The Cubberley Community Center Master Plan offers an example of the tensions and trade-offs involved in an all out push to build housing supply — in particular, whether limited publicly-owned land should be committed to long-term residential use or dedicated to the community services and facilities necessary to support a growing population.
On May 9, city consultants will convene the fourth and final community engagement session on a master plan to redevelop the Cubberley site. Anticipated as a wrap-up of the community co-design process, the consultants recently announced, based on discussions with City Council and the School Board, that the final meeting will also cover four brand new housing scenarios for the site. The scope and magnitude of the new housing concepts have not yet been released. But to the extent they impinge significantly on the priorities developed throughout the seven-month community “co-design” process, they could meet with some pushback.
The first community meeting focused on identifying the kinds of programming/uses participants hoped to see on the consolidated 43-acre site (Cubberley plus Greendell School plus PAUSD owned property at 525 San Antonio Road). The second meeting focused on prioritizing those uses. Affordable housing registered as desirable to some in both meetings, but in both instances was heavily outweighed by other priorities. The third meeting presented a draft concept plan that introduced potential teacher housing on the PAUSD property at 525 San Antonio, but focused primarily on site organization, massing, circulation, parking, and architecture and landscape styles. After that meeting, 73 percent of participants agreed or strongly agreed that “The Cubberley Master Plan is on the right track.”
One of the five priorities in the city’s 2018 Housing Work Plan included “engag[ing] in community conversations about the use of publicly-owned land for affordable housing.” With no city action on that goal to date, the introduction of new housing concepts at the final meeting of the Cubberley design process may demonstrate that the “conversation” is past due.
Stanford’s proposed 2.3 million square foot academic expansion will have far reaching local impacts on housing, traffic, schools, open space and more. The city, school district and our county representative, Santa Clara County Board of Supervisors President Joe Simitian, have been mutually supportive throughout the process of assessing the impacts of the university’s General Use Permit application, known as the GUP, and identifying mitigations and community benefits that could offset them. All three agencies recently participated together in a rally calling for full mitigation of Stanford’s PAUSD enrollment impacts.
Last month, the county was poised to issue a list of demands in the form of conditions of approval and community benefits that would form the basis for negotiation of a development agreement to govern the Stanford project. Meanwhile, the school district met with Stanford to discuss school impacts and emerged with a ready-to-sign agreement whereby Stanford would partially offset the per-student cost of new Stanford kids from tax-exempt housing, build a $15 million “innovative space” to be shared with the school district, and provide $500,000 for school transportation improvements. In exchange, the district would drop its demands for a new elementary school site on Stanford land, give up its right to sue and agree not to oppose any development proposed in the GUP.
Unfortunately, the proposed agreement also came with a big catch: the benefits would only materialize if the county signed on to a development agreement to approve Stanford’s expansion. Citing violation of established ground rules that forbid third party negotiations pertaining to the development agreement, Simitian and county staff immediately suspended planned discussions with Stanford and put development agreement negotiations on indefinite hold.
While Simitian has long welcomed negotiations between Stanford and PAUSD, he has made clear that they must proceed independently of the development agreement. News of the proposed PAUSD agreement elicited an unusually strong reaction from him as he criticized Stanford for using kids and schools as a cynical political weapon to force county concessions regarding housing, traffic, open space and other critical impact areas – issues that are of shared concern to constituents of the school district, the city, and the county alike.
The School Board gave the deal an initial enthusiastic reception, but it has not yet been agendized for approval. Supervisor Simitian says that development agreement negotiations will not resume unless Stanford modifies its deal with PAUSD to remove any conditions relating to county approval of the GUP.
For now, Stanford’s GUP will continue to be processed on the traditional review track. The county will release Conditions of Approval in response to the project’s Final Environmental Impact Report on May 23 and the County Planning Commission will hold a public hearing at Palo Alto City Hall on May 30 at 6:00pm. The Conditions of Approval will be available on the County Planning Commission’s website as part of the packet for it’s May 30 meeting.
With their backs against the wall, on April 15 City Council adopted new, objective standards for approving wireless equipment installations in the public right of way. Under new Federal Communications Commission regulations, the city would have no authority to reject new applications unless objective standards were in place by that date. The new ordinance creates a menu of acceptable installation designs including underground vaults; cylindrical pole-mounted “shrouds”; boxy “sunshields” for radio equipment attached to the side of poles; and equipment that can hide behind existing street signs.
Despite approval of the controversial new standards, the council heeded the pleas of dozens of residents seeking tighter controls. On a motion from Councilmember DuBois, they voted unanimously to direct staff to return within a year with an updated ordinance that considers minimum setbacks from homes and schools, minimum distances between cell antennas, and location preferences such as commercial vs. residential zones, arterial vs. neighborhood streets.
The Planning and Transportation Commission on Wednesday divided over zoning changes and impacts in the sensitive Baylands location as they voted 4-3 (Lauing, Summa, Templeton dissenting) to recommend accommodating a 48 foot tall, combined Mercedes and Audi car dealership in at 1700 and 1730 Embarcadero Road. The prospect of tax revenues from car sales seemed to carry the day, despite concern that the proposed project was far “out of scale” with the surrounding area and incompatible with the Baylands Master Plan.
The former Mings Restaurant site at 1700 Embarcadero had been previously up-zoned to allow a proposed hotel, introducing much more lenient development standards regarding height and density to the area. Although the hotel plan fell through, the new underlying zoning for that individual site remained, allowing the new owners to seek a similar intensity of use, still inconsistent with the surrounding area. The current application then sought to extend the more lenient zoning to an additional parcel to facilitate the combined Mercedes/Audi project.
Former PTC Chair Lauing encouraged his colleagues to resist doubling down on the controversial practice of project by project re-zoning and stay true to long established policy to maintain compatibility with other development across the surrounding area. Instead, the PTC majority relied on the existing, up-zoned Ming’s site to justify extending the zone to the neighboring parcel as “generally consistent” with area zoning.
Other concerns included both ecological and traffic impacts. The PTC voted to recommend conditions of approval to ensure that night-time lighting did not exceed that of other area properties and require that construction impacts on migratory birds would be mitigated. As for traffic, the adjacent intersection at Embarcadero and East Bayshore Roads is deemed one of the worst congested in the city. However, even with a requirement that the project pay a fair share of traffic mitigations associated with its impact, short term mitigations will be insufficient to manage the new traffic load and long term mitigations remain years away.
Palo Alto residents call for more robust and transparent approval process for small cell antennas
March 30, 2019 – by Tina Chow
Palo Altans are up in arms over the installation of cell antennas on utility poles in front of homes and schools throughout the city. Residents have many concerns about these “small cell towers” including aesthetics, noise, health effects, property value, and fire risk, among others. Furthering resident concerns, city staff are taking actions to codify controversial federal rules that streamline the cell tower approval process, limit public input, and hence reduce transparency. Other cities are doing more for their residents, and Palo Altans should demand nothing less. Speak up now before City Council takes action on April 15, 2019!
New FCC rules have opened the floodgates
A new order from the Federal Communications Commission (FCC) is enabling a flood of small cell towers by forcing rapid approval of applications. This FCC 18-133 ruling went into effect on Jan 14, 2019 and shortens the “shot clock” for application review to 60 days. It also requires that aesthetic standards be objective, non-discriminatory, and published in advance.
Palo Alto has already received over 150 applications for such “small wireless facilities.” With 4 major carriers and no requirement for consolidated or shared equipment siting, there could be hundreds more.
Wireless carriers say they are building small cell networks to enable transition to 5G (5th generation) service, which will operate at much higher frequencies and faster speeds to support gaming, self-driving cars, and the Internet of Things. The FCC severely restricts the fees that cities can charge for these smaller cells. A macro cell tower often earns a city roughly $30,000/year and the wireless provider assumes liability. In contrast, rental fees for small cells on utility poles are limited to about $270/year and the city has liability, creating additional financial advantages for carriers to create small cell networks that intrude further into neighborhoods.
Residents argue that these small cell towers are unsightly and unnecessary, and that they put the safety and welfare of our community at risk. Radio-frequency radiation has been shown to create adverse biological and health effects including cancer. In 2018, the National Toxicology Program of the National Institutes of Health concluded that long-term exposure to radio-frequency radiation from 3G and 4G cellular emissions causes brain and heart cancer in rats (Lin et al. 2018). This definitive and large-scale government study was replicated by the Ramazzini Institute, which used even lower radiation exposure levels. Dr. Joel Moskowitz, director of the Center for Family and Community Health at UC Berkeley’s School of Public Health, states that “many hundreds of peer-reviewed studies have found evidence of biologic and health effects from low level exposures to cell phone radiation. Hence, the FCC’s exposure guidelines must be re-assessed as they are likely inadequate to protect human health.”
Putting so many cell towers in such close proximity to resident homes (~20 feet) and schools means human exposures and hence adverse health effects will increase, especially for more vulnerable children and those with electro-sensitivity.
In addition, power lines and overburdened utility poles are implicated in the recent extreme wildfire events in California. Small cell towers would add hundreds of pounds of equipment hanging off already aging utility and light poles. Another concern is that property values have been shown to go down by 20 percent in some areas with new towers.
Proposed ordinance would reduce transparency and fail to mitigate key resident concerns
City staff in Palo Alto now want to update the wireless ordinance to streamline the approval process by creating a ‘menu’ of pre-approved designs and removing valuable public input from the process. This ‘menu’ would serve as an objective standard that would take the place of the City’s architectural review findings. Currently, the Architectural Review Board (ARB) evaluates the aesthetics of the proposed cell towers to make the required findings and make a recommendation to the Director of Planning.
With the plan to use a menu of options, decisions would be made solely by the Director of Planning. This means that in the future there would be no public hearing, public record, transparency, or meaningful public participation at all except through formal appeal of a decision to City Council – which is costly for residents and arguably more time consuming than an ARB hearing.
Staff claim that these changes are necessary under the FCC ruling which requires objective standards to be published by April 15, 2019. Remarkably, April 15 is also the date on which City Council is scheduled to consider these changes – with staff pressuring them to decide in favor or else lose the ability to reject applications until alternate standards are approved.
However the staff-proposed ‘menu’ is inadequate to address community objections. Other objective standards, such as requirements for undergrounding, setbacks from homes, and size of equipment, would all go further to mitigate many resident concerns. There is also no reason why we could not maintain the ARB public hearings to consider resident input and preserve our transparent process.
Other cities and lawsuits against the FCC
Other cities have interpreted the FCC ruling completely differently than Palo Alto city staff. In fact, the FCC order is currently being challenged by lawsuits brought forward by dozens of cities. These include such diverse cities as Los Angeles, New York, Seattle, Portland, Denver, San Jose, Hillsborough, Burlingame, Monterey and more. In addition, our own Congresswoman Anna Eshoo has introduced a bill to the U.S. House to overturn the FCC order.
Within this complicated legal context, dozens of other cities are taking action to protect resident interests and prevent small cell tower installations in such close proximity to homes and schools. For example:
Petaluma, CA now requiresundergrounding of ancillary equipment, 1500 ft minimum spacing of the small cells, and setbacks from residences.
Fairfax, CA passed an urgency ordinance putting a pause on cell tower installations and requiring setbacks from residences, schools, etc., and the city is pursuing a high-speed fiber-optic network.
Mill Valley, CA adopted an urgency ordinance to prohibit cell towers in residential zones, strengthen permitting requirements, set minimum distances and setbacks etc.
Ripon, CA also has a new ordinance that requires setbacks from schools and residences. Ripon, by the way, is having a cell tower removed from a school site after a cancer cluster (with at least 3 teachers and 4 kids affected).
Marin County is updating its ordinance, joined the lawsuit against the FCC and held a public meeting to discuss 5G in Marin County.
What can we do?
Residents must speak up now to preserve the health and safety of our community in Palo Alto. On April 15, City Council will vote on the Staff-proposed wireless ordinance changes, which would reduce public input and transparency while doing nothing to address public concerns.
A more robust set of objective standards that would include parameters such as setbacks from homes and schools, requirements for undergrounding, size of equipment, etc., informed by an inclusive public process.
A short term resident task force to inform standards that better reflect community concerns and values, with quick turn around of a resolution to adopt them.
Continued ARB review of applications to ensure public scrutiny and comment on proper application of the standards.
Tina Chow lives in Barron Park and is a Professor of Civil and Environmental Engineering at UC Berkeley.
Please Help Protect the President Hotel Apartments and Residents Citywide
March 29, 2019 – By PAN (Palo Alto Neighborhoods) Committee on Development, Zoning, and Enforcement
The City Council will decide Monday night whether to remove a 2016 law that currently prevents the President Hotel Apartments and similar buildings from becoming hotels or offices.
The impact on tenants in downtown apartment buildings could be devastating. Already, occupants of the 75-unit lower-rent President Hotel Apartments have had to leave because the building’s recent buyer, AJ Capital, aims to convert the property into a luxury hotel. Other tenants downtown may be affected too if the city removes the 2016 law, which is blocking conversions from any use to another in so-called “grandfathered” or oversized buildings.
The city claims the 2016 law was actually an unintended cut-and-paste error and seeks to replace it by a narrower ordinance that limits just the conversion of housing in oversized Downtown buildings to other uses or fewer units. However, city staff fear that AJ Capital or perhaps other owners will challenge the narrower law in court and prevail. So the proposal on Monday night also includes a controversial “waiver” process that allows the City Council to exempt a developer from other zoning laws, thinking this might lead to a compromise that would avoid a court battle.
The City’s approach is insufficient and very worrisome. Instead of just protecting residents in specific Downtown buildings, the Council should enact a city-wide law to prevent all conversions of residences into commercial space, akin to its ban on groundfloor retail and similar uses converting into offices. Such a law could benefit thousands of renters across town and also potentially be easier to defend.
The waiver process is itself problematic. The proposal has no guarantee that apartment tenants will be notified when their landlord applies for a waiver. Without that, they could wake up one morning to discover the City Council has granted their building generous exemptions the night before and that the residents must all move out when their leases end. Instead, every tenant should receive notice of any waiver hearing for their building well in advance.
The waiver proposal also empowers a slim majority of four councilmembers to grant benefits worth tens of millions of dollars to a developer by placing no limit on how many zoning rules are eliminated or watered down. For example, a council majority could respond to a waiver request by granting rights to build an office tower with no parking. Nothing in our municipal code currently gives councilmembers so much unchecked power for a specific site.
When the seven-member Planning and Transportation Commission reviewed the waiver proposal in January, they unanimously recommended against it. They further advised the Council to obtain outside legal advice after expressing concerns that the waiver process might not even be necessary. Their votes reflected concerns raised by many residents who spoke and wrote to them.
From the beginning of the President Hotel Apartment tragedy, our city has failed to protect tenants and preserve rental units, despite repeated proclamations that housing is a top priority. That can change Monday night if we insist that the Council:
insure that any waiver process fully protects tenants,
limits developer exemptions to the very minimum required by law,
consider the unanimous Planning Commission recommendation to eliminate the waiver, and
look at adopting a city-wide residential preservation ordinance.
We encourage you to send an email in your own words to the City Council at City.Council@CityofPaloAlto.org. You can also attend Monday’s Council meeting to speak or support others on this issue.
“Jobs-rich” designation extends impacts well beyond transit zones in Palo Alto
March 3, 2019 – Palo Alto Matters
Since last year’s defeat of Senate Bill 827, State Senator Scott Weiner has returned to try his hand again at replacing local zoning control with one-size-fits-all, state mandated housing standards. SB-827 sought to encourage bigger, denser housing projects near transit. This year’s version, Senate Bill 50, extends state mandates beyond transit corridors to include all residentially zoned parcels in “Jobs-Rich” areas. Whether a community is jobs-rich would be determined by proximity to jobs, area median income and public school quality. By those indicators, it seems inevitable that SB-50 impacts would reach all of Palo Alto.
SB-50 creates a tiered system of incentives designed to make dense housing projects more appealing to developers by requiring cities to waive or adjust local zoning rules regarding such things as density, parking, height and the size of a building relative to the size of the lot (known as Floor Area Ratio). Eligible projects also must be granted up to three additional density bonuses of their choosing (e.g., site coverage, setback, or daylight plane adjustments, even more height or FAR, etc.). Different sets of incentives apply based on the category of a project’s location:
In a Jobs-rich area or within ¼ mile of a high quality bus corridor.
Within ½ mile of a train station.
Within ¼ mile of a train station.
Within a ¼ mile of a train station, for example, dense housing projects could be up to 55 feet high (rising to 75 feet with density bonuses), with building floor area of 3.25 times the size of the lot, and no on-site parking.
To help make SB-50 easier for people to understand, we partnered with the Embarcadero Institute, a 501(c)3 nonprofit organization, to commission a professional analysis and visual renderings of what SB-50 could mean, on-the-ground, for Palo Alto. The report explains SB-50’s system of tiered development incentives and maps out where each tier would apply in the city.
The report also calculates the theoretical maximum housing units that could be produced through SB-50 redevelopment, based on both SB50 incentives and underlying zoning. Those calculations take the very conservative approach of counting only transit rich areas (in the unlikely event that Palo Alto is not ultimately deemed jobs-rich) and not counting extra units that could be achieved through additional density bonuses that may be chosen by developers. Still the theoretical maximum comes to 58,000 units, more than three times the entire city’s current housing stock. Adding in the much larger jobs-rich area would yield a much higher number.
Projections regarding increased parking congestion due to the reduction or elimination of on-site parking requirements and new population growth were beyond the scope of the study. However it does note that car registrations per capita in Palo Alto have climbed by 14 percent in the last five years, reflecting car ownership trends across the Bay Area.
Finally, to show the look and feel of increased building density and intensity allowed under SB-50, the report includes before and after images at five Palo Alto locations showing possible projects if developers take advantage of the state mandated up-zoning. Again, a conservative approach was taken to exclude discretionary density bonuses, demonstrating only what could be built under the bill’s explicit provisions regarding elimination of unit density limits, increased height limits, and higher Floor Area Ratios (floor area relative to the size of the lot).
Without local controls, developers decide
Surely some will cheer the potential housing growth under SB-50 and welcome a new look and feel for the city. Others will hate it. But don’t be fooled into thinking that “this could never happen in Palo Alto.” With the elimination of local controls under SB-50, the market-driven choices of individual developers and their “reasonable judgment” about zoning requirements will drive the outcome.
Recent studies have shown that up-zoning to increase density significantly increases land values, creating a substantial market incentive to buy up property for redevelopment. Once a site is acquired, developers will be entitled to take advantage of SB-50’s development incentives, whether the city or its voters like it or not.
The only way the city could stop or constrain an eligible project is through a showing of significant adverse effect on public safety, the physical environment, or properties on the historic registry. In addition, thanks to changes to the state Housing Accountability Act enacted in 2017 (AB-678, SB-167, and AB-1515), courts must defer to the reasonable judgment of the developer rather than a local government’s planning department as to consistency with zoning requirements – without regard for the weight of evidence.
SB-50 is a no-turning-back proposition. Bigger and denser housing projects with little or no on-site parking could result in a radical shift, city-wide, from today’s detached-house development pattern to a townhouse and apartment development pattern. Over time, that may or may not lead to greater affordability or reduced car ownership. Either way, under SB-50’s mandates, it will be up to developers, not the city, to determine whether SB-50’s vision comes to fruition.
SB-50 has been referred to the Senate Housing Committee, chaired by State Senator Scott Weiner, and the Senate Governance and Finance Committee, chaired by State Senator Mike McGuire. Whether it will get amended and/or approved in committee and move forward to passage is still an open question. Let your local representatives know what you think about the bill:
There will be a joint hearing of the Senate Housing and Governance and Finance Committees on March 5, at 1:30 pm focused on: “Addressing California’s Housing Shortage: How Can We Create Environments to Facilitate Housing Development?” Livestream video will be available here. Or you can view it in the media archive after the fact.
Assemblymember Berman will hold a public Open House on March 7, from 4 to 6 pm at his District Office, 5050 El Camino Real, Suite 117, Los Altos.
State Senator Hill will be meeting with mayors and city managers from across the district to discuss housing on March 15.
Touted as balanced compromise, Compact faces criticism from cities and offers no assurance of cohesive legislation
March 2, 2019 – Palo Alto Matters
SB-50 is perhaps the most prominent in a slew of proposed state legislation to implement an ambitious regional housing plan known as the CASA Compact. The Compact was designed as an interdependent package to address all three legs of the housing stool: production, preservation, and renter protection. Supporters describe the Compact as a necessary, if imperfect, compromise and they hope that controversial elements will have a better chance of passing if they all advance together to the state Capitol. However the Compact itself has been met with strong criticism and there is no certainty or commitment that every piece will move forward.
What is the CASA Compact?
The CASA Compact was created by the Committee to House the Bay Area, a coalition of developers, business leaders, elected officials, labor interests and tenant advocates convened by the Metropolitan Transportation Commission. Recently endorsed by the MTC and the Association of Bay Area Governments, known as ABAG, the CASA Compact consists of an ambitious ten-point planto:
Spur housing construction through minimum zoning near transit; streamlined approvals and exemptions from the California Environmental Quality Act; property tax breaks for developers; use of public lands for affordable housing; and further incentives for accessory dwelling units. “Sensitive communities” with a high percentage of low income residents, would get a grace period of up to 5 years to propose community-driven alternatives to meet state performance standards (i.e., housing production goals).
Protect renters through just-cause eviction rules and relocation assistance; access to emergency rent assistance and legal help; and a temporary cap limiting the size of annual rent increases.
The Compact calls for $1.5 billion in local and regional “self-help” funding (through taxes, fees, bonds and revenue set-asides) to implement the plan including: $1 billion from taxpayers, property owners and local governments; $400 million from employers; and $400 million from developers. At least 60 percent of that funding would go towards housing production, ten percent would go towards renter protections, and 20 percent would go toward preservation.
Notably, the CASA Compact also calls for state legislation to create an independent Regional Housing Enterprise board comprised of MTC and ABAG representatives and the stakeholder representatives who developed the Compact itself. The unelected RHE would have authority to collect and disburse fees, taxes, and other revenues, allocate funding, and issue debt.
Competing interests of small and big cities
The Mayors of San Francisco, Oakland, and San Jose were all on the CASA Steering Committee and voted to approve the final CASA Compact. However, numerous other cities and towns have been strongly critical and objected that the interests of their cities were not represented. The Cities Association of Santa Clara County, representing 15 cities, argued that the Compact’s one-size-fits-all solutions neglect the diversity of needs in each city and threaten to leave cities “without adequate funding for the infrastructure that makes our communities whole – schools, transportation, etc.” Similarly, they argued that the failure to engage cities of all sizes in the plan’s development could lead to significant unintended consequences both locally and regionally.
The intrusion on local land use decision-making (and the associated exclusion of community interests).
The diversion of property tax revenues that are vital to local General Funds and could result in cuts to core services in every Bay Area city; and the redistribution of those funds to counties (perceived as likely to benefit big cities at the expense of smaller cities with lesser voice in county decision-making).
Undermining of effective and promising ongoing local strategies to confront jobs/housing imbalances and finance and support the availability of affordable housing.
Sunnyvale Mayor Glenn Hendricks likened the proposed funding mechanisms and changes to land use authority to “a direct assault on cities” and Mayor Steven Scharf of Cupertino described the Compact as “a product that 97 percent of Bay Area cities think is a terrible idea.” Palo Alto’s then-Mayor Liz Kniss wrote that “[i]t would be problematic for MTC, as an organization representing local governments, to advocate the sweeping legislative proposals embodied in the CASA Compact without clear and robust engagement opportunities for Bay Area communities.”
Selective enactment could subvert the “compromise.”
Without legislative action toward all three goals of production, preservation, and protection, the so-called compromise embodied in the CASA Compact falls apart. Although SB-50 is a fairly fleshed out bill, not every Compact element has received as much attention. And there is no mechanism to ensure cohesion among the bills seeking to implement various elements of the Compact. While housing production incentives have picked up steam, both in Sacramento and locally, they focus mostly on “missing middle” populations earning up to 150 percent of medium income or more. Efforts to expand low-income housing, renter protections and anti-displacement policies have faired more poorly.
Perhaps indicative of the fragile promise of the CASA Compact’s “compromise,” the California Apartment Association, which represents landlords and participated in the CASA planning process, has already said it “will oppose any [CASA Compact] related legislation aimed at implementing the rent control and just cause eviction elements.”
Would enforcing the Cap help us get more housing downtown?
February 8, 2019, by Palo Alto Matters
The City Council is poised to repeal the Downtown Commercial Cap in Monday, February 11 with potentially major impacts on commercial and housing development downtown. Many Palo Altans don’t know about the Downtown Commercial Cap or understandably confuse it with Palo Alto’s other commercial caps. So we thought it was time to get you up to speed on how the Downtown Cap fits into the big picture of land use management in the city. Read on or scroll down to learn why the Downtown Cap is suddenly a big deal and where our public officials stand on it.
With the profit margin for commercial space well above that for most housing, the right combination of commercial controls and housing incentives could be key to tilting our jobs/housing imbalance.
COMMERCIAL DEVELOPMENT CAPS
Having struggled for several decades with an outsized jobs to housing ratio and the negative local impacts it creates, the city over the years has created three major limitations on commercial (jobs producing) development:
City-wide Cumulative Cap: Imposes an 850,000 square foot limit on the total amount of office and research-and-development growth in the city by the year 2030 (excluding medical offices in the vicinity of Stanford Medical Center). The City-wide Cap was reduced from 1.7 million new square feet in response to a citizens initiative in the summer of 2018. The lower Cap equates to an annual average of about 57,000 new square feet of office/R&D.
Annual Limit: Regulates the pace of office/R&D growth in the California Avenue, downtown, and El Camino Real areas by limiting project approvals to 50,000 square feet of office/R&D development in a single year. The Annual Limit does, however, permit unused square footage to be rolled over and added to the subsequent year’s allowable growth and includes some exemptions.
Downtown Commercial Cap: A cumulative limit on the total amount of new commercial development specifically in the downtown district. This Downtown Cap applies to all new non-residential development (e.g., office, R&D, hotel, retail, etc.). Once 350,000 square feet of new commercial development has been approved (relative to a May 1986 baseline), a one-year moratorium is imposed, preventing new downtown commercial floor area for one year while the city undertakes study and implementation of appropriate new regulations to manage downtown land use and its impacts.
HOUSING DEVELOPMENT INCENTIVES
The city recently created substantial new incentives designed to make housing development more economically attractive and feasible. In addition to new Affordable and Workforce Housing Overlays, the newly approved Housing Ordinance makes major changes throughout the zoning code, including the downtown district, that convey millions of dollars worth of value by reducing development standards for parking, density, size, and the like for both new and existing residential and mixed-use projects.
However, private economic incentives continue to strongly favor office over housing development downtown (higher rents per square foot offer greater return on investment for developers/owners). The city’s recent Downtown Development Evaluation Residential Capacity and Feasibility Analysis (October 2017) concluded that “the strength of competing uses (specifically for office space)” is one of the primary barriers to significant residential development in downtown Palo Alto. Indeed, the city itself speculated in a recent staff report that the new Housing Ordinance “is not likely to persuade a land owner redeveloping their property to build residential housing instead of commercial.”
WHY THE URGENCY AROUND THE DOWNTOWN CAP?
The goal of controlling commercial growth embodied in the 33-year old Downtown Commercial Cap ordinance is about to become real. City staff estimates that only about 18,000 square feet of commercial growth remains allowable under the Cap. Once that 18,000 square feet are consumed, the moratorium will kick in, preventing any new non-residential development downtown for one year (or more if extended), while appropriate new policies are designed and implemented. That means the proposed conversion of the President Hotel Apartments to a hotel, which given its size “would puncture the cap,” must wait, as must other new office, retail, or other commercial projects. On the other hand, allowing little or no commercial expansion downtown, even temporarily, could encourage developers to switch to housing, especially given the new housing incentives.
Whatever the council does on Monday night will have prompt and lasting impact. They could repeal the Downtown Cap, rendering meaningless its longtime promise of controlling downtown commercial growth on the eve of fulfillment. They could retain the Cap and hold downtown commercial development static while the city figures out whether and/or how to accommodate more commercial growth. Or they could direct staff to return with a proposal to revise the Cap to prioritize current community needs and preferences such as enabling additional commercial growth only for local-serving retail and services. Whichever way they go, it could largely determine how much new housing gets built.
HOW WE GOT HERE
The city passed the Downtown Commercial Cap ordinance in 1986 due to widespread concern about negative community impacts from unfettered downtown commercial growth. The 350,000 square foot limit allows about 10 percent growth beyond the total downtown commercial square footage existing as of 1986. That Downtown Cap was later embedded in the city’s 1998 Comprehensive Plan and updated in the zoning code in 2006.
Consistent with the law, once cumulative approvals of new non-residential floor area reached 235,000 square feet, the city commissioned a study in 2013 to reevaluate the limit. The Downtown Development Study was to be completed in two-phases: a data collection and projection analysis Phase I, and a policy analysis Phase II to formulate appropriate response strategies. Phase I was completed and shared with City Council and the Planning and Transportation Commission in 2014 and 2015.
According to Monday night’s staff report however, work on the policy analysis Phase II was stayed in January 2017 when a slim 5-4 majority led by Cory Wolbach and Greg Scharff voted to eliminate the Downtown Cap from the city’s updated Comprehensive Plan. Without the benefit of the planned Phase II analysis, both council members and the community at large were denied the opportunity to consider informed policy alternatives.
Although no longer in the Comprehensive Plan, the city’s broad guiding policy framework, the Downtown Cap remains a city ordinance. Last summer, just as the controversy over the President Hotel was heating up, city staff brought a proposal to repeal the ordinance to the Planning and Transportation Commission. Staff interpreted City Council’s January 2017 action as signaling intent also to repeal the longstanding, underlying ordinance. Nonetheless, the PTC voted 4-0-1 against recommending repeal, primarily on the grounds that it seemed inconsistent with the city’s push to promote housing downtown and the groundswell of community support for the citizens initiative seeking to reduce office growth citywide. Now the fate of the Downtown Cap ordinance will return to council with Monday’s vote.
PRO OR CON?
Arguments against the Downtown Cap
Those seeking to repeal the Downtown Cap argue that the cap is too blunt an instrument. They contend that downtown’s transit resources make it a good place for commercial growth and that the City-wide Cumulative Cap together with the Annual Limit in the California Avenue, downtown and El Camino Real areas make the Downtown Commercial Cap unnecessary.
Arguments for the Downtown Cap
Supporters of the Downtown Cap counter that the concerns leading to its original enactment have been borne out, with significant downtown commercial growth exacerbating the jobs/housing imbalance, creating major traffic and parking problems, and contributing to spiking rents by squeezing out housing. Because the Citywide Cap and Annual Limit allow average annual office space to expand more and faster than the historic average, they assert that those tools are insufficient to slow commercial growth. Finally, they argue that enforcing the cap offers the best promise for actually getting needed, and vigorously prioritized, new housing downtown. If the Downtown Cap is repealed, the economic incentives favoring office growth will persist.
WHO STANDS WHERE?
Councilmembers Fine, Kniss, and Tanaka all voted to eliminate the Downtown Cap from the Comprehensive Plan in 2017 and Councilmembers Dubois, Filseth, and Kou voted to retain it. If those returning councilmembers maintain their position as to repeal of the Downtown Cap ordinance, that leaves newly elected Councilmember Alison Cormack as the swing vote. At a public debate during the campaign, she “didn’t see any reason to remove the Cap,” but cautioned that there may be details she didn’t know or wasn’t privy to. More recently, she has indicated in meetings with residents that her view of the issues has changed.
At the grassroots level, Palo Alto Neighborhoods (PAN) recently issued a call to action in support of keeping the Downtown Commercial Cap.
If you have an opinion regarding repeal or retention of the Downtown Commercial Cap ordinance, or suggestions for a “third way,” be sure to share it with City Council. You can email the full council at email@example.com or attend the City Council meeting on Monday, February 11 to speak or support others on the issue. The Downtown Cap item is scheduled for discussion beginning at 8:45 pm.
Following the defeat of SB-827 in the 2018 legislative session, State Senator Scott Weiner circled the wagons and returned this month with a new proposal, SB-50, that adds some protections for existing rental housing sites and temporarily preserves local control for “sensitive communities” that are particularly vulnerable to displacement pressures. At the same time, however, SB-50 reaches far beyond the “transit-rich corridors” targeted for state mandates under SB-827.
SB-50 would require local governments to grant housing developers an “equitable communities incentive” not only for housing projects within a half mile of a major transit stop (rail station or ferry terminal) or a quarter mile of a stop on a high quality bus corridor, but also ANYWHERE that housing is allowed in an area deemed “job-rich” based on indicators such as “proximity to jobs, high area median income relative to the relevant region, and high-quality public schools.”
At a minimum, the equitable communities incentive must include waivers of parking requirements greater than 0.5 spots per unit and any maximum density controls, as well as up to three additional incentives and concessions available under the existing State Density Bonus law. Those additional concessions include such things as increased height, site coverage, and Floor Area Ratio limits; reduced side- and rear- setback requirements; and reduced daylight plane requirements.
Projects that are also close to transit and include a minimum, unspecified percentage of affordable units are then entitled to additional waivers as follows:
Within 1/2 mile, but more than 1/4 mile from a major transit stop: no height limits less than 45 feet, no Floor Area Ratio limits less than 2.5, and no parking requirements.
Within 1/4 mile of a major transit stop: no height limits less than 55 feet, no FAR limit less than 3.25, and no parking requirements.
The new, greater unit densities enabled by the waivers will form the baseline for calculating available additional concessions under the State Density Bonus law.
SB-50 has only just been introduced and is likely to undergo some amendment before coming to a vote. However, if passed in its current form it would likely apply to all residential, mixed use, and commercial zones in Palo Alto, including every single-family neighborhood. Council members have already begun to weigh in with differing perspectives. On one hand Councilmember Adrian Fine expressed general support, saying “we need the state to step in … [l]ocal councils and the idolatry around local control are not going to solve our housing issues.” In contrast, Councilmember Eric Filseth said the bill was “horrible for voters” because it ignores that addressing the housing crisis depends on paying for all the infrastructure necessary to sustain regional growth. SB-50 “skips all that.” Whether City Council will take a position on SB-50 remains to be seen.