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HomeMy WebLinkAbout2018-04-09 City Council Summary MinutesCITY OF PALO ALTO CITY COUNCIL FINAL SENSE MINUTES Page 1 of 27 Special Meeting April 9, 2018 The City Council of the City of Palo Alto met on this date in the Council Chambers at 5:02 P.M. Present: DuBois, Filseth, Fine, Holman, Kniss, Kou, Scharff, Tanaka, Wolbach Absent: Closed Session 1. CONFERENCE WITH CITY ATTORNEY-POTENTIAL LITIGATION Subject: Noise and Other Impacts Arising From Management of Aircraft in the Northern California Airspace Authority: Potential Initiation of Litigation Under Government Code Section: 54956.9(d)(4) (One Potential Case, as Plaintiff) Richard Staehinke hoped the City would initiate a lawsuit regarding intolerable airplane noise. Daniel Lilienstein asked the City to protect its citizens from airplane noise. The best option seemed to be a lawsuit. Briggs Nisbet believed residents were facing a metaphorical death by increments as a result of airplane noise. With improvements in aircraft and navigation systems, a reduction of noise below 2006 levels was possible. Marie Jo-Fremont felt a lawsuit was a mechanism for the City to pressure the Federal Aviation Administration (FAA) to solve the severe noise problem. Cities that had filed lawsuits were seeing results. Barbara Miller reported noise for residents living under the flight path was much more severe than for those living one or two blocks outside the flight path. Carl Thomsen reminded the Council that Palo Alto residents filed 6,000- 8,000 complaints per day. Airplane noise would only get worse with time. FINAL SENSE MINUTES Page 2 of 27 City Council Meeting Final Sense Minutes: 4/9/18 Nancy Martin advised that airplane noise would worsen with the San Francisco terminal expansion. She requested cities work together to resolve airplane noise. Karen Porter stated the FAA had not played fair; therefore, the City needed to escalate its actions. The City had a reasonable basis for disputing the environmental assessment outside the allowed timeframe. Kerry Yarkin reported the FAA's statements that flight paths had not changed were untrue. The City needed to stand up and advocate for its citizens. Jay Whaley related that the high concentration of low-flying aircraft was both unhealthy and unacceptable. The only solution was a legal one. Joel Hayflick shared negative health impacts stemming from chronic exposure to jet noise. He recommended the City join other cities in filing litigation. Robert Finn questioned the requirement for new technology that caused flight paths to change. Farzi Rau suggested litigation was the only remaining option. Carrie Snyder felt it was time for the City to begin litigation. MOTION: Council Member Wolbach moved, seconded by Vice Mayor Filseth to go into Closed Session. MOTION PASSED: 9-0 Council went into Closed Session at 5:30 P.M. Council returned from Closed Session at 7:19 P.M. Mayor Kniss announced the City Council conferred with attorneys regarding airplane noise during Closed Session and decided not to pursue legal action at the current time. Special Orders of the Day 2. Proclamation Celebrating the 80th Anniversary of the Friends of the Palo Alto Library. Mayor Kniss read the Proclamation into the record. FINAL SENSE MINUTES Page 3 of 27 City Council Meeting Final Sense Minutes: 4/9/18 Nigel Jones, Friends of the Palo Alto Library President, thanked the Council for the Proclamation and for its support over the years. As part of its 80th anniversary celebrations, the Friends of the Palo Alto Library (FoPAL) had planned its biannual book sale for the following weekend and readings from ten local authors on April 21. Gerry Masteller, Friends of the Palo Alto Library Board Member, thanked Mr. Jones for his outstanding service to FoPAL and Palo Alto libraries. Council Member Holman advised that FoPAL was one of the community non- profits that provided many benefits and requested nothing. She wished FoPAL well over the next 80 years. Agenda Changes, Additions and Deletions None. City Manager Comments James Keene, City Manager, reported the City would host an education and orientation event regarding the Ross Road Bicycle Boulevard Project on April 11. The Great Race for Saving Water and Earth Day Festival were planned for April 14 at the Baylands. During Earthquake Preparedness Month, the City planned to recognize recent graduates of the Emergency Services Volunteer Training Program. The City Clerk had extended the deadline to apply for the Historic Resources Board and the Human Relations Commission to April 23 at 4:30 P.M. Oral Communications Marnie Barnes remarked that cottage clusters needed protections similar to those provided for Eichler homes. She requested the City Council institute a moratorium on redevelopment of cottage clusters. Stephanie Munoz expressed her belief that some City facilities should include affordable housing. Sea Reddy commented regarding the University of California's admission of mostly out-of-state students, peace between Iran and Israel, and punishment of Facebook for selling data. Rita Vrhel inquired as to the date the anti-idling Ordinance would return to the Council and the Council's rationale for not implementing a business occupancy tax. Asking residents to pay $60,000 for a parking space that was utilized by private employers was not fair. FINAL SENSE MINUTES Page 4 of 27 City Council Meeting Final Sense Minutes: 4/9/18 Minutes Approval 3. Approval of Action Minutes for the March 26, 2018 Council Meeting. MOTION: Council Member Wolbach moved, seconded by Vice Mayor Filseth to approve the Action Minutes for the March 26, 2018 Council Meeting. MOTION PASSED: 9-0 Consent Calendar Fred Balin, spoke regarding Agenda item Number 6, he sought clarifying information regarding Planning and Transportation Commissioner Alcheck's potential conflict of interest and requested the Council take appropriate action. Council Member Kou abstained from the vote on Item Number 6. Council Member Tanaka abstained from the vote on Item Number 6. MOTION: Council Member Scharff moved, seconded by Council Member Holman to approve Agenda Item Numbers 4-6. 4. Approval of a Budget Amendment to the Electric and Fiber Optics Funds for the Upgrade Downtown Project, Increasing the Electric Communications System Improvements Budget by $1,000,000 and Decreasing the Fiber Optics Network System Improvements Budget by $1,070,202. 5. Approval of $2.5 Million Grant From the Community Center Impact Fee Fund to Avenidas for the Cost of Rehabilitation and Expansion of the City Owned Building Located at 450 Bryant Street, and Approval of a Budget Amendment in the Community Center Impact Fee Fund. 6. Two Ordinances: Ordinance 5432 Entitled, “Ordinance of the Council of the City of Palo Alto Amending Palo Alto Municipal Code (PAMC) Chapter 2.20 (Planning and Transportation Commission) of Title 2; Chapter 10.64 (Bicycles, Roller Skates and Coasters) of Title 10; and Chapters 18.04 (Definitions), 18.10 (Low-Density Residential (RE, R-2 and RMD)), 18.12 (R-1 Single-Family Residential District), 18.15 (Residential Density Bonus), 18.16 (Neighborhood, Community, and Service Commercial (CN, CC and CS) Districts), 18.28 (Special Purpose (PF, OS and AC) Districts), 18.30(G) (Combining Districts), 18.40 (General Standards and Exceptions), 18.42 (Standards for Special Uses), 18.52 (Parking and Loading Requirements), 18.54 (Parking Facility Design Standards), 18.76 (Permits and Approvals), FINAL SENSE MINUTES Page 5 of 27 City Council Meeting Final Sense Minutes: 4/9/18 18.77 (Processing of Permits and Approvals), and 18.80 (Amendments to Zoning Map And Zoning Regulations) of Title 18; and Chapters 21.12 (Tentative Maps and Preliminary Parcel Maps) and 21.32 (Conditional Exceptions) of Title 21;” and Ordinance 5433 Entitled, “Ordinance of the Council of the City of Palo Alto Amending Chapter 10.04 (Definitions) and Chapter 10.64 (Bicycles, Roller Skates and Coasters) of Title 10 (Vehicles and Traffic) to Prohibit use of Bicycles and Similar Vehicles on Certain Sidewalks and Undercrossings and Establish Speed Limits on Shared-use Paths When Others are Present. California Environmental Quality Act (CEQA): Exempt Under CEQA Guidelines Section 15061(b)(3) (FIRST READING: March 19, 2018 PASSED: 5-0 Kniss, Kou, Tanaka, Wolbach absent).” MOTION FOR AGENDA ITEM NUMBERS 4-5 PASSED: 9-0 MOTION FOR AGENDA ITEM NUMBER 6 PASSED: 7-0-2 Kou, Tanaka abstain Action Items 7. PUBLIC HEARING: Adoption of an Ordinance Amending Palo Alto Municipal Code Title 18 (Zoning) to add a new Chapter 18.30(J) (Affordable Housing Combining District) to Promote the Development of 100 Percent Affordable Housing Projects Located Within One-half Mile of a Major Transit Stop or One-quarter Mile of a High-quality Transit Corridor by Providing Flexible Development Standards and Modifying the Uses Allowed in the Commercial Districts and Subdistricts. California Environmental Quality Act (CEQA): This Ordinance is Within the Scope of the Comprehensive Plan Environmental Impact Report (EIR) Certified and Adopted on November 13, 2017 by Council Resolution Numbers 9720 and 9721. The Planning and Transportation Commission Suggested an Alternative and did not Recommend Adoption of the Ordinance at Their Meeting on March 14, 2018. Graham Owen, Associate Planner, reported that the concept for an Affordable Housing (AH) Combining District originated from the Housing Work Plan and a 2017 prescreening application for a mixed-use project. The AH Combining District was a tool to incentivize 100 percent affordable housing projects. The Ordinance, if adopted, would not specifically apply to any site outside of a separate and subsequent zoning action. The design of any future building would be reviewed concurrently with proposed rezoning. The AH Combining District could be combined with any of the commercial base zones. Eligible sites had to be located within a half mile of a major FINAL SENSE MINUTES Page 6 of 27 City Council Meeting Final Sense Minutes: 4/9/18 transit station or a quarter mile of a major transit corridor. The proposed Ordinance relaxed standards for Floor Area Ratio (FAR), lot coverage, usable open space, density, and height and retained standards for setbacks, encroachments, build-to lines, and daylight planes. The proposed parking requirement was 0.5 per bedroom or per unit, whichever was greater. If the AH Combining District was combined with Retail Shopping and Ground-Floor Combining Districts, then the retail requirements for those districts remained in effect. The Planning and Transportation Commission (PTC) held two public hearings and in March made recommendations to the Council. Przemek Gardias, Planning and Transportation Commissioner, described the PTC's rationale and recommendations. The PTC supported pursuit of a development agreement with Palo Alto Housing to proceed with the Wilton Court project. The PTC recommended separation of affordable housing into two categories, less than 60 percent of Area Median Income (AMI) and 60-120 percent AMI, because Federal tax credits were available for affordable housing targeted to residents with incomes less than 60 percent AMI. Affordable housing developments did not receive funding for a retail component; therefore, the PTC recommended concessions to entice private investment in development. On a project basis, the demand for parking could be higher than the State requirement of 0.5 parking space per unit based on different income levels. Consequently, the PTC recommended the City subsidize parking or agree with private parties to increase parking supply. With respect to transition height standards, the PTC recommended public outreach. Although not included in the Staff Report, the PTC recommended a by-right process for affordable housing under 60 percent AMI. Ed Lauing, Planning and Transportation Commission Chair, advised that the PTC unanimously supported affordable housing and acted on affordable housing items as quickly as possible. The PTC requested additional time to develop incentives and to address neighborhood context. Susan Monk, Planning and Transportation Commission Vice Chair, clarified that Planning and Transportation Commissioners compromised many points of discussion in order to reach consensus for a recommendation and referred to the PTC minority memorandum. Council Member Holman suggested the Council determine whether it would take up Item Number 8 as a courtesy to members of the public who wished to speak to it. James Keene, City Manager, recommended Item Number 8 be continued to a date uncertain. FINAL SENSE MINUTES Page 7 of 27 City Council Meeting Final Sense Minutes: 4/9/18 MOTION: Vice Mayor Filseth moved, seconded by Council Member Holman to continue Agenda Item Number 8 – Policy and Services Committee and Staff Recommendations on Next Steps Related to Airplane Noise to a date uncertain. MOTION PASSED: 8-1 Kou no Public Hearing opened at 8:21 P.M. Eric Rosenblum and Elaine Uang speaking for Jeff Salzman, Megan Kanne, Diane Morin, stated the City was lagging on affordable housing production. A housing overlay would spur flexibility to create housing supply. They had collected 318 signatures on a petition in support of an Affordable Housing Overlay. Palo Alto Housing was not the only developer that provided affordable housing. Jessica Clark supported the original version of the proposed Ordinance. Linnea Wickstrom advocated for allotments of affordable housing for residents of extremely low and low income and urged the Council to support the original AH Combining District proposal. Per Maresca requested the Council provide more low-income housing. Jan Stokely, Housing Choices, advised that developmentally disabled residents would benefit from remaining in the community and urged the Council to provide strong incentives for affordable housing and to incentivize units for very low and extremely low income. Shirley Wang opposed a parking requirement of 0.5 space per affordable housing unit. Public transportation was not a solution for the parking problem. Jieming Robinson supported affordable housing for individuals with incomes less than 60 percent AMI. Pei Liu detailed three development projects along El Camino Real and parking issues in the area of the projects. Danny Ross, Palo Alto Housing, supported the original draft of the proposed Ordinance. Parking and income limits were issues for affordable housing developments. Lauren Bigelow, Palo Alto Housing, shared statistics regarding parking costs and parking demand for Palo Alto Housing sites. FINAL SENSE MINUTES Page 8 of 27 City Council Meeting Final Sense Minutes: 4/9/18 Nicole Montojo, Silicon Valley @Home, asked the Council to make it easier to build affordable housing through zoning and development requirements and zoning processes. Bob Moss supported affordable housing in conjunction with protections for single-family homes. Changing the Zoning Ordinance would not build housing. Winter Dellenbach supported 100 percent below market rate (BMR) housing projects for people with different housing needs. Implementing a 2.4 FAR for affordable housing was a mistake. Liz Gardner requested the Council adopt an AH Combining District so that low-income residents could remain in Palo Alto. Ryan Carrigan, Silicon Valley Association of Realtors, believed the AH Combining District would encourage developers to propose affordable housing projects. Bonnie Packer, League of Women Voters of Palo Alto, strongly recommended the Council adopt the Ordinance with changes in requirements for retail, height, FAR, and Council approval. The League of Women Voters urged the Council to reject the PTC's majority recommendation. Annette Ross supported a housing priority for those with income below 60 percent AMI with an exception for those with special needs. Max Kapczynski supported adoption of the proposed Ordinance in its original form. Rita Vrhel voiced concern regarding the suggestion for Planning Director approval of affordable housing projects and the expression of the PTC's minority opinion during the meeting. Hamilton Hitchings remarked that 100 percent AMI residents included single technology workers, who could afford market-rate housing; therefore, he opposed inclusion of 120 percent AMI in the AH Combining District. He suggested a parking requirement of one space per unit. Terry Holzemer favored the PTC's recommendation for continued work on an Ordinance and public outreach, and housing for residents with income at 60 percent of AMI. Jared Bernstein supported increased density of housing, adoption of the original Ordinance, and an expedited permitting process. FINAL SENSE MINUTES Page 9 of 27 City Council Meeting Final Sense Minutes: 4/9/18 Becky Sanders advised that the Ventura Neighborhood Association concurred with affordable housing for those with incomes of 60 percent or less AMI and site-specific requirements for height, parking, and massing. Perhaps the City would subsidize parking for affordable housing projects. Mary Sylvester supported affordable housing for seniors, the disabled, and low-wage service workers; a 60 percent or less AMI cap; neighborhood context; and adequate parking for projects. Bill Ross concurred with Planning and Transportation Commissioner Waldfogel's written comments. Reliance on the Environmental Impact Report (EIR) for the Comprehensive Plan was not appropriate. Grant Dasher recommended the Council take some action to provide predictability for affordable housing developers. Gina Dalma asked the Council to support the AH Combining District. Carol Lamont commented that the proposed Ordinance would open doors to affordable homes. Fran Wagstaff remarked that an affordable housing overlay had worked well in other communities. Patricia Saffir supported the Council's adoption of an AH Combining District as recommended in the PTC's minority statement and relaxation of some development standards. Trina Lovercheck advocated for Staff's recommendation and flexibility in parking and retail requirements. Lynnie Melena remarked that a new housing development on El Camino Real would revitalize the area and fulfill a critical need for affordable housing. Deb Goldeen favored Staff's recommendation. Lisa Van Dusen read an excerpt from a New York Times editorial regarding the Fair Housing Act. John Kelley commended Planning and Transportation Commissioners for providing a minority opinion and reiterated the need for more affordable housing. Stephanie Munoz recommended development of small units and more dense housing for families. FINAL SENSE MINUTES Page 10 of 27 City Council Meeting Final Sense Minutes: 4/9/18 Sefa Santos-Powell believed the AH Combining District would reduce barriers for use of Stanford University land and funds for affordable housing. Zach Kirk urged the Council to consider the housing issue deeply. Beth Rosenthal favored an AMI limit of 60 percent; a direction for the PTC to continue study of height and parking requirements; and one community meeting. Mark Mollineaux stated the City of Palo Alto had failed to zone in accordance with the State's requirements and to provide benefit to residents. The City's responsibility was to create affordable housing regardless of residential needs. Stephen Levy stated development requirements had rendered affordable housing projects infeasible. Jeff Levinsky agreed with targeting affordable housing to residents with income of 60 percent AMI. He referred to a study of affordable housing projects, which determined parking usage averaged two-thirds space per bedroom. However, residents of those projects reported parking supply was not sufficient even with free bus and rail passes. Amy Sung provided data regarding home sales. Rebecca Parker Mankey suggested the City eliminate the retail requirement for the Wilton Court project and install a commercial kitchen to feed residents. Public Hearing closed at 9:51 P.M. Mayor Kniss advised that there was not an affordable housing project on El Camino Real. The last affordable housing project the Council supported was 801 Alma in 2009. The community was becoming less and less diverse. Middle-income residents reached 120 percent AMI, and they were as needy as low-income residents. Council Member Fine stated that affordable housing was not defined in the Palo Alto Municipal Code (PAMC) and was often subjectively defined. BMR housing was defined in the PAMC, was available for income-qualified people only, and was often deed restricted. The City had its own established income standards and rent limits. At 120 percent AMI, a family of four earning $127,000 had difficulty affording housing. An AH Combining District was a standard planning tool placed over existing base zones, which created special provisions in addition to those of the underlying zones. Staff FINAL SENSE MINUTES Page 11 of 27 City Council Meeting Final Sense Minutes: 4/9/18 proposed an affordable housing overlay that would only allow 100 percent BMR projects to have flexibility with development standards so that more affordable housing was created. Affordable housing required deep public subsidies in the form of land, financing, zoning concessions, and density. An affordable housing overlay applied to multiple areas of the City, did not rezone land, and continued to require review and public outreach for projects. Importantly, both Planning Staff and Palo Alto Housing had requested an affordable housing overlay. MOTION: Council Member Fine moved, seconded by Council Member Scharff to: A. Find the proposed draft Ordinance within the scope of the Comprehensive Plan Environmental Impact Report (EIR) and adopt the proposed Ordinance amending Chapter 18.30 of Title 18 of the Municipal Code to add a new chapter establishing an Affordable Housing (AH) Combining District and related regulations; B. Direct Staff to improve the Ordinance with the following changes: i. Explore including the RP, RM-15, and RM-30 zones in the Combining District; ii. Add an additional 1.5 residential Floor Area Ratio (FAR) to the maximum residential FAR; iii. Allow the Planning Director to recommend a waiver for transitional height standards; iv. Specify a parking requirement of 0.75 per unit, except as preempted by State law, and allow the Planning Director to modify this standard based on a parking study that shows fewer spaces are needed. For special needs housing units, maintain a requirement of no more than 0.3 spaces per unit; and v. Clarify that this Overlay includes all Area Median Income (AMI) standards including up to 120 percent AMI. Council Member Scharff felt an affordable housing overlay would deliver affordable housing and flexibility across the City. He requested the total FAR allowed with the additional 1.5. Jonathan Lait, Planning and Community Environment Assistant Director, responded 3.5 FAR. FINAL SENSE MINUTES Page 12 of 27 City Council Meeting Final Sense Minutes: 4/9/18 Council Member Fine clarified that his intent was to provide maximum flexibility. The maximum residential FAR would be 3.5; the total FAR for a project, including the maximum nonresidential FAR, would be 3.9. Council Member Scharff understood Council Member Fine's intention was to allow development standards other than FAR to be the limiting factors for a project. He requested Staff provide a practical description of a project under the provisions of the Motion. Mr. Lait reported the height limit was the controlling regulation that would affect the building form. Council Member Scharff asked if height, setbacks, daylight plane, and parking were other controlling factors. Mr. Lait replied yes. Staff proposed modifying the standard for lot coverage. Mr. Owen explained that Staff proposed no maximum site coverage; however, Staff retained the requirement for 20 percent landscape and open space. Roof decks and above-grade terraces would fulfill the open space requirement. Lot coverage would not necessarily be affected by the increase in FAR. Hypothetically, 80 percent of a lot could be covered with structures that did not contain some sort of landscaping component. Council Member Scharff reiterated that lot coverage could be greater than 80 percent with the open space requirement fulfilled through roof decks and terraces. Mr. Lait advised that a mixed-use development would be allowed a total FAR of 3.9. Mr. Owen added that the maximum FAR for a residential-only project would be 3.5. Council Member Scharff asked if the FAR was by right or if Council had discretion to change the FAR. Mr. Lait articulated the need for a project to follow the Architectural Review process. Application of the affordable housing overlay to the property was a legislative action, in which the Council could alter the FAR. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to replace in the Motion Part B.ii., “add an” with “if requested by an applicant, allow the Planning Director to recommend adding up to an.” FINAL SENSE MINUTES Page 13 of 27 City Council Meeting Final Sense Minutes: 4/9/18 Council Member Scharff intended to allow the Planning Director discretion to recommend the additional FAR, and the Council could approve or deny it. The goal was to allow Staff to support the project. Mr. Lait requested clarification of circumstances under which Staff could support increasing FAR from 2.5 to 3.5. Molly Stump, City Attorney, suggested Staff was seeking parameters under which they could exercise that discretion. Council Member Scharff suggested Staff think about the issue while he continued to ask questions. He wished to exclude affordable housing projects from the Midtown area, the Charleston Shopping Center, and Town and Country Village Shopping Center. Mr. Owen reported Midtown, Charleston-Middlefield, and San Antonio did not qualify for an affordable housing site, but Town and Country Village Shopping Center did. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to add to the Motion, “excluding Town and Country Village Shopping Center.” (New Part A.i.) Council Member Scharff returned to the issue of Planning Director discretion and suggested the City Council authorize the additional FAR. He did not want the applicant to expect the additional FAR or to believe additional FAR was by right. Ms. Stump reported that Staff needed time to review the additional FAR in relation to environmental work on which Staff was relying for the Ordinance. Staff was comfortable with the proposed 2.0 FAR. Council Member Fine inquired regarding Staff's comfort with the motion stating an increase from 2.0 to 3.0 FAR. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to replace in the Motion Part B.ii., “if requested by an applicant, allow the Planning Director to recommend adding” with “explore, if requested by an applicant, the City Council may authorize adding.” Council Member Fine requested Staff's comfort level with the Motion stating an increase from 2.0 to 3.0 FAR. James Keene, City Manager, suggested the Council bifurcate or stage a recommendation so that Staff could explore amendments. FINAL SENSE MINUTES Page 14 of 27 City Council Meeting Final Sense Minutes: 4/9/18 Council Member Fine asked if Staff concurred with the suggestion. Ms. Stump answered yes. Staff would also consider whether more defined criteria were needed. Council Member Fine reported the Council wished to pass the full Motion; however, Parts A and B required additional Staff review. Ms. Stump understood that the Council wished to pass an Ordinance that would not include FAR in the operative language at the current time. The Council was directing Staff to look at that and return with an amendment or advise that additional time was needed for environmental work. Council Member Scharff inquired about the effect of changes in bus and shuttle routes in high-quality transit corridors. He proposed excluding Middlefield Road. Mr. Lait asked if Council Member Scharff was talking about City, Marguerite, or Valley Transportation Authority (VTA) buses and shuttles. The City could exempt its own shuttle program. If Council Member Scharff wished to exclude certain areas, then he needed to be explicit. Council Member Fine believed future transit improvements could be compatible with affordable housing in parts of the City that were not included in the Ordinance. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to add to the Motion Part A.i., “Midtown Shopping Center, and Charleston Shopping Center.” Council Member Holman had long hoped for an affordable housing overlay but had not anticipated provisions contained in the Staff Report or the Motion. The proposed Ordinance did not provide clarity for affordable housing developers. To aid housing production and preservation, the Council had not reinstated the Palmer fix, modified the Density Bonus Ordinance to apply to housing only, and had not enacted prohibitions against the net loss of housing units. The Council's own folly had likely caused the lack of new affordable housing projects. If the Council enacted the proposed Ordinance with 120 percent AMI, then the press could report extremely low and very low-income housing developers were disadvantaged by Council action because of competition among developers. Developers such as Palo Alto Housing did not build office space; yet, the proposed Ordinance allowed 0.4 FAR for office. This was not a prudent action. She was uncomfortable with the advocacy and emotional content of some of Council Member Fine's slides. She did not understand how more than doubling the FAR could be FINAL SENSE MINUTES Page 15 of 27 City Council Meeting Final Sense Minutes: 4/9/18 covered by the Comprehensive Plan EIR. If the Council implemented a Planned Community (PC) zone solely for affordable housing, she did not believe the community would question the related public benefit. She did not understand how allowing 0.4 FAR for professional business offices, liquor stores, and general business services promoted housing. It appeared to increase the cost of the land and made it less affordable for Palo Alto Housing, for instance. Hotel development at 2.0 FAR was incompatible with the surrounding neighborhood; yet, the Motion proposed 2.4 plus potentially 1.5 FAR. She requested Staff comment regarding Mr. Borock's written communication. Ms. Stump had not had time to review Mr. Borock's communication. SUBSTITUTE MOTION: Council Member Holman moved, seconded by Council Member Kou to accept the Planning and Transportation Commission’s (PTC) recommendations and direct Staff to: A. Work with the property owner of a site at El Camino Real and Wilton Court to develop a site-specific Planned Community (PC) zoning Ordinance and development agreement for affordable housing; and B. Work with the PTC on the series of additional recommendations developed by an ad hoc committee of the PTC with the following modifications: 1. Pursue a PC with Palo Alto Housing (PAH) to advance the Wilton Court project. 2. Separating affordable housing into two work items: under 60 percent Area Median Income (AMI) (AH60) and 60 percent to 120 percent AMI (AH120); 3. For AH60 consider the following options for retail preservation: i. Where retail is retained, offer a zoning (height) concession; ii. Where affordable housing provider financing precludes retail: The City or a third party may participate in project financing, potentially in exchange for an ownership position; iii. As a last resort, City may waive the retail requirement as provided by the retail preservation ordinance; FINAL SENSE MINUTES Page 16 of 27 City Council Meeting Final Sense Minutes: 4/9/18 4. For AH60 explore City financial contributions to develop parking to meet demand based on measured parking utilization rates of comparable properties. The City may exercise an option to build additional parking available to the public; 5. Maintain transition height standards in all the C districts adjacent to residential districts. Explore a community process with outreach before changing transition heights for AH60 housing; 6. Explore an open space standard for AH60, recommending against roof gardens adjacent to low-density residential districts; 7. Explore folding AH120 work into the Housing Workplan effort; 8. With a goal to develop a by-right process for 100 percent 60 percent AMI projects. Council Member Holman indicated this was a way to establish some certainty for affordable housing developers. She did not want to lose the knowledge that was presented in the PTC ad hoc committee's comments. Council Member Kou agreed that this was the best way to accomplish affordable housing. It was poor judgment to combine the BMR project with the proposed Ordinance. Council Member Fine's recommendation appeared similar to Senate Bill (SB) 827. Palo Alto Housing needed to rebuild its reputation and rebuild trust with the community. Reviewing something that was already in the PAMC was better than a complete reinvention with loopholes. An affordable housing project for 60-120 percent AMI was a more expensive project because of the need to find funding sources. She inquired whether Staff had reviewed the impact of the 2017 legislative housing package on the Motion and Substitute Motion. Mr. Lait advised that an application for an AH Combining District or a PC zone would not qualify for streamlining under SB 35. Council Member Kou wished to ensure developmentally disabled people and veterans were taken care of. The Substitute Motion provided some idea of what would be presented to the Council. Council Member Holman reported that the intention was not to amend the entire PC Ordinance, but to develop a separate PC zone solely for affordable housing projects. Mr. Lait understood Palo Alto Housing was interested in implementation of zoning prior to its filing an application. Under the Substitute Motion, Staff FINAL SENSE MINUTES Page 17 of 27 City Council Meeting Final Sense Minutes: 4/9/18 was to craft a PC Ordinance and obtain Council approval, at which time Palo Alto Housing might file an application. Council Member Holman noted the Motion would have to return to the Council as well. Mr. Lait indicated the Motion advanced the Ordinance such that an application could be filed. Council Member Wolbach expressed interest in the by-right process for 100 percent and 60 percent AMI projects being incorporated into the Motion. He inquired about affordable housing for incomes greater than 60 percent AMI. Candace Gonzales, Palo Alto Housing Corporation CEO, advised that the laws for tax credits had been revised to extend to 80 percent AMI. Council Member Wolbach asked if Palo Alto Housing providing affordable housing for incomes in the range of 80-120 percent AMI. Ms. Gonzales replied no because of tax credit funding. Palo Alto Housing staff did not feel the two ranges of AMI competed against each other because housing was needed for both ranges of AMI. Including the upper range could allow a project for teacher, first responder, and City Staff housing. For the most part, affordable housing projects would serve individuals with incomes of less than 80 percent AMI. Council Member Wolbach reiterated that extending the range to 120 percent AMI would not disadvantage the lower range of AMI. Ms. Gonzales concurred. Council Member Wolbach understood incorporation of the streamlined process would provide an advantage for individuals with less than 80 percent AMI. He supported the Motion because it followed the language of Item 1.8 of the Housing Work Plan. Vice Mayor Filseth felt there was broad interest from City Hall and the community in proceeding with a high-quality affordable housing Ordinance and the Wilton Court project. There was a solution that the housing experts and neighborhoods could endorse, that was not so restrictive to deter affordable housing projects, and that did not generate neighborhood animosity. He liked the proposal to advance the Ordinance without delaying the Wilton Court project. He inquired about the process to revise the AH Combining District Ordinance. FINAL SENSE MINUTES Page 18 of 27 City Council Meeting Final Sense Minutes: 4/9/18 Mr. Lait reported the Council could direct Staff to revisit the Ordinance and return with proposed changes. Approval of the AH Combining District Ordinance would allow the filing of planning applications, but Staff would revisit the Ordinance as directed by Council. Vice Mayor Filseth inquired whether the Council could revisit the AH Combining District Ordinance in the context of reviewing the Housing Work Plan. Mr. Lait suggested Staff would return to the Council regarding the Housing Work Plan following the next Ordinance presented for Council review. Vice Mayor Filseth concurred with the PTC's idea for the City to fund parking as housing was a community issue. According to the Staff Report, 120 percent of AMI for an individual was $95,000 and $136,000 for a family of four. He assumed an affordable housing project targeted to 120 percent AMI would include incomes up to 120 percent AMI. Council Member DuBois supported the Motion and some key ideas in the Substitute Motion. There were some major differences between less than 80 percent AMI projects and greater than 80 percent AMI projects. The Council needed to flesh out the proposed Ordinance before considering by-right provisions. The Motion did not sufficiently reduce process costs. Having a different parking requirement for disabled housing, senior housing, and family housing was logical. He voiced concern regarding allowing rooftop gardens in residential zones. He supported elements of both the Motion and the Substitute Motion. Council Member Scharff clarified that residential zones and additional FAR had not been incorporated into the Motion. The Motion was superior to the Substitute Motion because it advanced the Ordinance and allowed Palo Alto Housing to file a planning application. The Council supported County Supervisor Simitian's proposal for teacher housing, which fell in the 80-120 percent AMI. He did not understand the concern about below 60 percent AMI and above 60 percent AMI. Mayor Kniss appreciated learning that other cities had utilized an Affordable Housing Overlay. She inquired whether the project located at the corner of Page Mill and El Camino Real provided workforce housing. Mr. Lait explained that the project was a pilot program in the range of 140 percent AMI. Mayor Kniss stated the goal was to obtain a variety of housing. She supported the Motion. Developing a new PC zone was not feasible. FINAL SENSE MINUTES Page 19 of 27 City Council Meeting Final Sense Minutes: 4/9/18 SUBSTITUTE MOTION FAILED: 3-6 DuBois, Holman, Kou yes Council Member Fine requested the rationale for inclusion of Section 18.30(J).070(b). Mr. Lait indicated the section allowed an affordable housing project to capture some of the existing retail component or to contain some nonprofit space. Council Member Holman related that the two points were addressed separately from general office uses. Mr. Lait suggested the Council define the types of uses that would be allowed. Council Member Fine stated it was nonresidential FAR rather than office FAR. AMENDMENT: Council Member Holman moved, seconded by Vice Mayor Filseth to add to the Motion, “remove Section 18.30(J).070.(b).” Vice Mayor Filseth reiterated that the Ordinance applied to 100 percent affordable housing projects. He inquired whether the proposed Ordinance allowed space to be leased to a technology company. Mr. Owen reported that all underlying uses in a zone could be considered on the ground floor, but retail preservation requirements continued to apply. Swapping retail space for office space was within Council's discretion. Space for a non-profit office would be a conditionally permitted use. Vice Mayor Filseth asked if the office space was specifically limited to use by a nonprofit. Mr. Owen responded no. Office Research and Development (R&D) could be allowed. Vice Mayor Filseth wanted the project to consist of 100 percent affordable housing with the ground floor restricted to retail or non-profit office. He did not want to subsidize other uses. Council Member Fine noted existing R&D could be preserved. An existing office space could further subsidize the entire affordable housing project. Council Member Scharff did not believe office space would be converted to housing. The existing ground floor uses probably were retail and personal services. He was agreeable to allowing nonprofit uses on the ground floor in affordable housing projects. FINAL SENSE MINUTES Page 20 of 27 City Council Meeting Final Sense Minutes: 4/9/18 Vice Mayor Filseth inquired whether these issues would be presented to the Council. Mr. Owen answered yes. Council Member Holman wished to eliminate office uses that were not compatible or consistent with an affordable housing project. The 0.4 FAR would increase the size of buildings. Council Member Fine suggested removing Section 18.30(J).070 was stronger and more detrimental to a project than Vice Mayor Filseth's suggestion in terms of the 0.4 FAR being reused as office. Council Member Tanaka felt the amendment reduced funding for affordable housing. Council Member DuBois understood the intention was to change underlying uses from permitted by-right to conditional, which was a good compromise. Council Member Wolbach did not support the Amendment. Mr. Lait recommended amending "B" to allow retail or retail-like uses. AMENDMENT RESTATED: Council Member Holman moved, seconded by Vice Mayor Filseth to add to the Motion, “replace in Section 18.30(J).070.(b), ‘any uses permitted in the underlying district’ with ‘retail or retail like uses.’” Council Member Fine advised that the overlay district did not eliminate the underlying zoning rights. AMENDMENT AS AMENDED FAILED: 4-5 DuBois, Filseth, Holman, Kou yes Vice Mayor Filseth asked if the parking requirement was per bedroom or per unit. Council Member Fine responded per unit. Vice Mayor Filseth noted the longstanding issue of projects being allowed without providing adequate parking spaces. The number of parking spaces should equal parking demand; however, parking demand was unknown. When the parking study was completed, the Council could amend the Ordinance to set an appropriate parking requirement. Council Member Scharff recommended retaining 0.75 parking space per unit and allowing Palo Alto Housing to proceed with the affordable housing FINAL SENSE MINUTES Page 21 of 27 City Council Meeting Final Sense Minutes: 4/9/18 project. Because the possibility of more affordable housing applications being filed in the next year was low, the Council could direct Staff to explore and recommend actual parking requirements for studio, one-bedroom, two- bedroom, and three-bedroom affordable apartments. Mayor Kniss did not believe the State would allow 0.75 parking space for a three-bedroom unit. Mr. Lait clarified that State law would preempt local law, and State law currently provided less than 0.75 parking space per unit for special needs individuals. The City required two parking spaces per single-family dwelling. Mr. Owen advised that the base parking requirement for multifamily was 1.25 spaces for a studio unit, 1.5 per one-bedroom unit, and 2.0 per two- bedroom or larger unit. AMENDMENT: Vice Mayor Filseth moved, seconded by Council Member Holman to replace in the Motion Part B.iv., “0.75 per unit” with “1.00 per bedroom.” Vice Mayor Filseth inquired whether the Wilton Court project proposed all studio units. Mr. Owen reported that in the prescreening Palo Alto Housing proposed all studios and one one-bedroom unit. Vice Mayor Filseth asked if a requirement of 0.75 parking space per unit would provide sufficient parking for the Wilton Court project. Mr. Lait did not believe Staff had sufficient information to respond. Vice Mayor Filseth requested language to prevent under-parked projects. Mr. Lait explained that the Amendment allowed the Planning Director to revise parking requirements based on results of the parking study. Staff needed to provide some certainty for parking requirements because it often influenced development of affordable housing projects. Mayor Kniss requested Ms. Gonzales address the parking requirement for 0.75 space per unit. Ms. Gonzales recalled that the parking requirement for retail and housing units resulted in a 50 percent parking ratio. A parking requirement of 0.75 space per unit resulted in an infeasible project unless the retail component was removed. A minimum of 25 percent of units would be reserved for FINAL SENSE MINUTES Page 22 of 27 City Council Meeting Final Sense Minutes: 4/9/18 developmentally disabled adults, which would reduce the parking requirement. Vice Mayor Filseth inquired about the expected completion date of the parking study. Mr. Lait replied a few weeks. AMENDMENT RESTATED AND INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to add to the Motion “return to Council following the parking study to reevaluate parking requirements.” (New Part B.vi.) Council Member Fine expressed concern regarding the parking requirement after Ms. Gonzalez's statement. Council Member Scharff suggested the Council modify retail parking requirements if it wanted retail as part of the project; modify retail requirements; or allow daytime retail uses only with no parking requirement. Mr. Lait indicated the PAMC allowed shared parking. Based on the size of proposed retail, shared parking would probably not be significant. Council Member Scharff reiterated that the Wilton Court project could utilize shared parking. Ms. Gonzales preferred the Council waive the retail requirement so that the project was composed of affordable housing units only. Council Member Fine stated the Council could waive the retail requirement; waive the retail parking requirement; or set the parking requirement at 0.6. Council Member Scharff wanted to require shared parking with retail rather than waive retail. Council Member Fine worried that the Council would have to waive the retail requirement. Council Member Scharff did not believe retail uses in Downtown or California Avenue created the need for more parking. He preferred waiving the retail parking requirement. Council Member Fine asked if language allowing the Council to waive the retail parking requirement would assist the Wilton Court project. FINAL SENSE MINUTES Page 23 of 27 City Council Meeting Final Sense Minutes: 4/9/18 Ms. Gonzales felt the neighbors would have issues with Council waiving the retail parking requirement. Again, she preferred flexibility for the Council to waive the retail requirement. Otherwise, the 0.5 parking requirement subject to a parking study was feasible. An 0.75 parking requirement was feasible for the Wilton Court project but could limit future projects. Vice Mayor Filseth reiterated his desire not to under-park future projects. Mr. Lait remarked on Staff's inability to control the filing of planning applications. INCORPORATED INTO THE MOTION WITH THE CONSENT OF THE MAKER AND SECONDER to add to the Motion, “Council has the ability to modify retail parking requirements.” (New Part B.vii.) Council Member Scharff clarified that the Council had the ability to modify retail parking requirements if ground floor retail was a component of a 100 percent affordable housing project. Council Member Tanaka inquired whether the proposed Ordinance prevented market-rate housing as a component of an affordable housing project. Mr. Owen answered no. However, including market-rate housing would eliminate the relaxed development standards. Council Member Tanaka recalled that ground-floor retail activated the street and provided tax revenue. Market-rate housing as a component of 100 percent affordable housing solved many of the problems and made a stronger community. He requested language that would allow market-rate housing. Council Member Fine noted the AH Combining District had been consistently discussed as 100 percent affordable housing. Mayor Kniss added that a mix of affordable and market-rate housing would return with review of the Housing Work Plan. Council Member Tanaka reiterated that a mix of housing types was better for the community. Council Member Fine recapitulated reasons for proceeding with 100 percent affordable housing at the current time. Council Member Tanaka felt it was important for the community to buy into affordable housing projects. He inquired whether the units were rentals under the proposed Ordinance. FINAL SENSE MINUTES Page 24 of 27 City Council Meeting Final Sense Minutes: 4/9/18 Mr. Lait advised that the units could be rental or ownership. Council Member Tanaka asked about the consequences of a low-income person buying an affordable unit and then his income exceeding the required limit. Ms. Gonzales reported that income recertification was not a requirement of the BMR for sale program. Once a unit was purchased, income was not a factor. Council Member Tanaka preferred affordable housing units be rentals rather than ownership so that unit turnover occurred as incomes exceeded eligibility requirements. Mayor Kniss requested clarification of BMR units. Council Member Tanaka stated affordable units. Council Member Fine did not believe Council Member Tanaka's proposal was helpful as almost all affordable housing was rental. AMENDMENT: Council Member Tanaka moved, seconded by Council Member DuBois to add to the Motion Part 1, “limit the Combining District to rental Below Market Rate (BMR) units.” (New Part A.ii.) Council Member DuBois liked the idea of recertification so that affordable housing was available for low-income individuals. Council Member Wolbach did not support the Amendment. Council Member Scharff suggested for sale affordable housing was rare, but he would likely support the Amendment. AMENDMENT PASSED: 7-2 Fine, Wolbach no Council Member Holman reiterated her concerns and stated the Motion contained radical provisions. AMENDMENT: Council Member Wolbach moved, seconded by Council Member XX to add to the Motion, “with a goal to develop a by-right process for 100 affordable units eligible for tax credits.” Council Member Scharff did not know how a by-right process would work in an overlay. AMENDMENT WITHDRAWN BY THE MAKER FINAL SENSE MINUTES Page 25 of 27 City Council Meeting Final Sense Minutes: 4/9/18 Council Member Kou did not support the Motion. The Ordinance was supposed to pertain to the entire City. Council Member DuBois inquired regarding transit stops along El Camino Real. Mr. Owen advised that the maximum distance was a half mile from transit stops, i.e., Caltrain, and a quarter mile from a high-quality transit corridor, i.e., VTA lines and the Marguerite shuttle. Along El Camino Real, the corridor was the determining factor rather than the individual bus stops. Some locations could be quite far from a transit stop. Council Member DuBois believed the previous definition of the nearest stop that operated with a specific frequency made more sense. Hopefully the upcoming parking study included distance to transit. The proposed Ordinance did not refer to AMI but referred to a part of the Code that was not modified. Ms. Stump explained that the Ordinance contained a cross-reference to the PAMC. Council Member DuBois asked if the PAMC section mentioned AMI. Mr. Owen replied yes. The PAMC provided a definition of an affordable unit. Council Member DuBois remarked that the definition of affordable housing was clear and defined by State law. Mr. Owen clarified that the PAMC defined affordable unit, not affordable housing. Council Member DuBois inquired about inclusion of portions of the North Ventura Concept Area Plan and the interaction between the AH Combining District and zoning around Ventura. Mr. Lait indicated a portion was included. Staff would review the interaction in the planning effort for Ventura. The proposed Ordinance would not affect the process of the North Ventura Concept Area Plan. Council Member DuBois felt the Council needed to remain mindful of 120 percent AMI competing for land over time. With the proposed incentives, for-profit developers could reduce the opportunities for low income and extremely low income. To make affordable housing projects acceptable to neighborhoods, the Council could consider a Council-initiated Residential Preferential Parking Permit (RPP) Program around specific projects. At least one community meeting regarding the AH Combining District would be FINAL SENSE MINUTES Page 26 of 27 City Council Meeting Final Sense Minutes: 4/9/18 worthwhile. More thought needed to be given to a process to waive retail requirements. He was interested in streamlining extremely low and low- income projects to reduce costs. He asked if a definition existed for the length of time affordable housing was designated as affordable housing. Mr. Lait reported Title XVI of the PAMC provided a term of 55 years or up to 99 years depending on the circumstances. Council Member DuBois voiced concern about rooftop decks in residential neighborhoods. Vice Mayor Filseth supported the Motion even though he was uncomfortable with some of the undefined provisions. Mayor Kniss advised that the City had made progress on one of the major community issues. This Ordinance was a step in the right direction. MOTION AS AMENDED RESTATED: Council Member Fine moved, seconded by Council Member Scharff to: A. Find the proposed draft Ordinance within the scope of the Comprehensive Plan Environmental Impact Report (EIR) and adopt the proposed Ordinance amending Chapter 18.30 of Title 18 of the Municipal Code to add a new chapter establishing an Affordable Housing (AH) Combining District and related regulations: i. Excluding Town and Country Village Shopping Center, Midtown Shopping Center, and Charleston Shopping Center; ii. Limit the Combining District to rental Below Market Rate (BMR) units; B. Direct Staff to improve the Ordinance with the following changes: i. Explore including the RP, RM-15, and RM-30 zones in the Combining District; ii. Explore, if requested by an applicant, the City Council may authorize adding an additional 1.5 residential Floor Area Ratio (FAR) to the maximum residential FAR; iii. Allow the Planning Director to recommend a waiver for transitional height standards; iv. Specify a parking requirement of 0.75 per unit, except as preempted by state law, and allow the Planning Director to FINAL SENSE MINUTES Page 27 of 27 City Council Meeting Final Sense Minutes: 4/9/18 modify this standard based on a parking study that shows fewer spaces are needed. For special needs housing units, maintain a requirement of no more than 0.3 spaces per unit; v. Clarify that this Overlay includes all AMI standards including up to 120 percent Area Median Income (AMI); vi. Return to Council following the parking study to reevaluate parking requirements; and vii. Council has the ability to modify retail parking requirements. MOTION AS AMENDED PASSED: 7-2 Holman, Kou no 8. Policy and Services Committee and Staff Recommendations on Next Steps Related to Airplane Noise. State/Federal Legislation Update/Action None. Council Member Questions, Comments and Announcements Mayor Kniss announced Council Member Wolbach and she would attend California League of Cities committee meetings later in the week. Council Member DuBois reported he attended the Water Now meetings and had shared ideas from the meetings with the Utilities Director. Adjournment: The meeting was adjourned at 12:38 A.M.