After repeatedly failing to meet its housing goals, the Palo Alto City Council agreed on Saturday to place the issue atop its legislative agenda for 2020.

By a unanimous vote, the council decided during its annual retreat to set housing, "sustainability, in the context of climate change" and "improving mobility for all" as its official priorities for 2020. In doing so, council members indicated that these subjects will require "particular, unusual and significant action" throughout the year.

The council's decision to add housing follows a year of disappointment on the housing front, with the city falling well short of its adopted goal of producing 300 units per year. The council approved just one housing development last year, a 59-unit project called Wilton Court for low-income residents and adults with disabilities. The council had also approved $20.5 million in loans to Palo Alto Housing, the nonprofit developer behind Wilton Court.

The only area in which the city saw some success was in encouraging the construction of accessory dwelling units, with about 150 people requesting permits for the small structures since the council revised the zoning code in spring 2017 to remove restrictions on building these units.

According to planning staff, the city had issued 112 permits as of December under the new rules. Last year's permitting of 61 accessory dwelling units was the highest total ever, according to staff. Historically, the city has issued about four permits for accessory dwelling units annually.

Other zoning efforts haven't fared as well. The city's new "housing incentive program," which grants density bonuses to housing developments in the city's main commercial areas, has not received any takers (though one developer has proposed a housing project on San Antonio Road that would utilize some of these density bonuses).

While housing has been a priority in the past, last year the council agreed not to include it on the list, reasoning that the council's existing plans would bring the city closer to its goals. On Saturday, council members recognized that that did not happen and that the city will need to focus more energy on the topic this year.

Residents largely agreed. Gail Price, president of Palo Alto Forward, a nonprofit that advocates for more housing, told the council that the city's existing housing shortage keeps many people who grew up in Palo Alto from affording a place here and results in service workers living elsewhere and enduring punishing commutes.

"Housing is a key element of our past, current and future community," said Price, a former City Council member. "Currently, we are a more exclusive community due to both income disparities and the lack of housing of various types and price points to serve a wider range of individuals and families of all incomes."

Sheryl Klein, board chairwoman at Palo Alto Housing, thanked the council on Saturday for its contribution to the 59-unit project but noted that there are about 3,000 people on the nonprofit's waiting list for below-market-rate units.

"I'd also advocate not just for affordable housing; we need more housing in our community for all income ranges," Klein said. "If there's more supply it might force prices down. I think we have some great opportunities in Ventura and Cubberley to build more housing, and I'd encourage you to use the tools that you have to build as much as we can."

Results from a survey commissioned by the city also supported the addition of housing as a priority. Of the 347 residents who chimed in, many argued that housing should be a top priority. Others made the case for transportation improvements, bike projects and sustainability initiatives.

Russell Siegelman, an Old Palo Alto resident, supported making affordable housing a priority.

"I want more of our school teachers, shopkeepers, police and all the people who serve and participate in our area to be able to live in Palo Alto and not commute hours to work and contribute to our community," Siegelman wrote. "Let's build more affordable, livable, attractive housing."

While some residents urged the council to focus specifically on "affordable housing," Councilwoman Liz Kniss argued that the city needs housing of all types, including market-rate housing. She called housing her top priority and said the council has "never had as loud a clarion cry as we heard this year for housing."

"We would have to have plugged our ears and nor read a thing to not know that this community said: housing, housing, housing," Kniss said.

While others agreed that housing is critical, not everyone shared her view that the priority should cover "all housing." Councilman Eric Filseth said most of the residents who have spoken out about housing talked about the need to accommodate low- and middle-income earners and that the city's goal should reflect that.

"You can't have a functional community composed only of data scientists and patent attorneys," Filseth said. "We need other kinds of people here."

Councilwoman Lydia Kou concurred and argued that the council's focus should be below-market-rate projects like Wilton Court. Market-rate housing developers, she argued, will find a way to build without the city's help, particularly if the state Legislature moves ahead with bills that override the powers of local governments to restrict residential construction.

Even though the most prominent of these bills, Senate Bill 50, failed to advance this week, Kou warned that there will soon be other bills aiming to spur market-rate construction.

"If we're going to continue to just free-for-all and we don't have the funds to help with these affordable projects, it's just another failure on the trickle-down method," Kou said.

Mayor Adrian Fine, who made the proposal for the three priorities, made a case for both market-rate and below-market-rate housing and argued that encouraging the former is a good way to attain the latter. He pointed to the city's "inclusionary zoning" requirement, which requires 15% of the units in market-rate housing projects to be offered at below market rate. The city, he noted, doesn't have the resources to make too much of a dent in increasing affordable housing.

"I don't think we'll be able to subsidize our way out of the housing crisis," Fine said.

As a compromise, the council agreed to a proposal from Filseth to call the priority "housing, with a special emphasis on affordability."

Councilman Greg Tanaka suggested that the council focus on smaller units, which he argued are inherently more affordable but would not require government subsidies. He also pressed his colleagues to make the goals more specific and measurable.

"If we keep it as a broad goal, the challenge is we aren't able to — especially within the yearly goals we asset — it's hard to make a lot of progress on it," Tanaka said.