With Palo Alto struggling to get state approval for its plan to add housing, a developer is preparing to build a complex with 350 apartments on Fabian Way by relying on a controversial provision that would allow him to override local zoning laws.
The proposal by Juno Realty Partners and Far Western Land and Investment Company is leaning on recent state laws to advance a major residential project near San Antonio Road, a part of the city that the City Council had recently identified as ripe for residential growth. The project would span six parcels and would be located at 3997 Fabian Way. It would exceed the city's regulations on density, height and other development standards.
The exact scale of the project remains to be determined. The proposal, which the two firms submitted earlier this month, actually includes two versions of the project. One would create 292 apartments in a seven-story building, which would be about 78 feet tall and which would include two stories for parking. The complex would include a mix of apartment types: 59 studios, 132 one-bedroom units and 84 two-bedroom units, according to project plans.
That version would rely on Senate Bill 330, a state law that creates a streamlined process for approval of residential developments and that bars city officials from revising development rules after an application is submitted.
The other, more ambitious version, would rely on the contentious "builder's remedy" provision in state code, which applies to jurisdictions that are out of compliance with the state Housing Accountability Act. Palo Alto, like most Bay Area cities, currently does not have a state-certified Housing Element and, as such, is out of compliance with state law. Even though the council adopted on May 8 its new Housing Element, it will likely be months before the state Department of Housing and Community Development certifies the document.
If Jeff Farrar of Far Western Land moves ahead with the "builder's remedy" version of the project, the development would consist of 350 apartments: 59 studios, 156 one-bedroom units and 102 two-bedroom units. To qualify as a builder's remedy project, the developer would designate 20% of the apartments at below-market-rate levels.
The eight-story building in this scenario would be about 88 feet tall, well exceeding the city's 50-foot height limit, and include 349 parking spaces, according to the application. It would include a public plaza on the corner of Fabian and East Charleston Road and a small retail kiosk or café, according to the project description.
"Since a Builder's Remedy project need not comply with General Plan or Zoning standards, the Project is not designed to comply in all respects with the General Plan and Zoning standards that would otherwise apply," attorneys Chelsea Maclean and Genna Yarkin from the firm Holland & Knight, which is representing the development team, wrote to the city in a May 1 letter.
For Palo Alto, the proposal for 3997 Fabian is the second "builder's remedy" project that the city has received. The only other proposal, which was pitched by developer Roger Fields, seeks to create a 45-condominium development at 300 Lambert Ave. by relying on the contentious code provision. Neither developer has yet to advance with a formal application for their respective development, though each had submitted a pre-application for an SB 330 project and had indicated an intent to potentially rely on builder's remedy.
While the council has yet to consider the latest proposal for the Fabian Way site, it had previously reviewed another proposal for the site that included 290 apartments. In 2020, Farrar of Far Western Land had applied for the housing development under the city's "planned home zoning" process, which aims to encourage residential development and which gives the council broad discretion to demand revisions or reject proposals. Council members discussed that proposal in February 2021 and generally concurred that while the site may be suitable for housing, the proposed development is too tall, too dense and does not include enough below-market-rate units.
Council member Pat Burt spoke for most of his colleagues when he said that he could support a "significant project" at the Fabian Way site but that the development "needs to be not breaking the bank." After getting the council's feedback, Farrar opted not to move ahead with a formal application.
The new proposal reflects the significant changes that have transformed California's housing landscape since 2021. Thanks to recent laws and the city's failure to get its Housing Element certified by Jan. 31, the developer now has far more leverage to advance the residential development.
It's not just the state laws that are generating momentum for the Fabian Way project. It is also benefiting from Palo Alto's own plans to funnel residential developments to the commercial and industrial areas around San Antonio Road, close to the Mountain View border. The city's proposed Housing Element is leaning on this part of the city to accommodate about 2,000 new housing units between 2023 and 2031, roughly a third of the city's total housing quota.
To meet these obligations, Palo Alto will be embarking on a major effort in the coming years to update its zoning standards to encourage residential development both around San Antonio Road and in other parts of the city. This includes, among other areas, raising the maximum allowed density in multfamily zones such that areas that currently allow up to 40 dwellings per acre would now accommodate 50 dwellings per acre.
The letter from the Juno and Far Western attorneys indicates that the developers are not willing to wait until the zoning is amended before advancing the project. The city's new Housing Element "does not provide detailed development standards that would apply to sites whose zoning is amended, which leaves the Applicant in an uncertain position about the feasibility of a compliant project," the letter states.
"It is therefore unrealistic (and simply not necessary under the law) to expect the Applicant to wait an uncertain period of time to apply to redevelop its Property under forthcoming changes to the zoning," Maclean and Yarkin wrote. "To the extent that the City asserts that the Applicant should seek legislative amendments, that is a similarly uncertain, infeasible, and unnecessary pathway."