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After numerous rejections and dramatic revisions, Palo Alto’s plan to build more than 6,000 dwellings has secured state approval, according to an Aug. 20 letter from the California Department of Housing and Community Development.
The determination by the HCD that the city’s Housing Element is now in “substantial compliance with the State Housing Element Law” represents a key victory for the city after nearly two years of setbacks. Cities were required to have their housing elements certified by the HCD by Jan. 31, 2023. Those that failed became vulnerable to “builder’s remedy” applications that allow developers to effectively ignore local zoning regulations and design standards.
Melinda Coy, proactive housing accountability chief at HCD, wrote in her letter that as part of approval, the city must monitor and report on the results of various programs in the document, which aims to add 6,086 housing units by 2031. The programs that would require monitoring include the city’s plan to build housing on downtown parking lots, its efforts to expedite review of housing projects and a “housing incentive program” that grants height and density bonuses to housing projects in commercial areas.
She noted that state code grants HCD the authority to determine whether the city’s actions or failures to act constitute an inconsistency with the Housing Element.
“This includes failure to implement program actions included in the housing element,” Coy wrote. “HCD may revoke housing element compliance if the local government’s actions do not comply with state law.”
Once a perfunctory exercise, the adoption of a Housing Element became a high-stakes struggle this time around as a result of new state laws and much ambitious housing targets, which were set by the Association of Bay Area Governments through the Regional Housing Needs Allocation process.
The consequences of failing to win certification are also steeper than in the past, Palo Alto and other cities seeing a procession of “builder’s remedy” projects that far exceed zoning regulations.
Locally, these include a 350-apartment project at 3997 Fabian Way; a 382-apartment complex in two residential towers at the Mollie Stone’s site at 156 California Ave.; a 380-apartment project at the former site of The Fish Market at 3150 El Camino Real; and 231-apartment proposal at the Creekside Inn site, 3400 El Camino Real.
Council member Pat Burt, who rejoined the council shortly before the first draft was submitted to the HCD in 2022, said the 6,000 housing units in the Housing Element is “triple the largest number of units of any previous Element.”
“It’s been a real challenging process — really having to respond to new and often undefined requirements that kept emerging that were pretty unprecedented in the history of housing elements,” Burt said in an interview.
In addition to the high number of units that the city has to plan for — which is more than triple the requirement in the prior eight-year period — the process was unpredictable, Burt said. HCD not only required the city to add new housing sites and streamlining policies, it also asked the city to make other revisions such as expanding the history chapter focusing on historic discrimination, which added to the approval timeline.
The council had initially adopted the Housing Element in May 2023. After the HCD rejected its submission, the city added additional measures for streamlining approval of housing projects and created a “housing focus zone” with looser development standards on El Camino Real, between Page Mill Road and Matadero Road. Last month, the state agency signaled that it’s close to approving the document when it requested only a few minor revisions and clarifications to the latest submission. City planners completed these changes and resubmitted the document earlier is month.
The adoption of the Housing Element also followed years of opposition from Palo Alto Forward and other housing advocates who challenged the city’s strategies and methodologies for determining future housing sites. HCD had repeatedly noted in its letters that its determination considered the testimony of Palo Alto Forward and others as part of its review. The nonprofit, which advocates for more housing, dropped its opposition last month and endorsed the latest version of the city’s submitted Housing Element.
The document introduces a range of policies to promote housing, including significantly loosening height and density requirements for residential developments in commercial areas like San Antonio Road and El Camino Real just south of Page Mill Road. The commercial and industrial areas around San Antonio and Fabian Way would accommodate about 2,000 units. The city is now launching an area plan with the goal of adopting a new vision for San Antonio in which new housing is supplemented with amenities like parks, retail and bike amenities.
Other programs in the new Housing Element include building affordable housing on downtown parking lots; “upzoning” residential zones in transit-friendly areas so that, for example, properties that had previously accommodated up to 40 dwellings per acre could now be developed for 50 dwellings per acre; and construction of housing at three “opportunity sites” owned by Stanford University.
Burt said that with the document approved, city staff can “now pivot from having to deal with the approval to doing things that make the housing more likely.”
“We will be trying get built the largest growth in housing in Palo Alto in over 60 years when south Palo Alto was originally developed from greenfields,” Burt said. “But these units need to be added to a largely built-out environment, and we need to do so in a way that has strong community design with parks, streets that are walkable and safe for biking, and has nearby retail and services.”
In a statement, city officials heralded HCD’s approval of the Housing Element “a key milestone following several years of council, city commissions and staff leadership and community engagement,”
“The Housing Element will help guide future housing production and housing related programs and policies,” the city stated.
The statement from the city also highlighted recent actions to promote housing, including its effort to preserve the Buena Vista Mobile Home Park; its contribution of $52 million from affordable housing fund or land value toward various housing projects; pending construction of the 108-unit transitional housing project in the Baylands; the 50-unit development known as Mitchell Park Place that Eden Housing is building at 525 Charleston Road, which targets people with disabilities; and a 129-apartment project for low income residents that Charities Housing is building at 3001 El Camino Real, former site of Mike’s Bikes.
The city’s new Housing Element acknowledges that despite recent efforts, “more is needed at the local, regional and state level to address California’s housing shortage.”
“This Housing Element includes meaningful programs to further incentivize and facilitate housing production at the local level and seek partnerships to expand
affordable housing opportunities in the City,” the document states.
