Palo Alto's elected leaders embarked this week on a long shot and possibly risky quest to formally challenge the city's regional housing allocations, which require planning for more than 6,000 new residences between 2023 and 2031.

The City Council on Tuesday directed planning staff to appeal the methodology that was used to come up with housing targets, even as council members and planning staff acknowledged that the challenge will likely be futile and may even backfire, resulting in bad publicity and higher allocations. The council voted 5-2, with council members Alison Cormack and Greg Tanaka dissenting, to file the appeal with the Association of Bay Area Governments, the regional agency that oversees allocations in the nine Bay Area counties. ABAG's Executive Committee, which is made up of elected leaders, is scheduled to formally adopt the methodology for its Regional Housing Needs Allocation process and approve the housing targets on May 20.

In deciding to appeal, council members acknowledged that their challenge faces long odds. Tim Wong, project manager for the city's Housing Element update, noted that in Southern California region, 52 agencies had filed appeals against the housing allocation process. Two of them "partially succeeded," Wong said. In the Bay Area, 14 jurisdictions have challenged their numbers in the current RHNA cycle, with three seeing some adjustments.

Council members also acknowledged that failure may come as a price. ABAG had initially considered scenarios in which Palo Alto would be assigned about 10,000 new residences between 2023 and 2031 — a number that the city pushed back against. The regional agency then further modified its methodology and redirected some of the projected growth from Palo Alto to the largest cities in the region, lowering Palo Alto's obligation to the current level of 6,086 housing units.

A report from the Department of Planning and Development Services notes that other jurisdictions may appeal Palo Alto's current numbers, given that the city is the only municipality to receive such a substantial reduction over the process. And the city's appeal would almost certainly increase public discussion about Palo Alto's role in addressing the region's housing shortage and social equity, the report states.

"There's obviously a lot of tension and spirited perspectives on both sides of the issue," Planning Director Jonathan Lait said during the May 18 discussion. "I do think there is a perception piece that the council may want to be aware of — and how an appeal plays into that."

The report notes that even if the city were to be successful in its efforts to appeal, planning staff "does not anticipate the results would have a significant impact to the ultimate number of housing units the City needs to plan for or alter the City's approach to the Housing Element." The challenge will also add to the workload of city's planning staff, which is concurrently implementing programs to encourage more housing.

"It's no small feat to file an appeal," Lait said. "It takes a lot of staff time and resources to do so."

Cormack and Tanaka voted against the appeal after concluding that the costs don't justify the potential benefits. Cormack said she does not believe that "doing futile things is wise."

"I don't hear our staff say that there's an opportunity for us to make a meaningful difference … In fact, a meaningful difference has already been made," Cormack said, alluding to the fact that the city's allocation for the next cycle has already been reduced by 39%.

The council majority concluded that the challenge is worth undertaking, even if the chances of success are slim. For months, members have argued that the RHNA methodology is flawed and that its housing allocations are "aspirational," if not outright impossible. In January, the council approved a letter urging ABAG to include in its projections more consideration of factors such as the COVID-19 pandemic, which they argued have long-term impacts on commuting strategies and growth patterns.

"While the plan's time horizon is long, the impacts of the pandemic and recession are also long; no doubt the pandemic and recovery will shape the next generation," the letter stated.

Council members also argued Tuesday that by focusing strictly on new housing, the regional agency's allocation process fails to consider the other side of the jobs-housing imbalance: commercial development. Council member Eric Filseth pointed to cities like Redwood City, which have seen significant growth in both housing and office developments. While their housing numbers satisfy the regional requirements, Filseth said, the office growth creates so much additional demand for housing that the development pattern actually worsens the region's jobs-housing imbalance.

Vice Mayor Pat Burt similarly argued that the regional methodology is seriously flawed because of its failure to account for projected job growth.

"Rather than looking at attempting to balance jobs and housing and really try to assure that the job growth is distributed rather than concentrated, they instead are embracing continuing to have a high concentration of jobs, in particular high-income tech jobs … and pursuing what's a pretty futile approach to have the housing try to keep up with an ever explosive job growth in specific areas like our region," Burt said.

While the council wasn't particularly optimistic that its appeal will succeed, most members agreed that it's worth submitting anyway. Mayor Tom DuBois said the city should try to get relief from the housing mandates, even if success is far from certain. It is the council's duty, he said, to try to protect the city from being forced to pursue "unachievable" housing numbers.

"We are really looking at advancing affordable housing," DuBois said. "At the same time, we have a responsibility to the city to protect ourselves from state override, using all the means we can. I think we are being assigned aspirational numbers."