HomeMy WebLinkAbout2024-09-25 Planning & Transportation Commission Summary MinutesPlanning & Transportation Commission 1
Summary Minutes: September 25, 2024 2
Council Chambers & Virtual 3
6:00 PM 4
5
Call to Order / Roll Call 6
6:05 PM 7
Chair Chang called to order the September 25 Planning and Transportation Commission (PTC) 8
meeting. 9
10
Administrative Associate Veronica Dao conducted the roll call. Chair Chang, Vice-Chair 11
Reckdahl, Commissioner Akin, Commissioner Hechtman, Commissioner Lu (remote), and 12
Commissioner Summa were present. Commissioner Templeton was absent. 13
14
Agenda Changes, Additions and Deletions 15
None 16
17
Oral Communications 18
1. Riley Adler, senior at Saratoga High School, collaborated with three of her peers last 19
year to create a documentary entitled A Dark Future to highlight the prevalent issue of 20
light pollution in our community and its wide range of detrimental effects on humans 21
and wildlife. She hoped that by sharing their documentary it would inspire more bird-22
friendly designs and dark sky ordinances. 23
2. Dylan Wilson, student at Saratoga High School, including Linda R., Lyn H., Margaret H., 1
and Dashiel L., played A Dark Future. The video included comments on light pollution 2
from Jane Mio, freelance environmentalist. Steven Lockley, Associate Professor at 3
Harvard, Division of Sleep Medicine, explained the effects of light pollution on the 4
circadian rhythm. Andy Kreyche, Vice President of Dark Sky International, Santa Cruz 5
Chapter, spoke about the impact of light pollution on birds’ migration. Nineteen U.S. 6
states have legislation on light pollution. The video encouraged evaluating the necessity, 7
color, and brightness of lights in the bedroom and exterior lights as well as 8
directionality. 9
3. Diana McCoy spoke on behalf of Connie C., Laura M., Alan K., and Audrey K. A CBS video 10
was played about a Eurasian Eagle Owl who escaped from the Central Park Zoo in 11
February 2023 and lived for a year among the skyscrapers until he crashed into a 12
building and died. In the U.S., up to 1 billion bird collisions occur annually. Birds provide 13
pest control, pollination, and dispersal of seeds, so the loss of birds has ramifications on 14
the ecosystem structure. Birds mostly migrate at night and light disorients birds. Over 15
1000 birds died in one night at McCormick Place, a convention center in Chicago. 16
Turning off lights can decrease bird strikes by 60 percent. It helped to put certain decals 17
on the exterior of windows spaced 1 or 2 inches apart. Fritted glass can reduce bird 18
collisions by more than 90 percent. 19
4. Shani Kleinhaus delivered a slide presentation. Palo Alto has a large diversity of birds in 20
urban areas, Baylands, and hills. The White Crowned Sparrow spends winters in Palo 21
Alto. U.S. migration maps were shown. Shani Kleinhaus intended to play a video but did 1
not have the right file. Chair Chang stated that it could be emailed to the Commission. 2
3
City Official Reports 4
1. Director’s Report, Meeting Schedule and Assignments 5
6
Assistant Director Jennifer Armer displayed the PTC meeting schedule and agenda items 7
through December 2024. Stream corridor ordinance review and recommendation planned for 8
October 9. Draft ordinances for dark skies/lighting and bird-friendly design was scheduled for 9
October 30. In November and December, staff expected to bring to the PTC the Annual 10
Comprehensive Plan reporting, Housing Element implementation program status, and parking 11
programs update. 12
13
Staff requested committee chairs to attend the October 21 City Council meeting for the 14
presentation of the PTC, ARB, and HRB work plans. 15
16
A list of 2025 meeting dates was included in the commissioners’ packets. Commissioners were 17
advised to inform staff of any expected absences or planned remote attendance so staff could 18
plan accordingly. 19
20
For the October 30 staff presentation on the dark sky ordinance draft, Commissioner Hechtman 21
hoped a member of the Palo Alto Police Department (PAPD) would address the Commission 22
about their lighting concerns that had been expressed in prior staff reports. Jennifer Armer 1
stated that staff reached out to PAPD to obtain additional information. Director Jonathan Lait 2
remarked that he met with PAPD and did not believe their presence at the October 30 PTC 3
meeting was necessary. 4
5
Rafael Rius, Senior Engineer, Office of Transportation, addressed the PTC. The El Camino Real 6
repaving project was expected to finish by next week. There will be temporary striping until 7
Caltrans restripes Los Altos, Mountain View, and Palo Alto in November. The El Camino Real 8
repaving and bike lane project completion date for the contractors was fall of 2025 but was 9
targeted to finish in spring of 2025, including electrical work for the traffic signal detectors. 10
11
Rafael Rius stated his department was in the early stages of a Southern Palo Alto 12
bike/pedestrian railroad crossing alternatives analysis. The project would start with background 13
and data collection as well as development of an outreach plan. Staff did not have a date yet 14
but anticipated bringing this item to the PTC in early 2025. This project’s efforts would be 15
coordinated with the Bicycle and Pedestrian Transportation Plan update. 16
17
Rafael Rius announced that Bike Palo Alto is 1 PM to 3 PM, Sunday, October 6, at Fairmeadow 18
Elementary School. 19
20
Commissioner Hechtman asked for an update on PAPD including KSIs in the monthly traffic 21
incident reports. Rafael Rius stated the request was declined by PAPD. The Transportation 22
Department shares the same data with the PTC and the Bicycle and Pedestrian Advisory 1
Committee. Rafael Rius shared the request with the Project Manager for Safe Streets for All to 2
recruit their help with PAPD. Rafael Rius noted the Safe Streets for All report used historic data 3
that he believed included KSIs and could be made available to the PTC. Chair Chang pointed out 4
the goal to reduce KSIs to zero but the PTC was unable to track KSIs. Chair Chang asked what the 5
Commission could do to help Rafael Rius obtain KSI data. Rafael Rius will talk to Sylvia, 6
Transportation Planning Manager, to combine efforts to address this with PAPD. Chair Chang 7
offered to write a letter to PAPD. Rafael Rius thought any support was helpful and he would 8
mention this to the Planner. 9
10
Jonathan Lait offered to follow up with the Chief Transportation Official and Police Chief to 11
obtain the PTC’s requested information. Chair Chang stated the Commission received a monthly 12
report on collisions in Palo Alto and wanted to know which collisions resulted in a serious injury 13
or death. Jonathan Lait responded that if data was available, they would look at ways to share 14
it. Commissioner Hechtman pointed out that the data needs to be available because the 15
measure of success of the Safe Streets program was a reduction in fatalities and significant 16
injury, so the only way to determine its success was to have data demonstrating those numbers 17
decreasing. 18
19
Commissioner Hechtman wanted to ensure that Transportation was aware of an emailed public 20
comment regarding Challenger School. According to the letter, cars were queuing in the bike 21
lane on Arastradero (Commissioner Hechtman thought the author meant Charleston) because 22
the width of the street was insufficient. Rafael Rius confirmed receipt of that concern. Rafael 1
Rius asked Transportation staff to research the use permit and any requirements because 2
typically there were requirements to keep the queuing onsite and not let it flow onto the 3
streets. Chair Chang noted traffic violations of cars in the intersection and opined it looked 4
unsafe. Chair Chang asked that PAPD be notified to address traffic violations. 5
6
Chair Chang wanted to know if the current traffic disruptions experienced as a result of the El 7
Camino Real repaving would temporarily cease when repaving finished at the end of next week 8
until Caltrans comes back for restriping. Rafael Rius could not provide a definite response but 9
anticipated the road would be smooth with temporary, thinner lines until Caltrans returned to 10
stripe the permanent, thicker lines. 11
12
Study Session 13
2. Study Session to Review Potential Amendments to the Regulations for the Affordable 14
Housing Incentive Program (AHIP) and Housing Incentive Program (HIP) in Title 18 15
(Zoning Ordinance) of the Palo Alto Municipal Code to Implement Programs 3.3 and 3.4 16
of the Adopted 2023-2031 Housing Element 17
18
Jonathan Lait introduced Jean Eisberg from Lexington Planning. Jean Eisberg began the 19
presentation and introduced Jane Lin, Architect and Urban Designer from Urban Field Studio; 20
and Tim Bretz, Principal with Keyser Marston Associates (KMA). 21
22
Developers have three programs available in Palo Alto to achieve additional density. Projects 1
have a base set of zoning standards that produce a certain amount of housing yield and the 2
option to pursue additional density bonuses. The Housing Incentive Program (HIP) allows for 3
relaxed development standards for market rate projects in commercial districts and required 4
architectural review by the Architectural Review Board (ARB). The Affordable Housing Incentive 5
Program (AHIP) allowed for relaxed development standards for middle-income projects (up to 6
120% of AMI) in commercial districts within a ½ mile of major transit (Caltrain) and required 7
architectural review by the ARB. The State Density Bonus Law (SDBL) relaxed development 8
standards in exchange for on-site affordable housing or senior housing. 9
10
AHIP was used once in the last six years. Housing Element Program 3.4 called for the following 11
changes to the AHIP: Modify zoning standards to 2.4 residential FAR except where retail was 12
required on California and University Avenues, 60-foot maximum building height for projects 13
<60% of AMI, reduce parking ratios consistent with State law, and expand applicability to all 14
housing opportunity sites. 15
16
HIP was an alternative to the State Density Bonus Law, so a developer had to choose which one 17
they wanted to use. HIP maintained the City’s base zoning density and required architectural 18
review for more design control. HIP was used twice in five years. The Housing Element proposed 19
the following modifications to the HIP: Streamlined process for projects that complied with 20
objective standards could be administratively reviewed through one meeting with the ARB. 21
Waive the retail preservation requirement for opportunity sites. Reduce the retail replacement 22
requirement except in specific locations. Expand applicability to add the RM Zone and 1
ROLM/GM focus area. Potentially modify zoning standards for building height, FAR, parking, and 2
other development standards to enable greater housing production. A map was shown of 3
existing and proposed HIP areas. 4
5
State Density Bonus Law provided bonus density in exchange for on-site affordable or senior 6
housing and unlimited waivers of standards that physically preclude housing units. Recent 7
changes allowed unlimited density bonus for 100% affordable projects and up to 100% density 8
bonus for mixed-income projects. A chart was shown comparing the State Density Bonus Law 9
versus local laws. 10
11
Jane Lin presented the summary of findings. Existing zoning standards yielded lower-density 12
townhomes and did not support retail, mixed-use, apartments, or condos. Key standards 13
affecting feasibility were parking, building height, FAR, density and retail requirements. 14
15
Tim Bretz spoke about financial feasibility. Pro forma analyses were prepared based on the test 16
sites, comparing value and costs to determine the likelihood of a project being developed. Each 17
of the prototypes in the pro forma analyses resulted in a net financial cost and deemed unlikely 18
to be developed under existing zoning standards. 19
20
Jane Lin stated they considered zoning changes to improve financial feasibility, accommodate 21
higher-density stacked flats and mixed-used development, and retain Palo Alto design values. 22
The following changes to development standards were proposed: Increase or eliminate 1
residential density. Increase floor area ratio (FAR). Reduce parking requirements. Increase 2
building height. Revise daylight planes. Reduce setbacks. Increase site coverage. Revise use 3
requirements for retail. Examples were shown of yields under existing and modified zoning. 4
5
Tim Bretz stated that pro forma analyses were performed for the conceptual scopes of 6
development with the proposed HIP zoning standards. All of the prototypes resulted in net 7
financial surpluses and deemed likely to be developed. 8
9
Jean Eisberg pointed out that some HIP changes were adopted as part of the Housing Element 10
and to meet the RHNA. Jane Lin tested the zoning standards in place prior to the update that 11
went into effect in January; however, additional standards were needed to achieve financial 12
feasibility. The objective was to make the HIP a viable option to retain the City’s design values 13
and avoid unlimited number of waivers under the State Density Bonus Law. The changes made 14
in January applied to Housing Element opportunity sites. The proposed changes to the HIP 15
included non-Housing Element opportunity sites, supported Housing Element AFFH goals to 16
distribute housing units throughout the city, and provided an opportunity for predictable design 17
control through architectural review or streamlined review consistent with objective standards. 18
The alternative could be citywide zoning changes. 19
20
An ARB study session was scheduled for next week to obtain feedback on potential changes to 1
the HIP. A PTC public hearing was expected before the end of the year and then to Council after 2
the New Year. 3
4
Package of potential HIP modifications: (1) Increase building heights by 5 to 23 feet, depending 5
on the district. (2) Increase FAR by 1.4 to 2.25, depending on the district. (3) Eliminate maximum 6
dwelling units/acre as a standard. (4) Reduce setbacks. (5) Increase maximum site/lot coverage. 7
(6) Modify daylight plane. (7) Allow more flexibility in how open space is provided. (8) Allow 8
Downtown Housing Plan and San Antonio CAP to dictate modified HIP. (9) Reduce parking 9
requirements beyond State Density Bonus Law standards. 10
11
Chair Chang invited questions from the Commission. Referring to Slide 10, Vice-Chair Reckdahl 12
asked for the difference between waivers and concessions. Jean Eisberg explained that waivers 13
were exceptions to physical standards that would preclude the development of the housing 14
units, such as setbacks and daylight planes. Concessions were for standards or regulations that 15
added costs to a project. For example, a concession could be requested if the City had a 16
requirement for a specific material. 17
18
On Slide 13, Vice-Chair Reckdahl noted the test sites were small and wondered if they 19
represented a good cross-section or if they were smaller than average lots. Jean Eisberg replied 20
that it was a good cross-section. Many larger lots were opportunity sites with proposed 21
projects. The test sites were chosen because they did not have development projects. The test 22
sites were representative but it was a conservative evaluation of financial feasibility since they 1
were smaller sites. 2
3
In response to Commissioner Akin’s inquiry about the modifications being proposed as a 4
package, Jean Eisberg answered that the package of standards achieved the maximum density 5
but they were seeking the Commission’s feedback on areas of concern. They were sensitive 6
about adjacencies to lower-density districts as there were often concerns. Changes could be 7
made to the proposed modifications if it achieved the same amount of yield within the 8
development envelope. 9
10
Commissioner Akin recalled the project on Encina Way had to change their design because 11
building out to the lot lines caused problems with fire safety. Commissioner Akin wondered if 12
the prototypes were vetted for fire safety and whether it might have some effect on their 13
viability. Jane Lin responded that nothing unusual was proposed, compared to other cities 14
where similar development standards were commonly applied to setbacks and building heights. 15
Commissioner Akin noted that side and rear zero setbacks were not common around here. 16
17
If someone wanted to develop more affordable housing, Commissioner Lu wanted an 18
explanation as to why the AHIP at 60 percent was appealing compared to using the State 19
Density Bonus Law at 35 percent. Jean Eisberg replied that the State Density Bonus Law was 20
well known and generally easier. The AHIP had only been used at the higher threshold. Jean 21
Eisberg was unsure if it would be used at the lower threshold with the 60-foot height limit. 22
Commissioner Lu remarked that the State Density Bonus Law gave more flexibility as long as the 1
weighted average affordability was 80% and SB 35 gave more streamlining, so the combination 2
of those two were better than the AHIP at 60 percent. 3
4
Commissioner Lu asked how the one ARB study session was envisioned, if the ARB would make 5
recommendations to the Planning Director, provide optional advice or comment on objective 6
standards. Jean Eisberg explained that the way the streamlined review was written into the 7
code was one study session with the ARB based on objective standards. The staff report may be 8
written differently. The ARB review was isolated to compliance with objective standards, 9
although they may make other comments. Assistant City Attorney Albert Yang remarked that 10
this had been done several times. The ARB would provide voluntary guidance to the developer, 11
for example, on changes the ARB thought would improve the project but it was left to the 12
developer to accept. If an objective standard was not met, the ARB would make a 13
recommendation to the Director to take into consideration. The ARB would provide subjective 14
guidance but it was not binding. 15
16
Commissioner Lu queried if for-profit or nonprofit developers provided feedback about the HIP 17
or AHIP updates. Jean Eisberg stated that they talked to developers as they prepared the 18
Housing Element, El Camino Focused Area Standards, and ROLM/GM Focused Area Standards. 19
The models that Jane Lin showed were in the Housing Element and they reviewed those 20
standards with a few developers to obtain their feedback. 21
22
Commissioner Lu inquired if other forms of streamlining were considered, such as deadlines for 1
review or to get in front of the ARB, similar to streamlining measures in other California cities. 2
Jonathan Lait explained that they were not proposing to codify anything. It was the intent that 3
projects get a meeting with the ARB within 60 days to obtain feedback. Staff would not waste 4
the applicant’s or the Board’s time on applications that had many challenges or if there were 5
components of the project that clearly did not comply with the code and would result in 6
significant design changes. If a project was compliant with zoning, height, setbacks, parking, 7
etc., the goal was to move it on to the ARB for an initial review within 60 days, regardless if the 8
project was going through a streamlined review process or the previous traditional process. 9
10
As State law decreased or eliminated parking requirements, Commissioner Hechtman heard 11
anecdotally that developers had trouble finding financing for projects with no proposed parking. 12
Commissioner Hechtman asked if the financial feasibility analysis considered financing 13
difficulties. Tim Bretz agreed that projects parked at zero would likely have trouble finding 14
financing for 100% market-rate projects, although those projects have been seen in dense 15
areas. None of the prototypes analyzed had zero parking; most were parked at one space or a 16
half space per unit. KMA would have told Jane Lin if they thought the project would not be 17
financed. 18
19
Chair Chang inquired about the assumptions used for financial feasibility, what was the standard 20
profit margin and interest rate put into the model. Tim Bretz replied that KMA researched 21
recent land sale transactions, recent sales comparables for similar units, market rate rents, and 22
construction costs. KMA worked on projects throughout the Bay Area and California, so they 1
kept track of construction costs. The assumption inputs in the pro forma analysis were based on 2
data collection of real-time real estate dynamics. A profit margin of 12% of net sales revenue 3
was a common assumption for the expected project range based on KMA’s work on a number of 4
projects and in talking to developers. For apartments, KMA used a capitalized valuation 5
approach based on research of current capitalization rates. Brokerage firms such as CBRE or 6
Price Waterhouse Cooper do quarterly surveys, CoStar tracks capitalization rates, and KMA gets 7
capitalization rates from the projects they work on. KMA capitalized the net operating income 8
and arrived at the total value of an apartment project, then applied a 10% apartment profit 9
percentage to the capitalized value, which was KMA’s professional judgment of a typical 10
apartment profit percentage in talking to developers. Construction costs were offset by sales 11
revenue or capitalized value with the profit margin built in to determine if there was a financial 12
surplus or a net cost. 13
14
Chair Chang read in the news that increased interest rates caused many proposed projects in 15
San Jose and other cities to be put on hold. Chair Chang asked how interest rates factored into 16
the analysis. Tim Bretz responded that interest rates were separate from the capitalization rate. 17
Cap rates did not go up as much as interest rates in the past couple years. The interest rate was 18
factored into the construction loan in the construction costs. As interest rates increased, it 19
caused developers to pause some projects in the development pipeline as they waited for 20
interest rates to decrease. This analysis was done in June with the interest rate set at 7%. The 21
prototype projects under the proposed HIP standards were deemed financially feasible. As 22
interest rates decrease, total construction costs will decrease commensurately, so projects could 1
perform better with lower interest rates; however, that could generate demand for more 2
projects, resulting in more materials and labor being used in the area, which could increase the 3
direct and indirect costs of the project conversely. 4
5
Chair Chang opined that inclusionary housing was better and requested further explanation on 6
how HIP supported AFFH if one of the big reasons the HIP was attractive was it allowed in-lieu 7
fees, which meant that affordable units would be concentrated in a particular area rather than 8
included in a development. Jonathan Lait replied that based on conversations with the HCD, the 9
HIP was not required for RHNA or to meet the City’s numbers but the HIP was a tool to increase 10
housing production citywide by broadening its extent into multifamily zones. The collection of 11
more in-lieu fees gave the City the ability to leverage those dollars to support additional 12
projects. Jean Eisberg pointed out that expansion of the HIP added the RM and faith-based 13
zones to eligible HIP sites, which were more within the neighborhoods, allowing the potential to 14
have multifamily housing across neighborhoods in the city. 15
16
In reference to reducing the retail requirement except for Cal Ave, University Avenue, and 17
certain nodes along El Camino, Chair Chang queried if those nodes were defined or needed to 18
be determined. Jonathan Lait responded that it was a general reference aligned with the South 19
El Camino Real Design Guidelines document prepared by the City that included images of the 20
street grid and nodes were identified as areas to promote commercial or mixed-use 21
development. Reduced retail for HIP projects would allow reduction in areas that were not 22
Ground Floor and R Combining Districts or key strategic locations along El Camino. Staff could 1
come back with a map to show the Commission where those areas were, which was generally 2
where California Avenue aligned and a couple other streets that intersected along El Camino. 3
4
Chair Chang asked approximately how old were the South El Camino Real Design Guidelines, as 5
she thought it had not been adjusted for the El Camino Real Focus Areas or the identification of 6
new Housing Element sites. Jonathan Lait answered it had been decades since the document 7
was produced but it was a part of the housing focus area work and the expansion work about to 8
get underway, and staff referred to that guide to inform decisions about development potential 9
in those areas. 10
11
Commissioner Summa wondered if the South El Camino Real Design Guidelines were based on 12
the Grand Boulevard concept that was never adopted or the string-of-pearls idea. Jonathan Lait 13
replied it was the string of pearls; not the Grand Boulevard concept. The desirability persisted of 14
maintaining local-serving commercial at strategic locations along El Camino. 15
16
Chair Chang recalled a project came before the PTC this year that did not have to pay 17
development fees as a result of being 100% affordable. Chair Chang inquired if it was AHIP 18
legislation to waive development fees for projects in Palo Alto that were 100% affordable 19
defined as 120% of AMI or lower. Albert Yang responded it was not part of the AHIP but it had 20
been a longstanding development fee ordinance. 21
22
The AHIP was used once in six years, which was for Wilton Court. Chair Chang wondered how 1
many affordable projects there were to see if the AHIP was not being used or if affordable 2
projects were not being built because it was difficult to achieve financing. Jonathan Lait stated 3
there were other factors that go into affordable housing production. Wilton Court set the 4
standard for the AHIP program. The AHIP may be less desirable for more deeply affordable 5
housing production; however, Jonathan Lait noted some interest from for-profit developers in 6
affordability up to 120% AMI. 7
8
Commissioner Akin remarked that Century Urban was a reference commonly used for financial 9
feasibility studies for San Jose and it was updated yearly. The calculation Century Urban used for 10
minimum acceptable developer profit was 5.75% return on cost. According to Commissioner 11
Akin’s calculations for some of the prototypes, Century Urban’s target profit was less than 12
KMA’s. Commissioner Akin asked why KMA’s approach was preferable. Tim Bretz replied that 13
KMA shifted a few years ago from a return-on-cost metric when capitalization rates dropped. 14
The return-on-cost metric typically was the capitalization rate plus one to two percentage points 15
for profit, resulting in 5.75% or 5.5% return. KMA’s analysis used a 4% capitalization rate. Adding 16
2% profit on a 4% capitalization rate was not justifiable. KMA used capitalization rates to 17
determine a value and used their professional judgment to set the profit percentage against the 18
value. 19
20
Public Comment: 21
1. Nikita Kutselev supported this project. He rents a house in Palo Alto for $6000. He 1
hoped to buy something but could not afford to because prices started at $2 million. He 2
made too much to qualify for affordable housing. He opined that increasing density in 3
Palo Alto was long overdue. He would be happy to buy a condo with zero parking but 4
bicycle parking requirements were missing. People should be discouraged from using 5
cars and encouraged to use bicycles. France had maximum parking requirements. 6
Regarding the discussion about reporting serious injuries and deaths, he thought non-7
serious injuries should be included in collision reports because it could be useful in 8
indicating problematic intersections. 9
10
Chair Chang clarified that the collision report included injuries but did not specify which were 11
serious and non-serious. 12
13
2. C saw in the meeting notes the plan to streamline 100% affordable housing 14
development projects, prioritizing them over other housing projects regardless of 15
submission date. Because Palo Alto had an affordable inclusion ordinance, many larger 16
projects needed to provide affordable units. She thought it was illogical to prioritize a 17
20-unit 100% affordable housing project over a 100-unit 25% affordable housing project 18
that had more market-rate units but netted more affordable units. She hoped the 19
streamlining could be based on the number of total affordable units rather than 100% 20
affordable projects because it might benefit more since there was more development of 21
market housing than 100% affordable housing. 22
1
Chair Chang invited Commission comments and discussion. Jennifer Armer found that the South 2
El Camino Real Design Guidelines were from 2002 and available online. The nodes listed in that 3
document were at some of the larger intersections, California Avenue, Barron-Ventura, and the 4
Triangle Area; in between it may be more reasonable to have residential-only developments. 5
6
Commissioner Hechtman queried if the City adopted the proposed changes in addition to the 7
planned changes and as a result was overrun with development applications and realized too 8
much flexibility or generous relief from the current requirements was provided, if there was 9
opportunity to reevaluate and amend the ordinances. Based on State Law, Jonathan Lait 10
believed Commissioner Hechtman was correct about having the ability to reevaluate, and 11
Albert Yang agreed. 12
13
Commissioner Hechtman inquired if only the planned changes were made but none of the 14
potential changes, what were the prospects of Palo Alto making substantial progress toward 15
our RHNA housing numbers based upon the revised City regulations and State Laws SB 330, SB 16
35, and the State Density Bonus Law. Jennifer Armer explained that the commitment in the 17
Housing Element was to provide additional housing throughout the city and certain changes 18
were explicit in the Housing Element. The potential changes were not as explicitly defined in 19
the Housing Element, which was the reason for this study. 20
21
Commissioner Hechtman restated his question about the likelihood of making substantial 1
progress toward our housing goals over the next six years, the rest of this cycle, or was is not 2
much better than the use of HIP and AHIP in the last few years. Jonathan Lait replied that the 3
City planned for the RHNA housing target goals. The adoption of the HIP did not affect the 4
RHNA numbers but it had consequences for Housing Element implementation, and HCD would 5
likely find the City noncompliant with the Housing Element if we did not proceed with the HIP 6
standards. Moving forward with the minimum changes, which Jonathan Lait defined as the 7
prescriptive language in the Housing Element for the AHIP and the package of suggested 8
changes before the PTC for discussion tonight, the City would be in compliance and housing 9
production was expected to increase. There was not a number associated with it but it would 10
make up for any deficiencies in the ordinary course of development for housing opportunity 11
sites not being developed as planned. 12
13
Jennifer Armer referred to three slides in the presentation. The two slides about AHIP and HIP 14
were the prescriptive items. Based on the study, the third slide had a list of modifications to the 15
development standards and not making those modifications would likely result in 16
noncompliance in implementation of our Housing Element. If there were items of significant 17
concern in the proposed package, the discussion tonight could be on identifying if adjustments 18
could be made while remaining compliant with the Housing Element. Commissioner Hechtman 19
was generally supportive of the bullet list on the last slide. 20
21
Commissioner Hechtman knew there were consequences if Palo Alto was deficient in their 1
RHNA numbers at the end of the cycle. Jonathan Lait remarked that there were consequences 2
before the end of the cycle if the HIP was not implemented. The City wanted to find the right 3
balance of development standards to adjust to ensure that the development was consistent 4
with our interests while allowing for a feasible development. 5
6
Commissioner Akin noted the no-parking option for Site F in RM-40 yielded fewer units than the 7
limited-parking option. 8
9
Commissioner Akin opined it was better to do a study methodically. Since each of the 10
modifications under discussion had a quality-of-life cost, one approach could have been to 11
identify the minimum set of modifications needed to make a financially feasible project on each 12
of the test sites. Commissioner Akin counted the proposed modifications used in the 13
prototypes; the biggest three were parking reduction, reducing setbacks, and increasing the 14
height limit. 15
16
Regarding maximum residential density, Commissioner Akin preferred to keep the current 17
standard because it encouraged family-sized units. 18
19
Commissioner Akin, acknowledging it was outside the PTC’s purview, suggested that staff think 20
about incentivizing lot consolidation to have larger lots and thus the modifications under 21
consideration would be more effective. 22
1
Vice-Chair Reckdahl asked how the options on Slide 29 compared to PHZ requests. Jonathan 2
Lait did not know if there was a documented comparison but PHZ applications routinely asked 3
for increased height, increased FAR, changes to dwelling units, reductions in parking, reduced 4
setbacks, increased lot coverage, and revised daylight planes, similar to the list on the slide. 5
6
In reply to Vice-Chair Reckdahl querying if the potential HIP modifications were interrelated, 7
Tim Bretz answered yes. With small sites, the more income-producing units you can get on the 8
site would drive value. For example, changing parking may allow you an additional unit and 9
changing the height allows you more units. Each prototype was designed with multiple 10
development standards changed. Jane Lin remarked that the daylight plane made sense for 11
adjacency but was very limiting for the development envelope because of the angle. 12
13
Site C had an FAR of 0.94, which seemed low to Vice-Chair Reckdahl if we were trying to make it 14
as feasible as possible. Jean Eisberg explained that one reason for the variations was the 15
different standards for each district. Vice-Chair Reckdahl said it was useful to know what was 16
limiting in Site C to consider what changes were needed to get more production out of the 17
CC(2) zone. Jane Lin stated that Packet Page 43 had layouts. Site C included retail, so the retail 18
requirements for FAR and parking perhaps had an impact. 19
20
Vice-Chair Reckdahl noted the indirect costs on Page 66 varied from 39% to 48%. Vice-Chair 21
Reckdahl asked if labor was considered an indirect cost. Tim Bretz replied that indirect costs 22
were split into categories of architecture, engineering, and consulting; permits and fees, 1
including the affordable housing in-lieu fee; taxes; insurance, legal, and accounting costs; 2
marketing costs; development management fee; contingency allowance and financing. Labor 3
was included in the direct costs. The difference between 39% and 48% could be due to 4
economies of scale or the affordable housing in-lieu fee. Related to Page 66, it was probably 5
related to the architecture, engineering, and consulting costs, which varied between townhome 6
and apartment projects as well as how the economies of scale were achieved. 7
8
Referring to the Housing Element, Vice-Chair Reckdahl spoke about the concern of only micro-9
units being built and he wanted to ensure there were various types of designs. There was a 10
program that exempted FAR if you had three or more bedrooms and Vice-Chair Reckdahl 11
inquired if relaxing FAR made the program less effective. Jonathan Lait acknowledged that 12
micro-units were more profitable. Vice-Chair Reckdahl wondered how the City could increase 13
the likelihood of having larger units if the maximum density was eliminated. Jean Eisberg stated 14
that developers frequently want to do more until they hit the end of a certain construction 15
type. The models that Jane Lin showed were wood construction over a concrete podium. After 16
about five stories of wood construction, that typology is maxed out. 17
18
Commissioner Summa felt this report provided a lot of data but she could not see how they 19
arrived to the conclusions. Commissioner Summa thought the outcome would concentrate 20
dense housing in locations that already had dense housing with the exception of changing 21
ROLM to housing in certain locations. Reducing development standards affected the people 22
living in and those living closest to the new housing. It eliminated retail and parking options. 1
Profit was directly tied to reducing the quality of life of future and current residents, which 2
Commissioner Summa found troubling. Commissioner Summa hoped to see an evaluation of 3
the lowest profit that would attract development because it would be associated with the least 4
diminished development standards for quality of life. 5
6
The top of Packet Page 2 mentioned retaining setbacks where zones abut R-1. Instead of only 7
protecting R-1, Commissioner Summa believed it should read low-density residential zones. 8
9
Commissioner Summa expressed her concerns about getting all micro units or developers 10
wanting to build big, expensive condo projects. Commissioner Summa was not sure how it was 11
consistent with AFFH. With the exception of adding neighborhoods that previously did not have 12
residential uses, the density remained where it currently was; although she was not suggesting 13
putting it in places where it was unwanted. Commissioner Summa opined that the State Density 14
Bonus Law with unlimited waivers was more attractive in most cases. 15
16
Commissioner Lu commented that in the past he had taken issue with one Housing Element site 17
in the Ventura neighborhood that he believed was the Chevron but 1½ blocks away the Shell 18
was not a Housing Element opportunity site. Commissioner Lu thought that strengthening these 19
measures would result in more consistency and predictability as well as an option to develop 20
neighborhoods and corridors instead of the previous lot-by-lot zoning. 21
22
Commissioner Lu spoke about the success of Executive Directive 1 in Los Angeles for 60-day 1
approvals of over 18,000 units in 100% affordable housing at 80% affordability requirements, 2
including units proposed by privately funded developers. Commissioner Lu was curious about 3
additional streamlining for the HIP and AHIP, as well as reducing indirect and soft costs in the 4
analysis. Tim Bretz did not know if you could achieve enough cost reductions to overcome the 5
addition of an extra floor or reduced parking standards but developers loved the certainty of a 6
streamlined process, for example, knowing they could enter the application on Day 1 and get 7
out of it on Day 100 and know all the milestones in between. You could take out a few months 8
for land carrying costs but it was hard to quantify the cost difference of streamlining. 9
10
Jonathan Lait remarked that the distinction between what Palo Alto has done in comparison to 11
the example in Los Angeles was having a codified mandate to process an application within 60 12
days. Staff would want to study the workload implications if housing applications increased. The 13
City committed to and implemented a number of significant streamlining initiatives, such as 14
housing projects being exempt from architectural review with the exception of one courtesy 15
review and would be processed quickly. For projects that were subject to architectural review, 16
the City has committed to in the Housing Element and implemented project reviews within 45 17
to 60 days. There was a stated goal to process development applications within 90 days after 18
being deemed complete. 19
20
Chair Chang asked how long it took to turn around an application. Jonathan Lait replied that 21
there was a lot of variability in the applications they process. Jonathan Lait acknowledged the 22
criticism on the length of time to process PC or PHZ applications. The Housing Element made no 1
reference to PHZ or PC Zoning applications to advance the City’s housing production objectives 2
because it was not an efficient tool to produce housing. Jonathan Lait stated that as more 3
housing applications come in, the length of time to process applications could be tracked as a 4
metric to ensure the 45 and 60 day goals were met. The HIP included streamlining initiatives, 5
such as requiring one architectural review instead of up to three hearings and the removal of 6
involving the director’s discretion. Chair Chang was not sure it made sense to focus solely on 7
streamlining without there being a systemic problem. If processing applications started taking 8
too much time, then the City Council could resource more people. 9
10
Potential HIP Modification Number 8: Allow Downtown Housing Plan and San Antonio Area 11
Plan to dictate a modified HIP for those areas. Chair Chang thought the HIP may be moved on 12
quicker, so the Downtown Housing Plan and San Antonio Area Plan could adopt items from the 13
HIP. 14
15
Regarding the list of proposed modifications, Chair Chang was most concerned about setbacks, 16
daylight plane, and parking. Regarding the modification of retail requirements, Chair Chang 17
wanted to ensure there were robust nodes along El Camino because we want to put in more 18
housing, we do not want to increase congestion, and we want people to have walkable services 19
within 15 minutes of their home. The best-performing retail in Palo Alto was in areas on El 20
Camino and it had the lowest vacancy rate. Chair Chang wanted to avoid inadvertently 21
destroying some of the most successful retail that served some of the least-served areas. Chair 22
Chang agreed with the public comment made about ensuring there was bike parking to replace 1
reductions in car parking. Chair Chang stated that if parking was reduced, excluding those 2
developments from participating in the RPP might be considered to avoid spillover parking. 3
Chair Chang was concerned about reduced rear setbacks because 10 feet was insufficient for 4
Palo Alto Commons and Wilkie. 5
6
Regarding the CC(2) parcel, Chair Chang requested clarification if the retail parking 7
requirements were putting a limitation on that parcel. Tim Bretz said the 0.94 FAR for the CC-2 8
proposed project was a typo. The FAR is 3.81. 9
10
To have a financially feasible project, Commissioner Hechtman agreed with reducing setbacks, 11
reducing parking, increasing height, and increasing the starting height for the daylight plane 12
measurement from 10 to 16. Commissioner Hechtman was concerned that eliminating 13
maximum density would yield micro-units. Jane Lin thought that developers approached a 14
project keeping in mind who they were trying to serve and usually wanted to provide average-15
unit sizes with enough flexibility for a variety. Jonathan Lait noted the analysis found that 16
apartment units were less likely to be constructed in RM Zones because developers could get a 17
better return on larger for-sale units instead of rental units. We see more apartment units in 18
commercial zones. Jean Eisberg has seen micro-unit projects in Berkeley next to the university, 19
in San Francisco, and in San Jose. Jean Eisberg expected rental housing to be a mix of studios, 20
one-bedroom, and two-bedroom units, but not many three bedrooms. Commissioner 21
Hechtman suggested further thought on whether eliminating maximum density was 1
appropriate for each of the zoning districts. 2
3
Commissioner Hechtman pointed out that developers would build a housing project in the city 4
that gave them the most profit. Commissioner Hechtman was supportive of maintaining 5
modest local control by robust incentives for developers to use the HIP and AHIP rather than 6
State law. 7
8
Commissioner Akin hoped to convince developers to build stacked flats instead of townhouses. 9
Commissioner Akin was unhappy with what happened at the Fry’s site. The townhomes on Site 10
D were more profitable than the apartments on Site F, even though Site D included affordable 11
units and Site F included in-lieu fees. Jonathan Lait agreed that the standards supported more 12
townhome-style development. Apartment-sized units on the prototype lots required greater 13
development concessions to make it financially feasible. Jonathan Lait said it was helpful for 14
staff to hear from the PTC if there was an interest in creating an opportunity in the RM Zones 15
for stacked flats. Jean Eisberg pointed out that it was difficult to fit the driveway and ramp to 16
underground parking for stacked flats on smaller sites. 17
18
On Packet Page 66, Site F in RM-40, 5000 square feet, eight units with no parking or 12 units 19
with limited parking, Commissioner Akin asked why the unit yield was higher for limited parking 20
than no parking. Commissioner Lu wanted to confirm if the designs corresponded to Packet 21
Pages 50 and 49 because the numbers appeared to be different. Jane Lin said she had to look at 1
it a little longer before providing an explanation. 2
3
Commissioner Akin checked Apartments.com for Palo Alto lease rates and unit sizes. The 4
prototypes were more expensive than current Palo Alto averages. Not all unit sizes were 5
documented in the Commission’s packet but the ones that were noted were smaller than 6
average. People living in these new, smaller, more expensive units give up some quality of life 7
because the units have less daylight and less ground-floor greenspace. If front setbacks go to 8
zero, we have less public space on the street side. People parking on nearby streets and 9
neighborhoods because of decreased or eliminated parking would cause a long-term 10
enforcement problem. The Residential Preferential Parking program should be used to ensure 11
Palo Alto achieved its sustainability goal of people not using cars. 12
13
Referring to the table on Packet Page 21, Chair Chang wondered why we would not have a 14
height increase for ROLM because it seemed strange to have a 35-foot height next to a focus 15
area next to potentially a 60-foot height for an opportunity site. Chair Chang believed there 16
needed to be further thought about increasing the height for RM-20 because of potentially 17
adjacent low-density housing. Having seen the potential negative impacts of Palo Alto 18
Commons proposed setbacks, height, and daylight plane on the Wilkie Way neighbors, Chair 19
Chang wanted to avoid that scenario. 20
21
In order to understand the implications, Chair Chang wanted to know what the current front 1
and side setbacks were and by how much were they proposed to be reduced. Chair Chang 2
hoped there would be no change to the current special setbacks used for planning reasons 3
because they were for a bike lane or to widen the sidewalk. Chair Chang noted Downtown 4
Burlingame had few retail vacancies, was vibrant, and had a wide walkway. Chair Chang did not 5
want the HIP changes to remove the potential for walkability in areas such as University or in 6
certain sections of El Camino on a node. 7
8
Commissioner Summa’s concerns were similar to Chair Chang and Commissioner Akin. 9
Commissioner Summa had observed office vacancies grandfathered in where it was supposed 10
to be retail on El Camino south of Page Mill. Commissioner Summa worried that office 11
vacancies corresponded to the placement of nodes. Commissioner Summa was concerned 12
about having adequate setbacks and daylight plane on the first block where zones abut. 13
14
Jean Eisberg made note of the Commission’s feedback on specific types of development 15
standards, shared lot lines, interior setbacks, daylight planes, and adjacencies as important 16
factors, and will craft a set of ordinances. Jennifer Armer stated that if they could put together 17
an ordinance, they will do so; however, if they needed to come back for further discussion, then 18
it might delay moving forward with an ordinance. 19
20
Vice-Chair Reckdahl recalled seeing at the last PTC meeting a townhome project with no trees, 21
which he did not think was good. Vice-Chair Reckdahl would rather give up height but have 22
more setbacks for trees that help the canopy and environment. Allowing an extra floor for 1
backyards was a good tradeoff to improve quality of life. Vice-Chair Reckdahl preferred to have 2
an extra bedroom than unused parking. Vice-Chair Reckdahl advised to be very cautious about 3
decreasing parking unless there was new data to back it up or a way to attract people who do 4
not have cars, maybe through TMA. Regarding Commissioner Akin’s comment about lot 5
consolidation, Vice-Chair Reckdahl wanted to know if there was a way the PTC could encourage 6
lot consolidation because it was more efficient to build flats on bigger parcels. 7
8
Approval of Minutes 9
3. Approval of Planning & Transportation Commission Draft Summary Minutes of May 29, 10
2024 11
4. Approval of Planning & Transportation Commission Draft Verbatim & Summary Minutes 12
of June 26, 2024 13
5. Approval of Planning & Transportation Commission Draft Summary Minutes of April 24, 14
2024 15
16
Motion 17
Commissioner Hechtman moved to approve the May 29, 2024 Draft Summary Minutes; June 18
26, 2024 Draft Verbatim and Summary Minutes as revised; and April 24, 2024 Draft Summary 19
Minutes as revised. 20
21
Commissioner Summa seconded the motion. 22
1
The motion passed 6-0-0-1 with Chair Chang, Vice-Chair Reckdahl, Commissioner Akin, 2
Commissioner Hechtman, Commissioner Lu, and Commissioner Summa voting yes by roll call 3
vote; Commissioner Templeton absent. 4
5
Commissioner Questions, Comments, Announcements, or Future Meetings and 6
Agendas 7
8
Vice-Chair Reckdahl stated that the Transportation Open House was very nice. People could 9
stroll around and ask employees about transportation projects. 10
11
Jonathan Lait encouraged all Commissioners to attend tomorrow’s Boards and Commissions 12
Recognition event if possible. 13
14
Chair Chang adjourned the meeting. 15
16
Adjournment 17
9:20 PM 18