With an eye towards balancing future jobs and housing growth, Mountain View city planners are proposing a new strategy that inextricably ties residential development to any office growth in the East Whisman area of the city.
The "jobs-housing linkage" strategy is the city's attempt to to take a clear-eyed approach toward solving the regional housing crunch, caused in large part by job growth that vastly outpaces the construction of new housing. The city's blueprint for future development in East Whisman seeks to address the problem head on, with tight restrictions to ensure 5,000 units of new housing are built alongside 2.25 million square feet of office space in the northeast corner of the city.
The East Whisman Precise Plan, currently under public review, is premised on the idea that office and housing construction are not on an even playing field, with obvious financial incentives favoring offices. Absent a mix of incentives and restrictions, the housing envisioned for East Whisman may go unbuilt while developers scramble to build as many tech offices as allowed.
Before any project gets approved, developers will have to submit a jobs-housing linkage plan detailing how they plan to "facilitate residential development." The plan could include dedicating land for housing or a partnership with a residential developer, and it's contingent on the housing getting built first. Residential developers also have an extra financial arrow in their quiver, with the ability to demolish offices for housing and "sell" the rights to that square footage to an office developer in the area.
All told, the policy is intended to lock East Whisman's future development at a ratio of 2.5 homes for every 1,000 square feet of office and research and development space. A city staff report readily admits that's still below a perfect equilibrium -- estimated at 3 housing units for every 1,000 square feet of offices -- but it would still put a big dent in the city's lopsided jobs-housing imbalance.
Developers in the area have warned that office and residential growth can't be expected to always happen at the same rate, particularly with the hodgepodge of property owners in East Whisman, according to the report. And having office projects contingent on the approval of housing means office developers are put in an uncomfortable position, relying on projects over which they have no control. The precise plan does have some flexibility on the timing, allowing office projects to move forward once there is a deed restriction or land dedication for housing.
The framework of the linkage strategy largely won the support of the city's Environmental Planning Commission on Wednesday, April 17, with commission member Robert Cox seeking assurances that the city will hold the developers' feet to the fire on the ratio of 5,000 housing units to 2.25 million square feet of offices.
"The 2.5 (ratio) is just about an even housing balance and I really have a strong desire that we don't make things worse with these precise plans," Cox said.
But one lingering concern, which dominated much of the commission's discussion, was whether the city is already on track to break those rules. On the other end of town, the City Council signed a deal with the Los Altos School District for the district could "sell" developers the rights to build 610,000 square feet of additional office and residential development in exchange for $79.3 million, which would help finance the purchase of land and construction of a school campus.
Six of those developers who bought development rights intend to build in East Whisman, and much of which is proposed is offices. Taken together, the projects would put 389,000 square feet of offices and 762 housing units in the area -- or about 2 housing units per 1,000 square feet of offices -- immediately running afoul of the precise plan's proposed ratio.
The city could simply exempt all projects from the linkage strategy if they bought density rights from the Los Altos School District, or it could stick to the ratio and put the onus on the developers to incentivize housing growth. The latter, city staff cautioned, could torpedo the school district's financial agreements.
Tampering with the complex and potentially fragile deal between developers and the school district seems like a bad idea, said commission member Bill Cranston, who strongly opposed the idea of imposing the linkage strategy on projects involved in the transfer of development rights (TDR). The precise plan is a forward-looking document exclusively for East Whisman, whereas the school district's sale of development rights is already in the pipeline and not exclusive to East Whisman.
"The TDR program is a different program landing on this at the same time," Cranston said. "I think the jobs-housing linkage program should be there, it's just that we've got a timing problem."
Commission members unanimously agreed to allow the TDR projects to move forward, but subject to "limitations." For example, developers who bought density rights from the school district may not have to directly partner with or facilitate residential development. Instead, they would be held to a lower standard and could offer fewer housing incentives. One of those TDR projects, located at 339 N. Bernardo Avenue, may be only partially responsible for offsetting its development with housing incentives.
Cox, who voted on the compromise, said the city should do its best to stick to its guns on the linkage ratio, particularly at a time when state lawmakers are proposing to take away local control over housing development in order to ensure housing gets built.
"Trying to achieve some jobs-housing balance is an important role for our city, even to the point where we have people in Sacramento that think it's important enough that they may have to take away our ability to make decisions," Cox said. "I really believe we have to show we are doing that."
The draft East Whisman Precise Plan can be viewed online. The City Council is tentatively scheduled to discuss the plan on Tuesday, May 7.
Comments
Whisman Station
on Apr 23, 2019 at 2:18 pm
on Apr 23, 2019 at 2:18 pm
Kudos to the City Council for the East Whisman Precise Plan.
Willowgate
on Apr 23, 2019 at 2:32 pm
on Apr 23, 2019 at 2:32 pm
I just hope that there's a requirement for a significant portion of the "housing" units to be homes that people can actually own rather than rent. Mountain View already has enough renters (a majority, in fact). Communities are built by people who have a financial stake in their homes, not by itinerants.
Registered user
another community
on Apr 23, 2019 at 2:42 pm
Registered user
on Apr 23, 2019 at 2:42 pm
@Alex M
It's a great idea in principle. But those of us who can (barely) afford to rent right now definitely cannot afford to own.
And after 26 years, I'm no itinerant.
Cuernavaca
on Apr 23, 2019 at 2:42 pm
on Apr 23, 2019 at 2:42 pm
Alex, it's frankly quite disgusting for you to denigrate all the people that rent in Mountain View. I've rented here for 25 years, and I've done more to build this community in a week than classists like you ever have.
Cuesta Park
on Apr 23, 2019 at 3:15 pm
on Apr 23, 2019 at 3:15 pm
@Alex M, that's not cool.
I'm a home owner, but for most of my adult life I was a renter. I assume you were a renter at some point as well and that you wouldn't view your rental period as subtracting from a community. The renters we've been lucky enough to know are just doing their best to live life and raise children.
I also promote ownership and equity, but to say that renters do not build our community is just flat wrong. It's the flip side to the asinine argument that only moderate income renters add culture, soul or diversity to a community.
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Shoreline West
on Apr 23, 2019 at 10:39 pm
Registered user
on Apr 23, 2019 at 10:39 pm
MVCC should not allow any office space until housing has been built. If I've learned anything watching this play out, it's that developers will do anything for the profit, and if the profitable part gets finished, we will never see the housing in our lifetime.
This housing is legally required to include specific percentages of "low, lower and lowest incomes" wether its rental or owner occupied. These are the plans the city council needs to be looking at today. Let the developers build the office space AFTER the housing is secured and complies with the housing laws.
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Slater
on Apr 24, 2019 at 3:06 pm
Registered user
on Apr 24, 2019 at 3:06 pm
Increasing the amount of owner-occupied and rental housing is great, but does the precise plan specify any retail? Or would everyone in the new housing proposed for Terra Bella, Middlefield and East Whisman shop at the Safeway on Shoreline?
Also, as a relatively new resident, I have a couple of questions long-term MV'ers might be able to answer:
1. Since there's such a shortage of land, why does MV allow cheap-looking single-story commercial properties to be thrown up around the area (like the ones at Whisman and Middlefield)?
2. What is the history of the large empty parcel with an abandoned parking lot on Middlefield and (I think) Shoreline? It seems odd that to tear down pretty nice existing apartment complexes (like Village Lakes and Eaves) while that land sits empty. Is it a Superfund site?
Gemello
on Apr 24, 2019 at 7:36 pm
on Apr 24, 2019 at 7:36 pm
This development rights swap with the school is wacko because the school is in the Los Altos district but the extra density ends up in the Whisman area which is several miles from Los Altos and doesn't benefit from that new school or from the park next to the school.
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Another Mountain View Neighborhood
on Apr 25, 2019 at 9:08 am
Registered user
on Apr 25, 2019 at 9:08 am
Boy, if these 5000 units are built, it will make a very big difference in the inventory of the City.
At the very least for every 2% increase in housing at least 1% decrease in current values will result.
In2010 the City reported 31,000 housing elements. a 5,000 unit increase in this project alone will be 16% increase in housing.
Thus a resulting 8% in housing value decease will occur. On top of any other housing market instablilty.
I can only imagine how much money will be spewnt by the current businesses to invest in the project builder so they will terminate the project.
That has been happening in Caslifornia for decades
Monta Loma
on Apr 25, 2019 at 1:32 pm
on Apr 25, 2019 at 1:32 pm
This is great news! Now developers will look elsewhere to its offices!
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Another Mountain View Neighborhood
on Apr 25, 2019 at 4:56 pm
Registered user
on Apr 25, 2019 at 4:56 pm
In response to all you can eat:
That may be true. But that will also provide even more land that can be used to provide a proprotionate balance of commercial, industrial, retail, and residential land in Mountain View, given that we cannot invade other towns to acquire land.
This in effect is not only what is needed for Mountain View, but is very likely inevitable given the new housing shortage state laws.
The reality is that a "market" correction of values is already happening in Mountain view, and will continue to occur until the balance is restored.
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Another Mountain View Neighborhood
on Apr 30, 2019 at 4:07 pm
Registered user
on Apr 30, 2019 at 4:07 pm
@ jordydog1
1. Most (if not all) of the "cheap-looking single-story" properties were built before there was "such a shortage of land". This applies to both residential and commercial properties.
They're still around because the owners haven't decided to tear them down and rebuild yet. The next major repair (e.g., replacing the roof) might be the nudge they need. When they do tear them down and rebuild, they'll probably build to the maximum density allowed by the current zoning. And in the case of residential properties, you can bet that there will be wailing and gnashing of teeth about the mean landlords who are kicking renters to the curb.
2. The property at the north corner of Moffett & Middlefield is called Shenandoah Square. Here's a recent MV Voice article about it:
Web Link
And naturally, the idea of tearing it down and rebuilding more housing met with opposition.
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Shoreline West
on Apr 30, 2019 at 5:11 pm
Registered user
on Apr 30, 2019 at 5:11 pm
@Darin,
Regarding #1, if the property is a rental thats torn down and replaced with Max density rental property, then the previous tenants get first right to return I believe, and at the previous rate. All the new units rent for new rate's to new renters following the new rules for income inclusion. Don't lose sleep over gnashing and wailing by tenants coalition. Nimbys maybe, but not tenants.
Regarding #2, you've either linked to the wrong article, or misunderstood it. The history of that land is complicated. Saying that the land has not been rebuilt with housing due to opposition is simplistic and misleading.
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Another Mountain View Neighborhood
on May 1, 2019 at 4:15 pm
Registered user
on May 1, 2019 at 4:15 pm
@ mv dweller
Are you aware of any residential rental properties that are being torn down and rebuilt as apartments? The ones I've seen around my neighborhood have all been rebuilt as row houses. It's hard to rent something at the old rate if it isn't available for rent at all.
And yes, the situation with Shenandoah Square is complicated. Concern about the displacement of existing tenants is just part of that complexity.
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Another Mountain View Neighborhood
on May 1, 2019 at 5:07 pm
Registered user
on May 1, 2019 at 5:07 pm
Unfortunately, the new No-Net Loss laws the state passed will not allow that to occur .
The law was made enforcable after Jan 1, 2019
When any city is not satisfying the regional housing needs assessment provided by the Association of Bay Area Governments, they either must have replacements of affordable housing already for those to relocate, or they cannot move forward without enormous financial liablilty to the displaced.
That may have been allowed in the past, but it comes to an end now.
North Whisman
on May 1, 2019 at 5:53 pm
on May 1, 2019 at 5:53 pm
You asked,
"Are you aware of any residential rental properties that are being torn down and rebuilt as apartments? The ones I've seen around my neighborhood have all been rebuilt as row houses. It's hard to rent something at the old rate if it isn't available for rent at all."
The answer is simple, there is language in Measure V that would require the new project if it were apartments, to be re-rented at the old rate.
There is no developer, business owner, apartment business owner in their right mind who would ever rebuild that property as an apartment complex again because of the language in Measure V.
Just one of the many consequences that is in Measure V that the majority of residents do not know about.
Registered user
Another Mountain View Neighborhood
on May 2, 2019 at 5:24 pm
Registered user
on May 2, 2019 at 5:24 pm
Re: Just one of the many consequences that is in Measure V that the majority of residents do not know about.
Yep. It's almost as though Measure V was designed to encourage the razing and rebuilding of older rental properties.
Re: That may have been allowed in the past, but it comes to an end now.
If you want property owners to rent their property, then renting it has to remain a financially viable decision. If renting the property isn't financially viable, then property owners WILL redirect their investment somewhere else. Laws like Measure V and No-Net Loss may change how they get out of the rental business, but they WILL get out of the rental business.
Registered user
Another Mountain View Neighborhood
on May 2, 2019 at 7:24 pm
Registered user
on May 2, 2019 at 7:24 pm
Inb response to Darin you said:
“If you want property owners to rent their property, then renting it has to remain a financially viable decision.”
But who is responsible for that situation? These owners only have one approach regarding the state of their business. If they achieve their goals they claim the responsibility for achieving it. If they fail, they blame others for their failures. Simply put they have the right to get out of the business, but they cannot just pick up the building and leave. They can simply sell the buildings, or they can own a empty building making no money at all. You also said:
“If renting the property isn't financially viable, then property owners WILL redirect their investment somewhere else.”
I totally agree with you. The current owners are not entitled to force the public to make up for their poor management that results in economic losses. They are free to leave at any time. You said:
“Laws like Measure V and No-Net Loss may change how they get out of the rental business, but they WILL get out of the rental business.”
Not really, they will simply sell the buildings, or implement a new project while in compliance with the no net loss requirements. There is NO CHANGE at all because the Ellis Act does provide them the right to leave the business. But no revenues will be collected if the property is taken off the market.
No revenue means no property values because those values are estimated by the operating income divided by the operating expenses times a capitalization objective equals the property appraisal. Thus if there is only operating expenses with no revenues, that will crash the property values.
It just seems that many of the property owners complaining about the situation in Mountain View simply had assumed that they are guaranteed their expected ROI. If you want that you invest in a bond, and not a property, share of stock, or an LLC that does not operate in business activites constrained to bonds. In fact, many have been conned into thinking that real estate is an investment. But investments should be made with advisors in the investment business.
Investment advisors are legally regulated via laws like this one:
The Investment Advisers Act of 1940, codified at 15 U.S.C. § 80b-1 through 15 U.S.C. § 80b-21, is a United States federal law that was created to monitor and regulate the activities of investment advisers (also spelled "advisors") as defined by the law.
Real Estate agents are not regulated regarding investment activities. They are only regulated regarding the business of purchasing and selling properties under California law.
NO ONE SHOULD EVER GO TO A REAL ESTATE AGENT TO GET INVOLVED IN INVESTING, THEY ARE NOT LICENSED INVESTMENT AGENTS.