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It's a problem most cities would envy. But job growth in Palo Alto — a regional leader in both technology innovation and traffic frustration — is as much a problem to be solved as a sign of prosperity.

As part of updating its Comprehensive Plan, the City Council agreed to a goal of creating between 9,850 and 11,500 new jobs by 2030 — a middle ground on a menu of options that ranged from 8,868 to 15,480 jobs. Much like with housing targets, the goal struck a compromise between residentialist council members looking to rein in job growth, which they see as unsustainable, and development-friendly council members who believe the city should celebrate its high-tech roots and create more jobs.

The new Business Element crafted by the Citizens Advisory Committee for the Comprehensive Plan clearly acknowledges this tension. While calling successful businesses "an integral part of a thriving, complete community," it also alludes to Palo Alto's most intractable land-use dilemma: the fact that it has about three times as many jobs (more than 100,000) as employed residents (about 36,000).

"This indicates an exceptionally strong local economy, but it has also brought negative side effects over the past decade," states the proposed Business Element, which the council is scheduled to review on May 22. "Due to the high number of jobs, relative to a low number of employed residents, many workers must commute to Palo Alto, resulting in traffic congestion, air pollution and parking constraints."

Without a dramatic increase in housing or a devastating recession, this tension is unlikely to disappear any time soon. None of the planning scenarios that the city is evaluating as part of the environmental analysis for the Comprehensive Plan update came anywhere close to reducing the jobs-housing imbalance (which ranged from 2.71 to 3.20 in the six proposed scenarios).

That's not to say, however, that the council is business unfriendly. Earlier this month, members sought to correct a zoning anomaly that generated national headlines about Palo Alto over the past year — the uncertainty over whether software startups are legally allowed to operate in downtown Palo Alto.

It became an issue after former Mayor Pat Burt suggested that downtown's zoning wasn't intended to accommodate the types of research-and-development uses one can find at Stanford Research Park and that the city should revise its zoning code to ensure consistency.

Mayor Greg Scharff noted that people from elsewhere were laughing at Palo Alto because of rumors that the city that gave rise to Facebook and Google is outlawing startups. Scharff characterized the new policy as an important correction.

Councilman Adrian Fine called the new policy "an affirmative vision."

"Software development and technology is the lifeblood of this community," Fine said.

The council majority agreed, but not everyone was enthusiastic about rolling out the red carpet to tech in the Comprehensive Plan. Councilman Tom DuBois and Councilwoman Karen Holman argued against adopting any broad land-use policies for downtown without more analysis of potential negative impacts.

Holman said the question is one of size and scale. Should the city encourage the types of small startups that have cemented Palo Alto's reputation as an incubator, or should its zoning policies acquiesce to tech giants like Palantir, which now has about 800 workers spread out among its leased downtown properties?

Or, to put it in the TV show "Silicon Valley" terms: Should Palo Alto be known as the home of Pied Piper or the home of Hooli?

Given the council's recent swing toward more development-friendly policies, the new Comprehensive Plan is unlikely to establish any new limitations on high-tech businesses. But the council also agreed on May 1 not to disrupt things too much. A separate proposal by Tanaka to legalize the long-established practice of launching startups out of residential homes fizzled by a 3-6 vote, with only Fine and Cory Wolbach joining him. Scharff called the proposal "radical," while Eric Filseth said he would be "astonished if a majority of Palo Alto residents supported legalizing hacker houses in R-1 (single-family) neighborhoods."

In addition to embracing Palo Alto's tech DNA, the updated Comprehensive Plan will likely address other emerging issues relating to jobs, retail and the world of tech. One new proposed policy calls for attracting businesses that innovate in the areas of "mobility and sustainability"; another calls for helping traditional retail adapt to the impacts of online shopping; yet another would consider ways to give more "development flexibility" to Stanford Research Park while not worsening traffic conditions.

• This article is part of a cover story on the Comprehensive Plan coming into focus. Find out what else the council is looking to change in the areas of development, building height limit, housing, and transportation.