News

Palo Alto scrambles to react to barrage of new housing laws

City prepares to craft 'urgency ordinance' in response to new state requirements

Arbor Real homes in Palo Alto on Nov. 13, 2020. Photo by Olivia Treynor.

Hoping to make a dent in California's housing crisis, state lawmakers have passed a barrage of sweeping new laws that streamline approval processes for residential developments, limit the ability of cities to regulate density in housing projects and effectively abolish single-family zones.

But while the laws have been hailed by housing advocates, Democratic lawmakers and Gov. Gavin Newsom as necessary tools to create more housing, local officials are still trying to grasp the laws' implications on both their communities and their zoning codes. In Palo Alto, city planners are already crafting an "urgency ordinance" that would modify the municipal code to comply with the state laws — an update that they hope to bring to the City Council in December.

The two bills that have garnered the most attention, celebration and pushback during the recently concluded legislative session have been Senate Bill 9, which allows the splitting of single-family lots to create up to four total dwellings, and SB 10, which allows cities to approve developments with 10 dwellings per acre in transit-rich areas, notwithstanding any existing zoning restrictions that require a lower density.

But while SB 9 and SB 10 have dominated the spotlight, neither is expected to significantly boost housing any time soon. An analysis by the Terner Center for Housing Innovation at University of California at Berkeley estimated that SB 9 could potentially generate 700,000 new dwellings across the state. The analysis notes, however, that "relatively few new single-family parcels are expected to become financially feasible for added units as a direct consequence of this bill" and suggests that the law will "modestly accelerate the addition of new units relative to status quo."

The impact of SB 10, which drew intense opposition from Palo Alto, Redondo Beach and other cities, will likely be even more negligible. That's because it's optional and, in Palo Alto at least, neither the council nor planning staff intend to exercise the option.

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"It's a tool and not a mandate. … Unless we received direction otherwise, we'd acknowledge that this is a tool and we can use it, but we're not considering this as part of our work plan going forward," principal planner Sheldon Ah Sing said Wednesday night during a Planning and Transportation Commission discussion of new housing laws.

A lesser known law that could have a potentially greater impact in Palo Alto is SB 478, which prohibits cities from using minimal lot-size requirements to preclude residential development and which sets minimum density requirements in residential zones that have multiunit developments. Under this law, developments that have between three and seven units would have a minimum floor area ratio of 1.0, while those with between eight and 10 units must be allowed a floor area ratio of 1.25.

Because many of these zones in Palo Alto currently allow a floor area ratio of 0.4 or 0.6, SB 478 would effectively double the density on residential lots.

Given the city's existing density restrictions, SB 478 impacts most of Palo Alto's existing mixed-use development standards in commercial districts, according to planning staff. Sing said that the law is one of several that will require the city to make changes to the local zoning code to ensure compliance. Planning staff expect to bring an urgency ordinance with a host of zoning changes to the council in early December and approve permanent ordinances in spring 2022.

Like SB 10, SB 478 was authored by state Sen. Scott Wiener, D-San Francisco, who described it as a "nerd bill," but an "important one" insomuch as it prevents loopholes that cities use to deny housing.

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"Small, multi-unit housing — prior to SB 478 — could be prevented even allowed by local zoning code because of onerous and unnecessary restrictions on square footage and lot size," Wiener said in a statement just after Newsom signed the bill into law. "Now, with the passage of SB 9 and SB 10, SB 478 will ensure we can actually build the small, multi-unit housing that we need so badly across the state. SB 478 is wonky, but it will help us make a dent in our housing crisis."

Another law that Palo Alto planners are paying close attention to is SB 8, which extends by five years the provisions of SB 330, also known as the Housing Crisis Act of 2019. SB 330 was set to expire in 2025; SB 8 extends it to 2030.

Both bills effectively freeze the design standards that a city has in place at the time a developer submits a housing application, thus preventing municipalities from erecting new barriers over the approval process. They also prohibit cities from holding more than five public hearings for residential developments. SB 8 clarifies that the five-meeting limit includes appeal hearings and that the law applies to projects that include a single-dwelling unit.

The law is particularly relevant in Palo Alto, which is currently reviewing two development proposals that are relying on the streamlining provisions of SB 330: a proposal from The Sobrato Organization for 91 townhomes at 200 Portage Ave., next to the former site of Fry's Electronics, and a plan by SummerHill Homes to construct 48 residences at 2850 W. Bayshore Road, next to Greer Park.

A new report from the Department of Planning and Development Services highlights SB 8 as one of four laws — along with SB 9, SB 10 and SB 478 — that are "relevant to our planning and housing policies and are focused primarily on process streamlining and housing production." Deputy City Attorney Albert Yang said that while SB 8 technically doesn't require the city to modify its code, staff will review its code to ensure it is consistent with the law's extension of the Housing Crisis Act's streamlining provisions to single-dwelling residences.

The planning commission supported planning staff's proposal to modify the zoning code with the urgency ordinance later this year and then make further refinements early next year before adopting permanent changes. Chair Bart Hechtman pointed to the potentially dramatic implications of the new bills — particularly SB 9 — and said he expects the planning commission to play a role in creating the permanent ordinance.

"This is a far-reaching legislation that the state has adopted and placed on our doorstep," Hechtman said. "It can have some potentially significant effects."

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Palo Alto scrambles to react to barrage of new housing laws

City prepares to craft 'urgency ordinance' in response to new state requirements

by / Palo Alto Weekly

Uploaded: Fri, Oct 15, 2021, 9:22 am

Hoping to make a dent in California's housing crisis, state lawmakers have passed a barrage of sweeping new laws that streamline approval processes for residential developments, limit the ability of cities to regulate density in housing projects and effectively abolish single-family zones.

But while the laws have been hailed by housing advocates, Democratic lawmakers and Gov. Gavin Newsom as necessary tools to create more housing, local officials are still trying to grasp the laws' implications on both their communities and their zoning codes. In Palo Alto, city planners are already crafting an "urgency ordinance" that would modify the municipal code to comply with the state laws — an update that they hope to bring to the City Council in December.

The two bills that have garnered the most attention, celebration and pushback during the recently concluded legislative session have been Senate Bill 9, which allows the splitting of single-family lots to create up to four total dwellings, and SB 10, which allows cities to approve developments with 10 dwellings per acre in transit-rich areas, notwithstanding any existing zoning restrictions that require a lower density.

But while SB 9 and SB 10 have dominated the spotlight, neither is expected to significantly boost housing any time soon. An analysis by the Terner Center for Housing Innovation at University of California at Berkeley estimated that SB 9 could potentially generate 700,000 new dwellings across the state. The analysis notes, however, that "relatively few new single-family parcels are expected to become financially feasible for added units as a direct consequence of this bill" and suggests that the law will "modestly accelerate the addition of new units relative to status quo."

The impact of SB 10, which drew intense opposition from Palo Alto, Redondo Beach and other cities, will likely be even more negligible. That's because it's optional and, in Palo Alto at least, neither the council nor planning staff intend to exercise the option.

"It's a tool and not a mandate. … Unless we received direction otherwise, we'd acknowledge that this is a tool and we can use it, but we're not considering this as part of our work plan going forward," principal planner Sheldon Ah Sing said Wednesday night during a Planning and Transportation Commission discussion of new housing laws.

A lesser known law that could have a potentially greater impact in Palo Alto is SB 478, which prohibits cities from using minimal lot-size requirements to preclude residential development and which sets minimum density requirements in residential zones that have multiunit developments. Under this law, developments that have between three and seven units would have a minimum floor area ratio of 1.0, while those with between eight and 10 units must be allowed a floor area ratio of 1.25.

Because many of these zones in Palo Alto currently allow a floor area ratio of 0.4 or 0.6, SB 478 would effectively double the density on residential lots.

Given the city's existing density restrictions, SB 478 impacts most of Palo Alto's existing mixed-use development standards in commercial districts, according to planning staff. Sing said that the law is one of several that will require the city to make changes to the local zoning code to ensure compliance. Planning staff expect to bring an urgency ordinance with a host of zoning changes to the council in early December and approve permanent ordinances in spring 2022.

Like SB 10, SB 478 was authored by state Sen. Scott Wiener, D-San Francisco, who described it as a "nerd bill," but an "important one" insomuch as it prevents loopholes that cities use to deny housing.

"Small, multi-unit housing — prior to SB 478 — could be prevented even allowed by local zoning code because of onerous and unnecessary restrictions on square footage and lot size," Wiener said in a statement just after Newsom signed the bill into law. "Now, with the passage of SB 9 and SB 10, SB 478 will ensure we can actually build the small, multi-unit housing that we need so badly across the state. SB 478 is wonky, but it will help us make a dent in our housing crisis."

Another law that Palo Alto planners are paying close attention to is SB 8, which extends by five years the provisions of SB 330, also known as the Housing Crisis Act of 2019. SB 330 was set to expire in 2025; SB 8 extends it to 2030.

Both bills effectively freeze the design standards that a city has in place at the time a developer submits a housing application, thus preventing municipalities from erecting new barriers over the approval process. They also prohibit cities from holding more than five public hearings for residential developments. SB 8 clarifies that the five-meeting limit includes appeal hearings and that the law applies to projects that include a single-dwelling unit.

The law is particularly relevant in Palo Alto, which is currently reviewing two development proposals that are relying on the streamlining provisions of SB 330: a proposal from The Sobrato Organization for 91 townhomes at 200 Portage Ave., next to the former site of Fry's Electronics, and a plan by SummerHill Homes to construct 48 residences at 2850 W. Bayshore Road, next to Greer Park.

A new report from the Department of Planning and Development Services highlights SB 8 as one of four laws — along with SB 9, SB 10 and SB 478 — that are "relevant to our planning and housing policies and are focused primarily on process streamlining and housing production." Deputy City Attorney Albert Yang said that while SB 8 technically doesn't require the city to modify its code, staff will review its code to ensure it is consistent with the law's extension of the Housing Crisis Act's streamlining provisions to single-dwelling residences.

The planning commission supported planning staff's proposal to modify the zoning code with the urgency ordinance later this year and then make further refinements early next year before adopting permanent changes. Chair Bart Hechtman pointed to the potentially dramatic implications of the new bills — particularly SB 9 — and said he expects the planning commission to play a role in creating the permanent ordinance.

"This is a far-reaching legislation that the state has adopted and placed on our doorstep," Hechtman said. "It can have some potentially significant effects."

Comments

Eric Filseth
Registered user
Downtown North
on Oct 15, 2021 at 3:44 pm
Eric Filseth, Downtown North
Registered user
on Oct 15, 2021 at 3:44 pm

“The impact of SB 10, which drew intense opposition from Palo Alto, Redondo Beach and other cities, will likely be even more negligible. That's because it's optional … ”


Palo Alto already had that option. The onerous innovation of SB10, not mentioned in the article, is the buried line that allows City Councils to establish a zoning ordinance even “if the ordinance supersedes any zoning restriction established by local initiative” (Web Link )

In other words, SB10 explicitly grants a “legislative body,” defined as “local government” … in -this- bill … the discretionary power to override voter ballot initiatives on land use, even if the initiative passes a legitimate public vote. Not all would consider that negligible. I believe this is the first state bill to confer that kind of authority.

Many branches of government these days want the power to override voters, but none should have it, other than courts on constitutional grounds; that was why the City opposed SB10, not the (meaningless in practice) “10 units per acre” stuff. Without that line (which appears in multiple places), the City might well have taken no position on the bill. But that line, of course, may have been the entire point of SB10.

SB10 was supported by our local Assembly representative, and not by our local State Senator.


Online Name
Registered user
Embarcadero Oaks/Leland
on Oct 15, 2021 at 4:33 pm
Online Name, Embarcadero Oaks/Leland
Registered user
on Oct 15, 2021 at 4:33 pm

"SB10 was supported by our local Assembly representative, and not by our local State Senator."

Didn't our local State Senator Becker abstain or vote "absent"? This was after repeatedly claiming during Zoom meetings attended by a few hundred of his constituents on the subject that he "couldn't wrap his mind around the issue" and the facts surrounding it.


felix
Registered user
Another Palo Alto neighborhood
on Oct 15, 2021 at 6:47 pm
felix, Another Palo Alto neighborhood
Registered user
on Oct 15, 2021 at 6:47 pm

An abstention is not a no vote. It’s not that different from Berman’s predictable Yes vote on these Bills.
Becker should not have weaseled around on SB 10. He should have cast an
unambiguous vote NO.


Tecsi
Registered user
Mountain View
on Oct 15, 2021 at 10:41 pm
Tecsi, Mountain View
Registered user
on Oct 15, 2021 at 10:41 pm

@Eric Filseth. You identified the key issue: override of citizens. No need for this clause, unless you like the authoritarian approach to governing, which Scott Wiener clearly does.

And needless to say, this presents a huge opportunity for speculator/developers to pour money into "friendly" Councilmember candidates. Just one elected Councilmember could make the difference, bringing 10-unit apartment buildings into the midst of single-family neighborhoods.


Easy8
Registered user
Green Acres
on Oct 15, 2021 at 11:41 pm
Easy8, Green Acres
Registered user
on Oct 15, 2021 at 11:41 pm

Here is the link to the ballot initiative aiming to stop Sacramento's centralized zoning and restore local input

Web Link



Steve Dabrowski
Registered user
Duveneck/St. Francis
on Oct 16, 2021 at 1:07 pm
Steve Dabrowski, Duveneck/St. Francis
Registered user
on Oct 16, 2021 at 1:07 pm

@Eric Filseth: Your comments are clear and your opinion is clear. So what are you prepared to do about it?

As Easy8 notes there is an initiative put forward by, among others, the mayor of Redondo Beach, whom you mention, that aims to put local control into the State Constitution and would do away with most of these laws mandating what communities have to do. Are you and the city prepared to support this initiative? Are you and the city prepared to work with the other communities affected to get this on the 2022 ballot and work to get it passed?

Or is the standard effort of writing letters to officials, who have no intention of listening, the extent of Palo Alto's efforts on behalf of the majority of citizens. Is it going to be hand wringing as usual along with capitulation in the form of crafting an "urgency ordinance"? I suspect it is the latter. What a disappointment our elected leaders are these days!


Eric Filseth
Registered user
Downtown North
on Oct 16, 2021 at 5:37 pm
Eric Filseth, Downtown North
Registered user
on Oct 16, 2021 at 5:37 pm

@Steve

A precedent for letting "legislative bodies" set aside public votes potentially has broad implications.

But specifically on zoning, I suspect if the Community Choice Initiative gets onto the ballot, it stands a good chance of passing. Even yimby polls show large majorities of voters want land-use and housing decisions made locally, not in Sacramento. Web Link


C
Registered user
Palo Verde
on Oct 17, 2021 at 5:15 am
C, Palo Verde
Registered user
on Oct 17, 2021 at 5:15 am

Wonder how many of our state lawmaker were born yesterday -- or at least after 2008. That's when we had our last recession, and I remember the foreclosures and even abandoned houses at the edges of California's housing market. With 2021 the unprecedented twelfth year of a bull run, and the performance of the market in September and October, the likelihood of another recession is even higher in the upcoming years. From a 2020 financial article about the California market during the recession:

"The California housing market, which has historically been one of the key drivers of growth in the state’s economy, all but collapsed during the worst of the current recession. Home prices in California have generally declined by more than 30% from their mid-2006 peak. The easy availability of credit in the residential mortgage market, emblemized by so called “no documentation” loans, has evaporated. The fall in home values, combined with an unprecedented collapse in credit availability, has made it difficult, if not impossible, for most owners and buyers to qualify for new credit.

These forces have resulted in a dramatic increase in residential foreclosures in California, first affecting primarily sub-prime loans and then expanding to affect prime borrowers. There were a total of 1,103,537 housing units in foreclosure in 2008 in California, representing a 377% increase from 2006. This compares to an average increase in residential foreclosures of 52% from 2006 to 2008 for all states other than California, Arizona, Florida, and Nevada. Although there was some degree of stabilization in home prices during the later part of 2009, the most recent data from the S&P Case-Shiller U.S. National Home Price Index showed a further drop in home prices in California in December 2009, suggesting to some a “double dip” in the decline of home prices.

Web Link


Steve Dabrowski
Registered user
Duveneck/St. Francis
on Oct 17, 2021 at 3:36 pm
Steve Dabrowski, Duveneck/St. Francis
Registered user
on Oct 17, 2021 at 3:36 pm

@ Eric: Interesting web link although it appears a majority in almost all cases support increased housing and density despite a strong objection to the State overruling local officials.

My question however remains, what are you and other leaders and the city going to do to support getting this measure on the ballot. If it doesn't get there then there will be no vote. What will be done to publicize it's existence in order to get the signatures needed? How do we get local publications like the Daily Post to to put forth stories and editorials so the word gets out? Will Palo Alto work with other communities to develop and carry out efforts to get this on the ballot?

This should all have been a campaign before these laws passed the legislature and before Newsom signed them. When Palo Alto sent its letter opposing these measures I just laughed to myself. There was never any chance these people were going to pay any attention to that.

Communities affected by this nonsense should resist, and if it costs us some state funds or Newsom decides to punish for resisting these atrocities us then that will only work in our favor. Civil disobedience has long been a tradition in our country when faced with these authoritarian actions on the part of government. It would be good to show some spine for a change.


Eric Filseth
Registered user
Downtown North
on Oct 17, 2021 at 7:16 pm
Eric Filseth, Downtown North
Registered user
on Oct 17, 2021 at 7:16 pm

@Steve,

I believe a majority of Bay Area voters, including a majority of Palo Altans, do indeed want to see some more housing in their town, especially for low and moderate-income workers like schoolteachers; but I think they also want to see these decisions made locally, not in Sacramento, and that’s what these polls show. As much as we cities struggle with this, I suspect most people think Sacramento not only won’t do any better, but will also do a bunch of harm trying. Assemblyman Kevin Kiley’s recent remarks about the State Assembly mostly giving handouts to special interests and theater to the public, which I’ve posted elsewhere, would be consistent with that.

SB10 is a constitutional travesty, but the Council opposed SB9 not because it banned R1 neighborhoods, but because the choice ought to be local. I work for Palo Alto voters; I doubt that a majority want to upzone R1 to RM40, but if they do, I’ll work to get that done. Just for Palo Alto it ought to be you folks deciding, not San Francisco or Sacramento.

As for the Community Choice Initiative - with my elected-official hat on I think it’s premature for me to do a lot of public advocacy either for or against. If you want my two bits as an individual, send me a private email.


Local
Registered user
Stanford
on Oct 17, 2021 at 9:37 pm
Local, Stanford
Registered user
on Oct 17, 2021 at 9:37 pm

I love having tons of noise from my neighbors, and them seeing into my living room as they build a second home right on the property line overlooking me. And i actually really like that it will take me twice as long to drive anywhere, prices will go up and property developers will make tons of money.

What we need is more congestion and higher prices - as always the little people get squeezed by the big-money special interest groups funded by developers and fat-cat property slumlords.

Capitalism meets politics


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