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Marissa Mayer's plans to redevelop property are delayed by housing-protection laws

Complex interpretations of law lead to revisions of plans to remove three townhomes, add granny unit and pool

Townhouses owned by Marissa Mayer, the former CEO of Yahoo!, on Addison Avenue in Palo Alto on Nov. 23, 2021. Photo by Magali Gauthier.

Since last July, former Yahoo executive Marissa Mayer has twice applied for a permit from the city of Palo Alto to tear down three of four townhomes on her Addison Avenue residential property. And twice she's been rejected.

Now, she's hoping that the third time will be a charm.

Mayer wants to replace the units with a swimming pool and an accessory dwelling unit, but her plans have run into conflict with a new state law designed to protect and build badly needed housing — and the city's confusion on how to interpret the laws, city emails show.

Mayer, who with her family filed a second pre-application in mid-October that was again rejected, is in the midst of a third attempt, submitting another revised pre-application to Palo Alto's planning department even as the city tries to interpret its way through complex new legislation.

The family's property at 561 Addison Ave. contains four two-story townhomes. Mayer initially planned to knock down three units and the adjacent garages and retain the home closest to the street. She planned to add the pool in the middle of the property and an accessory dwelling unit in the back, according to city documents. Eventually, Mayer wanted to replace the remaining townhome at the front of the property with a new single-family dwelling, according to emails obtained from the city.

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But in Palo Alto's initial interpretation of state law Senate Bill 330, the Housing Crisis Act of 2019, the city isn't allowed to approve any project that results in a net loss of housing units, Emily Foley, city associate planner, wrote to Patterson Properties LLC, the real estate firm representing Mayer, on July 21.

SB 330 is one of a series of housing laws designed to push cities to allow more housing to help make up an estimated 2 million-unit shortfall of residences in California. The law, which went into effect in 2020, banned projects that reduce residential density through Jan. 1, 2025.

The legislation requires that any housing development projects replace the existing housing with at least the same number of units.

Subsequent legislation, Senate Bill 8, which goes into effect on Jan. 1, 2022, clarifies SB 330's provisions and extends them until Jan. 1, 2030. Notably, SB 8 also applies to projects that include a single-family dwelling.

Mayer's 561 Addison project appears to have been caught up in confusing interpretations of the law. Under SB 330, whether the current townhomes are considered a "housing development project" or are single-family dwellings has been the subject of much back and forth with the city, and it's a point the city needs to clarify through a code revision, Jodie Gerhardt, manager of current planning, noted in a staff email earlier in summer.

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As an example, under SB 330 "a residential triplex cannot be demolished and replaced with a duplex as this would be a net loss of one unit," Gerhardt wrote to Patterson Project's real estate attorney Chris Wade in an Oct. 13 email.

The plan could proceed if the city were to interpret that a townhome is a single-family dwelling; single-family dwelling units under SB 330 are exempt since they don't appear to meet the definition of a "housing development project," Gerhardt noted.

A development project for construction of a new single-unit dwelling, with no accessory or junior accessory dwelling unit, is exempt from the "no net loss" density requirement, Gerhardt said,

But by adding the ADU to the mix, the plan violates the city's current ordinances. Staff took a closer look at state ADU law and local codes to determine whether the project could combine a detached accessory dwelling unit and a junior accessory dwelling unit with a duplex on an R-2 lot.

"Unfortunately, this is not currently permitted under our ADU ordinance," Assistant City Attorney Albert Yang wrote in an Oct. 27 email to Wade. "For the most part, our ordinance authorizes ADUs only when created in conjunction with a single family use."

City planners also considered sections of state law that require the city to approve applications to create ADUs in conjunction with a multifamily use. The city could consider a duplex or two-family use to be multifamily, but apparently, the townhomes don't qualify.

The only way Mayer's family could achieve its goal and still be compliant under SB 330 would be to first replace two of the existing townhomes with two detached ADUs, and then replace the remaining two units with a new two-family home under state and city ordinances that apply to existing multifamily dwellings, Yang told Mayer's real estate firm.

A spokesperson for Mayer said on Wednesday that a third pre-application was submitted to the city on Nov. 8. He declined to comment on details regarding the revisions at this time since the application is still in discussion. He said they are hopeful that this time they can achieve their goals and still be in compliance.

"Representatives for the family have been proactively engaged with the various city authorities responsible for this process," he said.

While new housing projects would need to comply with the revisions under SB 8 starting next year, Mayer's property would not be impacted if it passes muster under SB 330 and is submitted to the city before Jan. 1, 2022, according to a legislative counsel's analysis.

Planning staff said the most recent proposed project is to remodel the existing structure into a single-family, single-unit dwelling, according to city spokesperson Meghan Horrigan-Taylor. The three rear existing dwelling units — located at 563, 565, 567 Addison — and their attached garage structures would be deconstructed.

The north wall of the garage attached to the remaining single-unit dwelling at 561 Addison Ave., where it is affected by the removal of the adjacent structure, would be sealed and finished to match the existing exterior wall surfaces. The roof deck on the 561 Addison garage, which is currently accessible from the home's master bedroom, would have new a guardrail added, creating a contiguous rail around the deck.

The guardrail would be the same style and color as the one that exists. A new fence that is consistent with the city's policies would be installed to separate the driveway from the backyard; some fencing would be removed from the existing patio area of 561 Addison to allow access to its expanded backyard.

A separate parcel map or certificate of compliance process would be needed to combine the lots into one parcel.

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Marissa Mayer's plans to redevelop property are delayed by housing-protection laws

Complex interpretations of law lead to revisions of plans to remove three townhomes, add granny unit and pool

by / Palo Alto Weekly

Uploaded: Fri, Dec 3, 2021, 6:46 am
Updated: Mon, Dec 6, 2021, 12:21 pm

Since last July, former Yahoo executive Marissa Mayer has twice applied for a permit from the city of Palo Alto to tear down three of four townhomes on her Addison Avenue residential property. And twice she's been rejected.

Now, she's hoping that the third time will be a charm.

Mayer wants to replace the units with a swimming pool and an accessory dwelling unit, but her plans have run into conflict with a new state law designed to protect and build badly needed housing — and the city's confusion on how to interpret the laws, city emails show.

Mayer, who with her family filed a second pre-application in mid-October that was again rejected, is in the midst of a third attempt, submitting another revised pre-application to Palo Alto's planning department even as the city tries to interpret its way through complex new legislation.

The family's property at 561 Addison Ave. contains four two-story townhomes. Mayer initially planned to knock down three units and the adjacent garages and retain the home closest to the street. She planned to add the pool in the middle of the property and an accessory dwelling unit in the back, according to city documents. Eventually, Mayer wanted to replace the remaining townhome at the front of the property with a new single-family dwelling, according to emails obtained from the city.

But in Palo Alto's initial interpretation of state law Senate Bill 330, the Housing Crisis Act of 2019, the city isn't allowed to approve any project that results in a net loss of housing units, Emily Foley, city associate planner, wrote to Patterson Properties LLC, the real estate firm representing Mayer, on July 21.

SB 330 is one of a series of housing laws designed to push cities to allow more housing to help make up an estimated 2 million-unit shortfall of residences in California. The law, which went into effect in 2020, banned projects that reduce residential density through Jan. 1, 2025.

The legislation requires that any housing development projects replace the existing housing with at least the same number of units.

Subsequent legislation, Senate Bill 8, which goes into effect on Jan. 1, 2022, clarifies SB 330's provisions and extends them until Jan. 1, 2030. Notably, SB 8 also applies to projects that include a single-family dwelling.

Mayer's 561 Addison project appears to have been caught up in confusing interpretations of the law. Under SB 330, whether the current townhomes are considered a "housing development project" or are single-family dwellings has been the subject of much back and forth with the city, and it's a point the city needs to clarify through a code revision, Jodie Gerhardt, manager of current planning, noted in a staff email earlier in summer.

As an example, under SB 330 "a residential triplex cannot be demolished and replaced with a duplex as this would be a net loss of one unit," Gerhardt wrote to Patterson Project's real estate attorney Chris Wade in an Oct. 13 email.

The plan could proceed if the city were to interpret that a townhome is a single-family dwelling; single-family dwelling units under SB 330 are exempt since they don't appear to meet the definition of a "housing development project," Gerhardt noted.

A development project for construction of a new single-unit dwelling, with no accessory or junior accessory dwelling unit, is exempt from the "no net loss" density requirement, Gerhardt said,

But by adding the ADU to the mix, the plan violates the city's current ordinances. Staff took a closer look at state ADU law and local codes to determine whether the project could combine a detached accessory dwelling unit and a junior accessory dwelling unit with a duplex on an R-2 lot.

"Unfortunately, this is not currently permitted under our ADU ordinance," Assistant City Attorney Albert Yang wrote in an Oct. 27 email to Wade. "For the most part, our ordinance authorizes ADUs only when created in conjunction with a single family use."

City planners also considered sections of state law that require the city to approve applications to create ADUs in conjunction with a multifamily use. The city could consider a duplex or two-family use to be multifamily, but apparently, the townhomes don't qualify.

The only way Mayer's family could achieve its goal and still be compliant under SB 330 would be to first replace two of the existing townhomes with two detached ADUs, and then replace the remaining two units with a new two-family home under state and city ordinances that apply to existing multifamily dwellings, Yang told Mayer's real estate firm.

A spokesperson for Mayer said on Wednesday that a third pre-application was submitted to the city on Nov. 8. He declined to comment on details regarding the revisions at this time since the application is still in discussion. He said they are hopeful that this time they can achieve their goals and still be in compliance.

"Representatives for the family have been proactively engaged with the various city authorities responsible for this process," he said.

While new housing projects would need to comply with the revisions under SB 8 starting next year, Mayer's property would not be impacted if it passes muster under SB 330 and is submitted to the city before Jan. 1, 2022, according to a legislative counsel's analysis.

Planning staff said the most recent proposed project is to remodel the existing structure into a single-family, single-unit dwelling, according to city spokesperson Meghan Horrigan-Taylor. The three rear existing dwelling units — located at 563, 565, 567 Addison — and their attached garage structures would be deconstructed.

The north wall of the garage attached to the remaining single-unit dwelling at 561 Addison Ave., where it is affected by the removal of the adjacent structure, would be sealed and finished to match the existing exterior wall surfaces. The roof deck on the 561 Addison garage, which is currently accessible from the home's master bedroom, would have new a guardrail added, creating a contiguous rail around the deck.

The guardrail would be the same style and color as the one that exists. A new fence that is consistent with the city's policies would be installed to separate the driveway from the backyard; some fencing would be removed from the existing patio area of 561 Addison to allow access to its expanded backyard.

A separate parcel map or certificate of compliance process would be needed to combine the lots into one parcel.

Comments

felix
Registered user
Another Palo Alto neighborhood
on Dec 3, 2021 at 8:56 am
felix, Another Palo Alto neighborhood
Registered user
on Dec 3, 2021 at 8:56 am

Good for the City to hold firm. Mayer may end up buying half the neighborhood, but here, should neither be granted legal favors nor expedited processing by the City.

She seems determined to pop up every so often with tone-deaf proposals to alter properties she’s gobbled up on Addison to the consternation of neighbors. Remember her application at her party house/mortuary for a “women’s club” at the corner of Addison and Middlefield?

Now this when housing is so critical. She seems clueless.


A Person
Registered user
Southgate
on Dec 3, 2021 at 10:17 am
A Person, Southgate
Registered user
on Dec 3, 2021 at 10:17 am

Keep up the good work, Palo Alto.


Elementary Parent
Registered user
Professorville
on Dec 3, 2021 at 12:12 pm
Elementary Parent, Professorville
Registered user
on Dec 3, 2021 at 12:12 pm

I don't understand why Ms. Mayer doesn't move to a neighborhood with larger properties. Not only are these efforts part of a larger problem of low housing stock across California, but she is eroding the neighborhood she seems to want to live in and frustrating many of us neighbors. The downtown residential areas are vibrant because of the smaller plot sizes and the townhouses she wants to demolish allow for a wider range of incomes in the area. Her events are already a nuisance (I've waited in backed up traffic twice in the last two days while a crane and a semi-truck blocked the entire street), but this is much worse.


paulbc
Registered user
Mountain View
on Dec 3, 2021 at 1:24 pm
paulbc, Mountain View
Registered user
on Dec 3, 2021 at 1:24 pm

I don't necessarily object to the superrich throwing their money around, but they ought to find a bigger playground to do it in. There's a serious housing crisis in the Bay Area. We need denser, more affordable housing, not bigger lots for gazillionaires.


eileen
Registered user
College Terrace
on Dec 3, 2021 at 8:57 pm
eileen , College Terrace
Registered user
on Dec 3, 2021 at 8:57 pm

Hey, all you Marissa Mayer haters, why not pick on all the other billionaires living in Palo Alto?
Nine of the richest people in the country live in Palo Alto. Really, all this fuss about two townhomes is ridiculous! Marissa loves our city. and wants to raise her children here! Why not go after all those LLC's who buy homes for investment and just rent them out and then flip them after they go up in value? We have all sorts of income levels here in Palo Alto. We always have!


Speak your truth
Registered user
Barron Park
on Dec 3, 2021 at 9:43 pm
Speak your truth, Barron Park
Registered user
on Dec 3, 2021 at 9:43 pm

I wish MM and the city and all neighbors the best in this situation .


Allen Akin
Registered user
Professorville
on Dec 3, 2021 at 10:56 pm
Allen Akin, Professorville
Registered user
on Dec 3, 2021 at 10:56 pm

Marissa and Zach are getting press at the moment, but just a couple of blocks away there's Brian Acton's compound. A few blocks east there's Mark Zuckerberg and Patricia Chan, and their compound. A few blocks south there's Larry Page's compound where the fire occurred recently, and Laurene Jobs' house with the security detail always present at the vacant lot across the street. Alex Karp has a (noticeably strange) house a few blocks West. There's the place with the two-story basement, machine shop, and firing range on Waverley. There are more I haven't mentioned and I'm sure more I don't know about. My neighbors and I used to joke about accidentally violating security-zone boundaries as we walked our kids to school at Addison Elementary. The neighborhoods near Downtown are changing in ways far beyond the usual concerns of affordability and density; I'm not sure what to make of it.


RDR
Registered user
another community
on Dec 4, 2021 at 1:35 am
RDR, another community
Registered user
on Dec 4, 2021 at 1:35 am

Yeah, it's a good point to note that Mayer's 2 properties only total 14,000 square feet land, which is less than other large properties acquired in a piece by wealth entrepreneurs in the same general neighborhood. Plus, she has said she'd create one new separate house, which has morphed into a duplex by arcane rules having no sense. So it sounds like shes excluding 3000 sf or so from her compound, leaving her with 11,000 sf of land.

Interesting that this new duplex will probably be worth 6 million dollars by itself.


felix
Registered user
Another Palo Alto neighborhood
on Dec 4, 2021 at 6:26 am
felix, Another Palo Alto neighborhood
Registered user
on Dec 4, 2021 at 6:26 am

It’s not about Compared to What, it’s about not caring a whit for her neighborhood and our city’s housing need.
[Portion removed.] That she is not alone in this makes it no less so.


Leland J.
Registered user
Professorville
on Dec 4, 2021 at 8:46 am
Leland J. , Professorville
Registered user
on Dec 4, 2021 at 8:46 am

There’s lots of vacant space in the old Yahoo offices lol


Elementary Parent
Registered user
Professorville
on Dec 4, 2021 at 12:25 pm
Elementary Parent, Professorville
Registered user
on Dec 4, 2021 at 12:25 pm

No one is saying she is being better or worse then others who are doing similar things. That’s fantastic that she loves this community and wants to raise her kids here! There are plenty of larger lots without having to move out of the community, but this just isn’t one of them. Why not move to one of those? If I’m not mistaken, this property was already turned into a double lot. It is just a fact that we are in a housing crisis. Laws around keeping housing supply are put in place for a reason. These proposals have already been turned down twice.


Andreas
Registered user
Old Palo Alto
on Dec 4, 2021 at 2:05 pm
Andreas, Old Palo Alto
Registered user
on Dec 4, 2021 at 2:05 pm

I support Marissa and congratulate her neighbors that see the value of their properties go up because of her projects.
Lack of new housing projects in Palo Alto is not her fault, and that's where the solution is: build many new and affordable houses. It's irrational to believe that stopping a handful of projects, impacting a handful homes, solves the real issue... especially when said projects increase the value of the community on many different levels.

Instead, I believe, this is just about ill-disguised jealousy and an actual disregard for real solutions.


New PaloAltan
Registered user
St. Claire Gardens
on Dec 4, 2021 at 4:39 pm
New PaloAltan, St. Claire Gardens
Registered user
on Dec 4, 2021 at 4:39 pm
ALB
Registered user
College Terrace
on Dec 4, 2021 at 6:20 pm
ALB, College Terrace
Registered user
on Dec 4, 2021 at 6:20 pm
RDR
Registered user
another community
on Dec 4, 2021 at 8:25 pm
RDR, another community
Registered user
on Dec 4, 2021 at 8:25 pm

The city isn't doing anything to accommodate her. The laws are crazy. The 4 townhouses were just single family homes themselves. She bought all 4 of them. Why would the city be able to tell her what to do with them? The regs say she has to keep the number of units so the article describes how she's making 2 new ADU's and 1 new duplex home. 4=4. What did the city do?

The duplex is likely to be larger than 2 of the townhouses combined. They were 40+ years old, only 1000 sf each. In the duplex you might see maybe 8 people live counting kids. In the townhouse I doubt there were 4 in any one of them.

This kind of bean counting isn't going to help the housing shortage, such as it might be. It just distorts the whole thing. The bottom line is that anything New is worth about double anything old. The more new construction, the more pricey.


CGPA
Registered user
Downtown North
on Dec 5, 2021 at 4:54 am
CGPA, Downtown North
Registered user
on Dec 5, 2021 at 4:54 am

"Why not go after all those LLC's who buy homes for investment and just rent them out and then flip them after they go up in value?"

Because they don't cause the city to lose housing like your proposal does, "eileen".


KatherineWilson
Registered user
Professorville
on Dec 9, 2021 at 10:17 am
KatherineWilson, Professorville
Registered user
on Dec 9, 2021 at 10:17 am

This needs to stop now! It started with Steve Jobs, then Mr Facebook. Enough! She already quietly bought and tore down the house next to her. Yes, I agree, if she wants land she should live elsewhere!


eileen
Registered user
College Terrace
on Dec 11, 2021 at 7:14 pm
eileen , College Terrace
Registered user
on Dec 11, 2021 at 7:14 pm

Katherine, where is all your negative energy coming from? There are so many people, all over this city, buying up homes. They leave them empty for years, sell them to make a profit, rent them out, etc. What is the fuss about? The people you mentioned above are our neighbors. Leave them alone!


Annette
Registered user
College Terrace
on Dec 12, 2021 at 12:36 pm
Annette, College Terrace
Registered user
on Dec 12, 2021 at 12:36 pm

The common thread in so many of the lead stories these days: money. There's a certain hubris that seems to attach to some of the wealthy. Locally, we currently have this effort by MM and the Castilleja expansion. And of course the retail crime. One of my "favorite" examples is something I learned from watching the documentary "Bring Your Own Brigade" in which it was revealed that wealthy people can contract for private fire protection services. I had no idea that the wealthy had a higher entitlement to fire protection - and water. How naive of me.

As for Eileen's comments: she is, sadly, right about houses being bought up and not occupied. Stanford has done that in College Terrace. Pre-Covid when the housing shortage was an enormous problem the practice was most perplexing. When Stanford comments about the need for housing, the comments lack credibility. And smack of hypocrisy. I don't know if Miss Mayer has ever bemoaned the housing crisis, but if she's contributing to it, I think she'd be well advised to remain silent on that issue.

It would be interesting to see an expose about this phenomenon in order to gauge its true impact on supply/demand, the cost of housing, and commuting issues. I think we'd discover that the big players are contributing to the big problem. Similar dynamic exists in the area of commercial development: build big, don't mitigate for housing.


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