Go big on housing. That's the message that about a hundred Palo Alto residents delivered to the City Council on Monday -- in person and through letters -- as the council prepared to debate the city's long-term future.

After hearing from the speakers, the council agreed to explore a planning scenario that would indeed boost the city's housing stock -- though by a fewer units that many in the stands and some on the dais had hoped for.

The question of how much housing the city should plan for is among the most critical components of the council's broader discussion about updating the city's land-use bible, the Comprehensive Plan. The updated plan is intended to guide the city's development policies until 2030.

So far, planners have evaluated four different scenarios: a "business-as-usual" approach where all existing policies remain in place; a "slow growth" scenario that would restrain job growth; a "housing tested" scenario that would add housing units; and a "sustainability tested" scenario that allows both more jobs and more housing growth, but requires new developments to comply with regulations aimed at enhancing sustainability and reducing impacts on residents.

In January, council members agreed that these four scenarios aren't enough and directed planners to add a fifth, which should address the city's jobs-housing imbalance (the fact that there are about three jobs in the city for every employed resident). And in February, the council decided that the fifth scenario should also consider growth patterns that improve the city's "quality of life" by limiting jobs, promoting sustainable policies and improving the city's traffic and parking conditions, there was no clear consensus about what this scenario would entail when it comes to city's housing stock.

The council's task on Monday night was to further refine the fifth scenario, which will be evaluated in the Environmental Impact Report for the Comprehensive Plan update. After hearing from nearly 20 speakers and debating the topic for nearly three hours, the council finally reached a compromise. By a 7-2 vote, with Councilwoman Karen Holman and Councilman Greg Schmid dissenting, the council asked staff to consider a planning scenario that would include more new housing and fewer new jobs than any of the alternatives currently on the table.

Specifically, it would reduce the number of new jobs in the "slow growth" scenario (which already has the fewest number of new jobs) by 10 percent, from 9,850 to 8,868. At the same time, it would evaluate the impacts of building 6,000 new housing units -- 699 more than in the growth-friendly "sustainability tested" scenario.

The decision to study an alternative with more housing reflects the council's recent push to address the city's worsening housing-affordability crisis. Rising real estate values and spiking rents are displacing long-time residents and making it nearly impossible for most teachers, firefighters and almost all other city workers to live in Palo Alto. In recent months, the council has requested that staff explore ways to encourage construction of "accessory dwelling units" and "micro-units" aimed at young professionals.

The council isn't alone in thinking about the housing crisis. A recent poll that the city commissioned to evaluate the viability of a November transportation-tax measure showed 76 percent of the polled residents declaring the cost of housing to be either an "extremely serious" or a "very serious" problem ahead of the drought (65 percent) and traffic and congestion (53 percent).

The turnout at Monday's meeting underscored the level of citizen concern. Dozens attended the council's long discussion and nearly 20 spoke publicly, though only a handful remained in attendance by the time the council reached a decision on the fifth scenario shortly before 1 a.m. Tuesday.

Diane Morin, a board member of the citizens group Palo Alto Forward, was one of many speakers to request that the council "go big on housing" in designing the fifth scenario to be studied. Morin said she recently spoke to a woman who works in Palo Alto and who has been forced to sleep in her car for the past month because she can no longer afford the rent. It's important, she said, that the fifth scenario evaluate what it would take to significantly increase the city's housing stock.

"Without studying a greater housing number, we won't know what the impacts are," Morin said.

Judy Kleinberg, CEO of the Palo Alto Chamber of Commerce, urged the city to "be bold" and to think about the "silent minority who are critical to the vitality of this community," including hospitality workers, janitors and city employees. The city, she said, should pursue "a moonshot for housing."

"Go for as much housing as you can possibly do, and then have policies that enable it," Kleinberg said.

Resident John Kelley went a step further and proposed an actual target: 10,000 new housing units, or nearly double of what is currently proposed in the city's most aggressive planning scenario. He asked the council to "figure out how to do it" and suggested that relaxing the city's 50-foot height limit for high-density housing and relaxing parking requirements for these units would be a good start.

The council didn't have a clear consensus on the final number. Some members, including Councilmen Cory Wolbach and Marc Berman, suggested exploring a higher number of housing units. Wolbach proposed 8,868 housing units, to match the number of expected new jobs. Berman proposed 6,500 housing units.

"We don't get these opportunities often," Berman said. "I'd like to push the envelope even more and see what's possible."

Councilman Eric Filseth, meanwhile, supported exploring a concept he called the "21st Century suburb," which would combine slow-growth policies with the types of transportation improvements and sustainability policies proposed in the more pro-growth scenarios.

"A 21st century suburb must deal with transportation and environment like everyone else," Filseth said.

By the end of the discussion that featured numerous failed motions, the council finally coalesced around 6,000 housing units, a number proposed by Vice Mayor Greg Scharff.

Staff was also directed to evaluate a slightly less aggressive variation of this scenario, which would combine the fewer-jobs policies of the "slow growth" scenario with the more-housing policies of the "housing tested" scenario (which includes 3,546 units).

Scharff argued that adding 10,000 housing units would "change the character of the community dramatically," which is not something that he said he believes most residents want. He noted that when he ran for council in 2009, the city was coming off a period in which many residents were wary of more construction.

"If you build too much, you're going to make it look really bad and the community won't go with you," Scharff said.

Even studying a proposal like the one Kelley proposed would be wasteful, he said, because it probably wouldn't give the council any useful information. Even building 6,000 housing units by 2030 would be aggressive, he noted, because it would roughly triple the rate of housing construction that the city had experienced over the past 30 years.

"I think this addresses the concerns the public raised without going so high that we won't get decent information out of it," Scharff said.

Schmid and Holman both opposed this proposal, with Schmid arguing that the city should be exploring scenarios that reduce the number of jobs and Holman suggesting that the entire conversation be continued to another date (the council, she observed, doesn't make its best decisions at half past midnight). Holman also suggested that the city take a close look at policies that would address the loss of existing housing, whether through demolition of conversion to short-term rentals.

The council will continue its discussion of the Comprehensive Plan update on June 6, when it holds a hearing on the draft Environmental Impact Report for the project. The fifth scenario will later be added to the document once staff and consultants further refine and analyze it.