Palo Alto is taking a defiant stance toward a recommendation from the Santa Clara County Civil Grand Jury that it pursue more area plans and mixed-use projects as part of an effort to create affordable housing.
Instead, the city is arguing in its formal response letter that the commercial components of these projects would add to the demand for affordable housing and, as such, only exacerbate the problem.
The City Council voted 5-2 on Monday night, with council members Alison Cormack and Greg Tanaka dissenting, to approve its response letter to the December report, which compared Palo Alto's policies on affordable housing with those of Mountain View and issued recommendations for both cities to boost their supplies of below-market-rate apartments. Palo Alto bore the brunt of the criticism from the grand jury, which noted that the city was on pace as of 2019 to meet just 10% of its targets for low-income housing in the 2015-2023 cycle of the Regional Housing Needs Allocation process. Mountain View, meanwhile, was on pace to meet 56% of its housing targets for this period.
The city's response agreed with several of the grand jury's recommendations, including its calls for Palo Alto to identify ways to raise money to subsidize affordable housing projects (Palo Alto recently raised its housing impact fees to further this goal and it is preparing to place a business tax on the 2022 ballot, with the intention of dedicating some portion of the receipts toward affordable housing) and to consider both mixed-use projects and 100% affordable housing developments in its housing plans.
The city pointedly rejected, however, the suggestion from the grand jury that it depend more on "area plans" — a tool that Mountain View and Redwood City have relied on extensively to boost their housing stock.
"The City is not persuaded that area plans are inherently a solution to providing more affordable housing," the city's response states. "Rather, the City believes the primary challenges to affordable housing are economic, and the same economics apply equally in both the presence and absence of specific plans."
Council members Eric Filseth and Tom DuBois, who helped craft the letter, both took issue with the grand jury's analysis, which DuBois argued unfairly pitted Palo Alto against Mountain View. Even though Mountain View approved more affordable housing between 2015 and 2019, the period that the grand jury evaluated, Palo Alto has about 2,300 such units overall compared to 1,420 in Mountain View, he said. And in terms of affordable housing per capita, Palo Alto is second only to Gilroy among all Santa Clara County cities.
"It's unfortunate that the report compared two cities, us and Mountain View, which had the effect of making it competitive," DuBois said. "We didn't buy into that narrative."
Filseth argued that unlike the grand jury, which focused strictly on housing supply, Palo Alto's policies have looked at both supply and demand. To that end, the city over the past decade implemented an annual cap on office space and modified its Comprehensive Plan to reduce the amount of nonresidential development that could be added citywide — actions intended to reduce jobs growth and, by extension, housing demand.
While Mountain View added more housing than Palo Alto in recent years, it has also added many thousands more jobs during that time and constructed far more commercial space, Filseth said.
"The basic idea is that when you have commercial space, it creates — assuming people come and work here — a need for housing, because you have jobs," Filseth said Monday in explaining the city's response.
The response later states that jurisdictions throughout the county are struggling with the fact that "a given land-use policy or project can simultaneously influence both the supply and demand for affordable housing."
"Whether cities consider both the demand and supply impacts, or just the supply in isolation, makes an enormous difference in how to evaluate a project's housing availability and affordability impacts," the letter states.
The grand jury acknowledged in its report that building affordable housing is "neither simple nor inexpensive" and suggested that the council appoint a planner specifically dedicated to the task. The grand jury also encouraged council members to increase communication with city residents on the importance of boosting housing supply. It cites the 2013 citizen referendum over a proposed housing development on Maybell Avenue — which included 60 apartments for low-income seniors and 12 single-family homes — and the city's recent struggle to reach a consensus over a new vision for a portion of the Ventura neighborhood as examples of the city's failures in this area.
"Palo Altans need to understand the possible locations, design requirements, and financing required for AH (affordable housing)," the grand jury report states. "Responding to residential apprehensiveness that an AH project will lead to crime and increased traffic, the City can lead discussions that explain to residents how an affordable-housing project will allow teachers, city workers, and service employees to live in the city where they work.
"City leaders can also lead discussions to combat the idea that AH developers are motivated by profit when, in fact, they are often non-profit organizations."
Mayor Pat Burt argued that the council has in fact taken a "strong approach" on communicating the need for affordable housing.
"We hadn't relied on rhetoric primarily, but we've been focusing on action," Burt said. "In the last City Council campaign, we had strong consensus among candidates for identifying public land sites (for affordable housing)."
He pointed to the council's recent moves to create transitional housing on San Antonio Road in partnership with the nonprofit LifeMoves and its decision to explore use of downtown parking lots for affordable housing developments.
The city's response letter states that the city disagrees with the grand jury finding that the council does not play a strong enough role in educating the public about the importance of affordable housing. Cormack was the only council member who backed that finding and urged her colleagues to amend their response.
"Regardless of what the council has voted on, I think there is an opportunity to aid in resident acceptance of affordable housing," Cormack said.