With construction now under way on Palo Alto's first teacher-housing project, city officials sent a strong signal Monday that they're ready to welcome a second.

On Sept. 11 the City Council got its first look at a 44-apartment project that the developer Half Dome Capitals is hoping to build at a vacant lot next to a Travelodge motel. While the council didn't take any votes, members indicated that they liked what they saw and strongly encouraged the developer to proceed with the plan despite some concerns over whether most teachers will actually be able to afford to live there.

Formed in partnership with Palo Alto's teacher unions, the development at 3265 El Camino Real would provide 20 studios and 24 one-bedroom apartments targeting members of the two Palo Alto Unified School District teacher unions, Palo Alto Educators Association, which represents teachers, and California School Employees Association, which represents librarians, teaching assistants, bus drivers and other school district employees who are not certified teachers.

Nearly two dozen educators spoke in favor of the project, which they said would help both local teachers and the district with its recruitment and retention efforts.

Hunter Reardon, an English teacher at Palo Alto High School since 2016, recalled the difficulty he faced in the first half of his career in finding a place to live anywhere near the school. He said he moved four times between three different cities over the past seven years. Having a studio anywhere close to Palo Alto High School would be considered a "miracle," he said.

"I know I'm not the only teacher in this community who at an age 23 had to somehow figure out their first year of teaching while also enduring hour-plus commutes each way, see most of their first-year salary go toward rent and endure a net decrease in living conditions after moving out of college dorms and into their career," Reardon said.

Margarita Mendez, a Spanish teacher at Fletcher Middle School, said she routinely rides an e-bike to school, a luxury that many of her colleagues don't have because they live so far from Palo Alto.

"I can do this because I live within 10 miles of Fletcher, unlike our school librarian who commutes from Walnut Creek every day, two hours if there's no traffic."

Jason Matlof, managing director at Half Dome, said he was inspired to develop a project for local teachers after raising three children in Palo Alto and seeing how many of their teachers have to commute from afar. He noted that 87% of the city's teachers live outside the city.

"Providing affordable housing for teachers not only strengthens the district's ability to recruit and retain but also allows teachers to stay after school to attend more sporting events and club activities and other events that they currently can't do because many of them are commuting to faraway homes," Matlof told the council.

The proposed development is far more modest in scale than the teacher-focused project now being constructed at 231 Grant Ave., near the county courthouse. That project includes 110 apartments and aims to serve various school districts in Santa Clara County. But unlike the Grant Avenue project, the one pitched by Half Dome is hyperlocal in focus and does not rely on public funds. The Grant Avenue project, which is being developed by Mercy Housing and Abode Communities, required an infusion of county and city funds.

The privately funded nature of the project is one of many reasons that endeared the project to the council. Council member Pat Burt called it an "exciting proposal," while Council member Ed Lauing said "it's exactly what we're looking for, if not more, for PHZ (planned home zoning)," referring to the zone change that Half Dome is requesting to get approval for.

The council's biggest concerns pertained to parking and unit affordability. While all 44 apartments would be offered at below-market-rate levels, rents would vary widely, with 20% of the apartments designated for workers making 80% of the area median income and the remaining 80% designated as "affordable teachers."

Matlof estimated that rents for those in the low-income category would be about $2,200 for studios and $2,500 for one-bedroom apartments. For those in the moderate-income category, which is for households making 81% to 120% of area median income, the rents would be $3,600 and $4,100 for studios and one-bedroom apartments, respectively.

Given this discrepancy, some council members and residents wondered whether these units would be truly affordable to Palo Alto teachers, whose 2023 salaries range from $76,488 to $154,336, according to city staff. Vice Mayor Greer Stone, a teacher who formerly worked for the Palo Alto Unified School District, said teacher housing is desperately needed but noted that most of the units will not be affordable to teachers in the early stages in their careers and will largely go to their more tenured colleagues.

"My concern is that teachers who are deep in their career are likely either already settled in a home, they have families, they're not well-suited for a studio and a one-bedroom apartment," Stone said.

Council member Julie Lythcott-Haims concurred and suggested that the city hasn't yet "hit on a metric that's going to attract the people we want to attract and retain."

"If we're going to attract and retain teachers in this city, we've got to make it possible for them to live here when they're starting out," Lythcott-Haims said.

Teri Baldwin, president of the Palo Alto Educators Association, had no such concerns. The rents proposed by Half Dome remain well below the average rent in Palo Alto, she said.

"We're not going to, with 44 units, help every teacher out there. We have over 800 teachers," Baldwin said. "It's really about trying to help the ones that we can right now and hopefully more projects will come forward."

The "planned home zoning" process that Half Dome is working on allows residential developers to negotiate with the City Council over zoning exceptions. In this case, the developer is seeking a height exemption that would allow the building to be 58 feet tall, with a density bonus and a reduction in the parking requirement. The building would have 22 parking spaces in its ground-level garage – a ratio of half a spot per unit.

While Matlof said the ratio of parking spaces per apartment is consistent with demand in other multi-family projects in transit-friendly zones, some council members wondered whether the number of parking spaces would be sufficient. Burt said some of these concerns could be alleviated if the developer offers resident opportunities to use carshare services like Zipcar.

"I'm really of the belief that that's a direction we should be heading in as we're having more limitations on parking, not to mention really admirable projects like this, where parking drives costs," Burt said.

Council member Vicki Veenker, whose parents were teachers, joined his colleagues in encouraging Matlof to advance the project and said the city will need "creativity of this type to address the housing crisis we face."

"I truly hope you do set the precedent that you're out to set, to see for-profit builders be able to do affordable-housing projects like this," Veenker said.