Palo Alto looks to industrial sites to address housing shortage

East Meadow Circle is no stranger to housing booms.

Two decades ago, the neighborhood was Palo Alto’s hottest area for residential development, with newly constructed housing complexes known as Echelon, Vantage and Altaire bringing more than 500 apartments and condominiums to what has historically been one of the city’s few industrial neighborhoods. A few blocks away, on Fabian Way, the Taube Koret Campus for Jewish Life had just gone up — a major development that would ultimately include a 193-unit senior community known as the Moldaw Family Residences.

The area, which was developed in the 1960s and 1970s as a business park, became such a housing magnet that the city attempted to pump the brakes by revising the zoning code to prohibit residential uses in industrial zones and by launching a new neighborhood plan for the East Meadow Circle area. The document aimed to, among other objectives, snuff out residential growth and boost commercial development. The draft plan, which was never officially adopted, cites the recent conversion of industrial land to residential uses as a “chief concern” and its recommendations included increasing the allowed density of commercial development. Notably, its preferred alternative included no residential projects.

Now, the pendulum is swinging hard the other way. The city is now putting together its new Housing Element, a vision document that includes an inventory of potential housing sites that will help it meet its regional housing targets of 6,086 new dwellings between 2023 and 2031. For city officials and residents, East Meadow Circle and other streets around it are a key piece of the puzzle.

Last week, a citizen panel that is working on the Housing Element update endorsed a staff proposal to once again allow housing in manufacturing and light-industrial zones. According to calculations from planning staff, if the city’s general manufacturing (GM) and retail, office and light manufacturing (ROLM) zones are allowed to include residential use, they could potentially accommodate 2,579 dwellings — more than a third of the city’s total allocation.

The vast majority of these residences would be concentrated in the area around East Meadow and just north of San Antonio Road, which includes 102 of the city’s 155 general-manufacturing sites and all 27 sites zoned for light manufacturing. Unlike the GM zone, which does not permit residential use, the ROLM zone allows it through approval of a conditional use permit. The new proposal would continue to allow all existing uses while adding residential to the mix.

The proposal is still in its early phase and subject to reviews by the Planning and Transportation Commission and, ultimately, the City Council. But it cleared an initial hurdle on Nov. 18, when the Housing Element Working Group endorsed further exploring it by a 13-1 vote. Even the sole dissenter, Arthur Keller, generally supported the concept, though he wanted to see stricter density provisions in commercial areas next to single-family neighborhoods.

The proposal to allow housing in industrial sites is just one of numerous strategies that staff and the working group have been discussing over the span of nine meetings. Other strategies that are expected to advance as part of the Housing Element process include upzoning existing residential parcels and allowing greater residential density in areas near Caltrain stations and along transit corridors, according to a Nov. 18 presentation from senior planner Tim Wong, who is leading the update process. They are also considering allowing housing development on city-owned parking lots and at faith-based institutions.

In discussing the proposal to allow residential development in industrial zones, city staff and working group members acknowledged a few key challenges that the proposal would need to overcome. One is the potential health hazards of locating residential development near companies that handle hazardous materials. As part of the proposal, staff is now working with the Fire and Public Works departments to identify areas of concern and consider mitigations. Wong noted in a report that a 300-foot minimum distance from commercial uses is typically required for residential developments.

Another problem is the relative dearth of public transportation and the somewhat meager biking amenities in the area, notwithstanding the city’s new bike bridge over U.S. Highway 101, which opened to the public on Saturday and which offers East Meadow Circle residents convenient, year-round access to the Baylands. Ed Lauing, who chairs the planning commission and who co-chairs the Housing Element Working Group, suggested that it’s not enough to simply build thousands of units. The city needs to build the infrastructure to support its residents.

“The essential aspect here is to build a neighborhood,” Lauing said. “We don’t want to warehouse our citizens in any kind of structures, particularly just some things that look like old-fashioned housing projects in Chicago.”

Sheryl Klein, his fellow co-chair, agreed. Klein, who serves as chief operating officer at the housing nonprofit Alta Housing, said it’s important to create an environment where people can walk to amenities.

“Because right now, all those people are going to need to use their cars to go to the grocery stores, to go to the library, to take those kids to schools,” Klein said.

Some believe this will soon change. With Google buying up properties on East Meadow Circle over the past decade, several working group members suggested that the area may soon see an expansion of transportation options in the area.

“Just because there’s no transit today, doesn’t mean there won’t be transit in two years, three years, five years,” Keith Reckdahl, who serves on the working group, said at the Nov. 18 meeting. “The VTA (Santa Clara Valley Transportation Authority) is looking at running transit to Google and those VTA buses will go right by here. So by the time they are built, there may actually be very good bus service.”

Scott O’Neill, who lives on East Meadow Circle, said he would welcome the change. Addressing the working group at the Nov. 18 meeting, O’Neill said he would like to see more walkable services in the area, which will require more density.

He warned however, that any plans from the city to create housing in the area hinge in many ways on Google, whose logo he said he could see from the window of his home. As a sign of its investment in the neighborhood, the company contributed $1 million toward the new $23 million bike bridge over Highway 101.

“Unless you can secure a clear pro-housing representation from this major landowner, you should assume a low probability of development,” O’Neill said.