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After falling woefully short of their own housing goals, Palo Alto city leaders are bracing for a daunting new assignment: a state mandate that may force them to plan for more than 5,000 units by 2031.
Like other cities across the state, Palo Alto is preparing to receive in the coming months its latest mandate from the Association of Bay Area Governments and the Metropolitan Transportation Commission, the two regional planning agencies that are in the midst of crafting a long-term growth strategy called Plan Bay Area 2050. The two agencies also charged with administrating the Regional Housing Needs Allocation process, which assigns each city a certain number of housing units to plan for various income levels.
To date, Palo Alto has fallen well short of the regional goals. In the current cycle which runs from 2015 to 2022, the city was assigned 1,988 housing units. By the end of 2019, it had only approved 554 units, of which 420 were market-rate units listed in the “above moderate” income category. And while Palo Alto City Council members often talk about the need to address the shortage of affordable housing, the city has only produced 43 units in the “very low” income category since 2015. In the “low” and “moderate” categories, the city has approved 65 and 26 units, respectively.
Palo Alto leaders don’t yet know exactly how many units they’ll have to plan for in the next cycle, but all signs suggest the number could double or triple in the next cycle. Last month, the state Department of Housing and Community Development assigned to the Bay Area an allocation of 441,176 units, spread across all income categories.
The regional agencies are still finalizing the methodology for assigning housing numbers to cities, but given the projected growth rate of 16%, Palo Alto’s planning staff are estimating that the city will get an allocation of at least 4,475 units, based on the city’s share of the region’s household. Under certain scenarios, the city’s share could be as high as 6,532, according to staff.
Some residents have argued that the Bay Area numbers are far too high and have urged the city to appeal the 441,176 figure that the state had assigned to ABAG and MTC. The regional agencies have until this Friday, July 10, to challenge the number and have not indicated that they plan to do so.
Former Palo Alto Vice Mayor Greg Schmid is among those who believe the city should request a delay. During the Planning and Transportation Commission’s discussion on Wednesday of the new regional allocations, Schmid argued that the numbers are based on a “jobs-driven” forecast that disproportionately impacts already jobs-rich cities like Palo Alto.
While the numbers roughly double the number of housing units across the Bay Area, Schmid noted that Palo Alto’s allocations could triple under the methodology that ABAG is considering.
“These numbers are based on a jobs-driven forecast in already jobs-rich areas and will cost billions of dollars in subsidies in Palo Alto alone, along with a likely loss of control of neighborhood zoning,” Schmid said.
Other residents joined his call to slow down the process. Terry Holzemer said he found it “regrettable” and “shameful” that the process is moving toward the July 10 deadline with few opportunities for the public to weigh in.
“This is a major plan that not only affects one area of the city, but all areas of the city,” Holzemer said.
Others, however, argued that the numbers should be higher. Kelsey Banes, executive director of Peninsula for Everyone, a housing advocacy group, said she was hoping that the number assigned by the state housing department for the region would be between 600,000 and 1 million.
“We think a number this low is planning to fail, and planning to continue on in a housing crisis,” Banes said. “We know we need to build more inclusive housing in our region if we’re going to address our climate emergency and if we’re going to dismantle our structure of segregation.”
The commission did not support delaying the process, noting that the decision to appeal the Bay Area allocation should come from ABAG, not individual cities. While commissioners agreed that Palo Alto needs to plan for — and build — more housing, they disagreed about the consequences that the city may face if it falls short of the regional targets.
Commissioner Bart Hechtman said he is not fearful about the prospect of the state taking away local zoning powers. He noted that the state mandate could benefit developers who want to build a project in Palo Alto by allowing them to benefit from a streamlined approval process.
“That would be a good problem to have — developers coming here and wanting to build in the city. … If the RHNA numbers spur that activity in our market, I think that’s a good thing,” Hechtman said.
Commissioner Michael Alcheck said that he believes it is “moot to lose sleep over this number,” noting that the city has repeatedly fallen well short of its allocation numbers and has not suffered any significant consequences.
“I think it’s a red herring to get the community worked up about the allocation and the fear … because it just hasn’t played out,” Alcheck said.
But others pointed to recent state efforts to add some teeth to the housing allocation process and restrict cities’ abilities to reject housing proposals. Even though the most ambitious of these efforts, Senate Bill 50, fizzled earlier this year, other bills have already been approved or will likely win passage in the near future.
Commissioner Ed Lauing said he believes the state will pass new laws so that allocations will be enforced.
“There’s no question, these things put local control in question,” Lauing said.
Vice Chair Giselle Roohparvar pointed to bills like Senate Bill 35, a 2017 law that streamlines housing construction, and the numerous efforts to spur the creation of more accessory-dwelling units.
The city, she said, needs to do more to actually address the barriers to housing construction.
“You can say you want housing all you want, but you’ve got to put your money where your mouth is and make it happen. … What we really need to do is drill down into the nuts and bolts and make the changes that are needed in order to attract the type of housing and the type of diversity and community that we want to see in this city,” Roohparvar said.
Over the past decades, the ABAG process has made it harder for lower-income people to live in the Bay Area by allowing cities to build high-end housing instead,. ABAG gives lip service to below-marker-rate goals, but its own numbers show that’s not what gets built. ABAG is an utter failure that has harmed our region and in particular members of minority and disadvantaged groups unable to pay the higher costs of Bar Area housing.
ABAG instead promotes rezoning that helps developers, especially in cities like Palo Alto, who are then allowed to build more offices and luxury housing. You don’t have to look far to see this. The two commissioners most closely tied to developers both favor ABAG.
ABAG should be shut down and replaced by public servants who put housing production for lower-income people first, not last.
Why did the City Council not quote the ABAG demands for housing when it let the President Hotel be stripped of residents and returned to being a hotel? It seems to me that would have given them some leverage over the situation.
The only way Palo Alto is going to get control over this is to limit the numbers of jobs that developers want to add to the city. We do not have the infrastructure for transportation, schools, utilties or just about anything else to support the amount of housing that ABAG is demanding. And Palo Alto should insist on a moratorium on housing growth until it is clear what the consequences of the pandemic disaster may be. The working world is a different place now and may never return to the commute to work focus. Not to mention the toll being taken on small business, restaurants, etc. There needs to be a timeout on this until we come out the other end and see what the world looks like.
Is this the first shoe to drop before those in-the-pocket-of-developers state legislators try to ram through more bills to let luxury developments satisfy these quotas? SB50 will look like child’s play compared to these pending bills (courtesy of Livable California – google them for more details):
SB 1120 (by Scott Wiener and Toni Atkins)
SB 902 (by Scott Wiener)
SB 995 (by Wiener and Atkins)
SB 1085 (by Nancy Skinner)
AB 725 (by Buffy Wicks and Scott Wiener)
AB 1279 (by Richard Bloom)
AB 2345 (by Lorena Gonzalez and David Chiu)
AB 3040 (by David Chiu)
AB 3107 (by Richard Bloom and Phil Ting)
Surely we can find a way to approve some developments that are not high end. We are not doing our share for the housing crunch.
There is no escaping the fact that Palo Alto desperately needs more affordable housing. Our city leaders should step up.
How ABAG helps wealthy metropolitan real-estate developers.
Low cost housing development and office development are not opposed to each other but are instead actually two complimentary forms of development that are both essential for continued growth of the real-estate industry in “job rich” metropolitan areas like Palo Alto.
There is no market for the glut of office space that has been developed on the Peninsula over the last decade without stack-n-pack apartment development to warehouse the workers employed in those increasingly dense offices spaces.
Meanwhile California has one of the highest rates of poverty in the country and northwestern California and central California have some of the highest rates of poverty in the state.
The forced relaxation of zoning restrictions by unelected bodies like ABAG that are dominated by the influence of wealthy metropolitan real-estate developers is the only way these wealthy metropolitan real-estate developers can compete with the low land prices and low wage workers available in impoverished areas of the state.
ABAG is just another clever tool wealthy real-estate developers in “job rich” metropolitan areas like Palo Alto use to hoard jobs away from impoverished “job poor” areas of the state.
People who say that the City should be providing more housing are missing that the City is neither a developer nor the owner of property that could be redeveloped for housing. Not only does the City not build housing itself, but the legal property rights of the owner substantially limit what the City require of developments. Because of the high costs of land and construction, housing projects that are 100% “affordable” (Below Market Rate) units require large grants from the Feds, the State, the County and the City. Because of the high costs of building that housing, Palo Alto projects have difficulty getting the grants because sponsors prefer locations where their funding goes further.
“You thought SB50 was trouble?”,
You are absolutely correct and thank you for posting the bill numbers with the authors’ names. All should be aware that:
– the bills multiplied overwhelmingly. Developers are in a rush, particularly now that the pandemic is quickly re-shaping the world and this area and the office/housing trends may change dramatically. Another reason for this rush:
– lawmakers have NO TIME to even read the bills. Staffers do that and brief the congress-members. Make no mistake, not all know what they vote for. Especially, when they have nine for the one they reject.
– Some of the bills above go as far as repealing the local zoning and overriding the voters decisions, including municipal regulations for construction – height, etc.
Some – see the specifics – allow constructing four- and EIGHT-plexes on single family housing allocated lots. Ask them about parking – good luck. Those bills eliminate the very concept of singly family housing in CA, as you know it. Sen. Wiener’s belief is that it is IMMORAL to live in a single family home.
Those who are still oblivious to what is going on: do not be surprised when you wake up to the noise of eightplexes being constructed on the three sides of your house. There are some – including on this blogspace – who advocate for twelve story developments (yes, that’s right).
While Palo Alto is not a developer, it is being required to add zoning overlays that would permit developers to build dense housing units “by right” (regardless of the original zoning) to accommodate the 4,000 plus new housing units Palo Alto has been allocated to meet the regional housing goal. However, since Palo Alto has been completely developed for many years and there are no longer any vacant lots available for additional new housing, It seems the assumption has been that this new “by right” dense housing overlay will be cover areas currently restricted to single family homes.
But what if instead we were to put a new housing overlay over zoning that is currently zoned commercial and occupied by offices? The overlay would not change the current commercial zoning of a property if the owner wants to keep its use commercial. But it would allow the owner to develop dense housing “by right” and therefore Palo Alto would meet the requirement to demonstrate sufficient land available for the 4,000 additional housing units being required to be accommodated. Whether or not developers want to building housing is their choice, as it will be wherever the overlay is placed.
In addition, this might be a quicker way to demonstrate a way to meet the new housing goal Palo Alto is being allocated because commercial lots are generally large and it would likely take years for a developer to acquire a sufficient number of contiguous residential lots to be able to build a even a small multi-unit building.
The jobs/housing imbalance is killing our city. We need to get it under control one way or the other. Either restrict the number of new jobs in the city or increase the number of homes. Either option is fine with me. Doing nothing isn’t working.
It is going to be very “interesting” to see how the housing quotas for these ultra-rich and ultra-low-density communities compare to Palo Alto.
Will any horse stables or riding grounds be replaced by high-rise condos? Don’t count on it…
Posted by Eleanor Willemsen, a resident of Triple El
>> Surely we can find a way to approve some developments that are not high end. We are not doing our share for the housing crunch.
It is up to private industry to propose housing that is not high-end.
Posted by Jean, a resident of Downtown North
>> There is no escaping the fact that Palo Alto desperately needs more affordable housing. Our city leaders should step up.
It is up to private industry to build affordable housing. The city is not in the housing business, and, doesn’t own the land.
How ironic – as I drive around my area I am looking at older single family homes that have seen replaced with two-story new homes that are on the high end, along with all new landscaping. So while we are being threatened with what ever multi-homes we have the alternates going up and hell on wheels to anyone that gets in the way of those new homes.
So we are back to square one – and from where I am siting that is the Fry’s site. I drove through there today and it is clean as a whistle. And there are new apartments and commercial on Park which is one of the side streets. The city has to get the owner in and get them either to commit or sell to someone who will build there. We have been talking about this for almost a year and it is time to get this going.
>Either restrict the number of new jobs in the city or increase the number of homes. Either option is fine with me.
I think if Palo Alto is told to build more housing, they should sue, and threaten to respond to Covid by seriously increasing the amount of square footage per employee so that we get some movement out of Palo Alto by employers and eventually allowing some of the office space to convert to housing will seem attractive.
The thing is, we don’t benefit from having all these jobs here. We have Stanford nearby, so there is this major job and startup generator, we do not have to worry about getting all these cuckoo birds pushed out of the nest (cuckoo birds being parasitic).
Either option isn’t fine with me. Our main arteries are maxed out, and we have pollution, homelessness, small business flight, and other problems we can’t solve if we are just going to be forced to cram in more.
It’s just unreasonable, especially since places like Atherton and Woodside face no such pressures. We should threaten the state that we will push out jobs, maybe out of the state, if they don’t lay off.
What we really need in Palo Alto is an approach that takes into account housing and transit. I look at Mountain View and the high-rise apartments on El Camino replacing the endless hotels and motels that used to be there. Why can’t Palo Alto do something similar and pressure Santa Clara County to expand bus service on these main arteries?
I live right near San Antonio road, and I know the traffic has increased there, but has bus service? And isn’t the new Safeway and the mall there better than the almost empty Sears we looked at for twenty years?
I have also found that the inevitable NIMBY reaction is overblown. I remember the outrage in my neighborhood over the building of the JCC because of traffic concerns that never materialized. Much more dangerous were the commuters blowing down Montrose Avenue on their way to Sun Microsystems.
There are always trade-offs in prosperity, but given that Silicon Valley is moving towards more working from home, this is an opportunity to convert existing properties that have ugly motels on them to housing and to replace unneeded office space with housing especially if it is high density on corridors like San Antonio and El Camino Real.
Palo Alto’s responsibility should be even higher. We need to create a dynamic and inclusive community, and that means making a community that more people (including those who already work here) can live in and live in sustainably.
If community or council wants more control over the shape and pattern of these developments, they should start by leading with a clear vision and implementation of a plan for how more housing comes to Palo Alto. This target remains too low, and will doubtless be ignored – just as the last ones were too low, and then still not achieved.
Could other communities do more too? Sure, and they should. But there is plenty to fix and do here in Palo Alto, and there is a chance for leadership that should not be squandered.
I appreciate all who contribute here; learning so much from so many.
We are hearing mostly about the land use, 6:1 job to housing (wow, it was 3:1 just a year or two ago), zoning.
Could someone (I can see only Demand Side bringing up the livability point) weigh in on the transportation and other infrastructure? Has anyone here driven through Palo Alto 8-11 AM, 4-8 PM? Those are not just the PA but transit drivers, too, of course.
There is this popular “transit corridor” thing. I am sorry to be a pest but what transit do they speak of? Caltrain has been maxed out years back. Light Rail is an anachronism and is not even here. Buses … someone here said not enough buses. Excuse me, where would they be running? Buses will be stuck in the same traffic as we are in cars.
There need to be major – MAJOR – transportation solutions, which are not even discussed. Kind of like completing the BART loop. No chance of that to happen.
That is just to make this area formally livable. The end of story will be Hong Kong – great public transportation and extremely expensive housing. Look up “coffin homes”; it is very depressing.
https://www.msn.com/en-us/money/realestate/inside-the-coffin-homes-of-the-worlds-most-expensive-city/ss-BBPuay4#image=22
That is while San Jose is at 0.3:1 office/housing.
Posted by Samuel Jackson, a resident of Evergreen Park
>> Palo Alto’s responsibility should be even higher. We need to create a dynamic and inclusive community, and that means making a community that more people (including those who already work here) can live in and live in sustainably.
How many do you think can live here sustainably? Give me a number.
How will they get to work? (Drive?)
Why -here-, as opposed to, say, Los Altos Hills, or, Atherton?
Nobody is -against- inclusive, sustainable communities. We had one already, we’ve been losing it for a while…
-No more office space-
“What of Atherton, Woodside, and Portola Valley?”
They have never followed any mandates, if there were any. May have something to do with their City Council positions.
It may have more to do with the fact that they have little or no commercial establishments that employ people so they don’t have to deal with the destruction of their communities like we do,
So no worries about matching housing requirements to jobs which is one of the reasons that PA’s pro-development “leaders” keep doing everything they can to keep commercial development thriving with no business tax, stalling on penalizing developers for not providing promised housing and amenities (Sand Hill?), etc.
Have you ever heard the YUMBY’s/ABAG et al talk about taking on those communities and forcing them to do their fair share? Of course not.
“It may have more to do with the fact that they have little or no commercial establishments…”
Not really. Neighboring Los Altos has little commercial establishment. However they are under the gun just as Palo Alto is.
What perturbs me is why the YIMBYs and the State leave out Saratoga (similar in set up to Los Altos), Atherton, Hillsborouth etc (even less commerce than Los Altos). Here’s what I learned from my investigations: in Palo Alto as in Los Altos there were Council members who were hand in glove with the developers and ignoring the voices of residents who sought to go slow on development and maintain the character of their cities. In Saratoga, LAH, Atherton there are no such Council members and the residents insure it remains so.
To add to my previous:
All it takes for a city to lose its character and soul to developers:
some Council members that are pro-development, esp if they are the vocal, influential kind that can sway the neutrals over to their side;
a compliant City attorney that would do what those Council members want;
the manufacturing of pretexts and fabrications by them to justify their actions. E.g., “our hands are tied…”, “we have no choice…”, “State Law requires…”;
the general public’s gullibility, naivete, and reliance on those statements and the actions of those they entrusted to act on their behalf (i.e., Council members, City Attorney…).
Soon, the damage is done.
By the time the public wakes up to the damage and the fact they were duped the conspirators are gone. Council members either are termed out or voted out; City Attorney and City manager on to their next gig; City staff working as consultants for developers; and in any case, they all have Qualified Immunity and can’t be held accountable in a court of law.
It is thus that Los Altos amended its Code regulating ADUs and accessory structures 2018 eliminating the need for setbacks, etc.
It is thus that we lose the quality of living that brought us to this area, purchase our homes, etc.
All it takes for evil and the bad to win is for the good to remain silent.
Several of those involved in the Los Altos fraud now face accountability in a Court of Law. [A matter of regret former Mayor Mordo and his cohorts can’t be sued as they were elected.]
Time for Palo Altans to do something similar.
“It is thus that Los Altos amended its Code regulating ADUs and accessory structures 2018 eliminating the need for setbacks, etc. “
May I add:
It is thus that Palo Alto City Hall/Council approved the AJ Capital-Hotel President project, having stated earlier it would not be approved as it violated the City’s Zoning Code. No surprise the reasons they advanced for their approval: “State Law ties our hands…we have no choice”. Seems like cities and their attorneys follow a similar script to beguile and befuddle us! Wow!
The people who build housing are the solution to this problem. We need to encourage them to build in our community. The best way to do that is to provide them with more opportunities to make a profit. Because those opportunities don’t exist in Palo Alto today, developers are focusing their attention on other jurisdictions. That’s right, don’t kid yourself, there is not a lot of opportunities to make profits on multifamily housing development in Palo Alto. Anyone who believes otherwise is lying to themselves. So how do we do that? How do we make opportunities more lucrative? We allow builders to build more units per acre.
Stop saying you are “in support of affordable housing” if you are unwilling to make the development standards more appealing to residential projects. If you can’t support increases in density and height, YOU ARE ACTUALLY NOT A SUPPORTER OF AFFORDABLE HOUSING.
@Facts, it’s sad and irritating, esp. since office developers have targeted it and Menlo Park. I agree with your points about the destruction of the resident-serving businesses and community services.
Unlike the other communities — Atherton, Woodside and Portola Valley —
Los Altos has a vibrant downtown with resident-serving businesses so it’s a target for developer pressure, overpaid city managers who demand that everyone ELSE but him get pay cuts and self-enriching contractors, some of whom ironically worked here. https://padailypost.com/2019/02/18/man-wins-battle-with-los-altos-city-council-over-flashing-lights/)
A Los Altos merchant (formerly a PA merchant) described a major campaign by an office developer seeking to get merchant buy-in for a big office complex. Funny how He neglected to mention that his complex would have its own cafeteria and that the workers would be, uh, working most of the time.
Ooops. I was unclear. My first paragraph above referred to the changes happening to Los Altos.
–> Facts
Bingo …
ABAG bases it’s numbers on an algorithm. If Palantir and Tesla move out of Palo Alto then the numbers need to be adjusted. We have new apartments going up everywhere – many in South PA. Is any one adjusting the numbers to get us up to date? Those who are promoting growth will stall any adjustment. Get on top of current info. New apartments on Park by Fry’s. Build on Fry’s then you will have solved a lot of problems.
Focus On A Fix For The School Year First, not adding more housing and more people to the schools…
Palo Alto Schools have sports fields and open space on campus, why can’t school be held outside ? We have nice weather most of the years. Palo Alto middle school and high schools hold graduation ceremony’s outside with a flat screen so that family/friends who are sitting further away can still see the activity on stage.
Why can’t this be done for classes? A canopy over the sports fields/open space will provide shade from the sun, and a nice environment for the kids to learn. With all the technology available in Silicon Valley and elsewhere, how can this not be a possibility ?
All kinds of articles in the paper about housing and people who want to sue cities. They keep claiming that thousands are going to descend upon us. They never tell who these people are. Foreign people? homeless people? People just let out of prison?
In case you have not noticed people are leaving the state in droves. People want a house with a yard. People want a house that costs within their budgets. People want to move to a state that has less taxes.
Have you all noticed that we are going into a drought which will increase our fire risk? We will not have enough water for the thousands that are going to descend upon us.
Why don’t people who think up this type of stuff deal with the whole deck of cards. They are not magicians only pulling the cards that they want to play. There are absolutes here that no one can change. Drought – Water. And then there are man-made – taxes – the highest in the country.
ABAG – et all – get off your thrones and start talking about water. Talk about taxes. Talk about businesses that are moving to other states.
Google is putting a facility in Mississippi. They can read the cards.
Resident 1
There is a lot of truth to what you said. Water, fire, infrastructure, traffic, taxes. Fires are another argument against density. Still no good reason to turn developers into city planners. They will not have mercy on you. There will be enough built before more people realize that it is not worth living here. Investors from all parts of the world will always welcome an investment opportunity. It will not help to house people who work here then, will it?
When do we stop pretending that we can fix one thing without changing others? They all depend on each other. Where are the traffic and parking solutions? Is it biking/walking to Caltrain? All to not be able to get on the train? Come on. Driving through PA is already a joke.