As Palo Alto prepares to update its zoning code to meet its targets for new housing, city officials remain undecided on a critical question: How far should they go when it comes to loosening density limits in residential zones?
The zoning update, which the City Council plans to discuss on Oct. 4, is aimed at helping the city meet its goal of producing 6,086 dwellings between 2023 and 2031. It is a key component of the city's Housing Element, a state-mandated document that lays out all the programs that Palo Alto is launching to promote housing growth. It also lists all the sites that the city believes can accommodate the new housing.
The complex discussion comes with some urgency. Under state deadlines, the city must approve many of the zoning changes proposed in the Housing Element by Jan. 31. This despite the fact that the city's Housing Element has yet to win approval from the state Department of Housing and Community Development (HCD), which rejected the city's submitted drafts in March and in August.
A key component of Palo Alto's housing strategy is upzoning residential and commercial zones in various sections of the city so that they could legally accommodate more apartments or condominiums than they currently do. Sites that currently have a limit of 40 dwellings per acre, for example, will now have a 50-dwelling limit. In areas where the limit is 30 dwellings per acre, it would be raised to 40.
The council has also approved a more ambitious upzoning effort in the "general manufacturing" and "light office, research and manufacturing" zones, mostly around San Antonio Road and Fabian Way. This area, which is expected to accommodate roughly a third of the city's new housing units, would see residential zoning density increase to 90 dwellings per unit in some areas.
A key question that is yet to be answered, however, is: Should the city only upzone residential areas that are listed as "opportunity sites" in the Housing Element or should these changes apply to zoning districts throughout Palo Alto?
At the moment, staff and the Planning and Transportation Commission are leaning toward the more cautious approach. In discussing the effort on Sept. 13, the city's consultants and planning commissioners favored focusing only on the opportunity sites.
"The thinking is that if we made these changes across the board, in the base districts, you're catching a whole bunch of sites that we don't expect to redevelop," Jean Eisberg, principal at Lexington Planning, said at the Sept. 13 hearing. "There're existing uses that we expect to continue for the next eight years and maybe the next eight years after that."
Planning staff and commissioners acknowledged, however, that this change would create some complications for them and for project applicants, who will now be required to consult a new chapter in the zoning code to see what development standards apply to any particular property. It would create an inconsistency between sites that have the same base zoning district but would now have different development standards.
But while the commission didn't take any votes on the proposed upzoning effort, members supported it keeping the changes relatively narrow. They generally agreed that keeping the changes limited to the "opportunity sites" in the Housing Element areas would suffice when it comes to meeting the city's housing goals.
"If it was highly likely to be developed, it would be on the opportunity sites," Commissioner Keith Reckdahl said during the discussion. "I don't think we're missing anything by holding off and not giving benefit to somebody who's not going to use it."
Commissioner Allen Akin also said he's not ready to commit to broader zone changes to base zoning districts.
"I'm not opposed to the idea of updating the baselines later, when we have a little better justification for doing so," Akin said.
A report from planning staff also noted that because the Housing Element list already represents the "most viable housing sites for development, at least within the next eight years, the potential implications may not be significant." City planners noted that raising density limits more broadly would have implications for projects that rely on State Density Bonus Law, which allows developers to claim additional height and density for housing proposals.
"On the one hand, this would generate more below-market rate housing units within a State Density Bonus Law-compliant project, but would also allow additional density bonus, which could result in taller and larger buildings than are currently permitted by the Zoning Ordinance," the report states.
It remains to be seen, however, whether these changes meet the requirements of the HCD, which remains unconvinced that Palo Alto's housing inventory is adequate. Local housing advocates, including members of the group Palo Alto Forward, have consistently maintained that the city's rezoning efforts don't go far enough.
In a letter to the HCD, the group pointed to projects like the recently constructed Alta Locale complex (now rebranded as the Palomino) on the corner of El Camino Road and Page Mill Road and the recently approved development at 788 San Antonio Road. The two projects have residential densities of 130 and 102 dwellings per acre, respectively. Neither would be feasible even after the proposed zone change, the letter argued.
"The conclusion of our analysis was stark: real housing proposals in Palo Alto consistently require far more density, height, and FAR, as well as lower parking ratios, than the City is proposing in its Housing Element," the nonprofit wrote to the HCD in June. "For example, the typical density required by a real project is about 115 units per acre, but the Housing Element limits housing to 30-50 units per acre, or up to 90 units per acre in the GM/ROLM zone. That's a huge gap, and it strongly suggests that the proposed densities are governmental constraints to housing."
Some members of the group made this case to the commission. Scott O'Neil, board member at Palo Alto Forward, said the proposed development standards are "around half of the average of Palo Alto's recent history of proposals."
Amy Ashton, executive director at Palo Alto Forward, urged the city to apply the zone changes citywide. The proposed changes, she said, are "insufficient to meet what we need." She suggested raising base zoning to a level that makes projects economically feasible and extending the changes throughout the city.
"Projects happen outside the housing inventory. It happens all the time. Project deals come and go, you just never know, so why not let all of these sites participate in these zoning changes?" Ashton said.
Not everyone, however, is thrilled about the upzoning effort. Former Vice Mayor Greg Schmid, who is affiliated with the group Palo Altans for Sensible Zoning, criticized the state housing mandates, which he argued are based on outdated job forecasts. Schmid, an economist, suggested at the Sept. 13 meeting that because the job-growth numbers are inaccurate, the projected number of new dense housing that the city is required to produce is also wrong.
"I'm very concerned that the state is pushing Palo Alto to put up a rash of new buildings based on numbers that are completely outdated," Schmid said.