For decades, developers looking to build in Palo Alto faced a formidable restriction: a citywide 50-foot height limit that restricted most new buildings to four stories.

These days, as the city is preparing a plan to accommodate more than 6,000 new housing units over the next eight years, the rule is facing its biggest stress test since the city adopted it about 50 years ago. Palo Alto's proposed Housing Element, which lays out the city's housing strategies and lists potential housing sites, includes a variety of policies that would allow residential developments to exceed the 50-foot limit.

The Planning and Transportation Commission on Wednesday night reviewed and endorsed the policies and programs in the ambitious document, which aims to help Palo Alto meet its state mandate of 6,086 new residences between 2023 and 2031, as determined by the Regional Housing Needs Allocation process. These include rezoning industrial and commercial areas in south Palo Alto to allow housing use; allowing more density along El Camino Real and other transit-rich areas; and exploring the creation of affordable housing and parking garages on city-owned lots.

Many of the new programs, however, envision developments that would exceed the city's usual height limit, including proposed residences on properties owned by Stanford University. One policy, for instance, calls for encouraging an affordable-housing project at 27 University Ave., near the downtown Caltrain station, with a height of 85 feet and 270 apartments. Another policy encourages exploring an 85-foot building with 425 apartments at 1100 Welch Road, also a Stanford-owned property. Several sites along El Camino Real, including Palo Alto Square and the McDonald's site at 3128 El Camino Real, could accommodate development that go up to 75 feet.

In addition to these site-specific programs, Palo Alto also is exploring broader policies that would allow affordable-housing providers to exceed the 50-foot limit in other neighborhoods. This includes reforming the Housing Incentive Program, which grants affordable-housing providers height, density and parking concessions. The program, which made its debut in 2018 and which was initially envisioned only for sites along El Camino Real and in downtown and the California Avenue business district, would be expanded to other districts. Aside from producing housing, a key goal of the Housing Incentive Program is to offer developers an alternative to relying on recent state laws such as Senate Bill 330 and the State Density Bonus law, which limit the city's ability to influence projects.

Jonathan Lait, director of the Planning and Development Services Department, suggested at the Wednesday meeting that a developer who meets the requirements of the city's revamped Housing Incentive Program would be able to get more height, more density and an expedited approval, with one courtesy meeting with the Architectural Review Board and a certain path toward a green light.

"By approving these concessions or these incentives in the housing program, we as a community would be saying, 'We would accept and tolerate a development of this size, scale and density with these reduced standards. We accept that.' You meet our objective standards, you get a courtesy meeting, you get a building permit," Lait said. "That's huge for a developer. That is a huge incentive."

The Housing Element stops well short of proposing an outright elimination of the 50-foot height limit, a policy that continues to wield broad support among political leaders. Even as council members have become more willing in recent years to grant limited exceptions to specific residential projects, they have not had any debates about revising or abolishing that policy.

But even though Palo Alto's new housing plan preserves the limit, it also reflects the city's shifting debate over building heights. The question is no longer over whether exceptions to the 50-foot limit should be granted at all. Rather, it's under what circumstances should projects be allowed to break the barrier by right?

Commission Chair Ed Lauing, who co-chairs the Housing Element Working Group, has argued exceptions to the height limit should be reserved for affordable housing — a position shared by many in the working group and in the community.

"If we're going to put up higher buildings, that should be in targeted areas and for specific purposes," Lauing said on Wednesday.

That said, not everyone is thrilled about going high. Hamilton Hitchings, who also served on the Housing Element group but who was speaking as an individual and not on behalf of the group, suggested that the city should limit Stanford developments to 50 feet unless they include more affordable housing than the city typically requires. Jeff Levinsky went further and said that the city should simply not allow developments that exceed the limit.

"We don't need to allow housing taller than 50 feet," Levinsky said. "Developers love to get even more giveaways by claiming our current standards don't pencil out but we have projects in town building 100% affordable housing in under 50 feet so clearly it can."

Stanford, meanwhile, is hoping to get the height concessions without the requirement for more below-market-rate units. The concept it had proposed for the site at 27 University Ave., near the downtown transit center, envisions five stories of housing over two stories of parking.

Jessica von Borck, Stanford's director of land use, said Wednesday that the university supports being part of Palo Alto's housing solution and encouraged the city to pursue a holistic plan for Stanford properties along El Camino Real. She also urged the council not to stipulate an affordable-housing percentage.

"Height isn't a trade-off for developing more affordable units," Von Borck said. "Height doesn't mean construction is more affordable, it simply means a project is feasible to build because it avoids underground parking."

Even if the city grants the height exemption, the University Avenue project would have to overcome other hurdles before it becomes reality. Chief among them is the historic MacArthur Park building, which was designed by Julia Morgan and built in 1918 in Menlo Park as part of Camp Fremont, a mobilization camp for World War I soldiers. According to Palo Alto Stanford Heritage, the building was purchased by Palo Alto and moved to its current site in 1919. Winter Dellenbach, a local resident and land-use watchdog, suggested Wednesday that it would be inappropriate to move the historic building to another location to accommodate a new development.

"It's culturally backward and frankly is embarrassingly ignorant," Dellenbach said. "Should our city do such a thing, architects, preservationists and educated people all over California and nationally will be appalled by Palo Alto's desecration."

The planning commission, for its part, firmly supported exploring taller and denser developments at the Stanford sites than would normally be allowed. After a long and wide-ranging discussion, commissioners voted 5-0, with Vice Chair Doria Summa and Commissioner Bryna Chang absent, to approve the new Housing Element's goals, policy and programs. The only issue on which they couldn't get a clear consensus was on whether the University Avenue development should be focused primarily on affordable housing or allowed to have market-rate units. Lauing and commissioners Keith Reckdahl, Cari Templeton and Giselle Roohparvar all supported focusing on below-market-rate apartments while Commissioner Bart Hechtman suggested that doing so could preclude redevelopment altogether.

Commissioners also debated whether landowners at commercial and industrial sites around Fabian Way, near U.S. Highway 101, should be allowed — or required — to build housing when redeveloping their properties. A key strategy of the city's housing plan is to rezone some of these properties to allow residential use. Reckdahl suggested that the zone change should preclude commercial uses, which fetch much higher rents.

"If the landowner has the option of building housing or offices, more likely than not he's going to pick offices," Reckdahl said.

Hechtman, meanwhile, said he is concerned that if the city mandates all new projects to be residential, landowners in the commercial areas will simply not redevelop at all.

"The reason we're struggling with this is because office use is so lucrative," Hechtman said. "People don't want to give it up and translate it to housing because it doesn't pay. Now if you tell someone, 'If you're going to tear the building down you can only build housing,' their response will be, 'Fine, I'll keep the building,' and that will result in us not getting any housing."