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Despite widespread concerns about the recent wave of zone-busting developments, Palo Alto’s elected leaders split on Monday over a new proposal to reform the contentious provision known as “builder’s remedy” that makes these projects possible.
Authored by state Sen. Josh Becker, the legislation would narrow the window during which builder’s remedy could apply and raise the threshold for applications that could be submitted during this window. Under Senate Bill 457, only complete applications would be eligible for builder’s remedy, a state provision that applies to jurisdictions that don’t have certified housing plans. This would disqualify pre-applications with incomplete designs and scant environment analyses.
Builder’s remedy projects have been causing a stir throughout the Peninsula, with developers submitting a steady stream of applications before cities could secure certification from the state Department of Housing and Community Development.
Palo Alto has seen 10 applications through builder’s remedy totaling about 2,000 housing units. In three cases (3150 El Camino Real, 3997 Fabian Way and 660 University Ave.) it negotiated with developers, who agreed to to pause the projects and instead pursue code-compliant proposals. In the case of the city’s largest builder’s remedy project, 156 California Ave., the city loudly protested before quietly acquiescing. The proposal, which is located at the Mollie Stone’s site, features two residential towers, with heights of 17 stories and 11 stories. Council members had argued that it’s far too large for the area. But city planners had recently deemed the application from Redco complete.
Three other Palo Alto proposals — 762 San Antonio Road, 3606 El Camino Real, 3701 El Camino Real — have also similarly been deemed complete by city planners.
Mountain View has also been dealing with builder’s remedy. The city’s planning department has recently deemed complete a proposal by Tower Investment for a seven-story condominium development at 294 and 296 Tyrella Ave. The City Council is set to consider the project next month.
But the granddaddy of builder’s remedy projects is 80 Willow Road, a three-tower development in Menlo Park with 665 dwellings, more than 350,000 square feet of office space, a hotel and other amenities. Becker cited the Willow development in a recent interview in explaining his decision to pursue the reforms to builder’s remedy.
The Palo Alto City Council widely agreed that the Willow project is grossly out of scale. Vice Mayor Vicki Veenker called it a “monstrosity” while Julie Lythcott-Haims branded the project a “flagrant foul.” Yet despite concerns about builder’s remedy and the projects it spawns, both of them voted against a proposal to back Becker’s bill. The endorsement nevertheless advanced by a 4-3 vote, with Council member George Lu joining them in dissent.
Veenker and Lythcott-Haims agreed that builder’s remedy should be reformed. Each argued, however, that the Becker bill is too broad and that it fails to address the real problems with projects like 80 Willow. Veenker argued that the legislation may not be politically viable, while Lythcott-Haims worried that backing the bill could be a bad look for the city.
“Whereas our city in the past had a reputation for being somewhat difficult for developers to work with, I now consistently hear that they are finding us to be thoughtful and strategic about where to put housing and where to put density,” Lythcott-Haims said.
Backing a plan to limit builder’s remedy would “feel like yanking that welcome mat away,” she argued.
But supporters of the legislation argued that the bill is a common-sense solution to closing loopholes that developers have been exploiting. Currently, builder’s remedy remains in play until the HCD certifies the Housing Element. The Becker bill would make it so that provision would stop applying once the city adopts the Housing Element, provided that HCD ultimately certifies the locally approved version.
Stone was among those who argued that it’s not fair for cities to remain vulnerable to builder’s remedy because the state is taking too long to complete its review of the document.
“To me this is a common-sense reform that just restores balance, rewards good faith planning, helps balance the needs of our community while still delivering the housing that the region so urgently needs,” Stone said.
Mayor Ed Lauing and council members Pat Burt and Keith Reckdahl joined him in the 4-3 vote to support bill. The council did not, however, go so far as to sponsor the bill, which would have placed Palo Alto in the leading position in advocating for the legislation. Sponsorship was one of the options that council members were considering last month, when the bill was first drafted.
“As currently written, builder’s remedy is bad public policy and punitive,” Burt said. “It basically allows carte blanche complete elimination of sound urban planning, sound community planning, sound public policy.”
Opponents of the bill argued that SB 457 weakens a tool that has been responsible for generating hundreds of new housing units. Reckdahl countered that the legislation doesn’t break builder’s remedy but rather fixes it.
“If the city submits a bad Housing Element, it still gets punished,” Reckdahl said. “If it submits one that’s compliant, the punishment stops. It’s appropriate.”
Dozens of residents submitted letters to the council in advance of the April 7 discussion, with the vast majority supporting the Becker legislation. Others made their case during the public hearing. Alice Kaufman, policy and advocacy director for Green Foothills, pointed to the wave of builder’s remedy projects that were submitted in unincorporated Santa Clara County, in some cases targeting sites in flood planes in areas that are sensitive to wildfires and lack urban infrastructure.
“If these projects ultimately get built, we’ll be putting people in harm’s way,” Kaufman said. “Not to mention the loss of open space, wildlife habitat and farmland to sprawl development.”
But economist Steve Levy joined various housing advocacy groups in advocating against SB 457, which he argued would “allow local jurisdictions to deny existing housing applications at a time when the state desperately needs more, not less, housing to support equity and environmental goals and provide more customers for our struggling local businesses.”
“Besides codifying anti-housing provisions, SB 457 will lead to a waste of staff and council time and associated costs including probable legal costs in defending almost certain lawsuits,” he wrote.
For the council, the 4-3 vote represented a rare split over housing. In contrast to prior councils, the current seven-member group has been in virtual lockstep on most housing projects and policies. Dissenters suggested that while some recent developers have gone too far, the Becker bill is too blunt a tool.
“I remain hopeful that the conversation can continue with other cities, with Sen. Becker, with housing advocates and more,” Veenker said. “And I hope we can find the language that thwarts bad projects with good policy made possible by good politics. I just don’t think we’re there yet.”
