When California lawmakers passed a bill in 2021 to promote construction of duplexes, triplexes and accessory-dwelling units in single-family neighborhoods, Palo Alto was in the vanguard of opposition.
In its letter opposing Senate Bill 9, the City Council argued that state-driven, by-right housing approvals "fail to recognize the extensive public engagement associated with developing and adopting zoning ordinances and housing elements." Since then, the city has adopted a set of "objective standards," new design rules that SB 9 projects would have to meet to win approval. It has also begun to explore the designation of dozens of old homes as "historic," which would shield them from SB 9 provisions. And in March, Mayor Lydia Kou devoted a large share of her "State of the City" speech to attacking a host of recent housing bills that restrict local rights.
But in an ironic twist, the city may soon rely on SB 9 to preserve its local control over land-use decisions. Palo Alto is in the midst of preparing its response to the state Department of Housing and Community Development (HCD), which is in charge of approving the city's Housing Element. In a March 23 letter, the state agency indicated that the city's submitted Housing Element – which lays out its plan to accommodate 6,086 more dwellings between 2023 and 2031 – falls well short of the mark.
The HCD letter required Palo Alto to make a host of revisions to its Housing Element, including a more thorough analysis of regional and local housing trends; more evidence that nonvacant sites can be redeveloped for residential use; and a list of "quantified objectives" for new housing construction for each income levels, according to a letter from Melinda Coy, proactive housing accountability chief at the HCD.
The state also ordered Palo Alto to add goals and actions pertaining to a new requirement that cities "affirmatively further fair housing" by addressing historic patterns of discrimination based on race, religion, sex and other characteristics.
"For example, the element could examine past land use practices, investments, quality of life relative to the rest of the City and region and then formulate appropriate programs to promote more inclusive communities and equitable quality of life," the letter stated.
That's where SB 9 comes in. Palo Alto has 10 census tracts that are currently classified as "racially concentrated areas of affluences" (RCAA), a designation for communities that are disproportionately affluent and white when compared to the broader community.
A new report from the Department of Planning and Development Services notes that these areas are "a result of historic discriminatory redlining practices," a reference to banks and other financial agencies that had denied mortgages and loans to black individuals, effectively barring most of them from buying homes in Palo Alto.
To address this and respond to HCD concerns, Palo Alto staff is now proposing to loosen local zoning laws to enable larger homes as a result of SB 9 lot splits. Under the proposal, floor area limitations for homes on SB 9 lots would be raised from 800 to 1,200 square feet per unit, enabling them to accommodate one- and two-bedroom units. The idea behind the proposed policy is to create more opportunities for new residents in the city's most exclusive neighborhoods.
According to the city's assessment, these areas include Crescent Park, Duveneck/St. Francis, Old Palo Alto, College Terrace, Evergreen Park, Barron Park and portions of downtown and Midtown.
"Leveraging SB 9, the program will increase the floor area limitation that will allow for more units on a single family lot," the report states. "This will also help promote housing mobility throughout the City, especially in the City's lower density areas. And it will also provide greater housing opportunities for more segments of the community."
The council and the Planning and Transportation Commission plan to discuss this proposal and other aspects of the Housing Element during a joint meeting on Monday, May 8.
Potential consequences of delay
For Palo Alto, getting the HCD to approve its housing plan is key to ensuring its ability to preserve local control over zoning. Like most other Bay Area cities, Palo Alto is now out of compliance with the Housing Accountability Act, a state law that requires municipalities to have certified Housing Elements, documents that lay out local plans for meeting housing quotas under the Regional Housing Allocation Process. Palo Alto's last Housing Element expired on Jan. 31 and until a new one is adopted and certified by the state, the city is vulnerable to "builder's remedy" projects that can override local zoning regulations.
The city had already received one project under the "builder's remedy" provision: a 45-condominium development proposed for 300 Lambert Ave. Other cities in the area, including Mountain View and Los Altos Hills, have likewise been subject to builder's remedy applications.
Planning staff plan to release a matrix of local responses to HCD concerns next week, in advance of the May 8 meeting. In addition to the SB 9 proposal, the next draft will include greater exploration of local zoning laws that create constraints to new housing; a more thorough examination of local and Bay Area housing patterns; and new programs to support residents with special needs, according to the report.
While advancing its new housing plan, Palo Alto is also part of a group of cities that are trying to fend off a lawsuit from housing advocates for not having a compliant Housing Element. The nonprofit groups Yes In My Backyard and California Housing Defense Fund are seeking a court order that would force the city to rezone sites for housing by a specified deadline and that would limit Palo Alto's ability to deny housing projects until they have a certified Housing Element.
On April 19, the city's attorneys filed their response to the lawsuit from the nonprofit groups Yes In My Backyard and California Housing Defense Fund. In the response, the city strongly disputed the groups' assertion that the city had run afoul of state law and repeatedly asserted that the claims in the lawsuit "misstate, mischaracterize or misinterpret" state statutes.
The city's response also claims that Palo Alto has "acted in good faith in all matters pertaining to the petition, including preparing and adopting a Housing Element" and that any delay in formal adoption of the document is due to factors outside of its control.
"The City's adoption process is in progress, and because of time constraints in the Government Code and delays at the Department of Housing and Community Development due to an overload of submissions, any failure to comply with statutory deadlines has been impossible to avoid and outside the control of the City," Celia Lee, an attorney at Goldfarb & Lipman LLP, wrote on behalf of the city.
Comments
Registered user
another community
on Apr 28, 2023 at 5:55 pm
Registered user
on Apr 28, 2023 at 5:55 pm
PA has truly lost the plot.
Maybe it would be best to surround the city, and call the whole thing a museum, or oddity, or circus side show, and charge admission to all of the tourists who currently come and go without paying (literally) to see our Believe It Or Not showroom.
Maybe they are workforce employees, to meet the whims of the affluent. If they can't afford the entry fee, Mr. And Mrs Affluent Resident will have to learn to make coffee, do laundry, wash dishes and cook meals. Egad, has it come to this?
Let me get this right... Our City attorney hires an outside attorney to represent us at HCD?
Registered user
Green Acres
on Apr 28, 2023 at 7:38 pm
Registered user
on Apr 28, 2023 at 7:38 pm
Re: "...the city's most exclusive neighborhoods. According to the city's assessment, these areas include ..., Barron Park ..."
Seriously?
Registered user
Embarcadero Oaks/Leland
on Apr 29, 2023 at 9:31 am
Registered user
on Apr 29, 2023 at 9:31 am
Affluent areas in Palo Alto with expensive homes???? Where "affordable" studious rent for $4,000 a month to high=paid techies???
Who could have imagined.
And here I thought this was the rest of the USA where you the average home costs $300K.
Disappointed to see our fair city wasting money on this when they could have spent another $1,000,000 on dinosaur models and hired another asst city manager fir $35()K we can support with lifetime pensions and benefits.
Registered user
another community
on Apr 29, 2023 at 7:52 pm
Registered user
on Apr 29, 2023 at 7:52 pm
"Under the proposal, floor area limitations for homes on SB 9 lots would be raised from 800 to 1,200 square feet per unit, enabling them to accommodate one- and two-bedroom units."
Before everybody starts cheering for the affluent people who would allow a 1200 SF building to be erected on their property, think about who is going to llive there to improve the "diversity" of the neighborhood.
"Servant's quarters" comes to mind.
Registered user
Adobe-Meadow
on May 1, 2023 at 3:36 pm
Registered user
on May 1, 2023 at 3:36 pm
What is occurring in other cities in other states is that very large land holdings are now passing to the next generation which cannot afford to keep the "family place' up so are selling to the highest bidder. A relative in Lake Oswego, Oregon ended up with a whole street with second story houses over his fence line. Then moves to a suburb in Baltimore and same thing. A whole Cul-de-sac with two story homes is now over his back fence. The pool of people who can manage a large property is shrinking. And what state you live in can make a big difference - high taxation.
People keep pitching "diversity". People live where they can find work - and what type of wok you can do is up to the local economy. All those techies are now on the loose - what to do?
Registered user
Midtown
on May 1, 2023 at 3:41 pm
Registered user
on May 1, 2023 at 3:41 pm
Well-written article. Very informative. Thank you!
Registered user
College Terrace
on May 1, 2023 at 11:37 pm
Registered user
on May 1, 2023 at 11:37 pm
First, need to repeal SB 9. What makes neighborhoods wonderful is their lack of density (unless of course one wants to live in San Francisco, urban parts of Oakland, and urban parts of San Jose as a matter of personal preference).
Second, in the absence of not being able to repeal SB 9, the key is mandating/legislating SB XYZ: a required rent stabilization of only 5% increase every three years (for all rentals, not just those built 20 years ago) . Moreover, all new housing construction must offer 40% of the units at below market rates relative to a designated income level. For example, a one bedroom apartment or condo goes for about $3500 to $3800 per month. That same unit should rent for a maximum of $2000 per month (40 of 100 units set aside) for applicants making 80K or less per year.
There are plenty of units empty in Palo Alto. The owners/investors don’t lower their prices because they can write off the losses. Same applies to commercial properties. Change the law so that any commercial property or rental property that lays vacant still pays the full property tax and begins to pay a % of the market rate or below market rate each month. This will be the stick to lower their rates and make more housing available without having to build more units.
Finally, as part of the same law, prohibit private investment companies from buying up properties and then making them rentals (at always higher rates). Instead, homes can only be owned by one private person and only a maximum of 5: one of which they must live in. This will also drive rents down. And, more tiny home villages should be built, per city, to help the 20-40 something’s rent toward ownership and those that what to downsize in their 50s-80s. Here again, lower the demand pool to lower the price for homes and rentals. Last, legislation that awards more remote positions so the IT folks can move out of the Bay Area and reduce the horrible commute from all points to the Peninsula.
Registered user
Old Palo Alto
on May 3, 2023 at 2:04 am
Registered user
on May 3, 2023 at 2:04 am
As someone who opposes higher density and loves our city just as it is, I have serious concerns about these recent developments involving California's Senate Bill 9 (SB 9) and its potential impact on Palo Alto's neighborhoods. While I understand the need to address housing shortages and create more inclusive communities, I believe that relying on SB 9 to preserve local control over land-use decisions will ultimately alter the character of our beloved neighborhoods and negatively impact the quality of life for our residents.
The proposed policy of loosening local zoning laws to enable larger homes as a result of SB 9 lot splits will increase density and put pressure on existing infrastructure, schools, and public services. This not only threatens the unique character of our neighborhoods but also raises concerns about traffic congestion, noise, and other issues that can detract from the overall quality of life in our city.
Moreover, I believe that the focus should be on finding a balance between addressing housing needs and preserving the character of our communities. Forcing higher density upon single-family neighborhoods may not be the most effective solution to the housing crisis. We should explore other alternatives, such as incentivizing the development of affordable housing in suitable locations, improving public transportation, and promoting regional collaboration to address housing shortages.
Additionally, the potential consequences of delaying the adoption of a compliant Housing Element for our city should not be underestimated. We must recognize that our city's current noncompliance with the Housing Accountability Act exposes us to "builder's remedy" projects that can override local zoning regulations. This puts our city's ability to maintain local control over land-use decisions at risk.
As a lifelong resident of the city, I urge the city council and the Planning and Transportation Commission to carefully consider the long-term impacts.
Registered user
Another Palo Alto neighborhood
on May 4, 2023 at 9:42 am
Registered user
on May 4, 2023 at 9:42 am
For those of us who have been here 20 years or more, the appeal of Palo Alto has been its tree lined streets and the single family homes lining them. Whether it is in the more affluent areas north of Oregon or the southern area, we can testify that the reason we chose our homes was the space surrounding the home and neighbors with similar lots having similar values.
As for diversity, personally I don't care for their identity or profession, provided they are neighborly people who are pleasant to live beside. Packing more people into individual lots whether it is by splitting a lot or adding an adu (granny flat), is something that affects everyone in the community. From the length of wait time in the coffee shops, to the ability to get into a neighborhood school, or the ability for a guest to be able to park outside our house, packing more people into established neighborhoods will affect us all.
Once a lot is split or an adu is built, it will never return to a single family home. That is a detriment to the neighborhood.
I am concerned about this.
Registered user
Another Palo Alto neighborhood
on May 5, 2023 at 4:54 pm
Registered user
on May 5, 2023 at 4:54 pm
@Brian Hamachek
Rarely have a read something so balanced on this issue.
The other problem with densifying more than we already have at the serious expense of quality of life and safety (in a disaster-prone state)--and let's face it, it's not going to be the truly affluent areas that get affected--is that it makes the area (and the tax base) vulnerable to sudden shifts as we saw during the pandemic.
The quality of life is why people sacrifice to stay. Ruin it permanently through overbuilding, and it's hard to undo the damage (as SF is finding--shocking what's happened to Union Square).
Registered user
Adobe-Meadow
on May 8, 2023 at 11:30 am
Registered user
on May 8, 2023 at 11:30 am
I am concerned about the determination of some in the legislature to unravel what is a R-1 neighborhood in a suburban city which is lacking in all of the attributes required for densification - a reliable transit system, an up-to-date energy supply system, good roads, a crime free environment.
This city made it through the worst of the storms but we are still cleaning up the destruction left behind. I wonder about the people who are pushing this. Are they first generation Americans who still have stories of where their parents came from?
I am 4th generation CA and everyone worked very hard here to create what we have. All of the relatives who came before us have worked hard to create a life here. Who are the people who are trying to take that away? I can read about the need for housing in the papers but the papers do point out that the state owns a great deal of land where all of this new housing can go. It is time to turn the discussion as to where the state/federal land is and what is being done with it. They keep pushing the burden onto the taxpayer instead of doing the work themselves.
They are not fixing the roads, they are not fixing the water ways, they are letting all of the requirements slide because the do not know how to fix anything. They are pushing all of the fixes onto the taxpayer homeowner.