Despite acknowledging the area’s need for more housing, Palo Alto has come out swinging against a new county analysis that considers requiring Stanford University to build enough housing to accommodate for the university’s proposed academic growth.
In a strongly worded letter that the city sent to Santa Clara County on July 24, staff argue that the revised draft Environmental Impact Report (EIR) issued by the county earlier this year fails to spell out the specific problems the new housing would create in surrounding communities and, as such, fails to comply with state law.
Stanford’s proposal, as laid out in its application for a new General Use Permit, calls for building about 2.275 million square feet of new academic space and 3,150 housing units (that is, apartments and student beds) on campus between now and 2035. In response to concerns from neighboring cities and the county Board of Supervisors about insufficient proposed housing, earlier this year county planners agreed to include in the draft EIR a study of two housing alternatives, A and B. The scenarios would add 5,699 housing units (Alternative A) and 4,425 units (Alternative B) as part of Stanford’s expansion.
The Santa Clara County Board of Supervisors is set to review Stanford’s General Use Permit application in the fall, with the goal of making a decision on it by the end of the year.
The city’s letter of response to the analysis, signed by interim Planning Director Jonathan Lait, argues that the revised draft EIR effectively and unfairly forces the cities to bear the burden of Stanford’s growth, particularly when it comes to off-campus housing built in their cities.
“Local agencies in which off-campus housing would be located can and should mitigate the environmental impacts from off-campus housing to the extent feasible,” the county’s analysis states.
Palo Alto officials took issue with this language.
“This is not a satisfactory mitigation under CEQA (California Environmental Quality Act) and irresponsibly shifts the burden from the university to Palo Alto and surrounding communities to mitigate the housing impact,” Lait’s letter states. “The university has the land and resources to mitigate housing-related impacts and the county can and should require greater analysis of how induced population growth will impact Palo Alto and to require mitigation measures.”
In addition to requesting the county do further and better analysis, the letter aims to synthesize disparate comments that were made by City Council members during their June 25 review of the two housing alternatives. Councilmen Tom DuBois, Cory Wolbach and Adrian Fine voiced support for the alternatives, with DuBois saying they “make a lot of sense,” particularly Alternative A, which would house 100 percent of Stanford’s new employees and students. Fine called the alternatives “promising,” while Wolbach said he is much more in favor of the alternatives than the original Stanford proposal.
Other council members either remained agnostic about the alternatives or focused on the negative impacts that additional housing would usher in, including the prospect of new 130-foot-high buildings on El Camino Real, across from Town & Country Village.
Building housing of such height will be “problematic with the whole community” and would impact things like “vistas, viewpoints and compatibility,” Councilwoman Karen Holman said at the meeting. She and DuBois also raised concerns about eliminating the building-setback requirement on El Camino, while Fine and Wolbach said they have no problem with Stanford having more flexibility to build closer to the street.
The city’s letter tries to balance the council’s hopes and fears by stating the city’s support for denser housing on the Stanford campus, as well as its desire to see a new analysis for where the new housing would be located. The notion that future housing “must be up to 134 feet tall adjacent to El Camino Real exaggerates the impact of placing housing in the identified location,” the city’s letter states.
“The city encourages the county to take a closer look at how and where housing could be placed so it respects and preserves the surrounding character,” the letter states. “If such further analysis does not result in meaningful changes, it is difficult to support the conclusion based on information contained in the (analysis) that such housing would not degrade the existing visual character or quality of surroundings.
“El Camino Real has low-profile buildings, and construction contemplated in the alternative would significantly alter the character of the street and by extension the character of Palo Alto,” the letter states.
While the letter doesn’t take issue with requiring Stanford to build more housing, it rejects as wholly “unfounded” the draft EIR’s suggestion that Palo Alto’s recently revised Comprehensive Plan somehow accounted for Stanford’s projected growth.
The Comprehensive Plan anticipates housing growth of 4,420 units through 2030, which would have accommodated Stanford’s original proposal for 3,150 housing units. But the Comp Plan did not consider the additional 2,342 housing units contemplated in Housing Alternative A, the more ambitions of the two scenarios.
“Citing the Comprehensive Plan and suggesting it anticipated this additional growth is not only wrong, failure to disclose impacts renders the document inadequate under the California Environmental Quality Act,” the letter states.
One issue on which the Palo Alto council generally agreed is the need to request more assistance from Stanford on transportation. The letter makes that case by pointing to growing dissatisfaction in the city with traffic levels. The letter notes that resident satisfaction with “ease of travel by car” has plummeted since 2003. In 2017, only 42 percent gave the city good ratings on this issue, the lowest level in 14 years of data collection. For residents closest to the university, the letter notes, the figure dropped to 31 percent.
According to the draft environmental analysis, traffic would increase close to the campus (the analysis found that Housing Alternative A would add about 2,100 trips during the morning and evening rush hours, while reducing trips by commuters by about 700). As such, the city requests that the university provide upfront funding to “improve the efficiency, capacity and reliability of Caltrain,” as well as “fair share contributions” to the city’s effort to separate Caltrain tracks from local roads at the city’s four rail crossings.
The city’s letter also acknowledges, though does not delve into, Stanford’s potential impacts on the Palo Alto Unified School District (PAUSD) — which, according to the school district, are not disclosed in the revised EIR. The City Council, the letter states, “encourages the county and university to work closely with PAUSD to address these concerns and ensure the district maintains its neighborhood enrollment standards.”
“The impacts to PAUSD, new school sites and funding for increased enrollment, should be more clearly disclosed to the public in an updated environmental document,” the letter states. “Unmitigated impacts to the school district is a significant concern to the city.”
Related content:
• Guest Opinion: Tax revenues from Stanford lands support Palo Alto schools
It would be invaluable public service if newspapers would cover response from Menlo Park City Council and the San Mateo County Supervisors.
Stanford offers to build housing. The solution to adding more housing is rppp build up. Naturally some of the geniuses on the council do not understand that and are against. There is no pleasing some people. Palo alto had done nothing to address their housing issues and now wants Stanford to pay for it. The same demands made of Stanford regarding housing, transportation and school costs should be made of EVERY business in town. Maybe Stanford should start considering building on the dish area
Now that we have had a lively discussion of RV’s for construction workers then let’s make it clear that if SU is proceeding with a mega build then they need to allocate some land for the construction workers to park their RV’s – and that is not El Camino or the residential areas of PA. YES – that requires some liability insurance. There are a number of locations on campus where construction equipment is stored with ample parking space. And they could then have some food suppliers come in the lunch and evening. SU needs to make this right. We are not a dumping ground for workers on mega projects. And the construction companies need to step up to the plate here and negotiate space for their workers. Love that word – NEGOTIATE. Yes it costs more money but if every one understands their responsibility in the matter than price it in. And the food vendors will make out well here. SU can make this a win-win business model for how a large university handles growth. All other U’s are also in the growth mode so make an example of doing the right thing.
The problem here is overpopulation and the cities, counties and state government have done nothing to address this main problem. There should be a halt to new job production when the employees can not be maintained in the area where the job is.
Our crowded roads, crowded schools, loss of open space, dirty air, lack of water and diminished quality of life all stem back to too many people in the area.
Government is suppose to look at land and zone appropriately for what is needed for the community. Somehow this has been hijacked by developers and large corporations so that they have been allowed to build more than the other lands can support. They know that greedy city councils and such will change zoning so they can develop and make millions while not mitigating for all the growth. This has caused the massive run up in land values that is leading to resident serving businesses and entertainment venues being forced out. If the government had zoned areas specifically for parks with playing courts, ice skating rings, bowling alleys and such we would still have them because they could not become an office park. If they had managed the housing to jobs ratio properly then we would not see the massive run up in housing prices driven by the higher paid tech workers that are driving out the middle class. The hole has been dug by irresponsible poor planning government and they should not be allowed to make it worse by adding to the problem.
The answer is to stop building – don’t allow continued destruction of the quality of our infrastructure, schools and environment – and stop adding more people to the equation.
Tell Stanford not another square foot of office, research or teaching space. They are big enough, the area is full, and they will never be able to house all of the current workers and students and ancillary staff (janitors, gardeners, food prep workers, drivers, painters, electricians, teachers, doctors and such) that they are responsible for.
This should apply everywhere in California where their is not enough room to add more jobs. Send the jobs to areas that have room for them. We are rich enough to share. They don’t all have to be here.
No- why do you assume that every Stanford worker will want to live here. Or are you suggesting that Stanford force is workers to live here?
Palo Alto classism at its finest. Housing of any kind is DESPERATELY NEEDED. The median home price in Palo Alto is 3.2 MILLION DOLLARS. The council is completely tone deaf, wrong, and basically a cartel colluding to limit the supply of housing to make as much money as possible for their greedy selves. Their Prop 13 protected multi-million dollar homes raise in value with every housing application they deny and their expenses do not suffer for it. You want to talk about impact to Palo Alto schools? No one on the council or any longer-term residents in the city pay their fair share of property taxes to support schools. Because of Prop 13, no one who has owned property in Palo Alto for very long is paying barely anything for the schools compared to new residents. A new family buying a house now with two kids going to Palo Alto Schools is paying over 40 times as much as a senior member on the PA council in taxes to support schools. 40 TIMES. Like 81k a year in taxes vs. 2k a year. So the school is better off with the new residents because they pay more in than they get out. Older residents are also exempt from paying certain additional school taxes. So it’s just a racket. This is all empty rhetoric on the environment. On sustainability. They don’t care about that. They don’t care about public health, the environment, safety, even schools. They only care about increasing their home values, destroying the hopes and dreams and draining the financial resources of young people trying to start lives here, and making sure they remain in power.
Stanford should be alllowed and encouraged to build the maximum height, maximum (underground) parking and maximum housing units possible.
With better land use and eliminating restrictions on height, there is no reason Stanford could not add 10-15,000 units without any adverse affect to the area (since we know many of fhe anti-growth NIMBY folks would oppose this elsewhere).
This means TALL buildings (and can include mixed use such as retail, restaurants). Most of those who study or work within the campus would not need as much parking but it should be designed for visitors as well.
In addition, Stanford should be allowed and encouraged to have office and other space thst addresses startups or joint facilities with other organizations.
Stanford can and should do what the rest of Palo Alto is unable or unwilling to do…solve the housing crisis, at least for everyone associated with Stanford.
This comment perfectly sums either the cluelessness of certain council members or else the use of claims without any facts behind it to obstruct and delay:
“Building housing of such height will be “problematic with the whole community” and would impact things like “vistas, viewpoints and compatibility,”
So they want Standord to build housing, but they really do not want housing being built.
I assume that the housing would be built on Stanford property, so which community is holman referring to?
>>>Because of Prop 13, no one who has owned property in Palo Alto for very long is paying barely anything for the schools compared to new residents. A new family buying a house now with two kids going to Palo Alto Schools is paying over 40 times as much as a senior member
As a senior resident/homeowner under Proposition 13, why should we be paying for someone else’s children to go to school? That’s their parent’s problem/issue.
We put our kids through school 40+ years ago and our job is done.
If some of the newer and younger residents have a problem with this, move somewhere else.
They’re making $150K+ a year. We did it on $25K when wages were far lower than today.
While SU is tackling it’s growth issues it is time to tackle the Searsville lake and dam. The dam is over 100 years old. That whole section of land is a potential flood issue so the whole section should be brought up to a manageable lake and running river to the bay. A dam on the Carmel River had all of the same issues and a whole engineering task was input so there would be no flood damage to the city of Carmel. There is a very good model of how to resolve the same issues as the SU lake and dam.
Yes – we are in a drought right now which is a good time to tackle this issue but we all know that can turn on a dime with a huge rainfall later in the year.
“No one on the council or any longer-term residents in the city pay their fair share of property taxes to support schools.”
Why should they? It’s the responsibility of the younger parents to put their own kids through school.
If you want to pay $3.2M+ for a house in PA, then be willing to suffer the property tax consequences but don’t try to stick your financial encumbrances on older residential retirees who have already paid their dues and raised their own families. They are under no financial or social obligation to support your school-aged children. Period.
Consider San Benito County or somewhere in the Central Valley if the local taxes are too high for you.
“Consider San Benito County or somewhere in the Central Valley if the local taxes are too high for you. “
Or, just use the increasing number of younger renters in the state to take over the legislatures and jack up the taxes of selfish hording oldsters. Prop 13 is generational warfare, with weaponized taxes. The problem with generational warfare is eventually, the younger generation usually wins.
Proposition 13 (Jarvis-Gann) was initially conceived to protect older retirees from increasing property taxes & to curb wasteful spending by local governments.
If you were fortunate to have owned a home in 1978, you qualified for a fixed property tax based on its assessed value that particular year.
It was a very popular measure that breezed through at election time by almost a 2/3 majority vote. Future tax increases were passed along to newer homebuyers which still enabled county governments to continue their time-honored tradition of wasting tax-payer dollars.
So in many ways (with the possible exception of today’s homebuyers), it was a win-win proposition for existing homeowners in 1978.
I think the tax-break can be passed on to the children if they remain owners of the property.
QUOTE:If you were fortunate to have owned a home in 1978, you qualified for a fixed property tax based on its assessed value [that particular year].
I was just corrected by Mrs. Davis….its 1976 assesed value.
QUOTE: Or, just use the increasing number of younger renters in the state to take over the legislatures and jack up the taxes of selfish hording oldsters. Prop 13 is generational warfare, with weaponized taxes. The problem with generational warfare is eventually, the younger generation usually wins.
Spoken like a typical Millennial. You’ll just have to wait until the oldsters die off in order to get your wish.
Then again, if you are one of the fortunate ones (preferably an only child) who inherits your parent’s house with its 1976 property taxes, you’ll probably be singing a different tune.
>>>>Or, just use the increasing number of younger renters in the state to take over the legislatures and jack up the taxes of selfish hording oldsters. Prop 13 is generational warfare, with weaponized taxes. The problem with generational warfare is eventually, the younger generation usually wins.
This particular Town Square contributor obviously didn’t study (or learn) his/her civics. Probably too busy texting while in class. Prop 13 went to the US Supreme Court and was upheld. It cannot be overturned.
Lastly, how are you going to ‘jack up the taxes of selfish hording oldsters’ without introducing certain age discriminatory conflicts and issues?
Good luck getting elected with your attitude. Geez, why are so many Millennials such self-entitled crybabies?
BTW, I’m a Gen-Xer. When I was younger (your age), we were called ‘slackers’ by the media but the majority of us eventually grew up & took responsibility for our lives rather than blaming our parents/grandparents for everything that’s wrong with the world.
As young people, we were out having fun and pushing the ‘extreme’ rather than whining about life.
Actually I’m a 57 year old homeowner. But I still know what unfairness and greed look like. No place aside from California has a tax regime that favors one generation over another as much as ours does. The baby boomers will go down as the generation that broke America.
Since there is no more vehicle capacity on Embarcadero, Stanford should be made to expand capacity BEFORE building anything. Either add one extra lane each way, all the way to 101, or expand light rail all the way from Mountain View to Stanford. Stanford should not be allowed to push the costs onto Palo Alto residents, which is what the case will be, if they are allowed to build without creating necessary infrastructure.
New York City has high density, why can’t Palo Alto have greater density? We love free markets, consider roads the same way, supply and demand. The under supply of roads and over demand will create behavior changes – walking, biking etc. let the free market decide this one, Stanford, go ahead and expand, as big as you can!!!! Some of us love prosperity.
@Member is factually incorrect about nearly all of his or her assertions. But just to pick on the schools one: as a Basic Aid district, PAUSD gets only a fraction of its funding from the state. In the absence of higher revenues from property taxes, PAUSD funds itself from an ongoing stream of parcel tax increases and bond measures for both operating expenses (most recent – 2015) and capital investments (most recent – 2008, 2018) as well as continuous fundraising from the parents’ group PiE. So yes, in fact, the home and condo owners of Palo Alto do indeed pay for the schools, despite the vehemence of @member’s assertion to the contrary.
“The baby boomers will go down as the generation that broke America.”
The baby boomers will go down as the generation that raised a bunch of spoiled Millennials who now expect everything to be handed to them on a silver spoon.
California law ensure that all school’s receive adequate funding on a per student basis. As such, there would be no negative impact on PAUSD.
@Resident Here is the parcel tax exemption information:
On May 5, 2015, voters approved a Measure A Parcel Tax assessment of $758 per parcel with an annual two percent escalation for six years. Parcel Tax funds allow Palo Alto Unified School District (PAUSD) to preserve excellence in academic programs, including science, engineering, math, reading, writing, arts, and music with local funding that cannot be taken by the state; reduce class sizes; attract and retain qualified teachers; and advance health, well-being, and equitable opportunities for every student.
Exemptions
Pursuant to California Code Section 50079 (b)(1), any owner of a parcel used solely for owner-occupied, single-family residential purposes and who are either (a) 65 YEARS OF AGE OR OLDER on or on or before June 30 of the fiscal year immediately preceding the year in which the tax would apply, or (b) persons receiving Supplemental Security Income (SSI) for a disability, regardless of age, or (c) receiving Social Security Disability Insurance (SSDI) benefits, regardless of age, may obtain an exemption from the parcel tax by submitting an application therefore, by May 31 of any year, to the District.
So if you’re old. You don’t pay. If you’re young and you don’t have kids… you do pay. And this illusion that older residents are not making out like bandits is hogwash. They don’t pay barely any property taxes. They are exempt from parcel taxes. They don’t pay for anything. And then they vote to limit housing. So the city has to tax business and thus entice businesses to be here and thus cause employees to want to move here and then the city limits housing so that drives the price up because they have incentivized the jobs. And then they complain about millennials who are so much smarter, better, harder working, kinder, more thoughtful, and more community oriented than they are that it is disgusting.
If you don’t care about schools fine. That’s totally fine. But don’t sit there and complain that this housing will be built and ruin schools. Because young residents are paying for the schools. You are contributing nothing to them. So don’t act like you care about them because you don’t. You care about people not moving to Palo Alto. You care about getting rich. You do not care about this community. You do not care about the future. Boomers are the most selfish worthless generation. The Greatest Generation, your parents, had the decency to save the world and then die early in acts of unprecedented and laudable self-sacrifice. Boomers elected Trump. That’s your legacy. Congrats. Meanwhile millennials in the tech industry and beyond and driving the entire American economy and padding your portfolios. And you hate them because… they’re productive? They contribute more to society than you? I’m not sure. But the truth is there in black and white. Older people in this city don’t pay for schools so they shouldn’t complain that new housing will be a burden on schools because it won’t and they clearly don’t care about schools anyway or they would pay for them themselves. Done.
Stanford University, with a $24 billion endowment, has about $8 billion in property that isn’t taxed by Santa Clara County. This is a tax break worth about $80 million a year. (see: https://www.washingtonpost.com/news/grade-point/wp/2016/07/08/why-should-rich-universities-get-huge-property-tax-exemptions/?utm_term=.67a5a41efaa7)
In 2016-2017, the PAUSD parcel tax was $773 (the tax increases 2%/year, and is second the county only to Los Altos at $790). The parcel tax is the third largest source of revenue for PAUSD. This tax brought in $14,815,083 with 2906 out of 22,286 parcels receiving an exemption. The exemption amounted to $2,246,338. (see: http://www.scscourt.org/court_divisions/civil/cgj/2017/Show_Me_the_Money.pdf)
With an income of $231.5 million in 2016-2017, the parcel tax exemption represented less than 1% of the PAUSD’s income (see: https://www.pausd.org/sites/default/files/pdf-faqs/attachments/2016-17%20Budget%20Book.pdf)
So, your ageist, hate filled rant against seniors in favor of Stanford University is nonsense. Stanford has the ability to fund the impacts of its largess on the surrounding communities. You misdirection and “whataboutism” (see: https://en.wikipedia.org/wiki/Whataboutism) doesn’t hold water.
You lose.
@Member gets an impressive amount of ink from observing that 15% or 20% of Palo Alto residents are over 65, and a small subset of those apply for their parcel tax rebates.
@Bill H, I assume you’re kidding. Yes, their disingenuous comments aside, Stanford will try to drop its new school costs on PAUSD and therefore Palo Alto residents.
“California law ensure that all school’s receive adequate funding on a per student basis. As such, there would be no negative impact on PAUSD.”
Actually, no. California law ensures all schools receive a minimum amount of funding, which on average puts CA at 48 out of 50 states in per student funding. But yes, most districts are funded in a per student basis, so if they grow, they get more money.
PAUSD is different. It is one of about 100 “basic aid” districts, which means that it is instead funded by local property taxes (at a much higher level than the state minimum). But if enrollment grows, spending per student will go down unless there is more revenue coming in from new property taxes. That’s the problem with Stanford’s proposed GUP housing – hundreds of new students coming from TAX-EXEMPT rental housing.
Palo Alto residents shouldn’t have to subsidize Stanford. Stanford needs to pay its fair share.
Apple should replicate their spaceship campus in Cupertino for Palo Alto.
This time, it should be elevated over downtown Palo Alto since there’s so few tall buildings.
It could have great elevators and escalators to reach from key points.
No parking, of course, because you could only use Uber or Lyft to get there.
No need to worry about NIMBY’s because it wouldn’t be in anyone’s backyard. It would just hover above them.
I know what you are thinking…what about those Palo Altans who desperately need their sunlight?
Yes, under the spaceship, there will be giant natural spotlights to simulate the sun without the harmful UV rays.
We would reduce skin cancer, add massive office space and everyone can cling to their tiny buildings.
It still wouldn’t solve housing for Palo Alto, Stanford or the region (unless the spaceship included housing).
Also, it would be nice if the spaceship rotated a few degrees every week, so eventually everyone has the same view.
If this spaceship idea doesn’t make sense to you, please tell me what’s a better solution to the housing and office space crisis created by the NIMBY’s of Palo Alto.
How about a Palo Alto Lottery to aid school funding needs?
Why do children in basic aid districts like PAUSD deserve more funding per student than other school districts? If you feel that the basic aid funding formula is inadequate, why not fight to raise it on a statewide basis?
pmarca’s space ship was an amusing creation, of course he would need to talk to Trillion dollar Apple first.
Then he concluded with a falsehood and a slur. “what’s a better solution to the housing and office space crisis created by the NIMBY’s of Palo Alto.”
Repeating the developer cliche, so much for creative thinking.
pmarca, if you haven’t figured out that it is the over-building of office buildings that is creating the shortage, you haven’t been paying attention.
Maybe we do need those stupid violent games and useless aps, maybe it really is too hard for young people to figure out how to turn on a light switch, or keep a shopping list. Maybe we do need more violent games and time wasters.
And moneywasting upgrades.
Even so, it would be ok with me if they worked elsewhere.
“Why do children in basic aid districts like PAUSD deserve more funding per student than other school districts? If you feel that the basic aid funding formula is inadequate, why not fight to raise it on a statewide basis?”
@Bill H – I’m not sure I follow your question. Basic aid districts don’t “deserve” more funding – it’s just the way the funding formula was set up years ago. The issue is whether, given this set up, should Stanford make a fair contribution or not. Given their wealth and the number of students they house, I think it is important that they do.
As for raising funding statewide, I’m in favor of that as well. But that’s a different issue from whether Stanford should contribute its fair share to PAUSD.
The issue with housing on the Stanford campus raises the more general problem that it is hard for residential housing property taxes to cover a student in the Palo Alto schools. $20K/year per child means $40K/year of property taxes – that is a pretty high bar. Two kids in a single family residence would require $80K/year property taxes to cover what PAUSD would spend on those kids. When our household had 2 kids in school, PAUSD was only getting about 25% of their cost from our property taxes. For the school board member up the street with 2 kids also in PAUSD, the number was close to 10%. On the other hand, given that businesses generally don’t involve any children who need educating, and also are generally less expensive for the city to service, it is easy to see why the PA city manager and council would want to build new offices (high property taxes) rather than affordable housing (low taxes, school-age kids). This basic arithmetic would seem to be an important consideration in any discussion of housing.
The share of Palo Alto property taxes from non-residential sources is continuing to decline, down to 27.1% in 2017.
Properties in California are only fully reassessed only when there is a change in ownership. But business properties turn over at a slower rate. Not only are commercial properties on average held many times longer than residential properties, there are loopholes for commercial property that allows a property to change hands without triggering a new tax assessment.
Tax Code 64 states:
1) “purchase of ownership in legal entitities such as corporate stock is not a transfer of real property.”
2) “if a single person obtains more than 50% there is a change of ownership”.
That’s why commercial properties are held by LLC’s and other forms of corporate ownership and lawyers specializing in commercial real estate can structure a change of ownership without triggering a new tax assessment.
So while certain council members may support development, that is a much smaller percentage of Palo Alto’s revenues than residential, and it is declining year over year. Not quite the cash cow that it might appear to be.
@Stephen – the other factor with housing is time – you may own your house for 40 years (not uncommon in PA), but only have kids in schools for 20 years or less. So half the time (generally the period with higher assessments) you’ll be contributing without creating any school expense (thank you).
This is part of why rental housing, like Stanford’s, is tricky – it is high turnover, and hence ALWAYS has kids coming from it. (Plus ownership never changes, so it is never reassessed.) So while a house or a block over time probably carries its weight, Stanford rental property decidedly will not.
When it comes to the Research Park, Stanford companies lease land for 51 year terms. Stanford pays the property tax on the land, the companies pay the property taxes on the buildings. Property tax on the land is fixed at the Prop 13 level, plus the annual 2% increase for inflation. Property taxes on the buildings are paid by the companies that own the buildings. These are assessed at their value when they come into service.
Just over half of all non-residential square footage within the city limits is owned by Stanford, yet Stanford’s share of property taxes has fallen from 17% in 2,000 to 14.1% in 2017. The same for the school district. Like other business properties, Stanford’s share of Palo Alto property tax is declining year over year.
My niece lives in Baltimore. That city used to be the second biggest port on the east coast with great industry. People I know who grew up there have great memories of how it used to be. Now the biggest employer in Baltimore is John Hopkins – a non-profit. Family reports that the city has a very large property holdings by churches. So the tax base that supports the city schools and city infrastructure has been reduced to a small amount and whole blocks have empty buildings. Their school system is struggling. If the city of PA tries to limit themselves to non-profits then the tax base will deteriorate – which it appears is happening – canoodling about how to get more money. No – we will not go down to that level but depending on employers who have a reduced tax base will not produce good results.
Housing at Stanford would increase the soci-economic diversity of our schools. Since each school district is already guaranteed adequate per student funding by the state, the enrollment of low income students from Stanford housing would have not negative impact on the district.
@margaret heath – when you say that Stanford pays the land tax on ground-leased property, you may be right, but I think not. I believe that the the leases all includes an explicit obligation for the lessee to pay all taxes.
So I think this makes your point even stronger – Stanford only pays a small fraction of the taxes on “its” land, most being exempt, and the rest (mall, research park, etc.) being long-term ground-leased to others who pay all the taxes.
Here for instance is the VMWare lease from 2006 (on file with the SEC). In section 8.2 Property Taxes, it reads: https://www.sec.gov/Archives/edgar/data/1124610/000119312511208390/dex1026.htm
During the Term Lessee agrees to bear, discharge and pay to the relevant authority or entity, in lawful money of the United States, without offset or deduction, as the same becomes due, and before delinquency, all taxes, assessments, rates, charges, license fees, municipal liens, levies, excises or imposts…
@ Danny
“guaranteed adequate per student funding by the state”
Not so. Palo Alto elected to be a “Basic Aid” district many decades ago, which means we are one of the cities that elected to keep our property taxes and fund our own school district. In other words, Palo Alto opted out of being included in the state system that guaranteed paying a $ amount per pupil and each additional pupil equates to the pie being sliced smaller.
@ resident
If you are correct then this indeed reduces what Stanford itself pays in property taxes even further, despite what they would have us think.
@ resident
“If the city of PA tries to limit themselves to non-profits then the tax base will deteriorate -”
The city does not try “to limit themselves to non-profits”. Property taxes are paid primarily by residents, which represents approximately 75% of property Palo Alto’s tax revenue, increasing every year as residential properties are sold and reassessed.
Margaret Heath: Thanks for the information on property tax revenue – can you direct me to the source?
An example of the cities profit centers: I sat in on a meeting at Mitchell Park put on by Parks and Rec where they discussed how reservations at the facility and grounds would be managed. One lady was adamant that only non=profits could rent any part of the facilities or grounds. She was very hyper on that point. What an eye opener. She was too young to realize that major company recreational baseball teams and golf groups rent the facilities at the various venues for their intra-mural games. Also various bay area groups rent space at fields for their team games. the whole Parks and Rec is dependent on groups of any kind renting the facilities to offset the cost of managing the facilities. But not to worry – most private companies have left the valley and moved to better locations. Not every company needs to hire H1B employees – our engineering schools have US citizens poring out looking for jobs. I think this ladies ire was directed at Palantir. How unprofessional are our city staff.
Stanford needs to take more responsibility for employee traffic by using its off campus land for park and rides, and utilizing buses to bring people to campus. Companies are doing it, why not Stanford. The line of cars exiting 280 onto Page Mill and Sand Hill in the morning is horrendous.