsider the need for additional expansion. After all it doesn't last forever.

Remember the beautiful SUN campus? Wait, that's now FB. How about those amazing Silicon Graphics buildings? No, wait, that's now Google (and the history museum). Excite @ Home? Nope, it's now Stanford RWC. At least HP will always be here...well, at least Agilent is staying...nope! Well, at least we have Palantir? This list could go on and on.

Let's spread out, lower housing pressure locally, and find some breathing room! Lots of people are leaving and that's a good thing!


AnExampleOfOne?
Registered user
Palo Verde
on Aug 28, 2020 at 1:02 pm
AnExampleOfOne?, Palo Verde
Registered user
on Aug 28, 2020 at 1:02 pm

Head 'east' on Loma Verde towards West Bayshore (101). The last house on the right seems to have what this article describes, easily seen from the sidewalk/road. It is likely elevated because it is in the flood plain.


Increasing housing, a PRIVATE use, requires growing PUBLIC facilities.
Registered user
Another Palo Alto neighborhood
on Aug 28, 2020 at 2:32 pm
Increasing housing, a PRIVATE use, requires growing PUBLIC facilities., Another Palo Alto neighborhood
Registered user
on Aug 28, 2020 at 2:32 pm

Please note that two housing proposals (not mentioned in the article) are being considered in south PA in very close proximity to Cubberley:
- 788 San Antonio Road (102 units)
- 525 East Charleston Road (# units proposed for this county land as yet unknown)Web Link

More will come as SB35 is implemented. None of this is mentioned here. Also not mentioned is the amount of Palo Alto property that already has been fairly recently upzoned and housing incentives that already have been approved by Council at various citywide locations. Why aren't developers coming forward with housing projects in response to these incentives? Because Sacramento continues to dangle new legislation in front of them that promises to yield even higher profits for developers. They are waiting for (and lobbying for) bigger incentives. It's all about money.

Please present the whole picture. We need to preserve Cubberley for PUBLIC use to provide the school, playing field and community service capacity we will need to meet greater demand of new, higher density housing and thousands of new residents. Using Cubberley, our last publicly owned large parcel, for housing (a PRIVATE use) is a monumentally bad idea as the floodgates for housing development are being thrust open by the state.

I'm not opposed to housing, but I am opposed planning that does not include space for growth to provide adequate public services--and THAT is what Cubberley has been preserved for. We used to have 22 elementary schools and three high schools. Today we have 13 elementary schools and two overcrowded high schools. Meanwhile, we have increased the number of housing units over the last 20 years. Many of our single family homes are occupied by people who have not had children in the public schools for some time (many of them for decades).

Let's PLAN balanced community land use. That requires comprehensive planning and thoughtful local zoning.



Native to the BAY
Registered user
Old Palo Alto
on Aug 28, 2020 at 6:50 pm
Native to the BAY, Old Palo Alto
Registered user
on Aug 28, 2020 at 6:50 pm

“Using Cubberley, our last publicly owned large parcel, for housing (a PRIVATE use)...” Public housing is not private. The design element touted by the community for the use of this land is choked by too many rec and park build outs. Incorporate well designed publicly owned housing into this element for the elderly and or PAUSD teacher housing . It’s win, win, win. It’s terrible that those living in Greenmeadow area across the street from this site want public land for their personal recreation preference. The population in PA is aging. Those reaping the benefits of Prop 13 are now living alone in housing they raised families in. No better than red lining.


PA Moderate Wage Earner
Registered user
South of Midtown
on Aug 28, 2020 at 7:10 pm
PA Moderate Wage Earner, South of Midtown
Registered user
on Aug 28, 2020 at 7:10 pm

Who wants to live in in a complex with kids in tow where you have to cross major intersections to get to schools, groceries, libraries, rec activities? Doubly, why should poor people have to have reduced parking, live amoung massive concrete poured foundations and other. This without any tradeoffs like electric bike park up, washer drying in units, small separate storage units. It’s also shameful that Piazza’s market does not accept Cal Fresh EBT (food stamps). Their biz model stinks —especially in these COVID times when the return for them would be a Federally backed cash return for them. Redlining cloaked in “it doesn’t pencil out’” verbiage, garbage. I don’t buy it.


Anonymous
Registered user
Duveneck/St. Francis
on Aug 28, 2020 at 8:47 pm
Anonymous, Duveneck/St. Francis
Registered user
on Aug 28, 2020 at 8:47 pm

Sorry, I’m unclear...is there a way to prevent these units from being rented out on AirBnB? We do not want that usage.


Resident 1-Adobe Meadows
Registered user
Adobe-Meadow
on Aug 29, 2020 at 10:30 am
Resident 1-Adobe Meadows, Adobe-Meadow
Registered user
on Aug 29, 2020 at 10:30 am

Cubberley needs to be converted back to school use. What level of school use can be varied - a special education section that is K - 12, or a mix of all grades. It is centrally located and easy to get to. Children do not need to cross tracks and major streets. It has the required playing fields which are used on the weekends for AYSO and other sports. City management needs to figure out how those fields can be used for more purposes to the community. But housing at that location is not a legal avenue.

My great concern is that the city is not pushing on the Fry's site for housing so that any housing issues will default onto Cubberely. They are playing chess with city resources. Meanwhile the PA Business Park on East Bayshore at San Antonio has a gigantic parking lot that is just sitting there unused. As well as buildings that are not being utilized to the full extent. That is a place for some housing and it is next to the freeway so not mixing commute traffic with inner city traffic.


chris
Registered user
University South
on Aug 29, 2020 at 8:38 pm
chris, University South
Registered user
on Aug 29, 2020 at 8:38 pm

Section 8,

The law in California on Section 8 changed this year. I am not sure your information is current.


Asher Waldfogel
Registered user
Old Palo Alto
on Aug 31, 2020 at 7:49 am
Asher Waldfogel, Old Palo Alto
Registered user
on Aug 31, 2020 at 7:49 am

The original ADU argument was to create affordable housing. We have no idea if that has happened.

Question for ADU builders: have any of you built an ADU and rented it on the open market for $1500/month or less?

More broadly, what are you using your ADU for? Extended family residence? Caretaker residence? Home office? AirBnB? Market rental? Section 8 rental?


James
Registered user
Midtown
on Aug 31, 2020 at 9:31 am
James, Midtown
Registered user
on Aug 31, 2020 at 9:31 am

The problem with ADU is property tax assessment.

Many houses in Palo Alto have very low property tax basis. Some old houses pay only thousands annually while the market values are millions each.

Adding a new ADU may cause the entire house being re-assessed. Even if partially a 500 square feet new addition, at market value, may lead to property tax much higher than the house itself.

This is a shameless trap set up by the county to lure long-time residents to take on unnecessary tax burdens. Palo Alto Online should warn residents of this dire consequences of ADU.


Suzanne Keehn
Registered user
Barron Park
on Aug 31, 2020 at 11:21 am
Suzanne Keehn, Barron Park
Registered user
on Aug 31, 2020 at 11:21 am

We need low income housing, people are leaving, article today said many to AZ. How does an ADU costing 200.000 count as BMR housing. Anyone putting that much money into an ADU would be renting it as market rate. Does anyone consider our water supply, no we'll always just be able to turn a faucet and there it is. Right.


Online Name
Registered user
Embarcadero Oaks/Leland
on Aug 31, 2020 at 12:13 pm
Online Name, Embarcadero Oaks/Leland
Registered user
on Aug 31, 2020 at 12:13 pm

When ADUs were first pushed, we heard all about how this was going to help house Granny, the disabled adult child etc.

Because PA CC rushed the original ADU reg through, several of us got several CC members to clarify the details. Here's some of what we learned and which may have changed so knowledgeable folks please correct me on the following:

1) ADU renters couldn't discriminate in the rents they charged. So people trying to help out Granny, the disabled adult kid or friends/relatives couldn't give them a break and charge little or nothing.

2) Normal eviction laws applied so if you ended up with a bad tenant who didn't pay rent or was otherwise undesirable, you were stuck with them in your back yard or right in your home for the years that normal eviction (non-Covid) takes.

3) The city assumed that you were charging comparable rents to your neighbors so if your neighbor rented his/her ADU for $3,000 a month, it was assumed you would, too, and your rental income would be taxed accordingly. Too bad for Granny, the disabled adult child and the friends you wanted to help.

4) The obvious expense of the ADU and the tax consequences.

5) The neighborhood parking issues.

6) the 2-story allowance letting your ADU tenant peer in your house and your neighbors' home.

There were others but those were the highlights I remember. Please correct/update as needed.

How this would help create BMR housing or help needy relatives or friends escapes me.


Asher Waldfogel
Registered user
Old Palo Alto
on Aug 31, 2020 at 4:36 pm
Asher Waldfogel, Old Palo Alto
Registered user
on Aug 31, 2020 at 4:36 pm

@Online Name

You can charge whatever rent you want for an ADU. What you must do, if you offer it on the market, is follow equal opportunity housing rules. You must offer a minimum one year lease and you can't discriminate - race, family structure or size, and a bunch of other categories. Evicting a tenant means you must follow all the standard rules. Palo Alto doesn't allow shorter than 30 day rentals, but we also don't seem to enforce.

If you rent the unit, then you must declare the rent as income. Most ADU owners will claim depreciation to offset the rental income and the income washes out.

When this first came up 5 years ago, the only simple loan that was available to build an ADU was an equity line of credit, which was more expensive and shorter amortization than a mortgage.

Would be great to hear from ADU builders what your actual experience with construction loans and property tax assessments has been. Would also be great to hear what people are spending to build ADUs. An ADU is a small house with foundation, hookups, electricity, HVAC, water (maybe gas), Internet, sewer, kitchen, bath, vents, roof, windows and doors. All that costs money to build.


Online Name
Registered user
Embarcadero Oaks/Leland
on Aug 31, 2020 at 4:51 pm
Online Name, Embarcadero Oaks/Leland
Registered user
on Aug 31, 2020 at 4:51 pm

@Asher Waldfogel, thanks. A few questions: 1) How long does the average eviction process take in non-Covid times? 2) Does what you said mean I CAN privately offer a friend/relative free or low rent while charging a non-friend regular tenant who shares the unit market rates or is that discrimination as we were told? 3) I know I didn't dream up the part about the city assuming someone is charging the same market rate as their neighbors for purpose of assuming rental income; the 2 CC members who briefed us brought that one up. Can you clarify?

Thanks in advance and I'm interested in the answers to the other questions you pose.


Staying Young Through Kids
Registered user
Old Palo Alto
on Aug 31, 2020 at 5:22 pm
Staying Young Through Kids, Old Palo Alto
Registered user
on Aug 31, 2020 at 5:22 pm

[Tongue in Cheek] One way to increase Palo Alto's housing is to simply change how we handle addresses. We should do it like a mailbox center and just designate every rented bedroom in town as a suite! Have a 3 bedroom apartment? Each bedroom is now a "suite" with an individual address! And, Bam! We go from one unit to THREE units! With just a few change of address forms we can meet the unrealistic ABAG quotas by the end of the week!

Easier yet, don't even build housing, just add more mailbox "suites" to make more addresses!

No need to build housing...just offer the appearance of additional units.

These mailboxes could also serve all of those who can't afford housing. At least they could get their mail.

I would just hope the new mailbox suites each come with access to a bathroom.

[no longer kidding]

In all seriousness though...housing availability is very important to employers in the area. However, what's critical to our community is home ownership. In the clamor for more housing we seem to ignore that communities are stronger when you have a higher ratio of owners to renters. Of course developers, and landlords (and I am one) rarely want to bring this up. And businesses are loathe to mention their role in the problem right up to the point they announce they're leaving town due to "affordability".


Asher Waldfogel
Registered user
Old Palo Alto
on Aug 31, 2020 at 6:24 pm
Asher Waldfogel, Old Palo Alto
Registered user
on Aug 31, 2020 at 6:24 pm

@Online name - good questions and you may need to ask a lawyer. I am not a lawyer.

I am not aware of any restrictions on charging your friends or family lower rent than you offer a market rate tenant. Ask a lawyer if you have concerns. Also have no idea about eviction process or timeline, except to assume it's slow. I'd strongly recommend getting good legal advice before building and renting a "junior" ADU.

I have no idea why the City would assume or care about rental income. We have no City income tax and no sales tax on rental. We have a ToT on short-term rental, but AFAIK we don't charge that on AirBnBs.

The City has no budget to collect data on how ADUs are being used. Would be helpful if a few people with new ADUs commented.


Online Name
Registered user
Embarcadero Oaks/Leland
on Aug 31, 2020 at 7:53 pm
Online Name, Embarcadero Oaks/Leland
Registered user
on Aug 31, 2020 at 7:53 pm

@Asher Waldfogel, Thanks. When we asked these questions 5 years ago, the 2 city council members said EXACTLY the same thing -- Good questions. And they're still unanswered while our city leaders wring their hands and wonder why more people haven't rushed right out to build ADUs.

When we asked those and other questions, we weren't -- and aren't -- eager ADU prospects, just homeowners curious about the tradeoffs for us and our neighborhoods.

Re the City and rental income, there were several articles. I'll have to search, probably adding in "revenue collection targets" or somesuch.

Staying Young With Kids nails the key conflict between employer needs and those of communities -- one that's rarely noted when employers continue to add many more jobs than housing. ABAG/MTC's growth targets are 3,000,000 more people and 1,000,000 more jobs, creating MORE competition for housing. And they're converting 101 etc. to toll roads to discourage current and future residents/commuters from driving. Google and Facebook Villages can only house so many. And what happens when they leave the companies?

A lot's changed with so many people working from home or elsewhere.

End of Rant. I propose we adopt Staying Young With Kids Mailbox Proposal and be done with it already.




iSez
Registered user
Palo Alto High School
on Sep 1, 2020 at 12:32 am
iSez, Palo Alto High School
Registered user
on Sep 1, 2020 at 12:32 am

Are you kidding me? The amount of extra parked cars on the streets will be outrageous! This is unfair to neighborhoods with kids who will have strangers walking into the backyards. ADUs should be outlawed, not encouraged! This is not going to help the housing shortage, it will just turn us into a trashy liberal city like S.F. or Berkeley. It's our City Council's way of claiming they are doing something about the housing shortage. There are too many people who want to live in Palo Alto that if every house had an ADU, there would still be more people who want to live in Palo Alto. Our City Council does not care about its residents, they only care about themselves.


Bob Wenzlau
Registered user
Crescent Park
on Sep 1, 2020 at 2:25 pm
Bob Wenzlau, Crescent Park
Registered user
on Sep 1, 2020 at 2:25 pm

Have you considered converting the 150 acre Palo Alto Airport to a mixed use residential project that introduces retail and open space along the adjoining Baylands? The City owns the land could allow set asides for essential workers like teachers and firefighters and police.

A development plan would nominally introduce 4,000 housing units using 50 acres of the airport site and provide open space and parks on 100 acres.

I am not a fan of the airport. The airport continues to deposit lead in our air, generate noise, and serve an obvious elite group mostly outside of Palo Alto. The airport is fiscally a loser, and sits on land worth probably worth $750 million (at $5 million an acre). I can't walk and use the land of the airport because it is restricted.

Those against this conversion idea have stated that we need the airport for emergency response - to fuel a helicopter - San Carlos airport could fuel a helicopter. They say it is near the bay, and would be submerged - but Palo Alto will create a barrier to sea level rise and construction could mitigate this. They say this is away from the "core" of the City -- but Mountain View and other communities have done north of Bayshore projects to great success. Others will say the FAA would not permit this, but other communities have escaped their FAA contracts (Santa Monica), and if directed staff could do the same. I really don't think these are valid reasons not to explore the idea.

Ultimately the lack of evaluation of this approach begs whether Palo Alto can think "big" ideas. My future Palo Alto is sustainable, without the airport noise. My future envisions Palo Alto Landing - the renamed airport land - as a gateway to our baylands, with some dining as well as parkland that also has a robust housing element.

My "ask" would be that Council would examine this idea given this is the largest piece of non parkland in Palo Alto that could be developed. I had thought that a ballot measure could move this along as I would expect while there may be nostalgic love for our airport, there is no rationale for the airport as our city moves toward sustainability.

It would be nice to hear what the amazing candidates think of a bold idea. An idea that could unfold over 10 years, but make some great impact on our housing crisis. Again, keep up the other good efforts, but explore this city-owned land as an option.


jc
Registered user
College Terrace
on Sep 1, 2020 at 5:07 pm
jc, College Terrace
Registered user
on Sep 1, 2020 at 5:07 pm

"barrier to sea level rise"

The area between midtown and the bay was originally marshland and the water table is very high. As the sea water level rises so will the ground water level. Perhaps pumping stations and massive sea walls to pump the ground water over will be needed wherever development has taken place just above the current groundwater level.


Bob Wenzlau
Registered user
Crescent Park
on Sep 2, 2020 at 8:50 am
Bob Wenzlau, Crescent Park
Registered user
on Sep 2, 2020 at 8:50 am

I am truly concerned about sea level rise, but my hunch is the surface water impact (that of the actual bay level) would be greater than the impact on shallow groundwater especially south of 101. North of 101 construction would necessarily need to manage seepage when below grade construction would occur. As for my own vision of use of the airport, there are numerous examples of construction that is consistent with shallow groundwater, and even can compliment it.


Staying Young Through Kids
Registered user
Old Palo Alto
on Sep 2, 2020 at 12:24 pm
Staying Young Through Kids, Old Palo Alto
Registered user
on Sep 2, 2020 at 12:24 pm

@bob What about converting the golf course to housing (also or instead)?

And...a sincere thank you for all you did to help Palo Alto become a more sustainable city. Off topic, but it would be interesting to hear your thoughts on how well you feel GreenWaste is serving our community at this point?


Bob Wenzlau
Registered user
Crescent Park
on Sep 2, 2020 at 12:33 pm
Bob Wenzlau, Crescent Park
Registered user
on Sep 2, 2020 at 12:33 pm

In earlier evaluations I explored swapping the airport with the golf course as a site for housing but having just completed the capital improvements on the golf course, this seemed to stick a stick deeper into the hornets nest. The airport community is very strong, and even once I tried using a portion of the airport unused land it set off a very strong reaction. One will hear about the businesses lost, and the essential service it provides, and don't forget airport day. Sometimes a sustainability/housing pivot there are some winners and losers. I just thought it was time for our essential workers to have their win.

As for GreenWaste - well Covid had caused a pause in the international control of where plastics and mixed paper are going. With the recent NYT article on plastics impacts internationally, I asked staff to prioritize this again. GreenWaste broadly is an innovative firm, and we are lucky to work with them. However, they do rely on end points for the recycled materials that are not verified as to what the condition of the end point is. There is a sentiment in the City of what we don't know can't hurt us - and that is a convenient motto now. I had campaigned that we should understand an acceptable endpoint, or not send at all.


Anonymous
Registered user
Duveneck/St. Francis
on Sep 2, 2020 at 10:41 pm
Anonymous, Duveneck/St. Francis
Registered user
on Sep 2, 2020 at 10:41 pm

I thought the revamped PA golf course is built so as to hold possible flood waters in the contours. That huge rebuild of the creek by the airport also protects EPA. I hope we retain The Baylands Park. I prefer building higher on El Camino Real rather than trying to put housing in the Baylands.


Bob Wenzlau
Registered user
Crescent Park
on Sep 3, 2020 at 9:25 am
Bob Wenzlau, Crescent Park
Registered user
on Sep 3, 2020 at 9:25 am

@Anonymous
Not that this is a venue for any real discourse, but my objective is to have the merits "explored". The city is complex enough to have multiple avenues of housing exploration - look at El Camino (where the City owns no land but can stimulate development) or look at places where the City owns the land, and could build housing. Our deficit is enormous. From a habitat and environmental standpoint closing the airport and adding parkland with housing is a step forward for our habitat - how can airplanes landing ever be deemed benign to a natural habitat.
Bob


StarSpring
Registered user
Adobe-Meadow
on Sep 4, 2020 at 3:21 pm
StarSpring, Adobe-Meadow
Registered user
on Sep 4, 2020 at 3:21 pm

I don't know when the Federal grants for the Palo Alto Airport expire, but, until they do, using PAO for anything but what it is will be very difficult.


CC
Registered user
Professorville
on Sep 5, 2020 at 9:54 pm
CC, Professorville
Registered user
on Sep 5, 2020 at 9:54 pm
Resident 1-Adobe Meadows
Registered user
Adobe-Meadow
on Sep 8, 2020 at 8:41 am
Resident 1-Adobe Meadows, Adobe-Meadow
Registered user
on Sep 8, 2020 at 8:41 am

There is an ADU being built which is observable from a number of home backyards in my area. It appears to be disconnected from the home so question is the bathroom and kitchen.

I know that the homes on my street have had the city out working the main sewer lines for the homes. The sewer lines are old and are getting ruined by the tree roots. So how does that all work? Aging infrastructure now has to consider additional sewer capacity from a disconnected domicile? I think that is why a lot of homes are now being torn down and replaced with new homes. The internal systems have been compromised by age and earth movement. Earth movement is a big issue and we are on adobe soil. The soil expands and shrinks, the water table decreases so it all sinks.

Looking at the comments above it appears that people think the whole city needs to be subject to housing changes. Why is that? We live on a peninsula. The open land is further down the bay around Alviso and San Jose. And going south. That is where the new housing needs to go with new infrastructure, sewer systems, and thought out plans on where the sewer capacity is being processed.

It is like people grab onto one part of a concept to champion but no thought to the bigger picture. The bigger picture has to include how and where the additional infrastructure is processing all of this. The Palo Alto Sewer capacity has it's limits. The city was built to accommodate a level of use and we ae exceeding that level of use. And now we are getting complaints on the garbage - where is garbage going? Another list of complaints from the city on how we - the citizens - are dealing with garbage.


Resident 1-Adobe Meadows
Registered user
Adobe-Meadow
on Sep 8, 2020 at 10:47 am
Resident 1-Adobe Meadows, Adobe-Meadow
Registered user
on Sep 8, 2020 at 10:47 am

I assume that you all get the world maps provided by Doctor's without borders and others. Put that world map on the wall and stick a pin in the Palo Alto location. If we are to believe the powers that be a lot of the world is headed in our direction and we need to provide housing for them - within our city limits. Throw out the golf course, throw out the airport. Throw out the city parks?
And our governor is telling all of those people outside the border to come on in. So how does that all work out? Who is paying for what? We are told that is a "value" - do all of the other states think it is a "value"? Are all of the other states throwing out all of their amenities? No - don't think so.
So break it down further and use a map of CA - put a pin in PA. How are the other cities in the state dealing with this? They put people on planes and fly them to Hawaii, and now Hawaii is flying them back. Hawaii know what it's values are - the tourist trade - and the tourist trade does not like homeless people.
So the bigger question is why people think they have a requirement to house the world. Or a subset of the world. Given the comparative data this city does not have a requirement to house all of the random people. This city is older then the surrounding cities which were tracks of orchards. I think think need to up their game and work these issues since they are the new guys on the block.. And we need to quit wallowing in guilt. We have nothing to feel guilty about.


Resident 1-Adobe Meadows
Registered user
Adobe-Meadow
on Sep 8, 2020 at 3:41 pm
Resident 1-Adobe Meadows, Adobe-Meadow
Registered user
on Sep 8, 2020 at 3:41 pm

Comments above on use of some land in the airport - baylands for housing. Not a good idea - leave the Embarcadero area alone. Quit messing with that area - it has a lot going on there.

I keep pointing out that the Palo Alto Business Park on East Bayshore and San Antonio has a gigantic parking lot that is unused. Buildings which look in transition or empty. The city has an office in this specific area. Any reference to this area is ignored.

If Bob is a city planner - insider maybe he can tell us what is going on there. How can there be this big piece of property that is unused and no one wants to talk about it. Is there some city person who can adequately describe what the plan is there? Sell for big bucks? If so then encroach on R-1 neighborhoods to satisfy a state - guilt requirement?


Resident 1-Adobe Meadows
Registered user
Adobe-Meadow
on Sep 10, 2020 at 11:30 am
Resident 1-Adobe Meadows, Adobe-Meadow
Registered user
on Sep 10, 2020 at 11:30 am

Opinion in the paper is that no new housing should be approved until the state gets their power grid under control and we have the right number of population that it can support. We are not going to live in power shut-offs because additional housing is forced on us. How can any new business operate here if no power grid.


Resident 1-Adobe Meadows
Registered user
Adobe-Meadow
on Sep 11, 2020 at 7:54 am
Resident 1-Adobe Meadows, Adobe-Meadow
Registered user
on Sep 11, 2020 at 7:54 am

The "Housing Shortage". Reading the NYT they are of the opinion that we here are suppose to save the world. A post WW2 opinion in which case we did save the world. We rebuilt western Europe. To such a great degree that there is now a European Union of which most of the major and minor European countries are a member.

The EU manages their countries as to labor, immigration, trade, financial stability. Note that these are the same countries that colonized all of Africa - the second biggest continent on the planet that has the most natural resources. Also many Asian countries. Most of these countries became independent in name only to become members of the UN and other associated organizations that could financially benefit those countries.

Our ability to intersect in the well-fare of those countries is limited - we were not the colonizing entity. And as part of the process we expended people and resources in support of the rebuilding. But it is time for the colonizing countries and the EU organization to house and employ their former colony in-mates.

While the UK is busy with BREXIT it's former colonies are suffering. They need to step up and help those countries. And we need to help our citizens who are now suffering from every angle possible. Yes housing is an issue but that needs to be spread out over the continent and not localized in coastal cities which are now over burdened. WE should not be expected to shoulder that burden because some people are working their post WW2 issues - their relatives from the old country?


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