Palo Alto plans more changes to rules on accessory dwelling units

​​As accessory dwelling units proliferate throughout Palo Alto, the city is preparing to once again change the rules around the small structures as it tries to balance state requirements and local desires for privacy protections.

The latest round of revisions, which the Planning and Transportation Commission considered on Wednesday, pertain to basements, noise and new design guidelines for two-story accessory dwelling units. These include a prohibition on egress windows on walls that face an adjacent property line, restrictions on exterior lighting mounted above 7 feet and, where feasible, use of skylights in bathrooms and other spaces.

At the same time, city planners and commissioners are still working on their response to the state Department of Housing and Community Development, which notified Palo Alto last year that its recently approved guidelines violate state laws and demanded that the city loosen some of its restrictions.

Despite the shifting legal landscape, local interest in accessory dwelling units continues to surge. In 2015, the city received only 10 permit applications for these structures. The number climbed to 75 in 2019 and to 78 in 2020. Last year, it soared to 136, according to a quarterly report that the City Council received last month. The city approved 112 of these structures.

“Every day is a new ADU question,” Garrett Sauls, the city planner managing the revision process, said Wednesday. “It’s been that way since 2017, really. It’s been kind of a big-ticket item for most people.”

One of the areas that remains in dispute between the state agency and the city is height limits in flood zones. The state housing department noted in its letter that for most houses, the city allows some exemptions to the height limit to accommodate rules requiring a higher elevation for the ground floor in these areas. But the city does not extend this to accessory dwelling units, which are still subject to the 16-foot height limit. In that sense, the city has “impermissibly restricted the height of ADUs,” David Zisser, assistant director for local government relations and accountability at the HCD, wrote to the city.

Palo Alto is in no rush, however, to allow greater heights. Jonathan Lait, the city’s director of planning and community environment, argued in his response letter to the state agency that it is “unclear to the city how the failure to provide additional height above 16 feet represents an impermissible restriction on ADUs.” He noted that the state housing department has indicated in conversations with the city that it would want to see as few restrictions as possible on accessory units.

“The only restriction here is on finished floor height in the flood zone, which cannot be waived or relaxed without impacts on health and safety,” Lait wrote in the February letter. “Even in areas requiring the most extreme height above the base flood elevation, an ADU remains feasible within the 16-foot height limit.”

The city also is requesting more clarification about the state agency’s finding that local “daylight plane” restrictions, which aim to regulate height and massing and protect neighbors’ access to light and air, may be too restrictive, particularly if they result in limiting the height of the structures below the 16-foot limit established by the state.

Palo Alto has addressed most of the other comments from the state agency by adding clarifying language to make sure the local ordinance is consistent with state law. But according to Sauls, the city planner, Palo Alto is waiting for more information from the state housing department before it proceeds with the more significant changes that the state agency has called for.

The planning commission fully endorsed the cautious approach, even as it endorsed a host of relatively minor changes. These include affirming that accessory dwelling units should be allowed to have basements, as long as these basements do not encroach into a 4-foot setback area by the property line.

Vice Chair Doria Summa said she was concerned about the impacts of basements on groundwater and, in some cases, on trees. But she spoke for the majority when she noted that most other residential properties are allowed to build basements.

“It seems to me if other people can build basements, why can’t the ADU have a basement, for fairness?” Summa asked.

There was less consensus on the issue of whether accessory dwelling units should be allowed to have noise-producing equipment such as air conditioners near the property line separating them from the neighboring home. While staff suggested that loosening the rules around equipment could allow for more flexibility for accessory dwelling units on small lots, planning commissioners split 3-3 on the issue, with Chair Ed Lauing, Vice Chair Doria Summa and Commissioner Bryna Chang all opposing the change.

Commissioners also voted 6-0, with Commissioner Cari Templeton absent, to approve new privacy protections for two-story accessory dwelling units, including a guideline requiring exterior lighting fixtures to be directed downward to prevent light spillover onto adjacent properties.

“These added measures would provide guidance for applicants and additional protections for neighbors from the potential privacy impacts from new second units,” a report from planning staff states.

The commission plans to continue its discussion and make a formal recommendation on Aug. 10, after which time the revised ordinance will go to the council for approval. While rules will continue to change based on council and the state housing department’s guidance, architect Randy Popp urged the commission on Wednesday to bring some clarity to the ever-shifting landscape.

“Many of my clients have been anxiously waiting for the results of these discussions and we’re all looking forward to a resolution, whatever that may be,” Popp said. “Looming over all of this is anticipation of HCD’s response but for now, we just need to make some decisions and move on.”