HomeMy WebLinkAbout2024-03-13 Planning & Transportation Commission Agenda PacketPLANNING AND TRANSPORTATION COMMISSION
Special Meeting
Wednesday, March 13, 2024
Council Chambers & Hybrid
5:00 PM
Commissioner George Lu Remote Call‐In Location:AC Hotel, 208 106th Pl NE, Bellevue, WA
98004
Planning and Transportation Commission meetings will be held as “hybrid” meetings with the
option to attend by teleconference/video conference or in person. To maximize public safety
while still maintaining transparency and public access, members of the public can choose to
participate from home or attend in person. Information on how the public may observe and
participate in the meeting is located at the end of the agenda. Masks are strongly encouraged if
attending in person. The meeting will be broadcast on Cable TV Channel 26, live on
YouTube https://www.youtube.com/c/cityofpaloalto, and streamed to Midpen Media
Center https://midpenmedia.org. Commissioner names, biographies, and archived agendas and
minutes are available at http://bit.ly/PaloAltoPTC.
VIRTUAL PARTICIPATION CLICK HERE TO JOIN (https://cityofpaloalto.zoom.us/j/91641559499)
Meeting ID: 916 4155 9499 Phone: 1(669)900‐6833
PUBLIC COMMENTS
Public comments will be accepted both in person and via Zoom for up to three minutes or an
amount of time determined by the Chair. All requests to speak will be taken until 5 minutes
after the staff’s presentation. Written public comments can be submitted in advance to
Planning.Commission@CityofPaloAlto.org and will be provided to the Commission and available
for inspection on the City’s website. Please clearly indicate which agenda item you are
referencing in your subject line.
Spokespersons that are representing a group of five or more people who are identified as
present at the meeting at the time of the spokesperson's presentation will be allowed up to
fifteen (15) minutes at the discretion of the Chair, provided that the non‐speaking members
agree not to speak individually. The Chair may limit Public Comments to thirty (30) minutes for
all combined speakers. The Chair may reduce the allowed time to speak for Study Sessions and
Action Items to two (2) minutes or less to accommodate a larger number of speakers.
PowerPoints, videos, or other media to be presented during public comment are accepted only
by email to Planning.Commission@CityofPaloAlto.org at least 24 hours prior to the meeting.
Once received, the Clerk will have them shared at public comment for the specified item. To
uphold strong cybersecurity management practices, USB’s or other physical electronic storage
devices are not accepted.
Signs and symbolic materials less than 2 feet by 3 feet are permitted provided that: (1) sticks,
posts, poles or similar/other type of handle objects are strictly prohibited; (2) the items do not
create a facility, fire, or safety hazard; and (3) persons with such items remain seated when
displaying them and must not raise the items above shoulder level, obstruct the view or
passage of other attendees, or otherwise disturb the business of the meeting.
TIME ESTIMATES
Listed times are estimates only and are subject to change at any time, including while the
meeting is in progress. The Commission reserves the right to use more or less time on any item,
to change the order of items and/or to continue items to another meeting. Particular items may
be heard before or after the time estimated on the agenda. This may occur in order to best
manage the time at a meeting or to adapt to the participation of the public.
CALL TO ORDER/ ROLL CALL
PUBLIC COMMENT
Members of the public may speak to any item NOT on the agenda. Three (3) minutes per speaker.
AGENDA CHANGES, ADDITIONS AND DELETIONS
The Chair or Board majority may modify the agenda order to improve meeting management.
CITY OFFICIAL REPORTS
1.Director's Report, Meeting Schedule and Assignments
ACTION ITEMS
Public Comment is Permitted. Applicants/Appellant Teams: Fifteen (15) minutes, plus three (3) minutes rebuttal. All others:
Five(5) minutes per speaker.
2.Recommendation on an Ordinance Updating Chapter 18.15 (Density Bonus) of Title 18
(Zoning) to Reflect Recent Changes in State Density Bonus Law 5:10 PM – 6:00 PM
STUDY SESSION
Public Comment is Permitted. Three (3) minutes per speaker.
3.Presentation to PTC and HRC by Caltrans on El Camino Real Bike Lanes and Parking
Space Removal
6:00 PM – 8:00 PM
JOINT SPECIAL SESSION W/ HUMAN RELATIONS COMMISSION (HRC)
Caltrans response to Commissioner Lu’s questions
4.Study Session to Receive Presentation Regarding Strategies and Policy Recommendations
8:00 PM – 9:00 PM
APPROVAL OF MINUTES
Public Comment is Permitted. Three (3) minutes per speaker.
5.November 8, 2023 Draft Summary & Verbatim Minutes
COMMISSIONER QUESTIONS, COMMENTS, ANNOUNCEMENTS OR FUTURE MEETINGS AND
AGENDAS
Members of the public may not speak to the item(s).
ADJOURNMENT
PUBLIC COMMENT INSTRUCTIONS
Members of the Public may provide public comments to teleconference meetings via email,
teleconference, or by phone.
1. W r i t t e n p u b l i c c o m m e n t s m a y b e s u b m i t t e d b y e m a i l t o
planning.commission@cityofpaloalto.org.
2. Spoken public comments using a computer will be accepted through the
teleconference meeting. To address the Commission, click on the link below to access a
Zoom‐based meeting. Please read the following instructions carefully.
You may download the Zoom client or connect to the meeting in‐ browser. If using
your browser, make sure you are using a current, up‐to‐date browser: Chrome 30,
Firefox 27, Microsoft Edge 12, Safari 7. Certain functionality may be disabled in
older browsers including Internet Explorer.
You may be asked to enter an email address and name. We request that you
identify yourself by name as this will be visible online and will be used to notify you
that it is your turn to speak.
When you wish to speak on an Agenda Item, click on “raise hand.” The Clerk will
activate and unmute speakers in turn. Speakers will be notified shortly before they
are called to speak.
When called, please limit your remarks to the time limit allotted. A timer will be
shown on the computer to help keep track of your comments.
3. Spoken public comments using a smart phone will be accepted through the
teleconference meeting. To address the Commission, download the Zoom application
onto your phone from the Apple App Store or Google Play Store and enter the Meeting ID
below. Please follow the instructions above.
4. Spoken public comments using a phone use the telephone number listed below. When
you wish to speak on an agenda item hit *9 on your phone so we know that you wish to
speak. You will be asked to provide your first and last name before addressing the
Commission. You will be advised how long you have to speak. When called please limit
your remarks to the agenda item and time limit allotted.
CLICK HERE TO JOIN Meeting ID: 916 4155 9499 Phone:1‐669‐900‐6833
Americans with Disability Act (ADA) It is the policy of the City of Palo Alto to offer its public
programs, services and meetings in a manner that is readily accessible to all. Persons with
disabilities who require materials in an appropriate alternative format or who require auxiliary
aids to access City meetings, programs, or services may contact the City’s ADA Coordinator at
(650) 329‐2550 (voice) or by emailing ada@cityofpaloalto.org. Requests for assistance or
accommodations must be submitted at least 24 hours in advance of the meeting, program, or
service.
PLANNING AND TRANSPORTATION COMMISSIONSpecial MeetingWednesday, March 13, 2024Council Chambers & Hybrid5:00 PMCommissioner George Lu Remote Call‐In Location:AC Hotel, 208 106th Pl NE, Bellevue, WA98004Planning and Transportation Commission meetings will be held as “hybrid” meetings with theoption to attend by teleconference/video conference or in person. To maximize public safetywhile still maintaining transparency and public access, members of the public can choose toparticipate from home or attend in person. Information on how the public may observe andparticipate in the meeting is located at the end of the agenda. Masks are strongly encouraged ifattending in person. The meeting will be broadcast on Cable TV Channel 26, live onYouTube https://www.youtube.com/c/cityofpaloalto, and streamed to Midpen MediaCenter https://midpenmedia.org. Commissioner names, biographies, and archived agendas andminutes are available at http://bit.ly/PaloAltoPTC. VIRTUAL PARTICIPATION CLICK HERE TO JOIN (https://cityofpaloalto.zoom.us/j/91641559499)Meeting ID: 916 4155 9499 Phone: 1(669)900‐6833PUBLIC COMMENTSPublic comments will be accepted both in person and via Zoom for up to three minutes or anamount of time determined by the Chair. All requests to speak will be taken until 5 minutesafter the staff’s presentation. Written public comments can be submitted in advance toPlanning.Commission@CityofPaloAlto.org and will be provided to the Commission and availablefor inspection on the City’s website. Please clearly indicate which agenda item you arereferencing in your subject line.Spokespersons that are representing a group of five or more people who are identified aspresent at the meeting at the time of the spokesperson's presentation will be allowed up tofifteen (15) minutes at the discretion of the Chair, provided that the non‐speaking membersagree not to speak individually. The Chair may limit Public Comments to thirty (30) minutes forall combined speakers. The Chair may reduce the allowed time to speak for Study Sessions andAction Items to two (2) minutes or less to accommodate a larger number of speakers.PowerPoints, videos, or other media to be presented during public comment are accepted only
by email to Planning.Commission@CityofPaloAlto.org at least 24 hours prior to the meeting.
Once received, the Clerk will have them shared at public comment for the specified item. To
uphold strong cybersecurity management practices, USB’s or other physical electronic storage
devices are not accepted.
Signs and symbolic materials less than 2 feet by 3 feet are permitted provided that: (1) sticks,
posts, poles or similar/other type of handle objects are strictly prohibited; (2) the items do not
create a facility, fire, or safety hazard; and (3) persons with such items remain seated when
displaying them and must not raise the items above shoulder level, obstruct the view or
passage of other attendees, or otherwise disturb the business of the meeting.
TIME ESTIMATES
Listed times are estimates only and are subject to change at any time, including while the
meeting is in progress. The Commission reserves the right to use more or less time on any item,
to change the order of items and/or to continue items to another meeting. Particular items may
be heard before or after the time estimated on the agenda. This may occur in order to best
manage the time at a meeting or to adapt to the participation of the public.
CALL TO ORDER/ ROLL CALL
PUBLIC COMMENT
Members of the public may speak to any item NOT on the agenda. Three (3) minutes per speaker.
AGENDA CHANGES, ADDITIONS AND DELETIONS
The Chair or Board majority may modify the agenda order to improve meeting management.
CITY OFFICIAL REPORTS
1.Director's Report, Meeting Schedule and Assignments
ACTION ITEMS
Public Comment is Permitted. Applicants/Appellant Teams: Fifteen (15) minutes, plus three (3) minutes rebuttal. All others:
Five(5) minutes per speaker.
2.Recommendation on an Ordinance Updating Chapter 18.15 (Density Bonus) of Title 18
(Zoning) to Reflect Recent Changes in State Density Bonus Law 5:10 PM – 6:00 PM
STUDY SESSION
Public Comment is Permitted. Three (3) minutes per speaker.
3.Presentation to PTC and HRC by Caltrans on El Camino Real Bike Lanes and Parking
Space Removal
6:00 PM – 8:00 PM
JOINT SPECIAL SESSION W/ HUMAN RELATIONS COMMISSION (HRC)
Caltrans response to Commissioner Lu’s questions
4.Study Session to Receive Presentation Regarding Strategies and Policy Recommendations
8:00 PM – 9:00 PM
APPROVAL OF MINUTES
Public Comment is Permitted. Three (3) minutes per speaker.
5.November 8, 2023 Draft Summary & Verbatim Minutes
COMMISSIONER QUESTIONS, COMMENTS, ANNOUNCEMENTS OR FUTURE MEETINGS AND
AGENDAS
Members of the public may not speak to the item(s).
ADJOURNMENT
PUBLIC COMMENT INSTRUCTIONS
Members of the Public may provide public comments to teleconference meetings via email,
teleconference, or by phone.
1. W r i t t e n p u b l i c c o m m e n t s m a y b e s u b m i t t e d b y e m a i l t o
planning.commission@cityofpaloalto.org.
2. Spoken public comments using a computer will be accepted through the
teleconference meeting. To address the Commission, click on the link below to access a
Zoom‐based meeting. Please read the following instructions carefully.
You may download the Zoom client or connect to the meeting in‐ browser. If using
your browser, make sure you are using a current, up‐to‐date browser: Chrome 30,
Firefox 27, Microsoft Edge 12, Safari 7. Certain functionality may be disabled in
older browsers including Internet Explorer.
You may be asked to enter an email address and name. We request that you
identify yourself by name as this will be visible online and will be used to notify you
that it is your turn to speak.
When you wish to speak on an Agenda Item, click on “raise hand.” The Clerk will
activate and unmute speakers in turn. Speakers will be notified shortly before they
are called to speak.
When called, please limit your remarks to the time limit allotted. A timer will be
shown on the computer to help keep track of your comments.
3. Spoken public comments using a smart phone will be accepted through the
teleconference meeting. To address the Commission, download the Zoom application
onto your phone from the Apple App Store or Google Play Store and enter the Meeting ID
below. Please follow the instructions above.
4. Spoken public comments using a phone use the telephone number listed below. When
you wish to speak on an agenda item hit *9 on your phone so we know that you wish to
speak. You will be asked to provide your first and last name before addressing the
Commission. You will be advised how long you have to speak. When called please limit
your remarks to the agenda item and time limit allotted.
CLICK HERE TO JOIN Meeting ID: 916 4155 9499 Phone:1‐669‐900‐6833
Americans with Disability Act (ADA) It is the policy of the City of Palo Alto to offer its public
programs, services and meetings in a manner that is readily accessible to all. Persons with
disabilities who require materials in an appropriate alternative format or who require auxiliary
aids to access City meetings, programs, or services may contact the City’s ADA Coordinator at
(650) 329‐2550 (voice) or by emailing ada@cityofpaloalto.org. Requests for assistance or
accommodations must be submitted at least 24 hours in advance of the meeting, program, or
service.
PLANNING AND TRANSPORTATION COMMISSIONSpecial MeetingWednesday, March 13, 2024Council Chambers & Hybrid5:00 PMCommissioner George Lu Remote Call‐In Location:AC Hotel, 208 106th Pl NE, Bellevue, WA98004Planning and Transportation Commission meetings will be held as “hybrid” meetings with theoption to attend by teleconference/video conference or in person. To maximize public safetywhile still maintaining transparency and public access, members of the public can choose toparticipate from home or attend in person. Information on how the public may observe andparticipate in the meeting is located at the end of the agenda. Masks are strongly encouraged ifattending in person. The meeting will be broadcast on Cable TV Channel 26, live onYouTube https://www.youtube.com/c/cityofpaloalto, and streamed to Midpen MediaCenter https://midpenmedia.org. Commissioner names, biographies, and archived agendas andminutes are available at http://bit.ly/PaloAltoPTC. VIRTUAL PARTICIPATION CLICK HERE TO JOIN (https://cityofpaloalto.zoom.us/j/91641559499)Meeting ID: 916 4155 9499 Phone: 1(669)900‐6833PUBLIC COMMENTSPublic comments will be accepted both in person and via Zoom for up to three minutes or anamount of time determined by the Chair. All requests to speak will be taken until 5 minutesafter the staff’s presentation. Written public comments can be submitted in advance toPlanning.Commission@CityofPaloAlto.org and will be provided to the Commission and availablefor inspection on the City’s website. Please clearly indicate which agenda item you arereferencing in your subject line.Spokespersons that are representing a group of five or more people who are identified aspresent at the meeting at the time of the spokesperson's presentation will be allowed up tofifteen (15) minutes at the discretion of the Chair, provided that the non‐speaking membersagree not to speak individually. The Chair may limit Public Comments to thirty (30) minutes forall combined speakers. The Chair may reduce the allowed time to speak for Study Sessions andAction Items to two (2) minutes or less to accommodate a larger number of speakers.PowerPoints, videos, or other media to be presented during public comment are accepted onlyby email to Planning.Commission@CityofPaloAlto.org at least 24 hours prior to the meeting.Once received, the Clerk will have them shared at public comment for the specified item. Touphold strong cybersecurity management practices, USB’s or other physical electronic storagedevices are not accepted.Signs and symbolic materials less than 2 feet by 3 feet are permitted provided that: (1) sticks,posts, poles or similar/other type of handle objects are strictly prohibited; (2) the items do notcreate a facility, fire, or safety hazard; and (3) persons with such items remain seated whendisplaying them and must not raise the items above shoulder level, obstruct the view orpassage of other attendees, or otherwise disturb the business of the meeting.TIME ESTIMATES
Listed times are estimates only and are subject to change at any time, including while the
meeting is in progress. The Commission reserves the right to use more or less time on any item,
to change the order of items and/or to continue items to another meeting. Particular items may
be heard before or after the time estimated on the agenda. This may occur in order to best
manage the time at a meeting or to adapt to the participation of the public.
CALL TO ORDER/ ROLL CALL
PUBLIC COMMENT
Members of the public may speak to any item NOT on the agenda. Three (3) minutes per speaker.
AGENDA CHANGES, ADDITIONS AND DELETIONS
The Chair or Board majority may modify the agenda order to improve meeting management.
CITY OFFICIAL REPORTS
1.Director's Report, Meeting Schedule and Assignments
ACTION ITEMS
Public Comment is Permitted. Applicants/Appellant Teams: Fifteen (15) minutes, plus three (3) minutes rebuttal. All others:
Five(5) minutes per speaker.
2.Recommendation on an Ordinance Updating Chapter 18.15 (Density Bonus) of Title 18
(Zoning) to Reflect Recent Changes in State Density Bonus Law 5:10 PM – 6:00 PM
STUDY SESSION
Public Comment is Permitted. Three (3) minutes per speaker.
3.Presentation to PTC and HRC by Caltrans on El Camino Real Bike Lanes and Parking
Space Removal
6:00 PM – 8:00 PM
JOINT SPECIAL SESSION W/ HUMAN RELATIONS COMMISSION (HRC)
Caltrans response to Commissioner Lu’s questions
4.Study Session to Receive Presentation Regarding Strategies and Policy Recommendations
8:00 PM – 9:00 PM
APPROVAL OF MINUTES
Public Comment is Permitted. Three (3) minutes per speaker.
5.November 8, 2023 Draft Summary & Verbatim Minutes
COMMISSIONER QUESTIONS, COMMENTS, ANNOUNCEMENTS OR FUTURE MEETINGS AND
AGENDAS
Members of the public may not speak to the item(s).
ADJOURNMENT
PUBLIC COMMENT INSTRUCTIONS
Members of the Public may provide public comments to teleconference meetings via email,
teleconference, or by phone.
1. W r i t t e n p u b l i c c o m m e n t s m a y b e s u b m i t t e d b y e m a i l t o
planning.commission@cityofpaloalto.org.
2. Spoken public comments using a computer will be accepted through the
teleconference meeting. To address the Commission, click on the link below to access a
Zoom‐based meeting. Please read the following instructions carefully.
You may download the Zoom client or connect to the meeting in‐ browser. If using
your browser, make sure you are using a current, up‐to‐date browser: Chrome 30,
Firefox 27, Microsoft Edge 12, Safari 7. Certain functionality may be disabled in
older browsers including Internet Explorer.
You may be asked to enter an email address and name. We request that you
identify yourself by name as this will be visible online and will be used to notify you
that it is your turn to speak.
When you wish to speak on an Agenda Item, click on “raise hand.” The Clerk will
activate and unmute speakers in turn. Speakers will be notified shortly before they
are called to speak.
When called, please limit your remarks to the time limit allotted. A timer will be
shown on the computer to help keep track of your comments.
3. Spoken public comments using a smart phone will be accepted through the
teleconference meeting. To address the Commission, download the Zoom application
onto your phone from the Apple App Store or Google Play Store and enter the Meeting ID
below. Please follow the instructions above.
4. Spoken public comments using a phone use the telephone number listed below. When
you wish to speak on an agenda item hit *9 on your phone so we know that you wish to
speak. You will be asked to provide your first and last name before addressing the
Commission. You will be advised how long you have to speak. When called please limit
your remarks to the agenda item and time limit allotted.
CLICK HERE TO JOIN Meeting ID: 916 4155 9499 Phone:1‐669‐900‐6833
Americans with Disability Act (ADA) It is the policy of the City of Palo Alto to offer its public
programs, services and meetings in a manner that is readily accessible to all. Persons with
disabilities who require materials in an appropriate alternative format or who require auxiliary
aids to access City meetings, programs, or services may contact the City’s ADA Coordinator at
(650) 329‐2550 (voice) or by emailing ada@cityofpaloalto.org. Requests for assistance or
accommodations must be submitted at least 24 hours in advance of the meeting, program, or
service.
PLANNING AND TRANSPORTATION COMMISSIONSpecial MeetingWednesday, March 13, 2024Council Chambers & Hybrid5:00 PMCommissioner George Lu Remote Call‐In Location:AC Hotel, 208 106th Pl NE, Bellevue, WA98004Planning and Transportation Commission meetings will be held as “hybrid” meetings with theoption to attend by teleconference/video conference or in person. To maximize public safetywhile still maintaining transparency and public access, members of the public can choose toparticipate from home or attend in person. Information on how the public may observe andparticipate in the meeting is located at the end of the agenda. Masks are strongly encouraged ifattending in person. The meeting will be broadcast on Cable TV Channel 26, live onYouTube https://www.youtube.com/c/cityofpaloalto, and streamed to Midpen MediaCenter https://midpenmedia.org. Commissioner names, biographies, and archived agendas andminutes are available at http://bit.ly/PaloAltoPTC. VIRTUAL PARTICIPATION CLICK HERE TO JOIN (https://cityofpaloalto.zoom.us/j/91641559499)Meeting ID: 916 4155 9499 Phone: 1(669)900‐6833PUBLIC COMMENTSPublic comments will be accepted both in person and via Zoom for up to three minutes or anamount of time determined by the Chair. All requests to speak will be taken until 5 minutesafter the staff’s presentation. Written public comments can be submitted in advance toPlanning.Commission@CityofPaloAlto.org and will be provided to the Commission and availablefor inspection on the City’s website. Please clearly indicate which agenda item you arereferencing in your subject line.Spokespersons that are representing a group of five or more people who are identified aspresent at the meeting at the time of the spokesperson's presentation will be allowed up tofifteen (15) minutes at the discretion of the Chair, provided that the non‐speaking membersagree not to speak individually. The Chair may limit Public Comments to thirty (30) minutes forall combined speakers. The Chair may reduce the allowed time to speak for Study Sessions andAction Items to two (2) minutes or less to accommodate a larger number of speakers.PowerPoints, videos, or other media to be presented during public comment are accepted onlyby email to Planning.Commission@CityofPaloAlto.org at least 24 hours prior to the meeting.Once received, the Clerk will have them shared at public comment for the specified item. Touphold strong cybersecurity management practices, USB’s or other physical electronic storagedevices are not accepted.Signs and symbolic materials less than 2 feet by 3 feet are permitted provided that: (1) sticks,posts, poles or similar/other type of handle objects are strictly prohibited; (2) the items do notcreate a facility, fire, or safety hazard; and (3) persons with such items remain seated whendisplaying them and must not raise the items above shoulder level, obstruct the view orpassage of other attendees, or otherwise disturb the business of the meeting.TIME ESTIMATESListed times are estimates only and are subject to change at any time, including while themeeting is in progress. The Commission reserves the right to use more or less time on any item,to change the order of items and/or to continue items to another meeting. Particular items maybe heard before or after the time estimated on the agenda. This may occur in order to bestmanage the time at a meeting or to adapt to the participation of the public.CALL TO ORDER/ ROLL CALLPUBLIC COMMENT Members of the public may speak to any item NOT on the agenda. Three (3) minutes per speaker.AGENDA CHANGES, ADDITIONS AND DELETIONSThe Chair or Board majority may modify the agenda order to improve meeting management.CITY OFFICIAL REPORTS1.Director's Report, Meeting Schedule and AssignmentsACTION ITEMSPublic Comment is Permitted. Applicants/Appellant Teams: Fifteen (15) minutes, plus three (3) minutes rebuttal. All others:Five(5) minutes per speaker.2.Recommendation on an Ordinance Updating Chapter 18.15 (Density Bonus) of Title 18(Zoning) to Reflect Recent Changes in State Density Bonus Law 5:10 PM – 6:00 PMSTUDY SESSIONPublic Comment is Permitted. Three (3) minutes per speaker.3.Presentation to PTC and HRC by Caltrans on El Camino Real Bike Lanes and ParkingSpace Removal6:00 PM – 8:00 PMJOINT SPECIAL SESSION W/ HUMAN RELATIONS COMMISSION (HRC)Caltrans response to Commissioner Lu’s questions4.Study Session to Receive Presentation Regarding Strategies and Policy Recommendations8:00 PM – 9:00 PMAPPROVAL OF MINUTESPublic Comment is Permitted. Three (3) minutes per speaker.5.November 8, 2023 Draft Summary & Verbatim Minutes
COMMISSIONER QUESTIONS, COMMENTS, ANNOUNCEMENTS OR FUTURE MEETINGS AND
AGENDAS
Members of the public may not speak to the item(s).
ADJOURNMENT
PUBLIC COMMENT INSTRUCTIONS
Members of the Public may provide public comments to teleconference meetings via email,
teleconference, or by phone.
1. W r i t t e n p u b l i c c o m m e n t s m a y b e s u b m i t t e d b y e m a i l t o
planning.commission@cityofpaloalto.org.
2. Spoken public comments using a computer will be accepted through the
teleconference meeting. To address the Commission, click on the link below to access a
Zoom‐based meeting. Please read the following instructions carefully.
You may download the Zoom client or connect to the meeting in‐ browser. If using
your browser, make sure you are using a current, up‐to‐date browser: Chrome 30,
Firefox 27, Microsoft Edge 12, Safari 7. Certain functionality may be disabled in
older browsers including Internet Explorer.
You may be asked to enter an email address and name. We request that you
identify yourself by name as this will be visible online and will be used to notify you
that it is your turn to speak.
When you wish to speak on an Agenda Item, click on “raise hand.” The Clerk will
activate and unmute speakers in turn. Speakers will be notified shortly before they
are called to speak.
When called, please limit your remarks to the time limit allotted. A timer will be
shown on the computer to help keep track of your comments.
3. Spoken public comments using a smart phone will be accepted through the
teleconference meeting. To address the Commission, download the Zoom application
onto your phone from the Apple App Store or Google Play Store and enter the Meeting ID
below. Please follow the instructions above.
4. Spoken public comments using a phone use the telephone number listed below. When
you wish to speak on an agenda item hit *9 on your phone so we know that you wish to
speak. You will be asked to provide your first and last name before addressing the
Commission. You will be advised how long you have to speak. When called please limit
your remarks to the agenda item and time limit allotted.
CLICK HERE TO JOIN Meeting ID: 916 4155 9499 Phone:1‐669‐900‐6833
Americans with Disability Act (ADA) It is the policy of the City of Palo Alto to offer its public
programs, services and meetings in a manner that is readily accessible to all. Persons with
disabilities who require materials in an appropriate alternative format or who require auxiliary
aids to access City meetings, programs, or services may contact the City’s ADA Coordinator at
(650) 329‐2550 (voice) or by emailing ada@cityofpaloalto.org. Requests for assistance or
accommodations must be submitted at least 24 hours in advance of the meeting, program, or
service.
PLANNING AND TRANSPORTATION COMMISSIONSpecial MeetingWednesday, March 13, 2024Council Chambers & Hybrid5:00 PMCommissioner George Lu Remote Call‐In Location:AC Hotel, 208 106th Pl NE, Bellevue, WA98004Planning and Transportation Commission meetings will be held as “hybrid” meetings with theoption to attend by teleconference/video conference or in person. To maximize public safetywhile still maintaining transparency and public access, members of the public can choose toparticipate from home or attend in person. Information on how the public may observe andparticipate in the meeting is located at the end of the agenda. Masks are strongly encouraged ifattending in person. The meeting will be broadcast on Cable TV Channel 26, live onYouTube https://www.youtube.com/c/cityofpaloalto, and streamed to Midpen MediaCenter https://midpenmedia.org. Commissioner names, biographies, and archived agendas andminutes are available at http://bit.ly/PaloAltoPTC. VIRTUAL PARTICIPATION CLICK HERE TO JOIN (https://cityofpaloalto.zoom.us/j/91641559499)Meeting ID: 916 4155 9499 Phone: 1(669)900‐6833PUBLIC COMMENTSPublic comments will be accepted both in person and via Zoom for up to three minutes or anamount of time determined by the Chair. All requests to speak will be taken until 5 minutesafter the staff’s presentation. Written public comments can be submitted in advance toPlanning.Commission@CityofPaloAlto.org and will be provided to the Commission and availablefor inspection on the City’s website. Please clearly indicate which agenda item you arereferencing in your subject line.Spokespersons that are representing a group of five or more people who are identified aspresent at the meeting at the time of the spokesperson's presentation will be allowed up tofifteen (15) minutes at the discretion of the Chair, provided that the non‐speaking membersagree not to speak individually. The Chair may limit Public Comments to thirty (30) minutes forall combined speakers. The Chair may reduce the allowed time to speak for Study Sessions andAction Items to two (2) minutes or less to accommodate a larger number of speakers.PowerPoints, videos, or other media to be presented during public comment are accepted onlyby email to Planning.Commission@CityofPaloAlto.org at least 24 hours prior to the meeting.Once received, the Clerk will have them shared at public comment for the specified item. Touphold strong cybersecurity management practices, USB’s or other physical electronic storagedevices are not accepted.Signs and symbolic materials less than 2 feet by 3 feet are permitted provided that: (1) sticks,posts, poles or similar/other type of handle objects are strictly prohibited; (2) the items do notcreate a facility, fire, or safety hazard; and (3) persons with such items remain seated whendisplaying them and must not raise the items above shoulder level, obstruct the view orpassage of other attendees, or otherwise disturb the business of the meeting.TIME ESTIMATESListed times are estimates only and are subject to change at any time, including while themeeting is in progress. The Commission reserves the right to use more or less time on any item,to change the order of items and/or to continue items to another meeting. Particular items maybe heard before or after the time estimated on the agenda. This may occur in order to bestmanage the time at a meeting or to adapt to the participation of the public.CALL TO ORDER/ ROLL CALLPUBLIC COMMENT Members of the public may speak to any item NOT on the agenda. Three (3) minutes per speaker.AGENDA CHANGES, ADDITIONS AND DELETIONSThe Chair or Board majority may modify the agenda order to improve meeting management.CITY OFFICIAL REPORTS1.Director's Report, Meeting Schedule and AssignmentsACTION ITEMSPublic Comment is Permitted. Applicants/Appellant Teams: Fifteen (15) minutes, plus three (3) minutes rebuttal. All others:Five(5) minutes per speaker.2.Recommendation on an Ordinance Updating Chapter 18.15 (Density Bonus) of Title 18(Zoning) to Reflect Recent Changes in State Density Bonus Law 5:10 PM – 6:00 PMSTUDY SESSIONPublic Comment is Permitted. Three (3) minutes per speaker.3.Presentation to PTC and HRC by Caltrans on El Camino Real Bike Lanes and ParkingSpace Removal6:00 PM – 8:00 PMJOINT SPECIAL SESSION W/ HUMAN RELATIONS COMMISSION (HRC)Caltrans response to Commissioner Lu’s questions4.Study Session to Receive Presentation Regarding Strategies and Policy Recommendations8:00 PM – 9:00 PMAPPROVAL OF MINUTESPublic Comment is Permitted. Three (3) minutes per speaker.5.November 8, 2023 Draft Summary & Verbatim MinutesCOMMISSIONER QUESTIONS, COMMENTS, ANNOUNCEMENTS OR FUTURE MEETINGS ANDAGENDAS
Members of the public may not speak to the item(s).
ADJOURNMENT
PUBLIC COMMENT INSTRUCTIONS
Members of the Public may provide public comments to teleconference meetings via email,
teleconference, or by phone.
1. W r i t t e n p u b l i c c o m m e n t s m a y b e s u b m i t t e d b y e m a i l t o
planning.commission@cityofpaloalto.org.
2. Spoken public comments using a computer will be accepted through the
teleconference meeting. To address the Commission, click on the link below to access a
Zoom‐based meeting. Please read the following instructions carefully.
You may download the Zoom client or connect to the meeting in‐ browser. If using
your browser, make sure you are using a current, up‐to‐date browser: Chrome 30,
Firefox 27, Microsoft Edge 12, Safari 7. Certain functionality may be disabled in
older browsers including Internet Explorer.
You may be asked to enter an email address and name. We request that you
identify yourself by name as this will be visible online and will be used to notify you
that it is your turn to speak.
When you wish to speak on an Agenda Item, click on “raise hand.” The Clerk will
activate and unmute speakers in turn. Speakers will be notified shortly before they
are called to speak.
When called, please limit your remarks to the time limit allotted. A timer will be
shown on the computer to help keep track of your comments.
3. Spoken public comments using a smart phone will be accepted through the
teleconference meeting. To address the Commission, download the Zoom application
onto your phone from the Apple App Store or Google Play Store and enter the Meeting ID
below. Please follow the instructions above.
4. Spoken public comments using a phone use the telephone number listed below. When
you wish to speak on an agenda item hit *9 on your phone so we know that you wish to
speak. You will be asked to provide your first and last name before addressing the
Commission. You will be advised how long you have to speak. When called please limit
your remarks to the agenda item and time limit allotted.
CLICK HERE TO JOIN Meeting ID: 916 4155 9499 Phone:1‐669‐900‐6833
Americans with Disability Act (ADA) It is the policy of the City of Palo Alto to offer its public
programs, services and meetings in a manner that is readily accessible to all. Persons with
disabilities who require materials in an appropriate alternative format or who require auxiliary
aids to access City meetings, programs, or services may contact the City’s ADA Coordinator at
(650) 329‐2550 (voice) or by emailing ada@cityofpaloalto.org. Requests for assistance or
accommodations must be submitted at least 24 hours in advance of the meeting, program, or
service.
Item No. 1. Page 1 of 2
Planning & Transportation Commission
Staff Report
From: Planning and Development Services Director
Lead Department: Planning and Development Services
Meeting Date: March 13, 2024
Report #: 2402-2646
TITLE
Director's Report, Meeting Schedule and Assignments
RECOMMENDATION
Staff recommends that the Planning and Transportation Commission (PTC) review and
comment as appropriate.
BACKGROUND
This document includes the following items:
PTC Meeting Schedule
PTC Representative to City Council (Rotational Assignments)
Upcoming PTC Agenda Items
Commissioners are encouraged to contact Veronica Dao (Veronica.Dao@CityofPaloAlto.org) to
notify staff of any planned absences one month in advance, if possible, to ensure the
availability of a PTC quorum.
PTC Representative to City Council is a rotational assignment where the designated
commissioner represents the PTC’s affirmative and dissenting perspectives to Council for quasi-
judicial and legislative matters. Representatives are encouraged to review the City Council
agendas (https://www.cityofpaloalto.org/City-Hall/City-Council/Council-Agendas-Minutes) for
the months of their respective assignments to verify if attendance is needed or contact staff.
Prior PTC meetings are available online at https://midpenmedia.org/category/government/city-
of-palo-alto/boards-and-commissions/planning-and-transportation-commission.
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Item No. 1. Page 2 of 2
UPCOMING PTC ITEMS
These are placeholder dates targeted for items listed below; the dates for items may change.
March 27, 2024
Bicycle Pedestrian Transportation Plan Update (OOT)
739 Sutter Vesting Tentative Map (PDA)
Retail Study Session Recommendations (PDS)
April 10, 2024
Elections of Chair and Vice Chair
310-320 California Avenue CUP (PDS)
800 San Antonio Road PHZ (PDS) Multi-Family Residential Housing
3265 El Camino Real PHZ (PDS) Teacher Housing
April 15, 2024
Joint meeting with City Council to Approve Revisions to Adopted Housing Element
ATTACHMENTS
Attachment A: 2024 Meeting Schedule and Assignments
AUTHOR/TITLE:
Amy French, Chief Planning Official
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Planning & Transportation Commission
2024 Meeting Schedule & Assignments
2024 Schedule
Meeting Dates Time Location Status Planned Absences
1/10/2024 6:00 PM Hybrid Cancelled
1/31/2024 6:00 PM Hybrid Regular
2/14/2024 6:00 PM Hybrid Canceled
2/28/2024 6:00 PM Hybrid Regular
3/13/2024 5:00 PM Hybrid Special
Joint Meeting w/ HRC
3/27/2024 6:00 PM Hybrid Regular
4/10/2024 6:00 PM Hybrid Regular
4/15/2024 5:30 PM Hybrid Joint Meeting w/ Council
4/24/2024 6:00 PM Hybrid Regular
5/8/2024 6:00 PM Hybrid Regular
5/29/2024 6:00 PM Hybrid Regular
6/12/2024 6:00 PM Hybrid Regular
6/26/2024 6:00 PM Hybrid Regular
7/10/2024 6:00 PM Hybrid Regular
7/31/2024 6:00 PM Hybrid Regular
8/14/2024 6:00 PM Hybrid Regular
8/28/2024 6:00 PM Hybrid Regular
9/11/2024 6:00 PM Hybrid Regular
9/25/2024 6:00 PM Hybrid Regular
10/9/2024 6:00 PM Hybrid Regular
10/30/2024 6:00 PM Hybrid Regular
11/13/2024 6:00 PM Hybrid Regular
11/27/2024 6:00 PM Hybrid Regular
12/11/2024 6:00 PM Hybrid Regular
12/25/2024 6:00 PM Hybrid Cancelled
2024 Assignments - Council Representation (primary/backup)
January February March April May June
Cari Templeton
Keith Reckdahl
Bart Hechtman
Doria Summa
Bryna Chang
George Lu
Doria Summa
Allen Akin
Keith Reckdahl
Cari Templeton
George Lu
Bryna Chang
July August September October November December
Allen Akin
Bart Hechtman
Doria Summa
George Lu
Bart Hechtman
Keith Reckdahl
Cari Templeton
Bryna Chang
George Lu
Bart Hechtman
Doria Summa
Cari Templeton
Item 1
Attachment A - 2024
Schedule & Assignments
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Item No. 2. Page 1 of 3
Planning & Transportation Commission
Staff Report
From: Planning and Development Services Director
Lead Department: Planning and Development Services
Meeting Date: March 13, 2024
Report #: 2402-2695
TITLE
Recommendation on an Ordinance Updating Chapter 18.15 (Density Bonus) of Title 18 (Zoning)
to Reflect Recent Changes in State Density Bonus Law and Revising Regulations for Provision of
On-Site Affordable Rental Units Under the City’s Inclusionary Housing Ordinance
RECOMMENDATION
Staff recommends the Planning and Transportation Commission recommend the City Council
adopt the attached ordinance (Attachment A) updating Palo Alto’s Density Bonus regulations in
accordance with recent changes in state law and revising regulations regarding the provision of
on-site affordable rental units.
BACKGROUND
Chapter 18.15 of the Palo Alto Municipal Code outlines the City’s Residential Density Bonus
program. This Chapter was enacted to comply with the state density bonus law, California
Government Code Section 65915. California’s density bonus law requires local governments to
provide housing developers with density bonuses and other concessions or incentives when the
developers agree to provide a certain percentage of affordable housing. This state law requires
compliance by local governments, even in the absence of local ordinances providing state
mandated bonuses, concessions, or incentives. A local ordinance, however, can provide clarity
to developers and the public regarding the interaction of state density bonus law with other
aspects of local zoning regulations.
Palo Alto first adopted its Density Bonus ordinance (PAMC Chapter 18.15) in 2014. Since that
time, the City has periodically updated the code in response to changes in state law, most
recently in 2021.
Since that time, a variety of bills have made minor changes to state law, including SB 728
(2021), and AB 2334 (2022). More recently, AB 323 (2023) made a major revision, adding an
“additional“ density bonus that allows a developer to achieve up to a 100% density bonus over
the base provided in Title 18 or the Comprehensive Plan.
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Item No. 2. Page 2 of 3
In 2017, the City also recodified and updated its inclusionary housing ordinance in PAMC
Chapter 16.65. In accordance with that effort, the City Council also set housing impact fees,
housing in-lieu fees, and defined the on-site affordability alternative for rental housing projects
(Ordinance No. 5409). Although the on-site affordability option has not been used in years past,
as rental housing developers could simply pay an impact fee, it is likely to become more
relevant as developers seek to utilize state density bonus law, which requires provision of on-
site affordable units.
ANALYSIS
Regardless of whether the City acts to amend its ordinances, the changes to state law will
dictate the City’s actions. The state law is written to supersede any conflicting local ordinances.
Amending the City’s Zoning Code will provide clarity to the public about the current laws
applicable in the City. The following are changes made to Chapter 18.15, Density Bonus:
1. Updated section on applicability to clarify that projects in a Planned Community Zone or
subject to a development agreement are not eligible for density bonus and that the use
of state density bonus law might render a project ineligible for local incentives like the
Housing Incentive Program (HIP) or the recently adopted El Camino Focus Area
standards.
2. Updated definitions to include new and amended definitions in state law. Most notable
among these is the updated definition of “base density” or “maximum allowable
residential density,” which now provides explicit direction on how to apply density
bonus to zones that do not provide a maximum number of dwelling units per acre. In
the past, Palo Alto had very few areas that did not regulate maximum du/acre, but the
HIP and rezonings under the 2023-2031 Housing Element have increased the number of
sites where this may apply.
3. Minor adjustments made regarding the amount of density bonus and number of
concessions granted in certain situations, in accordance with state law.
4. Added provisions regarding the “additional density bonus” authorized by AB 323.
5. Updated regulations on the use of incentives and concessions and relocated the pre-
approved “menu” of incentives and concessions. The PTC may wish to consider simply
deleting this menu. These options were not used by developers. Recent caselaw on
density bonus has also led developers to utilize incentives, concessions, and waiver
much more aggressively, such that they are unlikely to consult a menu of pre-approved
options.
With respect to the on-site alternative for rental housing projects, staff have discovered that
regulations adopted by the Council in 2017 are too permissive, as they allow a rental housing
developer to provide 15% of units at rates affordable to moderate income households. Recent
experience has shown that this level of affordability is fairly close to market rate. Staff proposes
to revise this requirement to be 15% of units at rates affordable to lower income households,
which is more typical. This update also includes an option for developers to provide units
Item 2
Staff Report
Packet Pg. 10
Item No. 2. Page 3 of 3
affordable to very low income households, drawing from the ratios used in state density bonus
law.
FISCAL/RESOURCE IMPACT
There is no fiscal impact associated with this action.
ENVIRONMENTAL REVIEW
The adoption of this ordinance is not a project subject to the California Environmental Quality
Act.
ATTACHMENTS
Attachment A: Draft Ordinance Amending PAMC Chapter 18.15 and Updating Rental
Alternative Regulations
AUTHOR/TITLE:
Albert Yang, Assistant City Attorney
Item 2
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*NOT YET APPROVED*
1
Ordinance No. _____
Ordinance of the Council of the City of Palo Alto Amending Chapter 18.15
(Density Bonus) of Title 18 (Zoning) of the Palo Alto Municipal Code
to Incorporate Changes in State Density Bonus Law and Revising
SECTION 1. Findings and Declarations. The City Council finds and declares as follows:
A. On October 11, 2023, the Governor approved AB 1287, which substantially revised the
provisions of State Density Bonus law (Government Code Section 65915), which requires
a city to provide a developer that proposes a housing development within the
jurisdictional boundaries of that city with a density bonus and other incentives or
concessions for the production of lower income housing units, or for the donation of
land within the development, if the developer agrees to construct a specified
percentage of units for very low income, low-income, or moderate-income households
or qualifying residents and meets other requirements.
B. In 2023 and previous years, the Governor has approved additional revisions to State
Density Bonus Law, including AB 323, SB 713, AB 682, AB 2334, SB 290, and SB 728.
C. The City Council is therefore updating Chapter 18.15 (Density Bonus) of Title 18 (Zoning)
of the Palo Alto Municipal Code to incorporate these revisions in state law.
SECTION 2. Chapter 18 15 (Density Bonus) of Title 18 (Zoning) of the Palo Alto Municipal Code is
amended to read as follows [additions are underlined and deletions struck-through].
18.15.010 Purpose and Applicability
(a) The purpose of this chapter is to:
(a1) Comply with the state density bonus law under California Government Code s
Section 65915. To the extent this chapter conflicts with California Government Code
Section 65915, the provisions of Section 65915 shall prevail.
(b2) Establish procedures for implementing state density bonus requirements as set
forth in California Government Code Section 65915, as amended.
(c3) Facilitate the development of affordable housing consistent with the goals,
objectives, and policies of the City’s Comprehensive Plan Housing Element.
(b) This chapter applies to all development applications to create five (5) or more additional
dwelling units on a lot or contiguous lots, except:
(1) Developments proposed in conjunction with a rezoning to the Planned Community
zone district, which shall be entitled to densities and specific development plans
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2
approved as part of the rezoning and shall not be entitled to a density bonus in addition
to the units entitled by the rezone.
(2) This chapter shall not apply to developments proposed in conjunction with a
development agreement, pursuant to Government Code section 65864-65869.5, where
the development agreement specifies the densities and/or development standards
permitted thereunder.
(3) Utilization of the benefits afforded by this chapter may preclude an applicant from
taking advantage of local alternatives to state density bonus law, such as the Housing
Incentive Program or El Camino Real Focus Area standards set forth in Chapter 18.14.
18.15.020 Definitions
Whenever the following terms are used in this chapter, they shall have the meaning established
by this section. To the extent these terms are defined in California Government Code Section
65915, the definitions provided therein shall govern and the following definitions are provided
for convenience only:
(a) “Affordable rent” means monthly rent, including a reasonable allowance for utilities and
all fees for housing services, for rental restricted affordable units reserved for very low or lower
income households, as further defined in the California Health and Safety Code Section 50053.
that does not exceed the following:
(i) Very low income: 50% of the area median income for Santa Clara County, adjusted for
presumed household size, multiplied by 30% and divided by 12.
(ii) Lower income: 60% of the area median income for Santa Clara County, adjusted for
presumed household size, multiplied by 30% and divided by 12.
(b) “Affordable sales price” means the maximum sales price at which very low, lower and
moderate income households can qualify for the purchase of restricted affordable units as set
forth in the City of Palo Alto’s Below Market Rate Housing Program. The sales price shall be
considered affordable only if it is based on a reasonable down payment, and monthly housing
payments (including interest, principal, mortgage insurance, property taxes and assessments,
fire and casualty insurance, homeowners association fees, property maintenance and repairs,
and a reasonable allowance for utilities), all as determined by the city, that are equal to or less
than the monthly housing costs provided in Health and Safety Code Section 50052.5:
(i) Very low income: 50% of the area median income for Santa Clara County, adjusted for
presumed household size, multiplied by 30% and divided by 12.
(ii) Lower income: 80% of the area median income for Santa Clara County, adjusted for
presumed household size, multiplied by 30% and divided by 12.
(iii) Moderate income: 120% of the area median income for Santa Clara County, adjusted
for presumed household size, multiplied by 30% and divided by 12.
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(c) “Applicant” means any person, firm, partnership, association, joint venture, corporation,
or any entity or combination of entities who seeks development permits or approvals from the
City of Palo Alto.
(d) “Approval authority” means the person or body that is authorized to approve a
development as specified in the City of Palo Alto Municipal Code. Approval Authority shall also
include recommending bodies such as the Architectural Review Board and the Planning and
Transportation Commission.
(e) “Below market rate housing program” means Chapter 18.14 16.65 of the Palo Alto
Municipal Code and the Administrative Guidelines adopted thereunder for the below market
rate program.
(f) “Child care facility” means a child day care facility other than a family day care home,
including, but not limited to, infant centers, preschools, extended day care facilities, and school
age child care centers.
(g) “Concession or incentive” as used interchangeably means such regulatory concessions as
specified in Government Code Section 65915(k) to include:
(i) (1) A reduction of site development standards or architectural design requirements
which exceed the minimum applicable building standards approved by the State
Building Standards Commission pursuant to Part 2.5 (commencing with Section 18901)
of Division 13 of the Health and Safety Code, including, but not limited to, a reduction in
setback, coverage, and/or parking requirements which result in identifiable, financially
sufficient and actual cost reductions;
(ii) (2) Allowing mixed use development in conjunction with the proposed residential
development, if nonresidential land uses will reduce the cost of the residential project
and the nonresidential land uses are compatible with the residential project and existing
or planned development in the area where the development will be located; and
(iii) (3) Other regulatory concessions proposed by the applicant or the city which result
in identifiable financially sufficient, and actual cost reductions.
(h) “Density bonus” means a density increase, granted pursuant to Government Code
Section 65915 and this ordinance, over the otherwise maximum allowable gross residential
density as of the date of application granted pursuant to Government Code Section 65915 and
this ordinance, or, if elected by the applicant, a lesser percentage of density increase, including,
but not limited to, no increase in density.
(i) “Density bonus units” means those dwelling units granted pursuant to the provisions of
this chapter which exceed the otherwise maximum allowable gross residential density for the
development site.”
(j) “Development” means all developments pursuant to a single application proposal to
construct or place five (5) or more additional dwelling units on a lot or contiguous lots
Item 2
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including, without limitation, a planned unit development, site plan, subdivision, or conversion
of a non-residential building to dwelling units.
(k) “Development standard” means a site or construction condition, other than a control on
maximum density, such as a height limitation, a setback, or a floor-area ratio, an onsite open-
space requirement, a minimum lot area per unit requirement, or a parking ratio that applies to
a development pursuant to any ordinance, general plan element, specific plan, charter, or other
city condition, law, policy, resolution, or regulation, including regulations enacted by the
electorate exercising the local initiative or referendum power. In zones lacking a dwelling-units-
per-acre standard, Floor Area Ratio or FAR acts as a limitation on density and is therefore not
considered a development standard subject to wavier, incentive, or concession. A “site and
construction condition” is a development regulation or law that specifies the physical
development of a site and buildings on the site in a development.
(l) “Discretionary permit” means any permit issued for the development which requires the
exercise of judgment or deliberation from the Approval Authority, including but not limited to
conditional use permits, variances, site plans, design review, planned development permits,
general and specific plan approvals and amendments, zoning amendments, and tentative and
parcel maps.
(m) “Lower, very low, or moderate income” means annual income of a household that does
not exceed the maximum income limits for the income category, as adjusted for household size,
applicable to Santa Clara County, as published and periodically updated by the State
Department of Housing and Community Development pursuant to Sections 50079.5, 50105, or
50093 of the California Health and Safety Code.
(n) "Lower income student" means a student who has a household income and asset level
that does not exceed the level for Cal Grant A or Cal Grant B award recipients as set forth in
Section 69432.7(k) of the Education Code. The eligibility of a unit for lower income students
under this section shall be verified by an affidavit, award letter, or letter of eligibility provided
by the institution of higher education in which the student is enrolled or by the California
Student Aid Commission that the student receives or is eligible for financial aid, including an
institutional grant or fee waiver from the college or university, the California Student Aid
Commission, or the federal government.
(o) "Major transit stop" has the same meaning as defined in subdivision (b) of Section 21155
of the California Public Resources Code.
(1) “Located within one-half mile of a major transit stop” means that any point on a
proposed development is within one-half mile of any point on the property on which a
major transit stop is located, including any parking lot owned by the transit authority or
other local agency operating the major transit stop.
(n p) “Maximum allowable residential density” or “base density” means the maximum
greatest number of dwelling units permitted in the development by the city’s Comprehensive
Plan Land Use Element, a specific plan, an area plan, or and Zoning Ordinance at the time of
Item 2
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application, excluding the provisions of this chapter. If a range of density is permitted, the
greatest number of units allowed by the specific zoning range, specific plan, or Comprehensive
Plan Land Use Element shall apply. If the maximum density allowed by the zoning ordinance is
inconsistent with the density allowed by the land use element of the city’s Comprehensive Plan,
the land use element density shall prevail. However, if the applicable zoning ordinance, specific
plan, or land use element does not provide a dwelling-units-per-acre standard for density, then
the maximum allowable residential density shall be calculated by:
(1) Estimating the realistic development capacity of the site based on the objective
development standards applicable to the project, including, but not limited to, floor
area ratio, site coverage, maximum building height and number of stories, building
setbacks and stepbacks, public and private open-space requirements, minimum
percentage or square footage of any nonresidential component, and parking
requirements, unless not required for the base project. Parking requirements shall
include considerations regarding number of spaces, location, design, type, and
circulation. A developer may provide a base density study and the local agency shall
accept it, provided that it includes all applicable objective development standards.
(2) Maintaining the same average unit size and other project details relevant to the
base density study, excepting those that may be modified by waiver or concession to
accommodate the bonus units, in the proposed project as in the study.
(oq) “Non-restricted unit” means all dwelling units within a development excluding the
restricted affordable units.
(p r) “Qualifying mobilehome park” means a mobilehome park that limits residency based on
age requirements for housing older persons pursuant to Section 798.76 and 799.5 of the Civil
Code.
(q s) “Qualifying resident” means senior citizens or other persons eligible to reside in a senior
citizen housing development or qualifying mobilehome park.
(r t) “Regulatory agreement” means a recorded and legally binding agreement between an
applicant and the city to ensure that the requirements of this chapter are satisfied. The
regulatory agreement, among other things, shall establish: the number of restricted affordable
units, their size, location, terms and conditions of affordability, and production schedule.
(s u) “Replace” means either of the following:
(I 1) If any dwelling units described in Section 18.15.030(i) are occupied on the date
that the application is submitted to the City, the proposed housing development shall
provide at least the same number of units of equivalent size to be made available at
affordable rent or affordable housing cost to, and occupied by, persons and families in
the same or lower income category as those households in occupancy. For unoccupied
dwelling units described in Section 18.15.030(i) in a development with occupied units,
the proposed housing development shall provide units of equivalent size or type, or
both, to be made available at affordable rent or affordable housing cost to, and
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occupied by, persons and families in the same or lower income category as the last
household in occupancyin the same proportion of affordability as the occupied units. If
the income category of the (last) household in occupancy is not known, it shall be
rebuttably presumed that lower income renter households occupied these units in the
same proportion of lower income renter households to all renter households within the
jurisdiction, as determined by the most recently available data from the United States
Department of Housing and Urban Development’s Comprehensive Housing Affordability
Strategy database. All replacement calculations resulting in fractional units shall be
rounded up to the next whole number. If the replacement units will be rental dwelling
units, these units shall be subject to a recorded affordability restriction for at least 55
years. If the proposed development is for-sale units, the units replaced shall be subject
to California Government Code Section 65915(c)(2). For purposes of this subsection (s)
of Section 18.15.020, “equivalent size” means that the replacement units contain at
least the same total number of bedrooms as the units being replaced.
(ii2) If all dwelling units described in Section 18.15.030(i) have been vacated or
demolished within the five-year period preceding the application, the proposed housing
development shall provide at least the same number of units of equivalent size, as
existed at the highpoint of those units in the five-year period preceding the application
to be made available at affordable rent or affordable housing cost to, and occupied by,
persons and families in the same or lower income category as those persons and
families in occupancy at that time, if known. If the incomes of the persons and families
in occupancy at the highpoint is not known, it shall be rebuttably presumed that low-
income and very low income renter households occupied these units in the same
proportion of low-income and very low income renter households to all renter
households within the jurisdiction, as determined by the most recently available data
from the United States Department of Housing and Urban Development’s
Comprehensive Housing Affordability Strategy database., then one-half of the required
units shall be made available at affordable rent or affordable housing cost to, and
occupied by, very low income persons and families and one-half of the required units
shall be made available for rent at affordable housing costs to, and occupied by, low-
income persons and families. All replacement calculations resulting in fractional units
shall be rounded up to the next whole number. If the replacement units will be rental
dwelling units, these units shall be subject to a recorded affordability restriction for at
least 55 years. If the proposed development is for-sale units, the units replaced shall be
subject to California Government Code Section 65915(c)(2).
(t v) “Restricted affordable unit” means a dwelling unit within a development which will be
available at an affordable rent or affordable sales price for sale or rent to very low, lower or
moderate income households.
(u w) “Senior citizen housing development” means a Development consistent with the
California Fair Employment and Housing Act (Government Code Section 12900 et. seq.,
including 12955.9 in particular), which has been “designed to meet the physical and social
needs of senior citizens,” and which otherwise qualifies as “housing for older persons” as that
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phrase is used in the federal Fair Housing Amendments Act of 1988 (P.L. 100-430) and
implementing regulations (24 CFR, part 100, subpart E), and as that phrase is these phrases are
used in California Civil Code Sections 51.2, and 51.3, and 51.12.
(x)“Shared housing building” means a residential or mixed-use structure, with five or more
shared housing units and one or more common kitchens and dining areas designed for
permanent residence of more than 30 days by its tenants. The kitchens and dining areas within
the shared housing building shall be able to adequately accommodate all residents. If a local
ordinance further restricts the attributes of a shared housing building beyond the requirements
established in this section, the local definition shall apply to the extent that it does not conflict
with the requirements of this section.
(y) “Total units” or “total dwelling units” means a calculation of the number of units that:
(1) Excludes a unit added by a density bonus awarded pursuant to this section or any
local law granting a greater density bonus.
(2) Includes a unit designated to satisfy an inclusionary zoning requirement of a city,
county, or city and county.
For purposes of calculating a density bonus granted pursuant to this section for a shared
housing building, “unit” means one shared housing unit and its pro rata share of associated
common area facilities.
(z) “Very low vehicle travel area” means an urbanized area, as designated by the United States
Census Bureau, where the existing residential development generates vehicle miles traveled
per capita that is below 85 percent of either regional vehicle miles traveled per capita or city
vehicle miles traveled per capita. For purposes of this paragraph, “area” may include a travel
analysis zone, hexagon, or grid. For the purposes of determining “regional vehicle miles
traveled per capita” pursuant to this paragraph, a “region” is the entirety of incorporated and
unincorporated areas governed by a multicounty or single-county metropolitan planning
organization, or the entirety of the incorporated and unincorporated areas of an individual
county that is not part of a metropolitan planning organization.
18.15.030 Density Bonuses
This section describes the density bonuses that will be provided, at the request of an applicant,
when that applicant provides restricted affordable units as described below.
(a) The city shall grant a twenty percent (20%) density bonus when an applicant for a
development of five (5) or more dwelling units seeks and agrees to construct at least any one of
the following in accordance with the requirements of this Section and Government Code
Section 65915:
(I 1) A rental or for-sale development, including a shared housing building, that
provides at At least ten percent (10%) of the total dwelling units of the development as
restricted affordable units affordable to lower income households. Between ten and
twenty percent (10-20%), f For each one percent (1%) increase in the percentage of
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restricted lower income units up to twenty percent (20%) of total units, a development
will receive an additional one and one-half percent (1.5%) density bonus up to thirty-five
percent (35%) density bonus of the maximum residential density. For each one percent
(1%) increase in the percentage of restricted lower income units exceeding twenty
percent (20%) of total units, a development will receive an additional three and three-
quarters percent (3.75%) density bonus up to fifty percent (50%) density bonusof the
maximum residential density; or
(ii 2) A rental or for-sale development, including a shared housing building, that
provides at At least five percent (5%) of the total dwelling units of the development as
restricted affordable units affordable to very low income households. Between five and
eleven percent (5-11%), f For each one percent (1%) increase in the percentage of
restricted very low income units up to eleven percent (11%) of total units, a
development will receive an additional two and one-half percent (2.5%) density bonus
up to thirty-five percent (35%) density bonusof the maximum residential density. For
each one percent (1%) increase in the percentage of restricted very low income units
exceeding eleven percent (11%) of total units, a development will receive an additional
three and three-quarters percent (3.75%) density bonus up to fifty percent (50%)
density bonusof the maximum residential density; or
(iii 3) A senior citizen housing development; or
(iv 4) A qualifying mobilehome park; or
(v 5) At least ten percent (10%) of the total dwelling units of the development for
transitional foster youth, as defined in Section 66025.9 of the Education Code, disabled
veterans, as defined in Section 18541 of the Government Code, or homeless persons, as
defined in the federal McKinney-Vento Homeless Assistance Act (42 U.S.C. Sec. 11301 et
seq.). The units described in this subsection shall be subject to a recorded affordability
restriction of 55 years and shall be provided at the same affordability level as very low
income units.
(b) The city shall grant a five percent (5%) density bonus when an applicant for a
development of five (5) or more additional dwelling units seeks and agrees to construct a
development, in accordance with the requirements of this Section and Government Code
Section 65915, in which at least 10 percent (10%) of the total dwelling units of a housing
development are sold to persons and families of low or moderate income households, provided
that all dwelling units in the development are offered to the public for purchase. For each one
percent (1%) increase in the percentage of restricted moderate income units between ten and
forty percent (10-40%) of total units, a development will receive an additional one percent (1%)
density bonus up to thirty-five percent (35%) density bonus of the maximum residential
density. For each one percent (1%) increase in the percentage of total dwelling units restricted
for moderate income households exceeding forty percent (40%), a development will receive an
additional three and three-quarters percent (3.75%) density bonus up to fifty percent (50%) of
the maximum residential density.
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(c) The city shall grant a thirty-five percent (35%) density bonus when an applicant for a
student housing development of five (5) or more additional dwelling units seeks and agrees to
construct in accordance with the requirements of this section and Government Code Section
65915:
(i 1) At least twenty percent (20%) of the total dwelling units will be restricted and used
for lower income students.
(ii 2) For purposes of calculating a density bonus granted pursuant to this
subparagraph, the term "unit" as used in this subparagraph means one rental bed and
its pro rata share of the associated common area facilities. The units described in this
subparagraph shall be subject to an affordability restriction of 55 years.
(iii 3) All units will be used exclusively for undergraduate, graduate, or professional
students enrolled full time at an institution of higher education accredited by the
Western Association of Schools and Colleges or the Accrediting Commission for
Community and Junior Colleges.
(iv 4) The applicant submits evidence that the applicant entered into an operating
agreement or master lease with one or more institutions of higher education for the
institution(s) to occupy all units of the student housing development with students from
that institution(s).
(v 5) The rent provided in the applicable units of the development for lower income
students shall be calculated at thirty percent (30%) of sixty-five percent (65%) of the
area median income for Santa Clara County for a single-room occupancy unit type.
(vi 6) The applicant will provide priority for the applicable affordable units for lower
income students experiencing homelessness. A homeless service provider, as defined in
paragraph (3) of subdivision (e) of Section 103577 of the Health and Safety Code, or
institution of higher education that has knowledge of a person's homeless status may
verify a person's status as homeless for purposes of this subclause.
(d) The city shall grant an eighty percent (80%) density bonus to a development if the
following criteria apply: one hundred percent (100%) of all units in the development, including
total units and density bonus units, but exclusive of manager's unit or units, are for lower
income households, as defined by Section 50079.5 of the Health and Safety Code, except that
twenty percent (20%) of the units in the development, including total units and density bonus
units, may be for moderate-income households, as defined in Section 50053 of the Health and
Safety Code. For rental units, rents shall be restricted as set forth in Government Code section
65915(c)(1)(B)(ii). The city will not impose any maximum controls on density if either of the
following apply:
(i 1) Except as otherwise provided in clause (ii), the city will grant a density bonus of
eighty percent (80%) of the number of units for lower income households The housing
development is located in a very low vehicle travel area within a designated county.
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(ii 2) If the The development is located within one-half mile of a major transit stop, the
city will not impose any maximum controls on density.
(e) When calculating the number of permitted density bonus units, any fractions of units
shall be rounded to the next highest number Each component of any density calculation,
including base density and bonus density, resulting in fractional units shall be separately
rounded up to the next whole number. An applicant may elect to receive a density bonus that is
less than the amount permitted by this section; however, the city shall not be required to
similarly reduce the number of restricted affordable units required to be dedicated pursuant to
this section and Government Code Section 65915(b).
(f) Each development is entitled to only one density bonus, which shall be selected by the
applicant based on the percentage of very low, low, or moderate-income restricted affordable
units, lower income restricted affordable units, or moderate income restricted affordable units,
or the development’s status as a senior citizen housing development or qualifying mobilehome
park, or the development's provision of restricted affordable units for transitional foster youth,
disabled veterans, lower income students, or homeless persons. Density bonuses from more
than one category may not be combined. Except as provided for in 18.15.030(d) and 18.15.035,
in no case shall a development be entitled to a density bonus of more than fifty percent (50%).
(g) The density bonus units shall not be included when determining the number of restricted
affordable units required to qualify for a density bonus. When calculating the required number
of restricted affordable units, any resulting decimal or fraction shall be rounded to the next
larger integer.
(h) Any restricted affordable unit provided pursuant to the city’s below market rate housing
program shall be included when determining the number of restricted affordable units required
to qualify for a density bonus or other entitlement under this chapter. However, the payment
of a housing impact or in lieu fee shall not qualify for a density bonus or other entitlement
under this chapter.
(i) An applicant (or project) shall be ineligible for a density bonus or any other incentives or
concessions under this chapter if the housing development is proposed on any property that
includes a parcel or parcels on which rental dwelling units are located or, if the dwelling units
have been vacated or demolished in the five-year period preceding the application, have been
subject to a recorded covenant, ordinance, or law that restricts rents to levels affordable to
persons and families of lower or very low income; subject to any other form of rent or price
control through the City’s valid exercise of its police power; or occupied by lower or very low
income households, unless the proposed housing development replaces those units, and either
of the following applies:
(i 1) The proposed housing development, inclusive of the units replaced pursuant to
this paragraph, contains affordable units at the percentages set forth in
Section 18.15.030.
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(ii 2) Each unit in the development, exclusive of a manager’s unit or units, is affordable
to, and occupied by, either a lower or very low income household.
(j) Certain other types of development activities are specifically eligible for a density bonus
pursuant to state law:
(i 1) A development may be eligible for a density bonus in return for land donation
pursuant to the requirements set forth in Government Code Section 65915(g).
(ii 2) A condominium conversion may be eligible for a density bonus or concession
pursuant to the requirements set forth in Government Code Section 65915.5.
(iii 3) An applicant for a commercial development who has entered into an agreement
for partnered housing may be eligible for a density bonus pursuant to the requirements
set forth in Government Code Section 65915.7.
(k) As provided in Section 18.15.080(c), development proposed with rezoning to the Planned
Community zone district are entitled to densities approved as part of the rezoning and shall not
be entitled to a density bonus in addition to the units entitled by the rezone.
(l k) Notwithstanding any provision of this chapter, all developments must satisfy all
applicable requirements of the city’s Below Market Rate Housing Program in Chapter 16.65,
which may impose requirements for restricted affordable units in addition to those required to
receive a density bonus or concessions.
(l) For sites where Title 18, a Specific Plan, or the Comprehensive Plan do not expressly
prescribe a maximum number of dwelling units per acre and FAR therefore acts as the
limitation on density, the base density shall be calculated by estimating the realistic
development capacity, as described in Section 18.15.020(p). In such circumstances, the density
bonus shall be granted as additional floor area in proportion to the number of bonus units
proposed. The Director of Planning and Development Services may issue additional guidance on
the application of this section.
Table 1 summarizes the density bonus provisions described in this Section.
Table 1
Density Bonus Summary Table
Restricted
Affordable
Units (RAUs)
or Category
Minimum
Percentage of
RAUs
Percentage of
Density Bonus
Granted
Additional
Bonus for
Each 1%
Increase in
RAUs
Percentage of
RAUs Required
for 35%
Density Bonus
Percentage of
RAUs Required
for Maximum
50% Density
Bonus
Very Low
Income
5%20%2.50%
(3.75% bonus
11%15%
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for increases
above 11%
RAU)
Lower Income 10%20%1.50%
(3.75% bonus
for increases
above 20%
RAU)
20%24%
Moderate
Income
10%5%1%
(3.75% bonus
for increases
above 40%
RAU)
40%44%
Lower Income
Student
Housing
20%35%---------------
Senior Citizen
Housing
100%20%------------------
Qualifying
Mobile Park
100%20%------------------
100%
Affordable
Units
100%80% (or no
maximum
density)
---------------
Note: A density bonus may be selected from only one category.
18.15.035 Additional Density Bonus
(a) Provided that the resulting housing development would not restrict more than 50 percent
of the total units to moderate-income, lower income, or very low income households, the city
shall grant one additional density bonus calculated pursuant to paragraph (b) when an
applicant proposes to construct a housing development that conforms to the requirements of
section 18.15.030, agrees to include additional rental or for-sale units affordable to very low
income households or moderate income households, and meets any of the following
requirements:
(1) The housing development conforms to Section 18.15.030(a)(1) and provides twenty-
four percent (24%) of the total units for lower income households.
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(2) The housing development conforms to Section 18.15.030(a)(2) and provides fifteen
percent (15%) of the total units for very low income households.
(3) The housing development conforms to Section 18.15.030(b) and provides forty-four
percent (44%) of the total units for moderate income households.
(b) The additional density bonus granted under this Section shall be calculated as follows:
Table 2
Additional Density Bonus
Percentage Very Low
Income Units
Percentage Density
Bonus
Percentage Moderate
Income Units
Percentage Density
Bonus
5 20 5 20
6 23.75 6 22.5
7 27.5 7 25
8 31.25 8 27.5
9 35 9 30
10 38.75 10 32.5
11 35
12 38.75
13 42.5
14 46.25
15 50
18.15.040 Development Standards for Affordable Units
(a) Restricted affordable units shall be constructed concurrently with non-restricted units
unless both the city and the applicant agree within the regulatory agreement to an alternative
schedule for development.
(b) Moderate income restricted affordable units shall remain restricted and affordable to the
designated income group for a minimum period of 55 years (or a longer period of time if
required by the construction or mortgage financing assistance program, mortgage insurance
program, or rental subsidy program). Very low and lower restricted affordable units shall
remain restricted and affordable to the designated income group for a period of 55 years for
both rental and for-sale units (or a longer period of time if required by a construction or
mortgage financing assistance program, mortgage insurance program, or rental subsidy
program).
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(c) In determining the maximum affordable rent or affordable sales price of restricted
affordable units, the presumed household size as set forth in the city’s Below Market Rate
Housing Program shall be used, unless the development is subject to different assumptions
imposed by other governmental regulations.
(d) Restricted affordable units shall be built on-site and be dispersed within the
development, except as permitted in the city’s Below Market Rate Housing Program guidelines
in subsection (e) of this section. The number of bedrooms of the restricted affordable units
shall be equivalent to the bedroom mix of the non-restricted units in the development; except
that the applicant may include a higher proportion of restricted affordable units with more
bedrooms. The design, square footage, appearance and general quality of the restricted
affordable units shall be compatible with the design of the non-restricted units in the
development. The development shall comply with all applicable development standards, except
those which may be modified as provided by this chapter.
(e) A regulatory agreement, as described in Section 18.15.100, shall be made a condition of
the discretionary permits for all developments pursuant to this chapter. The regulatory
agreement shall be recorded as a restriction on the development. The regulatory agreement
shall be consistent with the city’s Below Market Rate Housing Program guidelines.
18.15.050 Development Concessions and Incentives
This section includes provisions for providing concessions or incentives pursuant to
Government Code Section 65915.
(a) By right parking incentives. Upon request by the applicant, a development that is eligible
for a density bonus may provide parking as provided in this subsection (a), consistent with
Government Code Section 65915(p), inclusive of parking for persons with a disability and
guests:
(i 1) Zero to one bedroom unit: one on-site parking space;
(ii 2) Two to three bedroom unit: one and one-half on-site parking spaces;
(iii 3) Four or more bedroom unit: two and one-half parking spaces.
If the total number of spaces required results in a fractional number, it shall be rounded up to
the next whole number. For purposes of this subsection, this parking may be provided through
tandem parking or uncovered parking, but not through on-street parking.
(b) Additional parking incentives for transit oriented project.
(i 1) For purposes of this subdivision, a development shall have unobstructed access to
a major transit stop if a resident is able to access the major transit stop without
encountering natural or constructed impediments. For purposes of this subdivision,
"natural or constructed impediments" includes, but is not limited to, freeways, rivers,
mountains, and bodies of water, but does not include residential structures, shopping
centers, parking lots, or rails used for transit.
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(A) Notwithstanding subdivision (a) above, if a development includes at least
twenty percent (20%) of low-income or at least eleven percent (11%) of very low
income units provided for in section 18.15.030(a)(i 1) or (ii 2), or at least forty
percent (40%) moderate-income units provided for in section 18.15.030(b), and
is located within one-half mile of a major transit stop, as defined in subdivision
(o) of Section 65915 of the Government Code, and there is unobstructed access
to the major transit stop from the development, then, upon request of the
applicant, the city shall not impose a vehicular parking ratio, inclusive of parking
for persons with a disability and guests, that exceeds 0.5 spaces per unit.
(ii 2) Notwithstanding subdivision (a) above, if a development consists solely of rental
units, exclusive of a manager’s unit, with an affordable housing cost to lower income
families, as provided in Section 50052.5 of the Health and Safety Code, then, upon the
request of the applicant, the city shall not impose vehicular parking standards if the
development meets one of the following criteria:
(A) The development is located within one-half mile of a major transit stop, as
defined in subdivision (o) of Section 65915 of the Government Code, and there is
unobstructed access to the major transit stop from the development, the ratio
shall not exceed 0.5 spaces per unit.
(B) The development is a for-rent housing development for individuals who are
62 years of age or older that complies with Sections 51.2 and 51.3 of the Civil
Code, and the development has either paratransit service or unobstructed
access, within one-half mile, to fixed bus route service that operates at least
eight times per day.
(C) The development is either a special needs housing development, as defined
in Section 51312 of the Health and Safety Code, or a supportive housing
development, as defined in Section 50675.14 of the Health and Safety Code. A
development that is a special needs housing development must have either
paratransit service or unobstructed access, within one-half mile, to fixed bus
route service that operates at least eight times per day.
(iii 3) Notwithstanding paragraphs (b)(i), (b)(ii)(A), and (b)(ii)(B), the city may impose a
higher vehicular parking ratio not to exceed the ratio described in subdivision (a) if the
city has conducted an area wide or citywide parking study in compliance with
Government Code Section 65915(p)(8).
(c) Other incentives and concessions. A development is eligible for other concessions or
incentives as follows:
(i 1) One concession or incentive for a development that makes at least ten percent
(10%) of the total dwelling units affordable to lower income households; or at least five
percent (5%) of the total dwelling units affordable to very low income households; or at
least ten percent (10%) of the total dwelling units affordable to moderate income
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households in a development in which the units are for sale; or at least twenty percent
(20%) of the total units in a student housing development for low income students, as
provided for in 18.15.030(c).
(ii 2) Two concessions or incentives for a development that makes at least seventeen
percent (17%) of the total dwelling units affordable to lower income households; or at
least ten percent (10%) of the total dwelling units affordable to very low income
households; or at least twenty percent (20%) of the total dwelling units affordable to
moderate income households in a development in which the units are for sale.
(iii 3) Three concessions or incentives for a development that makes at least twenty-
four percent (24%) of the total dwelling units affordable to lower income households; or
at least fifteen percent (15%) of the total dwelling units affordable to very low income
households, or at least thirty percent (30%) of the total dwelling units affordable to
moderate income households in a development in which the units are for sale.
(4) Four incentives or concessions for least 16 percent (16%) of the units for very low
income households or at least 45 percent (45%) for persons and families of moderate
income in a development in which the units are for sale.
(iv 5) Four Five concessions or incentives for a development that provides one hundred
percent (100%) of the total units, exclusive of a manager's unit or units, are for lower
income households, as described in Section 18.15.030, subdivision (d). If the project is
located within one-half mile of a major transit stop or is located in a very low vehicle
travel area in a designated county, the. Such development may additionally receive a
height increase of three stories or thirty-three (33) feet.
Table 2 3 summarizes the provisions of Concessions or Incentives described in subsection (a).
Table 3 2
Concessions and Incentives Summary Table
Target Group Restricted Affordable Units
Very Low Income 5%10%15% 16% ---
Lower Income 10%17%24% --- 100%
Moderate Income (Applicable to For-Sale Units
Only)
10%20%30% 45% ---
Lower Income Student Housing 20%------ --- ---
Maximum Incentive(s)/Concession(s)1 2 3 4 5
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Notes:
1. Concessions or incentives may be selected from only one category (very low, lower,
moderate, low income student development)
2. No concessions or incentives are available for land donation, or for senior citizen housing
developments and qualifying mobilehome parks that do not contain restricted affordable units.
3. In a student development, a “unit” is defined according to 18.15.030(c)(ii).
(d) In submitting a request for concessions or incentives, an applicant may request the
specific concessions set forth below. The concessions and incentives are deemed not to have a
specific adverse impact as defined in Section 18.15.090 (b)(ii).
(i) Up to a 25% average reduction of a side yard setback requirement if the design is
consistent with the applicable design standards and guidelines, unless adjacent to R-1, R-2,
RMD and other low density residential zones;
(ii) Up to a 25% average reduction of the rear yard setback requirements so long as the
setback is consistent with the applicable design standards and guidelines, unless adjacent to R-
1, R-2, RMD and other low density residential zones;
(iii) A percentage increase in the height limit equal to the Density Bonus percentage for
which the development is eligible if necessary to accommodate the restricted affordable units,
with a maximum increase of one foot per affordable unit, unless adjacent to R-1, R-2, RMD and
other low density residential zones, and no event to exceed fifty (50) feet;
(iv) An increase in the floor area ratio (FAR) up to 25% or up to the square footage of the
restricted affordable units, whichever is less. Any FAR bonus under this section shall be
consistent with the applicable height requirements and only apply to the residential portion of
the mixed use project;
(v) Reduction in daylight plane requirements not to exceed 25% of the length of the
adjacent lot line, so long as the intrusion is consistent with applicable design standards and
guidelines, unless adjacent to R-1, R-2, RMD and other low density residential zones;
(vi) Up to fifty percent (50%) increase over the maximum site coverage requirement or up
to the square footage of the restricted affordable units, whichever is less;
(e) The setbacks referenced in this section shall not include special setbacks as defined in
Section 20.08.020.
(f) The setbacks referenced in this section shall only apply to the residential portion of any
mixed use (residential and non-residential) development where it is feasible to setback portions
of the development differently.
(d) The city shall not require, as a condition of granting a concession or incentive the
preparation of an additional report or study that is not otherwise required by state law. The
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city may, however, request reasonable documentation to demonstrate that the incentive or
concession meets the definition set forth in Section 18.15.020.
(g e) Nothing in this chapter shall be construed to require the provision of direct financial
concessions for the development, including the provision of publicly owned land by the city or
the waiver of fees or dedication requirements.
18.15.060 Waiver/Modification of Development Standards
(a) An applicant may apply for a the waiver or modification of development standards that
will have the effect of physically precluding the construction of a development at the densities
or with the concessions or incentives permitted by this chapter. The developer must
demonstrate that development standards that are requested to be waived or modified will
have the effect of physically precluding the construction of a development meeting the criteria
of subsection (a) of Section 18.15.030 at the densities or with the concessions or incentives
permitted by this chapter. A development that receives a waiver from any maximum controls
on density pursuant to Section 18.15.030(d)(2) shall not be eligible for waivers or modifications
to development standards pursuant to this Section.
(b) For sites on which floor area acts as the limitation on density, additional floor area shall
be permitted to accommodate bonus units proposed, as set forth in Section 18.15.030(l), and
no additional waiver of floor area is permitted.
18.15.070 Child Care Facilities
(a) When an applicant proposes to construct a development that is eligible for a density
bonus under Section 18.15.030 and includes a child care facility that will be located on the
premises of, as part of, or adjacent to, the development, the city shall grant either:
(i 1) An additional density bonus that is an amount of square feet of residential space
that is equal to or greater than the square footage of the child care facility; or
(ii 2) An additional concession or incentive that contributes significantly to the
economic feasibility of the construction of the child care facility.
(b) The city shall require, as a condition of approving the development, that the following
occur:
(i 1) The child care facility shall remain in operation for a period of time that is as long
as or longer than the period of time during which the restricted affordable units are
required to remain affordable pursuant to Section 18.15.040. In the event the childcare
operations cease to exist, the Director of Planning and Development Services may
approve an alternative community service use for the child care facility.
(ii 2) Of the children who attend the child care facility, the children of very low, lower
and moderate income households shall equal a percentage that is equal to or greater
than the percentage of restricted affordable units in the development that are required
for very low, lower and moderate income households pursuant to Section 18.15.030.
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(c) Notwithstanding subsections (a) and (b) above, the city shall not be required to provide a
density bonus or a concession or incentive for a child care facility if it finds, based upon
substantial evidence, that the community has adequate child care facilities.
18.15.080 Application Requirements
An Application for a density bonus, incentive, concession, waiver, modification or revised
parking standard shall be made as follows:
(a) All applications for a density bonus, incentive, concession, waiver, modification or revised
parking standard shall be submitted with the first application for a discretionary permit for a
development and shall be processed concurrently with those discretionary permits. The
application shall be on a form prescribed by the city and shall include the following information:
(i 1) A brief description of the proposed development, including the total number of
dwelling units, restricted affordable units, and density bonus units proposed.
(ii 2) The zoning and comprehensive plan designations and assessor’s parcel number(s)
of the project site, and a description of any density bonus, concession or incentive,
waiver or modification, or revised parking standard requested
(iii 3) A vicinity map and preliminary site plan, drawn to scale, including building
footprints, driveway and parking layout.
(iv 4) Site plan showing location of market-rate units, restricted affordable units, and
density bonus units within the proposed development;
(v 5) Level of affordability of the restricted affordable units and proposed method to
ensure affordability;
(b) If a concession or incentive is requested, the following information must be included in
the application:
(i) A a brief explanation as to the actual cost reduction achieved through the concession or
incentive.
(ii) For concessions and incentives that are not included within the menu of
incentives/concessions set forth in subsection (c) of Section 18.15.050, the application requires
the submittal of the project proforma or other comparable documentation (referred to herein
as the "proforma information") to the Director, providing evidence that the requested
concessions and incentives result in identifiable and actual cost reductions. The cost of
reviewing the project proforma information, including, but not limited to, the cost to the city of
hiring a consultant to review the financial data, shall be borne by the applicant. The proforma
information shall include all of the following items:
(A) The actual cost reduction achieved through the concession;
(B) Other information requested by the Planning Director. The Planning Director may
require additional information as is required to evaluate the proforma information;
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(c) If a waiver or modification of development standards is requested, the following
information must be included in the application:
(i) A a brief explanation of why the development standard would physically preclude the
construction of the development with the density bonus, incentives, and concessions
requested.
(ii) Evidence that the development standard for which the waiver is requested will have the
effect of physically precluding the construction of the development with the density bonus and
concessions requested;
(d) If a density bonus or concession is requested for a land donation, the application shall
show the location of the land to be dedicated, provide proof of site control, and provide
evidence that all of the requirements and each of the findings included in Government Code
Section 65915(g) can be made;
(e) If a density bonus or concession is requested for a child care facility, the application shall
show the location and square footage of the child care facilities and provide evidence that all of
the requirements and each of the findings included in Government Code Section 65915(h) can
be made.
(f) If a density bonus or concession is requested for a condominium conversion, the applicant
shall provide evidence that all of the requirements found in Government Code Section 65915.5
can be met.
(g) In accordance with state law, neither the granting of a concession, incentive, waiver,
modification, or revised parking standard, nor the granting of a density bonus, shall be
interpreted, in and of itself, to require a general plan amendment, zoning change, variance, or
other discretionary approval.
(h) The Planned Community (PC) zone district is intended to accommodate developments
requiring flexibility under controlled conditions not attainable under other zoning districts.
Because of the flexible nature of the PC zone, which determines site specific requirements
including density, the chapter does not apply to this zoning district.
(i) This chapter implements state density bonus law. Any density bonus, incentive,
concession, revised parking standard, waiver, or modification sought by an applicant shall be
made pursuant to this chapter and may not be combined with similar requests under state
density bonus law.
18.15.090 Review Procedures
An application for a density bonus, incentive, concession, waiver, modification or revised
parking standard shall be acted upon by the Approval Authority concurrently with the
application for the first Discretionary permit. The granting of a density bonus shall not be
deemed approval of the entire Project or approval of any subsequent discretionary permit.
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(a) Before approving an application for a density bonus, incentive, concession, waiver,
modification or revised parking standard, the Approval Authority shall make the following
findings, as applicable:
(i 1) The development is eligible for the density bonus and any concessions, waivers,
modifications, or revised parking standards requested.
(ii 2) Any requested concession or incentive will result in identifiable and actual cost
reductions based upon the financial analysis and documentation provided. The city finds
that the concessions and incentives included in Section 18.15.050(c) will result in
identifiable and actual cost reductions.
(iii 3) If the density bonus is based all or in part on donation of land, a finding that all
the requirements included in Government Code Section 65915(g) have been met.
(iv 4) If the density bonus, concession or incentive is based all or in part on the
inclusion of a child care facility, a finding that all the requirements included in
Government Code Section 65915(h) have been met.
(v 5) If the concession or incentive includes mixed-use development, a finding that all
the requirements included in Government Code Section 65915(k)(2) have been met.
(vi 6) If a waiver or modification is requested, a finding that the development standards
for which the waiver is requested would have the effect of physically precluding the
construction of the development with the density bonus and concessions permitted.
(b) Any granted density bonus and/or concession(s) shall terminate with the demolition,
destruction or other removal of the structure receiving the density bonus and/or concession.
(c) If the findings required by subsection (a) for a concession, incentive or waiver of this
Section cannot be made, the Approval Authority may deny an application for a concession,
incentive, waiver or modification only if it makes one of the following written findings,
supported by substantial evidence:
(i 1) The concession or incentive does not result in identifiable and actual cost
reductions required to provide for affordable rents or affordable sales prices; or
(ii 2) The concession, incentive, waiver or modification would have a specific, adverse
impact upon public health or safety or the physical environment or on real property
listed in the California Register of Historic Resources, and there is no feasible method to
satisfactorily mitigate or avoid the specific adverse impact without rendering the
development unaffordable to low and moderate income households. For the purpose of
this subsection, “specific adverse impact” means a significant, quantifiable, direct, and
unavoidable impact, based on objective, identified, written public health or safety
standards, policies, or conditions as they existed on the date that the application for the
development was deemed complete; or
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(iii 3) The concession, incentive, waiver or modification is contrary to state or federal
law.
(d) The City Council has determined that the following modifications, when requested as
concessions, incentives, or waivers, will not have a specific adverse impact as defined in
Section 18.15.090 (b)(ii).
(1) Up to a 25% average reduction of a side yard setback requirement if the design is
consistent with the applicable design standards and guidelines, unless adjacent to R-1,
R-2, RMD and other low density residential zones;
(2) Up to a 25% average reduction of the rear yard setback requirements so long as the
setback is consistent with the applicable design standards and guidelines, unless
adjacent to R-1, R-2, RMD and other low density residential zones;
(3) A percentage increase in the height limit equal to the Density Bonus percentage for
which the development is eligible if necessary to accommodate the restricted affordable
units, with a maximum increase of one foot per affordable unit, unless adjacent to R-1,
R-2, RMD and other low density residential zones, and no event to exceed fifty (50) feet;
(4) Reduction in daylight plane requirements not to exceed 25% of the length of the
adjacent lot line, so long as the intrusion is consistent with applicable design standards
and guidelines, unless adjacent to R-1, R-2, RMD and other low density residential
zones;
(5) Up to fifty percent (50%) increase over the maximum site coverage requirement or
up to the square footage of the restricted affordable units, whichever is less;
(e) If the Approval Authority is not the City Council, any decision denying a density bonus,
incentive, concession, waiver, modification or revised parking standard may be appealed to the
City Council within fourteen days of the date of the decision.
18.15.100 Regulatory Agreement
(a) AApplicants for a density bonus, incentive, concession, waiver, modification or revised
parking standard shall enter into a regulatory agreement with the city in a form acceptable to
the City Attorney. The terms of the draft agreement shall be approved as to form by the City
Attorney and reviewed and revised as appropriate by the Director of Planning and
Development Services, who shall formulate a recommendation to the Approval Authority for
final approval.
(b) Following execution of the agreement by all parties, the completed density bonus
regulatory agreement, or memorandum thereof, shall be recorded and the conditions filed and
recorded on the development.
(c) The approval of the regulatory agreement shall take place prior to tentative map
approval, and recordation shall take place prior to final map approval The executed regulatory
agreement shall be recorded on the development prior to approval of a final map, or, where a
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map is not being processed, prior to approval of the final discretionary permit issuance of a
building permit. The regulatory agreement shall be binding to all future owners and successors
in interest.
(d) The regulatory agreement shall be consistent with the guidelines of the city’s Below
Market Rate Program and shall include at a minimum the following:
(i 1) The total number of dwelling units approved for the development, including the
number of restricted affordable units;
(ii 2) A description of the household income group to be accommodated by the
restricted affordable units, and the standards for determining the corresponding
affordable rent or affordable sales price;
(iii 3) The location, dwelling unit sizes (square feet), and number of bedrooms of the
restricted affordable units;
(iv 4) Term of use restrictions for restricted affordable units of at least 55 years for
moderate income units and at least 55 years for low and very low units;
(v 5) A schedule for completion and occupancy of restricted affordable units;
(vi 6) A description of any concession, incentive, waiver, modification, or revised
parking standard, if any, being provided by the city;
(vii 7) A description of remedies for breach of the agreement (the city may identify
tenants or qualified purchasers as third party beneficiaries under the agreement);
(8) That any restricted affordable unit offered for sale: is initially sold to and occupied by
a person of family of very low, low, or moderate income, or, if not purchased by an
income-qualified household within 180 days after the issuance of a certificate of
occupancy, the unit is purchased by a qualified non-profit housing corporation, in
accordance with Government Code section 65915(c)(2); and
(viii 8) Other provisions to ensure implementation and compliance with this section.
SECTION 3. As provided in Section 16.65.080(C)(1) of the Palo Alto Municipal Code, the City
Council hereby determines that the following percentages of rental affordable units that are
equivalent to provision of on-site for-sale affordable units or payment of housing impact fees:
Required Affordable Rental Units
(Where rental alternative requested under 16.65.080(C))
Income Category
Rental Alternative to For-Sale
Units
(Sites Less than 5 Acres)*
On-Site Alternative for
Rental Residential
(no condo map)
Very Low Income 8%
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Low Income 15%15%
Moderate Income N/A N/A
Total 15%8% VLI or 15% LI**
*Rental alternative equivalents for projects over 5 acres will be subject to Council approval
on a case by case basis.
** For Residential Rental Projects, the Director of Planning and Development Services or City
Council may approve the provision of a lesser amount of affordable rental units, provided that
the remainder of the housing obligation is paid in housing impact fees. For example, if a project
may propose to restrict 6% of its dwelling units at rents affordable to very low income
households, these units would represent 75% of the project’s affordability obligations and the
remaining 25% could be paid in impact fees; housing impact fees due would be calculated by
taking 25% of the impact fee that would otherwise apply to the project.
SECTION 4. If any section, subsection, sentence, clause, or phrase of this Ordinance is for any
reason held to be invalid or unconstitutional by a decision of any court of competent
jurisdiction, such decision shall not affect the validity of the remaining portions of this
Ordinance. The City Council hereby declares that it would have passed this Ordinance and each
and every section, subsection, sentence, clause, or phrase not declared invalid or
unconstitutional without regard to whether any portion of the Ordinance would be
subsequently declared invalid or unconstitutional.
SECTION 5. The Council finds that the Ordinance is exempt from the California Environmental
Quality Act (CEQA) pursuant to CEQA Guidelines Section 15061(b)(3) because it can be seen
with certainty that there is no possibility that updating the municipal code to incorporate
existing changes in State Density Bonus Law will have a significant effect on the environment.
SECTION 6. This Ordinance shall be effective on the thirty-first date after the date of its
adoption.
INTRODUCED:
PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
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____________________________ ____________________________
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
____________________________ ____________________________
Assistant City Attorney City Manager
____________________________
Director of Planning and
Development Services
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Item No. 3. Page 1 of 7
Planning & Transportation Commission
Staff Report
From: Planning and Development Services Director
Lead Department: Planning and Development Services
Meeting Date: March 13, 2024
Report #: 2402-2580
TITLE
Presentation to PTC and HRC by Caltrans on El Camino Real Bike Lanes and Parking Space
Removal
RECOMMENDATION
Staff recommends Planning and Transportation Commission (PTC) and Human Relations
Commission (HRC) receive a presentation by Caltrans requesting to repurpose parking lanes on
El Camino Real for bicycle lanes and to provide feedback on the Caltrans proposal.
EXECUTIVE SUMMARY
This report provides background and context for the Caltrans proposal to repurpose parking
lanes for bicycle lanes on El Camino Real throughout Palo Alto. Conversion from parking to bike
lanes would occur during the upcoming repaving project to be done in Palo Alto. Caltrans staff
seek community feedback on the proposed bicycle lanes, and Caltrans has asked City Council to
consider (tentatively scheduled for April 1) the parking removal necessary to install the bicycle
lanes.
PROJECT DESCRIPTION
This Caltrans project proposes converting parking lanes to bike lanes throughout Palo Alto
during the upcoming Caltrans repaving project.
BACKGROUND
El Camino Real is a state highway maintained by Caltrans. To meet the requirements of its
Capital Preventive Maintenance (CAPM) program, Caltrans is repaving El Camino Real (State
Route 82) in Mountain View, Los Altos, and Palo Alto to improve ride quality, comply with
current ADA standards, and improve safety, access, and mobility of pedestrians and bicyclists.
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The project will repair pavement and upgrade existing non-standard ADA curb ramps and add
complete street elements.1
According to Caltrans correspondence with the City Manager2, the 2020 Bicyclist Safety
Improvement Monitoring Program Report found a cluster of collisions (13 of 33, or 40%) where
cyclists were riding on the sidewalk against traffic or riding against traffic. Caltrans proposes
bike lanes in place of existing on-street parking to reduce or eliminate the risk of riding on the
sidewalk and against traffic. Caltrans requests feedback on the proposal and has asked that the
City Council consider supporting Caltrans’ removal of parking on El Camino Real to
accommodate proposed bike lanes. Council consideration is tentatively scheduled for April 1.
Prior planning by the City for El Camino Real includes a 2017 grant-funded project that targeted
collision hot spots in Palo Alto and Redwood City. In November of 2018, two resulting concept
plans for bicycle facilities were presented to PTC and generated an inconclusive discussion.3 At
the time, the City had a separate pedestrian-focused Once Bay Area Grant (Cycle 2) to prepare
design plans and construct improvements on El Camino Real between Stanford and Lambert
Avenues, but the City returned the grant in December of 2020 after the Valley Transportation
Authority (VTA) was unable to re-scope it to include bicycle facilities.
Caltrans staff notified City staff in early-2019 about the upcoming repaving project that was
then scheduled to begin in 2020. Caltrans staff noted that the City could add complete street
elements such as bicycle lanes to the Caltrans plans if the City funded the community
engagement, design, environmental clearance, and construction of those elements before the
scheduled construction date, which was within 9-12 months of notification. As the City had not
already initiated a project, and due to the size and complexity of the project, 9-12-month notice
was insufficient time to conduct a community conversation, and to design, gain necessary
approvals, fund, and environmentally clear a bike facility proposal. City staff worked with
Caltrans to include pedestrian and bicycle improvements consistent with the existing Caltrans
project scope.
In early 2023, Caltrans shared initial ideas for proposed bike lanes with City staff, and by mid-
2023, the first draft of the plans had been reviewed by the City’s Pedestrian and Bicycle
Advisory Committee (PABAC) and a limited number of stakeholders granted access by Caltrans,
such as the Valley Transportation Authority. The second iteration of the draft bike lane plan is
the subject of this report and is posted to the City’s website.4
Caltrans formally notified the City of their proposed SR 82 El Camino Real Bikeway Project in a
letter dated November 3, 2023, and since then staff has sought additional details to fully
understand reasoning and implications for the community.
1 Caltrans project website: SR-82-Pavement Rehabilitation and ADA Improvements
2 See City website: City Issues Letter to Caltrans SR82 El Camino Real Bikeway Project
3 PTC Staff Report, November 14, 2018
4 Draft Caltrans Bicycle Lane Plan, dated January 22,2024
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On November 17, 2023, the City sent an official communication to Caltrans in response to the
proposed addition of new bikeways along SR 82. The City asked several questions about the
proposed project and requested additional information in an effort to ensure that the Palo Alto
community and businesses potentially impacted by Caltrans plan are given an opportunity to
fully understand the details, timeline, and opportunities for input. Caltrans responded on
January 11, 2024, with answers to the City’s questions.5 This correspondence with Caltrans can
be found at the City’s website referenced above.
ANALYSIS
Staff continue to seek clarity from Caltrans regarding several aspects of the bike lanes proposal
which are detailed in this section, including the safety of the proposed bicycle facility design
and the effects of parking reductions on businesses and RV dwellers. In addition, staff note
below the planning context of the El Camino Real corridor, specifically the Housing Element and
the Bicycle and Pedestrian Transportation Plan.
Safety Considerations
As noted in correspondence with the City, the bike lane proposal is a response to Caltrans
policies to reduce risk to vulnerable road users on State Highway 82. Caltrans has adopted both
a Safe System Approach and a Vision Zero goal in roadway safety planning across California to
eliminate traffic deaths and severe injuries.6 This approach identifies traffic safety as the
highest priority for the design and operation of the transportation system and views traffic
fatalities and severe injuries as unacceptable and preventable through joint action. The Safe
System Approach is the foundation for the National Safety Strategy released by the US
Department of Transportation in 2022.7
To bring the Safe System Approach into statewide roadway design, Caltrans issued Design
Information Bulletin – 94 (DIB-94), effective on January 16, 2024, which provides Caltrans staff
guidelines on how to select and incorporate transit, bicycle, and pedestrian facilities to match
their urban context.8 This bulletin alters Caltrans design guidance to “minimize the transfer of
kinetic energy through the adoption of design elements that minimize crash speeds and impact
angles.”9 City staff have noted that the bicycle lanes included in the Caltrans draft plans for El
Camino Real do not consistently align with the design guidance provide in DIB-94. City staff
have requested clarification of whether DIB-94 applies to the repaving project given that the
recent bike lane draft plans were dated after January 16, 2024.
The City is currently developing its own Safe Streets for All Safety Action Plan to incorporate the
Safe System Approach into the City’s policies and practices.10 As part of this work, El Camino
Real has been identified as part of the City’s High Injury Network. Representing 4% of the City’s
5 Caltrans Response Letter, dated January 11, 2024
6 https://dot.ca.gov/news-releases/news-release-2022-009
7 https://www.transportation.gov/nrss/usdot-national-roadway-safety-strategy
8 Design Information Bulletin – 94 Complete Streets: Contextual Design Guidance
9 Design Information Bulletin – 94 Complete Streets: Contextual Design Guidance, p. 17
10 PTC Staff Report, October 11, 2023
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streets, this roadway network concentrates 63% of injury collisions involving any modes of
travel between 2018 and 2022. A recent PTC staff report (February 28) shared the Safety Action
Plan collision data analysis and High Injury Network.11 A way to improve safety for all road
users is to include bicycle lanes, especially separated and protected bicycle lanes to streets.12
Parking Impacts & Considerations
A diverse variety of community members use parking availability along El Camino Real
segments, at day, evening, and overnight hours. Several segments are included in Residential
Preferential Parking (RPP) programs to ensure day time parking is available for business
customers, employees of businesses, visitors, and residents. RPP programs ensure turnover and
short term parking availability for business interests and residents during restricted hours
(weekday working hours). Longer parking sessions are available overnight and weekends.
Parking segments in these programs are from Park Blvd. to Page Mill Rd. Other segments, from
Page Mill Rd. to San Antonio Rd., provide business-interested and residential parking less
restrictively. It is unclear whether alternative parking is available, either off-site or only in
adjacent residential areas for current usage.
Caltrans recently provided estimates of total parking spaces currently available along El Camino
Real in the City of Palo Alto. These provided Office of Transportation staff an opportunity to
conduct parking occupancy counts of these segments on Saturday, February 24, 2024, 1pm -
2pm, and Wednesday, February 28, 2024, 4am – 5am, to provide a sample of current usage at
evening and overnight hours. See Table 1 for this sampling of occupancy usage rates along
these segments of El Camino Real.
11 PTC Staff Report, February 28, 2024
12 Cycling Lanes Reduce Fatalities for All Road Users, Study Shows, ScienceDaily.com, Accessed February 27, 2024
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Table 1: El Camino Real Parking Counts, February 24, 2024 (1-2 pm) and February 28 (4-5 am)
Source: Caltrans and City of Palo Alto
SF Cre e k to Sa n Antonio Rd. (southbound & e a stbound)2/24/2024 Saturday 2/28/2024 W ednesday
SF Creek to San Antonio Rd.Total 1p - 2p %RVs 4a-5a %RVs
PAMF Drive to Galvez St. / Embarc adero Rd.26 18 69%8 12 46%4
Galvez St. / Embarcadero Rd. to Churchill Ave.71 60 85%10 39 55%13
Churchill Ave. to Serra St. / Park Blvd.29 21 72%3 6 21%2
Serra St./ Park Blvd. to Stanford 32 3 9%1 8 25%2
Stanford to Oxford 4 2 50%0 1 25%0
Oxford to College 4 2 50%0 2 50%0
College to California Temporary No Park ing - Construction Signage
California to Page Mill 18 18 100%0 12 67%0
Page Mill to Portage No Park ing
Portage to Hansen No Park ing
Hans en to Matadero 13 11 85%4 11 85%6
Matadero to Kendall 8 7 88%2 7 88%5
Kendall to Barron 3 2 67%0 0 0%0
Barron to Curtiner 4 2 50%0 0 0%0
Curtiner to Military 6 2 33%0 0 0%0
Military to Ventura 4 4 100%0 0 0%0
Ventura to Los Robles 14 10 71%0 11 79%0
Los Robles to Vista 12 8 67%2 10 83%1
Vista to Maybell 21 5 24%0 10 48%0
Maybell to Aras tadero 10 4 40%0 0 0%0
Arastadero to Dinah's Court 18 14 78%0 1 6%0
Dinah’s Ct. to Los Altos Ave.10 2 20%0 0 0%0
Los Altos Ave. to San Antonio Rd.24 1 4%0 1 4%0
Sa n Antonio Rd. to Stanford Ave . (northbound a nd w estbound)
San Antonio back to Stanford
San Antonio Road to Del Medio COMV 6 0 4 0
Del Medio to Cesano 16 9 56%0 2 13%0
Cesano to Monroe No park ing
Monroe to Dinah's Ct.9 0 0%0 0 0%0
Dinah’s Court to Deodar 15 2 13%0 3 20%0
Deodar to Charleston No park ing
Charleston to El Camino Way 10 1 10%0 1 10%0
El Camino W ay to El Camino Way 37 25 68%0 1 3%0
El Camino W ay to Ventura Way 11 1 9%0 1 9%0
Ventura W ay to Curtner 7 3 43%0 0 0%0
Curtner to W ilton 7 2 29%0 0 0%0
W ilton to Madero 6 1 17%0 3 50%0
Matadero to Margarita No park ing
Margarita to Fernando 7 2 29%0 1 14%0
Frenando to Portage No parking - Construc tion
Portage to Acacia No parking - Construc tion
Acacia to Page Mill No parking - Construc tion
Page Mill to Sheridan No parking - Construc tion
Sheridan to Grant 9 0 0%0 0 0%0
Grant to Sherman 11 3 27%0 0 0%0
Sherman to California Ave.No parking - Construc tion 0
California Ave. to Cambridge 10 4 40%0 0 0%0
Cambridge to College 9 3 33%0 0 0%0
College to Oxford 12 3 25%0 No parking - Construction 0
Oxford to Stanford 9 8 89%0 2 22%0
Stanford to Park No parking - Construc tion
Park to SF Creek No parking
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The Caltrans El Camino Real Project will result in, at minimum, temporary displacement of
vehicles that park along this State Highway. This will have impacts on people that visit the area,
as well as those who live on or near El Camino Real. The City is working with Caltrans to
improve communication and ensure a project schedule is provided for the whole community
and as much advance notice as feasible of segments where work will begin that triggers “no
parking” signage.
At the end of January, 41 vehicles parked along El Camino Real in Palo Alto appeared to have
people dwelling in them. Caltrans has indicated that their approach is to notify the County
“Continuum of Care” two weeks prior to noticing vehicles. Then Caltrans workers place notices
on vehicles indicating they must move within 72 hours. At the 72-hour mark, California Highway
Patrol steps in to enforce. In light of impacts to people living in vehicles along El Camino Real,
the City is working towards enhanced collaboration and communication between City, County,
and strategic partners to:
1. Identify a way to give people more than 72-hours’ notice of displacement.
2. Identify places for people to relocate to when displaced.
3. Identify resources for people with inoperable vehicles.
Planning Context: Housing Element & Bicycle and Pedestrian Transportation Plan Update
The City’s new Housing Element13 concentrates housing along El Camino Real, a state highway
that is well-served by transit but lacks a bicycle facility. The presence of a bicycle facility on El
Camino Real (or lack thereof) will influence the transportation choices of future residents of this
corridor. Notably, the City’s development review pipeline currently includes over 1,000 housing
units proposed for El Camino Real.
The City’s new Bicycle and Pedestrian Transportation Plan update will be complete in the fall of
2025.14 This document will take the Housing Element into account to recommend an updated
bicycle network for Palo Alto. Prior bicycle network plans have included bicycle facilities parallel
to El Camino Real, and El Camino Real Bicycle Facilities were to be included along with VTA’s
Bus Rapid Transit (BRT) on El Camino Real. The BRT project would have dedicated two El
Camino Real lanes to rapid buses in each direction, however the project was discontinued by
VTA. The current bike lane proposal accommodates bus stops within the bike lanes. Cyclists
approaching a bus at a stop are expected to either wait behind the bus or merge into the
vehicle lane to pass the bus on the left.
13 Housing Element Update project website
14 Bicycle and Pedestrian Transportation Plan Update project website
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Item No. 3. Page 7 of 7
FISCAL/RESOURCE IMPACT
It is not anticipated that Caltrans will ask the City for any funding to fund the proposed bike
lanes. The City is absorbing the cost of hosting the community engagement meetings that are in
excess of the usual standing committee calendars.
STAKEHOLDER ENGAGEMENT
Caltrans requested City staff assistance in setting up community engagement meetings to gain
public feedback on the proposed bike lane plans. The meeting schedule was publicized on the
City website and shared through City communication channels including City digital newsletters
and via social media. A web form to gain community input continues to be available.15
A Community Meeting was held on February 29, 2024, at Palo Alto High School, where Caltrans
shared the proposed bike lane plans and gained input from over 60 attendees. The meeting
recording will be available on the City’s YouTube channel at
https://www.youtube.com/c/cityofpaloalto.
A Joint Pedestrian and Bicycle Advisory Committee (PABAC) and City/School Transportation
Safety Committee meeting was held on March 7, 2024 at the Mitchell Park Community Center.
Council consideration of the Caltrans proposal is tentatively set on April 1 and aligns with
Caltrans’ request for Council to discuss project details in April.
ENVIRONMENTAL REVIEW
As the lead agency, Caltrans is responsible for the environmental review of the El Camino Real
Repaving Project. Provision of feedback to Caltrans staff is not a project under CEQA Guidelines
section 15378.
ATTACHMENTS
Attachment A: Caltrans Presentation: Proposed Bikeway Implementation in Palo Alto on State
Route 82 (El Camino Real)
AUTHOR/TITLE:
Amy French, Chief Planning Official
15 Website Feedback Form; https://us.openforms.com/Form/1328d991-d30a-4ca1-b9f7-9e364540e959
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AGENDA
-Introduction
-Presentation
-Q&A
Proposed Bikeway Implementation
in Palo Alto
on State Route 82 (El Camino Real)
February 29, 2024, at 6PM in Palo Alto High School
Caltrans community meeting in Palo Alto
Item 3
Caltrans Presentation: Proposed
Bikeway Implementation in Palo Alto
on State Route 82 (El Camino Real)
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PROPOSED BIKEWAY IMPLEMENTATION IN PALO ALTO ON STATE ROUTE 82 (EL CAMINO REAL)
Community meeting in Palo Alto, February 29, 2024
By Caltrans District 4, Bay Area
Item 3
Caltrans Presentation: Proposed
Bikeway Implementation in Palo Alto
on State Route 82 (El Camino Real)
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-Caltrans paving project on State Route (SR) 82 (El Camino Real)
-Planning & Mobility
-Safety Discussion for the proposed bikeway in Palo Alto
-Design Considerations
TOPICS
Item 3
Caltrans Presentation: Proposed
Bikeway Implementation in Palo Alto
on State Route 82 (El Camino Real)
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Caltrans SR 82 Paving Project
•Pavement Rehabilitation
•Curb ramps, sidewalks, and driveways to comply with Americans with Disabilities Act (ADA) standard.
•High visibility crosswalk markings
•Electrical work
•New bikeways in Mountain View and Los Altos
•New bikeway proposal in Palo Alto
Schedule:
•In construction and completion in fall 2025(T).
Pedestrian Hybrid Beacon
Class IV
Bike WayClass II Bike Lane
High Visibility Crosswalk
APS
Scope:
Item 3
Caltrans Presentation: Proposed
Bikeway Implementation in Palo Alto
on State Route 82 (El Camino Real)
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Strategic Priorities
North-South Greenway on US 101 Bridge over
Corte Madera Creek, Marin
Safety, Equity,
Climate Action +
Prosperity
Planning & Mobility Item 3
Caltrans Presentation: Proposed
Bikeway Implementation in Palo Alto
on State Route 82 (El Camino Real)
Packet Pg. 48
Director’s Policy 37
Complete Streets
It is “Caltrans’ organizational
priority to encourage and
maximize walking, biking, transit,
and passenger rail.”
SR 123/San Pablo Avenue, Albany
Item 3
Caltrans Presentation: Proposed
Bikeway Implementation in Palo Alto
on State Route 82 (El Camino Real)
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Planning
The need for bikeway improvements on El Camino Real has been documented in numerous county, regional and city planning efforts:
-VTA Bicycle Superhighway Implementation Plan (2021)
-Peninsula Bikeway Wayfinding, Safety and Feasibility Study (2021)
-Grand Boulevard Initiative Palo Alto Safety Study (2019)
-Caltrans District 4 Bike Plan (2018)
-VTA Countywide Bike Plan (2018)
Item 3
Caltrans Presentation: Proposed
Bikeway Implementation in Palo Alto
on State Route 82 (El Camino Real)
Packet Pg. 50
Improving Mobility for Bicyclists on El Camino Real
•El Camino Real connects many downtowns and
business districts between San Jose and San
Francisco.
•The proposed bikeway would connect to existing
local and regional bikeways within Palo Alto
•Class IV separated bikeways align with FHWA and
Caltrans bikeway selection guidance.
Item 3
Caltrans Presentation: Proposed
Bikeway Implementation in Palo Alto
on State Route 82 (El Camino Real)
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El Camino Real BikewaysIn Development
Caltrans SHOPP projects proposing
bikeways on El Camino Real (tentative
construction years):
-Mountain View and Los Altos (2024)
-Redwood City and Atherton (2026)
-Daly City, Colma, South San Francisco
(2026)
-Santa Clara (2026)
-South San Francisco (2028)
-Palo Alto (potential in 2024/2025)
Item 3
Caltrans Presentation: Proposed
Bikeway Implementation in Palo Alto
on State Route 82 (El Camino Real)
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SAFETY DISCUSSION ON THE IMPLEMENTATION OF BIKEWAY IN PALO ALTO ON SR 82 (ECR)
Item 3
Caltrans Presentation: Proposed
Bikeway Implementation in Palo Alto
on State Route 82 (El Camino Real)
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Topics
•Caltrans’ Safety-First Mindset
•Bicyclist Safety Improvement Monitoring Program
•Review of Crash History
•Safety Enhancement Recommendation
Item 3
Caltrans Presentation: Proposed
Bikeway Implementation in Palo Alto
on State Route 82 (El Camino Real)
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Safety-First Mindset
•Priority: safety for all road users
•Vision: elimination of all fatal and
serious injury
•How: adoption of the Safe System
Approach
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Caltrans Presentation: Proposed
Bikeway Implementation in Palo Alto
on State Route 82 (El Camino Real)
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Bicyclist Safety Improvement Monitoring Program
Purpose: identify and
investigate areas with high
concentration of bicyclist-
involved crashes
Date range covered by the
Monitoring Program:
Jan 1, 2016 –Dec 31, 2020
(5-year period)
Item 3
Caltrans Presentation: Proposed
Bikeway Implementation in Palo Alto
on State Route 82 (El Camino Real)
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Bicyclist Safety Improvement Monitoring Program
1.Bonita Ave to Mariposa Ave (Mountain View)
2.West Charleston Rd to Maybell Ave (Palo Alto)
3.Wilton Ave to Matadero Ave (Palo Alto)
4.California to Park Blvd (Palo Alto)
5.Entrance to El Camino Park to Quarry Rd
(Palo Alto)
1
2
34
5
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Caltrans Presentation: Proposed
Bikeway Implementation in Palo Alto
on State Route 82 (El Camino Real)
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Bike Related Crash History Review
Highway Segments Along El Camino Real
Number of Bicyclist-related Crashes
(1/1/2016 – 12/31/2020)
Fatality Injury
1. Bonita Ave to Mariposa Ave (MV) 0 12
2. West Charleston Rd to Maybell Ave 0 4
3. Wilton Ave to Matadero Ave 0 4
4. California Ave to Park Blvd 1 8
5. Entrance to El Camino Park to Quarry Rd 0 4
Total 1 32
33
Item 3
Caltrans Presentation: Proposed
Bikeway Implementation in Palo Alto
on State Route 82 (El Camino Real)
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Broadside, 79%
Sideswipe, 6%
Head on, 3%
Other, 12%
Bike Related Crash History Review
(Crash Type)
Item 3
Caltrans Presentation: Proposed
Bikeway Implementation in Palo Alto
on State Route 82 (El Camino Real)
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Other violations
52%Failure to yield
30%
Improper turn
9%
Not stated
6%
Speeding
3%
Bike Related Crash History Review
(Primary Collision Factor)
Item 3
Caltrans Presentation: Proposed
Bikeway Implementation in Palo Alto
on State Route 82 (El Camino Real)
Packet Pg. 60
Bike-Related Crash Pattern / Mitigation
1. Drivers’ Failure to Yield
2. Bikes Going Against Flow of Traffic
3. Red Light Violation
Item 3
Caltrans Presentation: Proposed
Bikeway Implementation in Palo Alto
on State Route 82 (El Camino Real)
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Bike-Related Crash Pattern / Mitigation
Potential Underlying Issues Potential Mitigations
•Distraction
•Visibility issue
•Unclear right-of-way
assignment
•Upgrade / improve signs, markings
•Ensure clear line of sight
•Driver education
•Provide bike boxes at select
intersections
1. Drivers’ Failure to Yield
Item 3
Caltrans Presentation: Proposed
Bikeway Implementation in Palo Alto
on State Route 82 (El Camino Real)
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Bike-Related Crash Pattern / Mitigation
Potential Underlying Issues Potential Mitigations
•Lack of designated area for
bicycling
•High-stress bike riding
environment
•Provide standard bike facility
designating portion of roadway for
bikes
•Installing appropriate signs and
markings to indicate direction of bike
travel
2. Bikes Going Against Flow of Traffic
Item 3
Caltrans Presentation: Proposed
Bikeway Implementation in Palo Alto
on State Route 82 (El Camino Real)
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Bike-Related Crash Pattern / Mitigation
Potential Underlying Issues Potential Mitigations
•Speeding
•Not able to see signal
equipment
•Signal timing
•Traffic enforcement
•Education
•Ensure signal visibility
•Verify appropriate signal timing
3. Red Light Violation
Item 3
Caltrans Presentation: Proposed
Bikeway Implementation in Palo Alto
on State Route 82 (El Camino Real)
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Safety Enhancement Recommendation:
•Implement bikeway on El Camino Real with the on-going Caltrans pavement rehabilitation project
Benefits:
•Provides bike network connectivity between various communities along El Camino Real
•Reduces the incidence of bicyclist riding against the flow of traffic
•Lessens potential for conflict between bikes and vehicles
•Improves traffic safety on El Camino Real
Item 3
Caltrans Presentation: Proposed
Bikeway Implementation in Palo Alto
on State Route 82 (El Camino Real)
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Proposed Bikeway Implementation on SR 82 Bikeway Design Considerations
23
•Right of Way
•On-Street Parking
•Intersections and Driveways
•Transit Stops (VTA)
Item 3
Caltrans Presentation: Proposed
Bikeway Implementation in Palo Alto
on State Route 82 (El Camino Real)
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Right of Way along SR 82Proposed Bikeway &
RoW = 130 ft RoW = 121 ft RoW = 100 ft
RoW RoW
Right of Way Various:
•Back of sidewalk (TYPICAL)
•Face of curb
•Or Lip of Gutter
Item 3
Caltrans Presentation: Proposed
Bikeway Implementation in Palo Alto
on State Route 82 (El Camino Real)
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On-Street Parking along SR 82
NB -253SB -350
Proposed Bikeway &
SB near Churchill Dr NB near Cambridge Ave
NB near Los Robles Ave
ENLARGED VIEW OF SHADED AREA
Item 3
Caltrans Presentation: Proposed
Bikeway Implementation in Palo Alto
on State Route 82 (El Camino Real)
Packet Pg. 68
Intersections and Driveways along SR 82Proposed Bikeway &
Intersections & Driveways:
•Conflict zones
•Turn Lanes
Item 3
Caltrans Presentation: Proposed
Bikeway Implementation in Palo Alto
on State Route 82 (El Camino Real)
Packet Pg. 69
Transit Stops along SR 82Proposed Bikeway &
Transit Stops:
•Conflict zones
•Provide room for buses to pull in and out
Item 3
Caltrans Presentation: Proposed
Bikeway Implementation in Palo Alto
on State Route 82 (El Camino Real)
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Proposed Bikeway Plan View (partial)Item 3
Caltrans Presentation: Proposed
Bikeway Implementation in Palo Alto
on State Route 82 (El Camino Real)
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Proposed Bikeway Typical Cross-Section (Before and After)
29
Class IV
(shown)
Before
After
SR 82 / California Ave
Item 3
Caltrans Presentation: Proposed
Bikeway Implementation in Palo Alto
on State Route 82 (El Camino Real)
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Proposed Bikeway (BEFORE)
Northbound Southbound
(at California Ave)
Item 3
Caltrans Presentation: Proposed
Bikeway Implementation in Palo Alto
on State Route 82 (El Camino Real)
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Proposed Bikeway (After) Rendering
Northbound Southbound
(at California Ave)
Item 3
Caltrans Presentation: Proposed
Bikeway Implementation in Palo Alto
on State Route 82 (El Camino Real)
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Alternatives that were Considered
32
1.MAINTAINING ON-STREET PARKING
2.LANE WIDTH REDUCTION
3.ROADWAY DIET (POSSIBLE FUTURE PROJECT BY CITY OR STATE –NOT PART OF
PROJECT SCOPE)
Proposed Bikeway
Item 3
Caltrans Presentation: Proposed
Bikeway Implementation in Palo Alto
on State Route 82 (El Camino Real)
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Proposed Bikeway implementation in Palo Alto
•Joint Pedestrian and Bicycle Advisory Committee (PABAC)/City/School Transportation Safety Committee (CSTSC) Special Meeting:
March 7, 6:30 p.m. at Mitchell Park Community Center
Adobe Room, 3700 Middlefield Road
•Joint Planning and Transportation Commission/Human Relations Commission Meeting:
Wednesday, March 13, 6 p.m., City Hall Council Chambers,
250 Hamilton Avenue.
•City Council Meeting :
Monday, April 1, 6 pm(Tentative), City Hall, Council Chambers, 250 Hamilton Avenue.
NEXT STEPS:
Item 3
Caltrans Presentation: Proposed
Bikeway Implementation in Palo Alto
on State Route 82 (El Camino Real)
Packet Pg. 76
THANK YOU!
QUESTIONS/COMMENTS?
Item 3
Caltrans Presentation: Proposed
Bikeway Implementation in Palo Alto
on State Route 82 (El Camino Real)
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El Camino Bike Lanes – Caltrans Questions
General Questions
The goal of these questions is to understand the broader context of these bike lanes, and how
similar projects have proceeded elsewhere.
1.Can you confirm if DIB-94 guidelines apply to this project? If not, why not, and are there
any alternative standards that we can reference?
Yes. DIB 94 guidelines were applied for the new bikeway design.
2.Does Menlo Park have plans to add bike lanes? If so, is there any timeline or design
concepts that you can share?
We are not aware of any plans for adding new bike lanes by Menlo Park currently.
3.Can you share examples in the last ~5 years where Caltrans rolled out similar Complete
Streets concepts?
○Ideally, we can see examples from arterials in mid-size cities, with a mix of
protected and unprotected bike lanes. A simple list of examples would suffice, but
it’d be great to see any more d etailed notes or case studies if those are available.
-East 14th St in Ashland (Unincorporated Alameda County) uses more permanent
materials but has a mix of bike lanes and separated bike lanes throughout the
corridor on Caltrans Road.
-Hwy 152 in Gilroy used a repaving project to incorporate bike lanes on 1st St. This
project installed buffered bike lanes with no vertical separation.
-Hwy 12 Broadway in the City of Sonoma also used a repaving project to
incorporate bike lanes. This project installed buffered bike lanes with no vertical
separation.
Physical Design Questions
The goal of these questions is to understand safety risks and opportunities within existing
designs.
Protective Buffer Questions
1.Can we extend protective buffers more aggressively at intersections?
a.Specifically, I’ve found several cases where the protective buffer ends 20+ feet
before an intersection, which allows drivers to take fast right-turns through the
cycling lane. (Similar conditions exist at Vista Ave, Dinah’s Court, etc.)
b. For reference, see the highlighted section at Deodar, where: (1) protection ends
~50 feet ahead of the intersection; (2) there seems to be no driveway or bus
stop; and (3) the travel lane is sufficiently wide to include a buffer.
In accordance with Caltrans standards, there should not be protective buffers at intersections 50 ftto 200 ft.
Item 3
Responses to George Lu -
Palo Alto PTC - ECR Bike
Lane Questions 3.11.24
Packet Pg. 78
2. What are the exact guidelines for the width of bike lanes and protective buffers? Would it
be feasible or sensible to convert 7’ bike lanes without any protective buffer to a 5’ bike
lane with a 2’ buffer?
a. There are several unprotected sections with a 7’ bike lane, without other conflicts
like bus stops and driveways. Presumably, these areas are unprotected because
the right-of-way is too narrow to include a buffer. However, these unprotected 7’
lanes could plausibly become a narrower bike lane with a 1.5’ to 2’ buffer. (To be
clear, I’m not saying this is the right tradeoff – I’m just asking whether this is
reasonable.)
Item 3
Responses to George Lu -
Palo Alto PTC - ECR Bike
Lane Questions 3.11.24
Packet Pg. 79
b. For example, see some highlighted sections near Sheridan and Grant, where a 7’
bike lane abuts a 12’ car lane.
Bike Box Questions
3.Can you confirm whether cars will be allowed to make a right-turn on red at bike boxes?
How does Caltrans determine which intersections get a bike box?
a.I’m trying to understand if it’s reasonable to add more bike boxes, especially
along city recommended / safe school routes.
Bike boxes were picked for locations to either reduce turning collision (California Ave) or
to act as a wayfinding to direct cyclists to turn (Embarcadero). This counter measures
increases cyclists’ visibility to motorists and to allow bicyclists to get ahead of queuing
traffic during the red signal phase. Bike boxes can be used with a ‘no turn on red’ sign
to clarify that the motorist cannot make a right turn on red.
4.How did you decide the placement of the ‘Two-Stage Turn Queue’ bike boxes at
Stanford Ave and Embarcadero?
The purpose of the bike box at Embarcadero and Stanford Ave is to direct northbound
cyclists to the bike path along Stanford University. The green cross bike at the
intersection is also serving this purpose. The bikeways end here, and it is not advisable
for cyclists to attempt to maneuver the undercrossing/ on ramps at Palm Ave/University
Ave. This design is consistent with the MassDOT Separated bike lane design guide on
how to transition from a two-way bikeway (Mass DOT page 86).
a.My understanding is that these are the only left turn bike boxes along El Camino
in Palo Alto. I worry that if there are only two bike boxes of their type, that neither
cyclists nor drivers will understand how to use them.
b.I also worry that the green bike box in the middle of Embarcadero will be
misperceived as a signal that the bike lane continues onward. Moving cyclists
might not realize that the box is intended for left turns only, and instead think the
box is part of green striping that invites them to keep riding forward into an
No buffer required before and after T-section from 50' to 200'
At this location, bike lane width varies from 5 to 7 feet.
Item 3
Responses to George Lu -
Palo Alto PTC - ECR Bike
Lane Questions 3.11.24
Packet Pg. 80
unprotected 22’ car lane.
Route Design
5.Did Caltrans consider extending the Northbound bike lane from Embarcadero to Encina
Ave?
a. See how the area seems sufficiently wide, with a ~22’ right travel lane.
The route wasn’t extended to Encina Ave, because the bikeway would have to end prior
to University. The signalized intersection at Embarcadero offers a way for cyclists to
transition to the Stanford Path.
b.By continuing to Encina Ave, there’s a more natural way for cyclists to reach
Caltrain, Palo Alto Medical Foundation, Town and Country, and the Embarcadero
Bike Path.
There are positives and negatives about continuing the bikeway to Encina Ave. While it
does provide more connections to the Embarcadero Bike Path, Churchill and
Embarcadero Rd both have connections to the Embarcadero Bike Path as well. The
design didn’t want to encourage cyclists to proceed northbound on El Camino after
Item 3
Responses to George Lu -
Palo Alto PTC - ECR Bike
Lane Questions 3.11.24
Packet Pg. 81
Embarcadero Rd. The bike box has a left arrow pointing cyclists toward the Stanford
Path.
c.As noted above, I think the green bike box + abrupt end of the bike lane is
potentially dangerous, inviting cyclists to ride straight where they have no
protection. By continuing the bike lane forward, we could add green paint that
wraps around the corner of Encina, which signals that cyclists should continue
through the Embarcadero bike path.
6.How are cyclists expected to continue north-bound in Menlo Park after Sand Hill?
a.See how the north-bound intersection at Palo Alto Ave contains two flowing, fast
right turns (one onto Palo Alto Ave; one off of Palo Alto Ave). It’s not clear how
the bike lane then continues into Menlo Park.
This is the end of Caltrans paving project limit so the bikeway ends after Sand Hill. The
current design tried to continue the bikeways as long as possible before dropping it.
7.Have there been attempts to limit fast turns onto El Camino? More specifically, is there
any communication with the county about Page Mill Road? The County informed the
future project to improve this intersection and plan to begin after the Caltrans paving
project is completed. The draft plan shows extending the corner sidewalk and
removing the right turn lane at the porkchop island.
a.For example, the highlighted section of Page Mill includes a porkchop /
pedestrian island. Cars drive through that channel extremely quickly, and sight
angles are awkward. It seems likely that the bike lane will be used as an
extremely dangerous merging lane for cars. Ideally we can coordinate with the
county to eliminate the porkchop (or at least add signs, lighting, more green
paint, etc.).
Item 3
Responses to George Lu -
Palo Alto PTC - ECR Bike
Lane Questions 3.11.24
Packet Pg. 82
b.Note there are other fast-flowing right turns (like at Los Altos Ave and Palo Alto
Ave) though none seem as dangerous as Page Mill.
8.At locations where protected bike lanes abruptly end, will there be signs to warn cyclists
and drivers? What will the signs say?
Sharrow markings are used to warn cyclists that a bike lane is ending.
Item 3
Responses to George Lu -
Palo Alto PTC - ECR Bike
Lane Questions 3.11.24
Packet Pg. 83
a.See intersection at Sheridan. Inexperienced cyclists may panic if they suddenly
realize they’re sharing a car lane. (Similar conditions exist at Embarcadero,
Churchill, etc..)
9. What are the design guidelines for lane width, including for bus lanes?
a. Potentially lanes could be slightly narrowed (like from 11’ to 10.5’ for the central
lanes, and 12’ to 11’ on the outer lane). This could allow a narrow Class 2 bike
lane at Sheridan, rather than having to resort to sharrows.
All the lane width will be reduced to 11’ and a class II bike lane will be placed here.
Misc Design Questions
10.Can you briefly discuss any drainage improvements? Are there any guidelines for the
design of sewer grates?
There is no drainage improvement work in Palo Alto under this paving project. Most of
the grates are shown as bicycle proof ones but we need to review all the existing grate
types.
a.I want to make sure we take reasonable steps to prevent flooding2, and
avoid accidents where bike wheels get caught in grates.
11.Could design improvements for bus lanes be in scope? How much money or time would
Caltrans need to consider a design like the example from DIB-94 below, where the bike
lane is slightly elevated?
There is insufficient Caltrans Right of Way to accommodate the separated bus lane as
the figure/ example below.
Item 3
Responses to George Lu -
Palo Alto PTC - ECR Bike
Lane Questions 3.11.24
Packet Pg. 84
Figure 7-G - Diagram of an integrated bicycle/pedestrian zone at a bus stop (MassDOT
Separated Bike lane Guide)
Item 3
Responses to George Lu -
Palo Alto PTC - ECR Bike
Lane Questions 3.11.24
Packet Pg. 85
Item No. 4. Page 1 of 4
Planning & Transportation Commission
Staff Report
From: Planning and Development Services Director
Lead Department: Planning and Development Services
Meeting Date: March 13, 2024
Report #: 2402-2578
TITLE
Study Session to Receive Presentation Regarding Strategies and Policy Recommendations
RECOMMENDATION
Staff recommends the Commission receive presentations from staff, the consultant and the
members of the ad hoc committee, to consider the recommended strategies for economic
development.
BACKGROUND
On February 28, 2024, the Commission established an ad hoc committee to assist staff to make
progress on the retail study tasks and timeline. The ad hoc committee held its first meeting on
March 5, 2024, with staff of Planning and Development Services and City Manager’s Office, and
the consultants (MBI), to clarify expectations for the committee and share high-level strategies
to present to the full Commission on March 13, 2024. Focus areas for March 13th PTC meeting
were noted as:
•Identifying the problem(s) (e.g. persistent and extensive vacancies)
•Establishing a nexus with Streetsense Report (I.e. purpose to identify zoning constraints
and what approaches to address these zoning constraints, noting this effort does not
include looking at building processes or other entitlement processes)
•Showcasing charts from CoStar data
•Discussing the stakeholder interviews (including Car-free streets report)
•Discussing possible zoning strategies (noting Council acceptance of Streetsense report)
Harvard Study of 2023
During the ad hoc meeting, the City’s consultant noted a recent Harvard Study (November
2023) that addresses persistent retail vacancy rates. The study summary and full report is
attached (Attachment B) and found via this link: https://www.jchs.harvard.edu/blog/why-do-
urban-storefronts-stay-empty-so-long
Item 4
Staff Report
Packet Pg. 86
Item No. 4. Page 2 of 4
Briefly, the study focused on retail spaces and found these businesses generally sign longer
leases, an average of ten years, than office space since there are much higher tenant
improvement costs and that rates reflect a very steady increase where the stronger the market
is, the higher the rent is. Further, it found landlords are looking for these long-term ten-year
investments – which is why they may have persistent vacancies, and owners may provide the
tenants with funds to make tenant improvements, to capture costs over long term. The
landlords are waiting for a good rate over the last tenant and are looking for best tenant
performer – a high quality tenant.
Supplemental Interviews
On February 23, 2024, staff emailed the Commission with (1) a summary of stakeholder
meetings in the fall of 2022 and spring of 2023 regarding the California Avenue business district
and the Ramona Street block between University Avenue and Hamilton Avenue, and (2) the
questionnaire our consultant (MBI) used to interview businesses to date. The summary
(Attachment A), prepared by the consultant working with the City Manager’s Office who is now
on staff and who participated in the first ad hoc meeting, noted:
•Nine interviews were conducted between October 10 and 20, 2022 to engage California
Avenue business district stakeholders.
•Six focus groups were conducted with:
o Ramona Street Business Owners, November 17, 2022 & April 26, 2023
o California Avenue Business Owners, December 1, 2022 & April 26, 2023
o Chairpersons of City Commissions, November 17, 2022 & April 27, 2023
The first meeting enabled input on priorities and mapping of assets, issues and opportunities
for change. The second meeting recorded participants’ feedback on survey results, outreach
findings, demonstration projects and upcoming study topics. The 60-minute interviews,
conducted by a consultant who is now a staff member of the City Manager’s Office, used the
following questions:
• How did California Avenue and Ramona Street become part of your life?
• What makes it an attractive place?
• What concerns do you have about the closure of California Avenue and Ramona
Street to vehicle traffic?
• What would you like to see change to make these streets more attractive for people
to visit and spend time?
MBI Prior Interviews in 2022/Upcoming Interviews
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Item No. 4. Page 3 of 4
The summary of interview efforts in 2022 by MBI with Palo Alto businesses and property
managers is provided as Attachment A. Staff will be seeking anecdotal information, and stories
from several business owners that moved operations to nearby cities. Staff plans to ask these
questions as a supplement to questions used in earlier interviews:
•Why did you leave Palo Alto? (the main question)
•Did the move increase your customer base (and do Palo Altans continue to visit your
business?)
•What kind of business support are you getting from the new city/at the new location?
Any incentives/marketing assistance?
Staff asked the Commission to share with staff the names of businesses that are still open that
left Palo Alto for other cities (other than University Art). Staff received suggestions for three
such businesses to explore – Paper Whirl, Shady Lane, and Nature Gallery (however Nature
Gallery closed in the Los Altos in 2022 due to the owner’s retirement). The plan is to bring the
responses and stories of these relocated businesses to a future PTC session:
•University Art, 2550 El Camino Real, Redwood City
•Paper Whirl, 151 Main Street, Los Altos
•Shady Lane, 325 Sharon Park Drive, Menlo Park
Other Sources of Anecdotal Data
There have been several articles in recent years about businesses that have closed in Palo Alto.
One such recent article1 notes several businesses that closed prior to 2021. In an article about
the Town and Country shopping center, the reporter noted efforts of the center’s owner to
offer rent relief were not enough to offset the high costs of running a food business including
utilities, minimum wage and labor requirements, compounded by the shutdown during the
pandemic. The article noted the shopping center owner had also helped Town & Country
Village restaurants build parklets to expand the outdoor dining areas.
ANALYSIS
The City’s consultant provided staff with several slides (Attachment C) prior to the packet
preparation and several of the slides are attached to this report. For example, one slide reflects
a comparison of vacancy rates over the past ten years, for Palo Alto’s retail areas (Downtown,
California Avenue, Town and Country, El Camino Real, Midtown) compared to Los Altos (LA)
and Santa Monica (SM). These statistics were pulled from Costar data. Given the agenda item
before the study session is anticipated to bring many speakers, it is uncertain whether there
will be enough time for the consultants to present all of the slides in Attachment C on March
13.
1 Link to article about businesses closed in Palo Alto https://anthromagazine.org/a-farewell-to-palo-alto-
businesses/
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Item No. 4. Page 4 of 4
Based on interviews and studies, staff and the consultant believe there is a need to reset what
is needed, where the market is going, and how to adapt to the changing market, to structure
around that. When the retail protection ordinance was established, office space was booming;
however, that context doesn’t exist anymore as circumstances have changed, before, during
and after the pandemic.
FISCAL/RESOURCE IMPACT
The consultant contract with MBI was budgeted in a previous budget cycle(s).
STAKEHOLDER ENGAGEMENT
As noted, Palo Alto interviews have been conducted, and several additional interviews are
planned to hear stories from businesses that have left Palo Alto, to supplement the existing
information. The ad hoc committee, comprised of three Commissioners, has not set a date for
its second meeting, but is expected to do so after the March 13th PTC meeting.
ENVIRONMENTAL REVIEW
The effort to recommend strategies for economic development is not subject to the California
Environmental Quality Act.
ATTACHMENTS:
Attachment A: May 2023 Car Free Streets Stakeholder Meetings Summary
Attachment B: Harvard 2023 Study Summary
Attachment C: MBI Retail Recovery Slides to Share Goal, Study Contents and Findings
AUTHOR/TITLE:
Amy French, Chief Planning Official
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STAKEHOLDER MEETING SUMMARIES
Car Free Streets - California Avenue & Ramona Street
Fukuji Architecture & Planning
Fehr & Peers
May 2023
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Car Free Streets – Community Engagement Meeting Summaries 2
TABLE OF CONTENTS
INTERVIEWS ................................................................................................................................................. 3
FOCUS GROUPS .......................................................................................................................................... 10
COMMUNITY MEETINGS ............................................................................................................................ 24
SURVEY RESULTS ........................................................................................................................................ 37
Appendix A - Community Workshop Comments ........................................................................................ 41
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Interviews
I NTERVIEWS
Nine interviews were conducted between October 10 and 20, 2022 to engage
stakeholders and initiate planning per the City Council’s direction to study the feasibility
of permanent closure of Californian Avenue and Ramona Street to vehicle traffic. The
interviews were 60 minutes with the following questions:
• How did California Avenue and Ramona Street become part of your life?
• What makes it an attractive place?
• What concerns do you have about the closure of California Avenue and Ramona
Street to vehicle traffic?
• What would you like to see change to make these streets more attractive for people
to visit and spend time?
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Interviews
W HAT 3 W ORDS WOULD YOU USE TO D ESCRIBE C ALIFORNIA A VENUE T ODAY ?
A FFIRMING
• Comfortable, walkable, local
• Friendly, personal, small scale
• Kind, longevity, artistic
• Accessible, distinctive, friendly
CHALLENGING
• No compelling reasons to be here
• Underutilized, undervalued, under “destinationed”
• No great architecture, no charm
• Mid-century architecture, undefined, large scale
• Circus in progress, shambles, ugly
W HAT ARE YOUR T OP C ONCERNS WITH CLOSURE OF C ALIFORNIA A VENUE TO
VEHICLE TRAFFIC ?
• Cherished history, but District is in decline
• Walkable, potential for growth
• Revive District as a destination
• Economic development needs to turn around vacancies, loss of retail
• Needs to be visible, accessible and walkable
• Need to attract people, be vibrant, outdoor dining is a success
• Re-establish District’s identity
• Can be a people gathering place
• Facilitate housing in the District
• Design for locals, yet attract new customers
• Need more responsive City government (delays, permit requirements, zoning regulations, parking,
density, ground floor use and design review issues)
• Ensure the District’s long-term health and viability (retail viability, reliance on daytime workers,
customer visibility and access to local businesses)
• Build on Avenue of the Arts
W H AT ARE C ALIFORNIA A VENUE R EVITALIZATION PRIORITIES ?
• Attract people to the district; it is essential for its survival
• Create and define the identity of a main gateway to the City, not as a dead main street
• Give the business district a focus of attention for change
• Make California Avenue a stronger destination for Palo Altans and the subregion
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Interviews
O PINIONS ON C ALIFORNIA A VENUE A SSETS
Economics Placemaking
• No vacancies in heyday, once a bustling Main Street
with theater, bookstores, camera shops, magazine
shop, pharmacy, clothing, shoes, candy, ice cream,
cafés and restaurants
• Have right combination of transit, mixed-use, low-
density development with potential to go up in height
(to accommodate growth)
• More accessible feeling
• like range of restaurants, reflects diversity of
community, lower cost lunch places than downtown’s
higher end restaurants
• Ton of opportunity to build upon, great things there
to build upon, make California Avenue a destination a
success
• More local than downtown, lower key place, meet
friends here
• Like outdoor dinning
• Street improvements helped, but not night to day
result
• Street/district can handle more people without
compromising feeling
• Like artwork on California Avenue
• Music adding so much life to the area
• Walkable street and block pattern with alley access to
businesses and parking
Community Governance
• All business owners take care of each other, business
owners are community of their own
• Businesses want to stay on California Avenue, have
longevity
• Businesses support local shopping
• Appreciate pride of businesses I visit
• No comments
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C ONCERNS A BOUT C ALIFORNIA A VENUE
E CONOMICS & P LACEMAKING
Economics Placemaking
• No reason to go there, only research park
workers
• No destination stores
• California Avenue so dead it is depressing, not
functioning as downtown, it’s a dinner hall;
today, deadsville, 32 years, see businesses come
and go, not gotten better, gotten worse
• Office workers not returning to Stanford
Research Park only 5% occupancy
• California Avenue vacancy at 25%; too many
vacancies – Hotel California not doing anything;
shadow vacancies
• Rents down
• Not much on California Avenue, very few retail
stores
• Pandemic – horrible for retail, restaurant saved
business for us
• Amazon has wiped out retail
• How can restaurants make it given the costs of
business (workers comp, increased wages, no
relief for tips for business owners) even if free
rent hard to support; can’t get enough people
locally to work for me
• Don’t want California Avenue can end up like
downtown Portland. Portland once lively, now
sad, business closed, homeless encampments,
disturbing to see it, walking downtown now feel
fearful
• California Avenue is a business district – not a lot
of tourists, they go University Ave
• Mollie Stone and the train station on one end,
and the other: nothing, and nothing in the
middle, camera store gone
• Camera sales went down due to cell phones
• California Avenue was a vibrant retail street: 3
supermarkets, department store, variety store,
shoe store, entire family shopping on street, over
time, several factors, now less desirable for
shopping
• Not all restaurants are doing well
• Out of sight, out of mind – not able to drive by,
forget what’s there, never stop or shop
• Street is filthy, dirty, empty space, nothing
charming, nothing to draw you, no height, nothing
worth saving there today, Dirty from Farmer’s
Market
• Dead end street poor access: problems have gone
on for years; it is unattractive, poorly organized,
now only a street with no cars - just an emergency
lane, it is confusing, street level with curb, reduced
to outdoor parklet seating
• Need flow of traffic for business, affect closure on
future of street will result in landlords not able to
attract good businesses, obstacle course to drive
to my business
• Visually, looking down California Avenue, see old
buildings, not kept up, farmer’s market filthy from
BBQ’s not good-looking street
• Street has “bad quilt” visual appearance
• Would go to California Avenue as destination, only
when invited, otherwise no
• City’s street revitalization did not do a whole lot,
still older buildings on street, no new buildings
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Interviews
C ONCERNS A BOUT C ALIFORNIA A VENUE
C OMMUNITY & G OVERNANCE
Community Governance
• In computer literate area, little
towns can still be vibrant out of
this area in Canada little towns
are thriving because people
support their businesses, here
people don’t support the
businesses
• Need to bring more people here
• Need to focus on the overall health of district, viability of
pedestrian shopping, given vacancies and uncertainty of workers
returning, need to pivot from office to housing
• Need practical, long-term benefit for everyone, need to generate
a business place for people to want to go
• City Council wants California Avenue like State Street, but it is not
European street, it doesn’t have the density of housing, of a
metropolitan city like SF, NY Europe
• City Council all want special gathering places, not sure practical for
street to be closed
• City believes small business return to city, but it is too expensive
to exist today
• Palo Alto likes to point to wonderful streets – Santa Barbara’s
State Street, and California Avenue looks nothing like it – zero
comparison
• Long term effect street closure will be negative to business, hear
community think it is a great idea to sit outside, for restaurants it
is good for them, but not for the good of the whole district
• Frustrated by city, raised funds to create community gathering
space, city could not make happen - they didn’t have time for turf
and chairs, takes too much time with City to make things happen
• Moved workers to parking garage, displaced parking for retail
• City needs to broaden definition of retail, not object to services on
ground floor
• The length of time it takes for the city to move, by time something
done rest of retailers gone be by then; closure of street in 2022
business die off by 2025 before anything done
• City makes it difficult to find tenants for buildings, hard to get
conditional use permits
• City can’t require parking for change of use, city allows
apartments to be built without adequate parking
• Farmer’s market is an important event; however, it controls so
much how space is used, need to understand what is really needed
to support local businesses too (and needs to clean up after itself
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Interviews
O PPORTUNITIES F OR C HANGE ON C ALIFOR NIA A VENU E
E CONOMIC S & P LACEM A KING
Economics Placemaking
• Need reason to come to street, need base of 2 -3
shops that are interesting destinations, need to
supply community what it is missing
• Need mix of shops, bakery, deli (Mademoiselle
Colette, on Santa Cruz Avenue, Menlo Park, or
Maison Alyze on Castro Street, Mountain View),
bookstores, galleries, artists, skateboard shops,
dance ballet studios
• Need economic development consultant to be
creative, will be a lot of effort to find right uses,
and not formula retail, have so many vacant spaces
• Could be destination for electronics retailers:
Microsoft, Apple, Amazon
• Could celebrate research history with museum and
retail for electronic goods, housing, think about
Varian, Lockheed, Loral
• Need financial analysis for higher density
development
• Need a bookstore, tradition with Printer’s Inc.
boutique clothing for women or destination
retailers like on 4th Street in Berkeley
• Now food is entertainment, attract daytime
workers to stay for dinner
• Retail chains provide marketing and advertising
support, and enable more minority franchise
business ownership which is illegal in Palo Alto,
need occupancy, innovation and chain stores
• Top businesses needed are restaurants,
beauty/hair and fitness/exercise
• Compare Berkeley’s 4th Street – similar community
melding of design, culture, rather than all about
retail, when planning and economic development
work together can see impact, right mix on block,
how to implement over time, not be formulaic
• Need diversity, selection of businesses
• Goal to attract variety businesses to attract people
• Destination businesses, are good for street
• Office buildings had several start-ups, they have
money to spend, however successful ones move
out
• Shopping centers need bookend anchors to draw
people from one end to the other, businesses in
between benefit
• Need shade is strategic place
• Need a community gathering space – dining took it
over, no place to sit or work, need free Wi-Fi, pop
up shops, turf over asphalt to change vibe of street
• Safer for bikes, need enough people
• Need to open it up, California Avenue as one way
street off El Camino Real, going north turn right,
left turn, 1st half block wider, then narrow down,
landscape and retail out to street, on both side
streets off California Avenue, then add charm
• Street needs more uniformity
• Need template of options for parklets and pergola
structures on street for restaurants, selfie stations,
public art, textural and interactive
• Have vintage trailer in front of my store
• Need art and entertainment
• Make it one way, rows of trees, some arch ways,
walking lane, tables chairs, biking, really make it
happen
• Arts Creative Placemaking Movement capture
Instagram culture motivated to go and photograph
places
• Arts based district like Orange County Museum of
Art, new facility, situated on plaza, it is an arts
district with a symphony hall, has Richard serra
sculpture, can walk into, dramatic art on top of
museum
• Open California Avenue, one lane? Not want street
closed
• Need signage – talk with City Council, they passed
legislation to put signage up during this temporary
time to direct people to businesses effected,
couldn’t do it because ECR governed by Caltrans,
no signs on ECR
• Need street signs
• Canada had good idea with parklets as sidewalk
and dining next to building
• Music added so much life to the area, build on this
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Interviews
O PPORTUNITIES F OR C HANGE ON C ALIFORNIA A VENUE : C OMMUNITY &
G OVERNANCE
Community Governance
• California Avenue needs to be redefined
• Street needs to redesign itself
• Explore public art park with fixed or rotating
exhibits, or partnership with Stanford for Roden
sculptures
• Need district identity - performing arts, outdoors
stage, takes over street, small scale, host events,
need venue for artists
• Manage programed public activities
• What is attractive? What will bring people back?
• Goal is for a vibrant downtown, direct community
action, quality landscape
• Need planning, with temporary measures, and
economic development manager, make sure
businesses are on board
• Need more than forced compliance, need housing
with improvements to livability, vibrancy and
connection, including connecting across El Camino
Real
• Amend retail ordinance to permit uses found on a
Main Street: ground floor office, real estate,
medical/dental offices, more than coffee, permit
fitness centers
• Need to address parking, circulation, enable uses
in middle of street, way finding
• Need to program experiences, public art, standing
music venues
• Need community serving uses, at least 40% as
walk-in businesses
• Need to solve housing here, more housing will
bring customers
• Need to make sure everything works
• Address very high vacancies in parking assessment
district
• Need flexibility in allowed uses
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FOCUS GROUPS
Six focus groups were conducted:
• Ramona Street Business Owners, November 17, 2022 & April 26, 2023
• California Avenue Business Owners, December 1, 2022 & April 26, 2023
• Chairpersons of City Commissions, November 17, 2022 & April 27, 2023
The first meeting had two input activities: input on priorities and mapping of assets,
issues and opportunities for change. The second meeting recorded their feedback on
survey results, outreach findings, demonstration projects and upcoming study topics.
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Focus Groups
R AMONA S TREET B USINESS O WNERS – 1 S T M EETING
November 17, 2022
A TTENDEES
Tim Pham Tea Time
Nancy Coupal Coupa Cafe
Giuseppe Carrubba Osteria
Greg St. Clair Nola Palo Alto
Brenda Local business owner
Ozzy Arce, City Palo Alto
Bruce Fukuji, Fukuji Architecture & Planning
Nina Price, Fehr & Peers
C ONCERNS
E MERGENCY A CCESS
• The fire lane is making it more difficult for the street to be utilized as an open space for people.
• The hotel lack of life safety sprinklers is causing the fire lane space challenge
• If fire truck needs to go through outdoor dining area, restaurant owners OK with cost and will sign a
liability waiver
• Use retractable bollards to separate vehicles from pedestrian areas and enable fire access
A ESTHETICS /P LACEMAKING
• There needs to be some standard for aesthetics for the parklets and any other street furniture to
maintain a consistent and good appearance
• Nice Santa Barbra style buildings are beautiful, doesn’t make sense to have people eat next to the
sidewalk looking the way it does today
• Better street lighting, string across the street
V ITALITY
• Concerned about the vitality of the downtown able to facilitate the needs of the students and community
with Stanford
• How do we quantify measures of success?
• Essential to have retail
S TREET C LOSURE
• people love Ramona Street being closed, it brings that vitality
• love outdoor living rooms
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Focus Groups
P ARKLETS
• Make sure that the parklet program and the car-free streets work into tandem
• Need to get rid of the consent of adjacent for parklet program. There’s still movement we can make in
one way or the other.
• If there’s nothing in front of a store, neighbors should be able to use the space for their businesses. The
landlords don’t have say over what goes in the street.
W AYFINDING
• Need wayfinding and signage to make sure people can find Ramona Street dining from University Avenue
• Signage and wayfinding are important
C URBSIDE L OADING A REAS
• Add more curbside loading along the west side of street between alley and University Avenue (move
closer to the barricaded section)
B IKES
• Add more bike racks, people lock bikes to trees
• Move the bike rack outside of the parklets and then use the space inside the closed street for living room
O THER
• Closing California Ave is a mistake. Friends who work right-off of California are having a hard time
with the street closure
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Focus Groups
R AMONA S TREET B USINESS O WNERS - 2 ND M EETING
April 26, 2023
A TTENDEES
Tim Pham Tea Time
Nancy Coupal Coupa Cafe
Ozzy Arce, City Palo Alto
Bruce Fukuji, Fukuji Architecture & Planning
Alexandra Lee-Gardner, Fehr & Peers
F EEDBACK
S TREET D ESIGN
• Customers want to be outside
• Businesses want to continue to support community needs
• Teatime issue with rain drainage
• Streets not level, water ponds
• Sidewalks are causing tripping hazards
• Pavement is really ugly
• Reallocate Ramona space to community use, Murphy Street in Sunnyvale as an example)
F UTURE S TUDY T OPICS
• Want City to study street drainage
• Want City to look into sidewalk improvements
• Want street resurfacing
• Want to see upcoming study topics
• Fire access and safety is there a possibility to access buildings from other areas to avoid Ramona Street
emergency access lane
• How to get City Council to make moves? (City: studies will arm council to make decisions and
demonstration projects will show City's commitment to improvements in the short term)
• Tim really good direction support - want City to continue work
• Want practical, streamlined solutions
• Remove parklet parking space regulations
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Focus Groups
C ITY C OMMISSIONERS – 1 S T M EETING
November 17, 2022
A TTENDEES
Peter Baltay: Architectural Review Board
Nia Taylor: Public Art Commission
Nellis Freeman: Parks and Recreation Commission
Caroline Willis: Historic Resources Board
Doria Summa: Planning and Transportation Commission
Osma Thompson: Architectural Review Board
Ozzy Arce, City Palo Alto
Bruce Fukuji, Fukuji Architecture & Planning
Nina Price, Fehr & Peers
C ONCERNS
P ROCESS
• Ensure that conversations with business owners and property owners are held separately.
• Involve businesses in the conversation
• Their investment will help with improve the vibrance street, you can use the street to benefit the
businesses. Their stakeholder perspective is valuable
S URVEY
• You cannot give the public this survey. It’s too complicated and interconnected and unclear. Ask
straight forward questions and make sure that they’re able to comment on the big issues.
• Ask, what are the six things you wanted to see on California Avenue
• Give people opportunity to understand questions
• There is a definitive number of things that we can accommodate, ask them what they want to see.
• What do we see the future role of this street? Show photo examples of streets
E XHIBITS
• The parking garage should be highlighted
• Show California Avenue from Caltrain to El Camino Real
• Show district context to adjacent street to discuss circulation patterns
O PPORTUNITIES
• Natural distance for music to travel, add outdoor music places
• Art needs to be meaningful
• Nicer banners that can be exciting
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Focus Groups
• It would be nice to have a designated bike use lane
• There needs to be focus on the pedestrian entrances so that it looks like something. The alleys aren’t
that cool, could use some investment in a better
• Activating the street as something that connects to the Caltrain station and is a first thing that you see
when you get to Palo Alto
• Thorough discussion about the balance of soft and hard scape. Can we achieve the design intent of
making it feel like a green space, even if the needs of the streets don’t make sense with only softscape
• See a study of maximizing soft scape
C ONCE RNS
• Need to amend parking ratios and allocations
• Merchant kiosks aren’t going to work
• The street is too long and straight. Could meander through
• The barriers are ugly, ongoing discussion
• There should be some linkage to Cambridge
• Need to think about short term parking for businesses and the other access issues that come with
loading, disabilities, and what can be accommodated to make sure that those people have access.
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Focus Groups
C ITY C OMMISSIONERS – 2 N D M EETING
April 27, 2023
A TTENDEES
Peter Baltay: Architectural Review Board
Nia Taylor: Public Art Commission
Nellis Freeman: Parks and Recreation Commission
Doria Summa: Planning and Transportation Commission
Christian Pease: Historic Resources Board
Bruce Arthur: PABAC
Ozzy Arce, City Palo Alto
Bruce Fukuji, Fukuji Architecture & Planning
Alexandra Lee-Gardner, Fehr & Peers
F EEDBACK
O UTREACH F EEDBACK
• Nellis – How many people responded to the survey (City: 356 people responded)
o Wanted to know geographic distribution
o More people coming into the office and would expect more traffic – when was survey was sent?
• Doria – Were there separate surveys? Did everyone that responded to both streets (City: yes, and yes)
o Wants survey results and would want in advance of meeting in the future
• Nia – Question about empty store fronts – what can the city do policy wise to disincentivize vacancies?
o Use art to activate the space while vacant – want thoughts on other ways to activate vacant
spaces
D EMONSTRATION P ROJECTS
• Nellis – How did this affect business owners’ opinions?
• Christian – Is Birch street open? How will traffic managed at the intersection?
o How are supplies delivered to restaurants and retail?
• Peter – Don’t see any consideration for temporary landscaping, was that considered? Why not for
demonstration projects?
o (City: did explore but not priority, does city have better contacts with garden club)
o It is a short coming to not include plants as they are cheap and enhance the character
o City has design standards on parklets – what is the effort for enforcement of standards?
What are you doing in flexible community spaces?
o Does it involve furniture?
o Who is designing that and selecting it?
o Will the City be purchasing it?
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Focus Groups
• Doria – we have an ARB involved that is well trained and poised to make landscaping decisions
o Flexible bollards are a no brainer
o Flexible community spaces could interfere with farmer’s market
o Conflict legally – private businesses putting seats in ROW and restricting people from using them
– how do businesses pay for public ROW?
o Adirondack chairs not consistent with historic character of area
o Want financial reviews and traffic studies
o Need shaded opportunities
• Doria and Nellis – Huge California Avenue with bikes
o Need better signage to manage bikes on the street
o More walk your bike signage
• Christian – compare crowds on Sunday farmer’s market vs other times on the street
U PCOMING S TUDIES
• Christian – circulation study expand to not just adjacent streets
o Bike paths – bike volumes at Park Blvd, look at the context
o Want outreach around that area what is happening at different times of day
• Bruce – want to consider bike circulation and how that affects commuters and bikes
o Want money and time for signs and paint
• Peter – wants to engage to involve with this demonstration project
o Could improve without getting too expensive
• Doria – beautify alleyways
o New restaurants can use that space
o City Hall plaza could use sprucing up
o Unused spaced near bike tunnel – why is it so unused?
• Nellis – want to be competitive with other jurisdictions
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Focus Groups
C ALIFORNIA A VENUE B USINESS O WNERS – 1 S T M EETING
December 1, 2022
A TTENDEES
Lara Ekwall La Bodeguita del Medio
Jessica Roth Cobblery
Franco Campilongo Terun
Miaco Campilongo Italico
Ozzy Arce, City Palo Alto
Bruce Fukuji, Fukuji Architecture & Planning
Nina Price, Fehr & Peers
C ONCERNS
E XISTING C LOSURE TO V EHICLE T RAFFIC
• Worry City won’t be able to pull off closed street
• City first needs to address the vacancies
• Want street back open to cars and let people who want to pay for parklets have them
• Open to any solutions [a few restauranteurs]
• Closed street not active during the day
• Mobility issues by restrictions with closed street
• Want to pay a car to come right where a business is, also for ADA
• Need Uber pick-up spots
• Walkways are unsafe – no light, no electricity
• Many people want one way in
• Close on weekends
• Want to open street during planning process
M AINTENANCE
• For added chairs/street furniture – concern who pays and maintains
F ARMER ’S M ARKET
• Stores want to have outside stalls but prohibited during farmer’s markets
• Can market stalls face sidewalk to bring people to stores rather than blocking access to store
fronts
• Fire lane prohibits range of configurations
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Focus Groups
G OVERNANCE
• Rules to getting new businesses located on California Avenue are too restrictive, which
increases, not reduces vacancies
• Frustrated with lack of [City] responsiveness and broken promises
• Frustrated with conversations with no follow through
• City saved restaurants by letting them use the street to serve people during pandemic
• Want faster [permitting, responsiveness] process
• Want to take time to go through process
• [Some business owners are] not ready to discuss assets, opportunities, challenges
• Don’t believe city has money to do this or will do it on time
• Businesses wanting to organize
• Historic advocacy work to no avail
• Businesses are spending time and effort to fund Christmas decorations
• City promised to match $5k and never followed through
• City restrictive zoning is preventing new businesses [locating here]
• Want streamlined process and fees waived to help with [outdoor] electricity requirements
• [City] promised street investment early on in exchange of closing street
• Want to have closed street but don’t trust city to do it well, so would rather have it open
• Need to restore faith in City Hall
• Want consultant/staff to report back to council what local business needs are: signage at
barriers, prettier barriers, landscaping issues, one way street
H EATERS
• Heaters essential to outdoor dining during winter
• City required electric heaters to replace gas is expensive at $100,000 – $200,000 to do per
business
• businesses cannot pay for it à don’t have outside parklets
• No open fire gas flame in a tent (California does not allow gas flames inside or under tent)
• What if city provided electricity to businesses, asked in 2006 and 2007 – city said no
• Would like [City] to commit to putting electrical service on street for outdoor dining
B ARRIERS
• Need to replace orange plastic barriers
• Need to make orange barriers look prettier
• Orange barriers need to be clearly positioned to stop cars
• Businesses have been having to tell cars to not come in
• Doordash drivers park along orange barriers
• Signage needed at turn area where orange barriers are so people know where to drive to parking
U RBAN D ESIGN
• Compromise with one way street (slow traffic)
• Extend sidewalk with painting – temporary
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Focus Groups
• Allow restaurants to have structures – eventually to be permanent, need uniform design
• Don’t like temporary tents (don’t look very nice)
• Common pergola on either side of the street
• Add more tables and chairs
• One way street
• Cold weather – people aren’t using street, need heaters
• California needs to look open for business from El Camino Real and transit station
• One way street would improve access to businesses
• Landscaping continues to be neglected
• Need to be safe and attractive
F UTURE S TUDY
• Need to pose question to residents do you want street closed?
• Open to at least one way during this planning process
• Want to know budget before proposing design feedback
E CONOMIC D EVELOPMENT
• Gamelandia late hours open works with late hour dining
• Gain traffic from closed street outdoor dining with restaurants, need build on that
• Want to shop before after dinner
• Need to vitalize during the day
• Worried that retail won’t invest to area since there are blocks of vacancies
• Making a destination for during the day
• Add free WIFI
• Events during the day
• Invite busking
• Unclear about Streetsense’s role
P ARKING
• One way to parking structure
• Want parking
• Need signage to parking from El Camino Real
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Focus Groups
C ALIFORNIA A VENUE B USINESS O WNERS – 2 N D M EETING
April 26, 2023
A TTENDEES
Lara Ekwall La Bodeguita del Medio
Jessica Roth Cobblery
Franco Campilongo Terun
Miaco Campilongo Italico
Zareen Khan Zareen’s
Lisa Robins Van Vino Wine
Charlie Weindanz Palo Alto Chamber of Commerce
Dennis Kelly Protégé
Don Lundell Zombie Runner Coffee
Steve Uger Sekoya Palo Alto
Caglar Vural Kali Greek Kitchen
Ozzy Arce, City Palo Alto
Steve Guagliardo, City Palo Alto
Bruce Fukuji, Fukuji Architecture & Planning
Alexandra Lee-Gardner, Fehr & Peers
F EEDBACK
M A IN P OINTS
• Business interests not represented, heard or reflected
o “Car free” title for outreach = perception done deal
o Interests not reflected or represented as shown with no senior staff or City Council participation
o Need to be the highest priority voice in decisions on future of street
o Not seeing open-to-cars alternative(s)
o Opinion (of a few) that many other businesses are not participating due to lack of confidence in
City
o City mis-representing business owner’s opinion that they support street closure
o City breaking promises, no progress with street closure since Feb 2021 City Council action, no
options
o Need data on parklets, who willing to invest who benefits, who using (this assumes street re-
opens to cars alterative)
• Demonstration Projects
o No opposition to demo projects, some support
o Need events, social media destination to attract Stanford students
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Focus Groups
I NDIVIDUAL F EEDBACK
• Lara
o “Car free” title for outreach = done deal
o Where are multiple plans? One lane for traffic?
o How many businesses participated in outreach?
o Not expressing feelings of business owners
o Hearing from community that City is presenting impression that California Avenue businesses
want street closed
• Salik- (Zareens)
o Wondering how to market or plan events while the street is closed
• Steve
o Assumed pre-pandemic that street would reopen
o Concerned wording – you have a downtown opened to cars and it is people oriented
o Want to have cars driving by
o Will study what the street will look like if it were to reopen and have parklets
o Why making this more complicated
• Lisa
o Unease around car-free phrasing
o Timeline of feasibility study seems like a broken promise
o Is there work being done about working being done right now on the street
§ Want better signage to prohibit bikes – unsafe that they wiz by
o Need better detour signage (can’t turn on California Avenue)
• Dennis
o Missed meetings because not included in emails
o Want businesses need to be the loudest voice – ignoring what most important voice
o Businesses don’t involve in outreach because not confident that they are not being heard
o Feels like City has already made a decision
o Businesses don’t feel like they have a voice, oppose closure
o Lack of confidence in City, process is waste of time, insulting
o Pandemic over, not go backwards
o Businesses need to vote
o 20 months just singular idea
o Only have junior staff at this meeting, but senior staff and council at community meeting
• Salik
o Like demo projects
o Really like the ground plane artwork
o Bonfire nights
o Music event or concert to attract Stanford students
o Need destination for social marketing, Instagram photo place
• Steve
o Unfair to businesses that they have to sacrifice road and storefront while community members
don’t have to pay
o Palo Alto already has parks, unfair have here
o Attract – think that opening streets to cars will attract
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Focus Groups
• Jessica
o Love some ideas and presented some of them a while ago (she raised some money between 6k
and 20k)
o Business down 37% from pre-pandemic
o Events help promote businesses such as at Santana Row
o Need public restrooms
o Want to have more business representation
o Want City to talk to businesses asking if this has been successful to them?
o Paint the street – start with little square and want to paint the whole street – will help with temp
in the summer
o Support for the bollards
o Question about possible plans for a street open to vehicle traffic
• Other comments
o Need more dialogue about possibility of open vs closed
o Study businesses participation in parklets, who is benefiting and who is using parklets
o Has city talked to businesses to see who is willing to invest in outdoor parklets
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C OMM UNITY MEETINGS
Two community meetings were conducted. The first meeting was a Community
Workshop on December 7, 2022, attended by approximately 60 people. The meeting
was 90 minutes, comprised of a presentation with an hour of facilitated small group
discussion focused on two questions:
1. What concerns you most about the closure of California Avenue and Ramona
Street to vehicle traffic?
2. If you can have anything on California Avenue and Ramona Street, what would
attract the most people to visit and spend time?
The second meeting was conducted on-line via Zoom and attended by 32 residents. The
meeting was 90 minutes, focusing on their validation of outreach findings and feedback
on proposed demonstration projects and upcoming studies.
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Community Meetings
C OMMUNITY W ORKSHOP
A TTENDEES
60 community members
Pat Burt, Mayor
Lydia Kou, City Council
Ed Shikada, City of Palo Alto
Ozzy Arce, City Palo Alto
Sylvia Star-Lack, City Palo Alto
Philip Kamhi, City Palo Alto
Nathan Baird, City of Palo Alto
Molly Boyes, City of Palo Alto
Bruce Fukuji, Fukuji Architecture & Planning
Alexandra Lee-Gardner, Fehr & Peers
Nina Price, Fehr & Peers
F ACILITATOR S UMMARY O F C OMMUNITY P OINT OF V IEW
C LOSURE TO V EHICLE T RAFFIC
• Overall favor closure and want it extended to longer roadway segments
• However, don’t get to drive by and see businesses
P EDESTRIAN /BIKE SAFETY
• Too many bike/pedestrian conflicts with closed street, bicyclists feel pedestrians in way and pedestrians
scared of bikes going too fast
• Need environment safe for both pedestrians and bikes
• Need safe bike facilities and connectivity at both ends (El Camino Real and too narrow California Avenue
tunnel)
• Need bike facilities and parity amongst travel modes that is clear, consistent, safe and efficient
• California Avenue is a bicycle corridor, need to connect Caltrain to Stanford
U RBAN D ESIGN OF S TREET AS A W HOLE
• Orange barriers are ugly, turn away visitors and are not welcoming
• Overall, there’s a lack of foot traffic throughout the day
• Need to consider how to use, beautify, clean-up alleys to access businesses with California Avenue closed
to cars
• Need ideas for park/plaza space, make open space active, bigger tents, and activities for when it rains
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Community Meetings
• Need consistent, planned, unified space
• Need weatherizing [so useable outdoor space all year round]
• Add lighting so safer at night
S IGNAGE AND W AYFINDING
• Need signage and wayfinding so businesses can get attention [event banners, closed ends need to say
check this spot out, attract and distribute customers]
• Need digital presence (encourage incidental shopping while on California Avenue)
P ROGRAMMING
• Need variety events – music, theater and capitalize on temporary space for community groups, such as
first Friday to support creativity
• Need better ways to serve youth – park space, living room, programmable space
E CONOMIC D EVELOPMENT
• Need small business support
• Need equity on who gets access to the parklets and outdoor dining spaces, ¼ business get parklets
• Need anchor stores, such as Apple Store
• Need economic development to create a destination, no main draw, no main business, no destination
getting people there – that is the priority.
C OMMUNITY C ONCERNS BY T OP IC
T RANSPORTATION
• Street Design
o Orange barriers are ugly and tacky
o Street is not convenient
o Lots of pavement
o [Existing street design is] obviously a throughway for cars
• Auto Access/Closure
o Overall, favor closure and want extended to longer roadway segments
o Concerned closure will go away
o Don’t get to drive by and see businesses
o Concerned that street will not remain car free
o Don’t bring cars back
o Open cross streets to improve access, circulation concerns, back-ups on Ash Street
o Cut off from closed California Avenue
o Love that California Avenue is closed
• Bikes
o Bike access with ped safety
o Ideally, allow bike riding (not just walked) but at a reduced pace
o If bikes cannot be ridden, provide parity with walking and driving, but create an alternate that is safe
and efficient as a cross-town route on a parallel street
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Community Meetings
o Bicycle facilities on street, connecting El Camino Real to and from the tunnel
o Not allowing bikes inconsistent with city bike plans
o Need control for bikes (commuter bikes especially), they conflict with pedestrians
o Cyclists don’t feel accommodated, add a bike lane
o Add something where bikes and scooters coexist
o Don’t like bicyclists disobeying the walk your bike signs
o Alternative routes are not safe or convenient
o Cyclists not in favor of speed bumps
o Center street for bikes and peds mixing
o Bikes going fast
o Like Castro where bike space is not established?
o Narrow tunnel – bikes can’t get thru
o Farmer markets: Cambridge for cyclists is dangerous, remove parking from Cambridge for cyclists
during farmer’s market
• Pedestrians
o Coordination and routing of bikes and peds, how to be a safe multimodal street.
o Overall, there’s a lack of foot traffic throughout the day
o Older people need shorter walking distances from parking
o Disabled access – could design be better?
o How to attract pedestrians to sidewalks
• Active Mobility
o E-bikes, scooters, skateboards are too fast
• Alley Access
o Add rear entrances from parking lots so that parking is more convenient, shorter walking distances
• Transit
o Train station nearby
• Emergency Egress
o Any flexibility around emergency access lane?
• Service And Delivery
o Delivery access
o Improve back-of-house access via alleys and possibly provide early hours freight access on California
Ave
• Parking
o Parking minimum restricts retail
o Parking available
P ROGRAMMING AND E VENTS
• Outdoor summer concerts (love music from restaurants)
• Farmer’s market successfully attracting people to California Avenue
• Performers are a draw
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Community Meetings
• Performance space at Ash and California Avenue
• Regular events and activities, surprised there’s no programming
• Events could help distinguish
• Bummer that trick or treating didn’t happen this year
U RBAN D ESIGN
• There seems to be a limitation on tent size which does not provide enough internal, covered space during
rainstorms
• [Like} Community feel of car-free
• Fair but realistic allocation of space
• Haven’t learned how to keep streets alive?
• It has been an important place
• Improve the functionality
W AYFINDING
• Not enough wayfinding and signage
• Need more signage where pedestrian walkways from parking areas meet the street
• Need signage/wayfinding compatible with winter tents
• Better wayfinding is required adjacent and prior to street closures to reduce conflicts where vehicles
unexpectedly encounter closures and stop traffic or need to perform ~15-point turns in front of businesses
with their own parklets
• Poor signage, low visibility of shops and options
• No signage directing customers to the parking garage or special single lane traffic leading to the garage (new
customers are 60-65% of base)
A ESTHETICS
• Not yet a complete attractive streetscape
• Back alleys not attractive and should be included
• Design consistency, allow outdoor dining while addressing original issues with more concrete and consistent
policy/guidelines
G OVERNANCE
• Restrictions have made it challenging
• Gas issue, extent of where things can be set
• Cleaned streets, planters not maintained, more trees
• Communication with residents and businesses – booth/poster at farmer’s market
• Smoke shop – nonsmoking street
• Dogs without consequences
• Need to get emergency-order level dining back
R ETAIL
• Can’t get to stores and bank
• Bank closed and relocated out of the way
• Retail is suffering
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Community Meetings
• Restaurants busy during the day on Friday
• Dive bar/amusement activities
• Wants things to stay open later
• Lack of staffing
• No medical offices
• Art/movie theaters
• Outdoor tents for restaurants
• 2:15pm is dead on California Avenue
• Loss of retail – prices need to be competitive to succeed.
• Movie theater, bookstore, bakery, pharmacy, bank
• Convert theater back to a theater
E CONOMIC D EVELOPMENT
• Establish business district
• Viability and loss of retail
• Decline of retail not caused by but associated with street closure
• Drawing visitors from outside Palo Alto
• Opportunity for design
• Which businesses benefit?
• Economic Development ideas – new ballet school, game store, hardware store to emphasize
• California Avenue competes with University Ave, Stanford mall, Castro Street
• 5 stories of housing to activate
H EATERS
• Energy of heaters
• No tents and no heaters will mean loss of outdoor dining for winter while covid grows
• No tents and no heaters will mean loss of outdoor dining for winter while covid grows
• Emissions from heaters not consistent with vision zero aspirations
• Heater prices increasing
R AMONA S TREET
• According to a local restaurant owner, visitors appreciate the safety and feeling of community offered by the
street closure
• Cars turning around in front of the Wine Room, and related confusion and congestion, is an issue.
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Community Meetings
C O MMUNITY I DEAS ON H OW
T O A TTRACT P EOPLE T O C ALIFORNIA A VENUE & R AMONA S TREE T
T RANSPORT
• Improve ease of access to destinations along California Avenue
o Potentially one-way traffic from ECR
o Drop off and loading zones
o Backdoor access for delivery – time divided access/management plan
o Loading and ADA access along Ash St.
o More bike racks where people need them
• Improve mobility
o Bike lane on parallel street
• Improve safety
o Stripe for bikes and add rules like bike speed limits
o Meandering bikeway thru emergency lane?
o Raised crosswalks
• Expand the street closure to cover all of Ramona
P ROGRAMMING AND E VENTS
• Activities
o Continue, expand music
o Add games
o Outdoor summer concerts (love music from restaurants)
o Event programming, fashion shows
o Playground
o Youth center for the interim period between lunch and dinner to activate the street
o Theater with beer and couches – entertainment like that
o Walking tour with wine party on California Avenue after
• Management
o Need Winter/summer programming consistent tenting areas for vendors
o Provide coherent holiday/outdoor decoration or consistent thematic programming
o Provide programming like “Forward Los Altos” (“First Fridays”)
o Create cultural venues where artistic events can be held that draw people to the
street
o Music! Allow for restaurants to communicate their scheduling, add public music
venue
o Need chairs, variety of music (amps not required)
o Programming needed for events and activities
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Community Meetings
o Events, live music, art, things to do
o Seasonal events, especially winter events (skating rink, xmas decor)
o Downtown Los Altos has good events, Mountain View has its cross-streets open
• Locations
o Spread out events/music along the streets so bands/musicians do not compete
o Are there options to leverage temporarily vacant spaces for this kind of thing?
o Outdoor entertainment
o Use country sun as the hub for renting games
o Farmer’s market during the weekdays
o A place to watch sporting events
o Provide places for bands to play (in Los Altos, they play for free but can receive tips)
U RBAN D ESIGN
• Places
o Go for a full plaza design and sense of place
o Outdoor living rooms
o Outdoor patios and seating
o Store stalls outside (e.g., hardware store)
o Outdoor tents for restaurants
o Enliven the alleyways (Mimosa Lane) with stage, games, murals, general
beautification
o Living room space on-street
o Attractive back alleys
• Landscape
o Shade, landscaping, trees
o Big trees on the corridor
o Transition to more park-like
o Change out the landscaping to improve ambiance, big trees in the middle
o Replacing concrete with turf
W AY FINDING
• Billboard/attractions to draw visitors in
• Wayfinding signs to both garages and street
• Signage to shopping from Cambridge and Sherman
• Wayfinding on street (like a mall map)
A ESTHETICS
• Character
o Community feel of car-free
o Street still feels like a street, tents coming down didn’t help
o Visually interesting, not just an empty street
o Unification, consistency, beautification
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Community Meetings
• Aesthetic elements
o Murals
E CONOMIC D EVELOPMENT
• Establish business district
• Housing
o Add housing
o Housing (small units for young people) could help revitalize
o Add housing between Caltrain and ash to activate
o Add housing for young and old to activate
G OVERNANCE
• Provide City of Palo Alto support for web presence
• Consider tapping into the chamber of commerce
• Create small business support
• Communicate at farmer’s market
• California Avenue merchants should restart their organizations
R ETAIL
• Retail outdoors, will benefit from having people walk in front of the stores
• Yogurt shop
• Retail – coffee, ice cream
• Art/movie theaters
• Convert the theater to a theater
• Destination tenant
• Kid-friendly businesses and attractions
• Ice cream store (relax parking requirements)
• Bookstore, knitting store, stores with workshops and classes
• Yoga converted to ballet school, hardware store is here now
• Boba shop is attracting youth on bikes
• Loss of the art store
• Don’t let store fronts become office/tech companies
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Community Meetings
2 ND C OMMUNITY M EETING
April 27, 2023
A TTENDEES
32 community members
Ozzy Arce, City Palo Alto
Sylvia Star-Lack, City Palo Alto
Philip Kamhi, City Palo Alto
Bruce Fukuji, Fukuji Architecture & Planning
Alexandra Lee-Gardner, Fehr & Peers
O UTREACH FEEDBACK
• Jon (resident)
o What kind of feedback do you want?
• Carol
o How was the survey distributed?
o Concern survey biased to reflect people who go to restaurants (so, of course, they want
restaurants)
§ Want more information on people who don’t go there and why
§ The place is dead during the day – what would get people there without a meal?
o Ramona Street (has downtown employment) is very different than California Avenue (by itself)
• Rose (resident nearby)
o Little city of its own, before covid we had very successful restaurants – they don’t have to be
outside to be successful
o Physically challenging because its crowded – very narrow for bikes North Ash St.
§ Especially cars have trouble maneuvering because of cars double parked along orange
barriers
§ Empty parking spaces
o Hard to get to post office
o Traffic light has long red light at El Camino and California Avenue despite minimal traffic
o Doesn’t think restaurants need so much outdoor space
o Against street closure
• Sonia (10 year resident)
o Closing down the streets is amazing – all friends seek it out and spend time to walk
o Plenty of parking near by
o Walk in groups – like no traffic, stroll baby, easy walk
o At night vibrant with outdoor dining at night
o What can she do to keep giving her feedback to influence decisions
o Friends with restaurant owners – say closed streets has improved business
• Deborah (resident)
o 26 observation sessions on California Avenue
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Community Meetings
o The fact that there are no cars is helping to the life of the street
o Closed street is not cause of retail closure, loss of office workers
o Pro closed street
o Does not want to eat indoors – prefers to eat outside
o (Carol Garsten and Sonia gave thumbs up)
o Retail needs to adapt to times – open later
• Steve (Ramona resident)
o Findings are consistent with his feelings
o Ramona: go for restaurants and cafes – love eating outdoors; don’t like eating indoors; worried
about covid eating indoors
§ Want to see music and want to have closed street
o California Avenue: go to farmer’s market and country sun – like restaurants
§ Don’t have any issue with parking
§ Retail was declining because of WHF and online shopping
• Agree that economic findings that zoning restrictions need to be lifted for retail
development
o Keep streets closed and bring activity
• Patrick (resident)
o Supports Sonia points
• Michael
o Seem to capture what was discussed
o Want survey about rental prices - ground level units at California Avenue hotel are vacant
§ Attract retail if price is right
• Sharon Murphy (College Terrace long-time resident)
o State of California Avenue is consequence of many things – on-line shopping, Covid
o Street is dead midday - park is nearby for children to play
o Don’t write off California Avenue because of retail
§ Town and Country most vibrant
§ Don’t have to use whole street – can use sidewalks
§ Don’t need to close street
§ Want city to support retail in other ways
o Not worried about covid
o Don’t want to drive to get things but wants street open to cars with outdoor eating
o Need alternatives
• Ben (resident)
o Car free streets are huge improvement
o Love going and outdoor dining
o Only do outdoor dining
o Not dead in the middle of the day
o Quite active in the middle of the day more active than pre pandemic (thumbs up from Sonia)
o Find easy to get to and parking
o Want to look into further car free streets in palo alto
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Community Meetings
D EMONSTRATION P ROJECTS AND U PCOMING S TUDIES F E EDBACK
• Steve
o Love them and hope the city gets them going
o Omission of zoning and permitting – want City to add that to the list of the upcoming studies
o Need to be partnered with economic development to be successful
• Elizabeth
o Liked the look of the demonstration projects
o Concerned for bike lanes
o Similar physical barriers between ped areas and bike lanes
§ Peds don’t realize they are wandering into the bike lanes
§ Stop signs for the bikes
• Carol – want more information on traffic study
o People like to get cars to get to a car free streets
o Want to know how much traffic will go through residential neighborhoods
o Fire access
o Restaurant delivery
o Construction on adjacent areas – would cause additional street closures
o Want to see alternatives – full closure, one-way, open
• Deborah
o Flexible community spaces in front of dance studio is perfect location
o Don’t want game play area way off in the corner by El Camino Real
o Bikes go through flexible space in front of nut house, take off plan
o Street is designed for car traffic – want to remove islands
o Bikes were good about negotiating pedestrians
o Only issue when there was lack of sight distance
• Ben
o Fames area not a priority but one idea is shuffle board courts
o Seen work well in other areas and engages people of all ages
• Rose
o North/south bike way at Park Avenue – California Avenue is important for transportation,
emission reductions and GHG goals
o Nothing is more important than protecting the environment
• Carol (resident)
o California Avenue is the place that I like to go – former retail business owner
o Founder Downtown Los Alto first Friday – will start music event on California Avenue
o Third Thursday music event on May 18
• Mauro (frequent visitor)
o Timeline - when it will be decided if closed or open?
• Patrick
o Remove the white traffic and parking markings
o Improve the attractiveness of ingress from parking structures
o Businesses have trash on streets
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Community Meetings
§ (thumbs ups from Sonia)
o Bicycles will not observe stop signs if added
K E Y P OINTS
• Meeting demographic: long-term residents, frequent visitors of California Avenue
• General support for closure, like outdoor dining
• Support for retail, recognize impact on-line shopping, covid on retail, need lift zoning restrictions
for retail, economic development partnership to be successful
• Concerns on pedestrian/bike conflicts, important role California Avenue in bike network
• Debate on how dead California Avenue is mid-day
• Want alternatives – closed, open, one-lane, with traffic and parking analysis
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S URVEY RESULTS
The on-line survey was conducted from December 7, 2022 to January 9, 2023. 617 people
viewed the survey with 356 responses with approximately 18 hours of public comment.
A total of 15 questions were asked to solicit opinions of California Avenue, Ramona Street
and demographics.
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Survey Results
C AL IFORNIA A VENUE
1. How often do you visit California Avenue?
67% of respondents visit California Avenue at least once a week, with 1/3 visiting several times a week, so
respondents are predominantly regular visitors.
2. What brings you to California Avenue?
The predominant reasons that bring visitors to California Avenue is dining for 90% of respondents, and 2/3 attend
the Farmer’s market. Half of respondents go grocery shopping or to a café. Retail shopping is at approximately
40%. Interestingly, ¼ of respondents use Caltrain and 24% use professional services, showing diversification of
reasons to be at California Avenue. More respondents visit for the arts/entertainment at 10% than employment,
at 5% and even less go for government or non-profit reasons.
3. What Concerns you the most about California Avenue today and in the future?
Too many vacancies and loss of retail are primary concerns, at 46% and 39%, with almost a ¼ of respondents
feeling the area is underutilized, and 15% feeling there are no appealing storefronts and buildings. 30% of
respondents observed there are no people gathering spaces, and over 1/3 felt there were other concerns not
listed in the survey. Alternatively, little concern was expressed on the visibility of the store fronts to motorists
driving along the street at 8 %, or insufficient parking at 6%.
4. If you can have anything on California Avenue, what would you want long-term?
The overwhelming response was continuation of outdoor dining, at 82%, followed by 2/3 of respondents wanting
public places with seating at 62%, and music at 62%. Slightly less than half want to see public art (47%), retail
vendors and kiosks (44%), and programmed events and activities 42%. Over ¼ of respondents want to see
children’s play areas (26%), and almost 1/3 would like artisan stalls (29%) and food trucks (32%). Slightly less
than 1/5 expressed interest in adult games and sports.
5. If you were to test creative, flexible interim street design prior to permanent improvements,
which options would you want to explore?
The predominant preference is for closure of the street to all car traffic except emergency vehicles, at 79%. A
pedestrian promenade (71%) and public plazas with street furniture including movable chairs, tables, planters and
lighting (69%) are preferred urban design options to explore, followed by identifying locations for future trees and
nature areas (53%) and bike lanes (52%). Slow low traffic volume two-way access to local businesses (10%) and
partial closure to one lane vehicle access to local business (9%) were the least desired options of respondents.
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Survey Results
R AMONA S TREET
6. How often do you visit Ramona Street?
30% of respondents visit Ramona Street at least once a month, with 1/4 visiting at least once every six months.
26% of respondents are regular visitors at least once a week. 18% visit at least once a year.
7. What brings you to Ramona Street?
The predominant reason that bring visitors to Ramona Street is dining for 81% of respondents, and over half visit
a cafe. 1/3 of respondents visit for retail shopping.
8. What Concerns you the most about Ramona Street today and in the future?
The predominant concern of 1/3 of respondents is the lack of people gathering places (34%). Too many vacancies
and loss of retail are concerns, at 26% and 24%, followed by not enough parking at 21%. The road closure barriers
are of concern for 16% of respondents. ¼ of respondents felt there were other concerns not listed in the survey.
9. If you were to test creative, flexible interim street design prior to permanent improvements,
which options would you want to explore?
The predominant preference is for closure of the street to all car traffic except emergency vehicles, at 70%.
Expanding outdoor dining, (58%) and creating an urban public space (55%) are preferred urban design options to
explore, followed by identifying locations for future trees and nature areas (48%) and bike lanes (42%). Slow low
traffic volume two-way access to local businesses (10%) and partial closure to one lane vehicle access to local
business (12%) were the least desired options of respondents.
10. If you can have anything on California Avenue, what would you want long-term?
The preferred response is creating an outdoor dining destination, at 70%, followed by 61% of respondents
wanting planting and streets trees that complement the historic buildings. Over half want to maintain the historic
character and scale of the street (56%) and small-scale public spaces with seating (56%), followed by 43% wanting
to see high quality design.
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Survey Results
D EMOGRAPHICS
11. How old are you?
Just under half of the respondents are over 55 years of age, and the other half of respondents are adults 25-54.
12. Where do you live?
Over half work within a short 5–10-minute bike ride of California Avenue (54%). 16% work within a short 5–10-
minute bike ride of Ramona Street in Downtown Palo Alto. Ten percent of respondents work at Stanford at less
than 2%, other areas not within walking of cycling distance of California Avenue at 6%. Surprisingly, 15% of
respondents live outside of Palo Alto.
13. Where do work?
Approximately 1/3 work within a short 5–10-minute bike ride of California Avenue. Slightly over 20% live within a
short 5–10-minute bike ride of Ramona Street in Downtown Palo Alto. Approximately 25% work at Stanford
Research Park (14%) and Stanford University (11%). One quarter of respondents work outside of Palo Alto 26%
and ¾ of respondents work in Palo Alto.
14. Do you own a business in Palo Alto?
99% of respondents do not own a business in Palo Alto. Only 5 respondents of 356 own a business on California
Avenue or Ramona Street.
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A PPENDIX A - C OMMUNITY W ORKSHOP C OMMENTS
S UMMARY OF C OMMENTS BY T ABLE
TABLE 1
F ACILITATOR HIGHLIGHTS P HILIP
• Local retail businesses hurting
• loss employees from Stanford Research Park
• Need to consider how to use, beautify, clean-up alleys to access businesses with California
Avenue closed to cars
• need safe bike facilities and connectivity at both ends (El Camino Real and too narrow
California Avenue tunnel), need ped/bike safety
• Too many of the same uses salon, gyms
• Need more diverse uses and services such as low cost food options
C ONCERNS
• Energy of heaters
• Drawing visitors from outside Palo Alto
• Bike Access (balancing with ped safety)
• Opportunity for design
• Which businesses benefit?
• Decline of retail not caused by but associated with street closure
• Questions about the building owners and impacts to renters
• Fair but realistic allocation of space
• Haven’t learned how to keep streets alive?
• Don’t get to drive by and see businesses
• Any flexibility around emergency access lane?
O PPORTUNITIES
• Potentially one-way traffic from ECR
• Billboard/attractions to draw visitors in
• Wayfinding signs to both garages and street
• Drop off and loading zones
• Music continuing
• Visually interesting, not just an empty street
• Replacing concrete with turf?
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TABLE 2
F ACILITATOR HIGHLIGHTS M OLLY
• Need bike facilities and parity amongst travel modes that is clear, consistent, safe and
efficient
• Need directions for cars and bikes
• Use alleys for back-of-house deliveries and pick-up/drop-off with freight/deliveries
management plan [like Pike Place Market in Seattle]
• Need signage and wayfinding so businesses can get attention [event banners, closed ends
need to say check this spot out, attract and distribute customers], including digital presence
(encourage incidental shopping while on California Avenue)
• Need weatherizing [so useable outdoor space all year round]
• Need small business support
• Need variety events – music, theater and capitalize on temporary space for community
groups, such as first Friday to support creativity
• Need ideas for park/plaza space, make open space active, bigger tents, and activities for when
it rains
• Need consistent, planned, unified space
• Need to address “haphazard” look and feel
• Barriers are temporary need to get to next stage
C ONCERNS
• Restrictions have made it challenging
• Gas issue, extent of where things can be set
• Not enough wayfinding and signage
• Need more signage where pedestrian walkways from parking areas meet the street
• Need signage/wayfinding compatible with winter tents
• Delivery access
• Improve back-of-house access via alleys and possibly provide early hours freight access on
California Ave
• Overall, there’s a lack of foot traffic throughout the day
• Coordination and routing of bikes and peds, how to be a safe multimodal street.
• Ideally, allow bikes to roll (not just be walked) but at a reduced pace
• If bikes cannot be rolled, provide parity with walking and driving, but creating an alternate
safe and efficient cross-town route on a parallel street
• Better wayfinding is required adjacent and prior to street closures to reduce conflicts where
vehicles unexpectedly encounter closures and stop traffic or need to perform ~15-point turns
in front of businesses with their own parklets
• Not yet a complete attractive streetscape
• There seems to be a limitation on tent size which does not provide enough internal, covered
space during rainstorms
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• Overall, all table members favored the closure and wanted it extended to cover longer
roadway segments
• Ramona:
• According to a local restaurant owner, visitors appreciate the safety and feeling of community
offered by the street closure
• Cars turning around in front of the Wine Room, and related confusion and congestion, is an
issue.
O PPORTUNITIES
• Games, etc.
• Aesthetic design
• Murals
• Go for a full plaza design and sense of place
• Winter/summer programming consistent tenting areas for vendors
• Provide coherent holiday/outdoor decoration or consistent thematic programming
• Provide programming like “Forward Los Altos” (“First Fridays”)
• Provide places for bands to play (in Los Altos, they play for free but can receive tips)
• Spread them out along the streets so bands/musicians do not compete
• Provide City of Palo Alto support for web presence, consider tapping the chamber of
commerce and/or creating small business support
• Create cultural venues where artistic events can be held that draw people to the street
• Are there options to leverage temporarily vacant spaces for this kind of thing?
• Expand the street closure to cover all of Ramona
• Backdoor access for delivery – time divided access/management plan
TABLE 3
F ACILITATOR H IGHLIGHTS J ONATHAN
• Mix of pro/not pro street closure opinions
• Need to draw people in and know about what is here with adequate wayfinding to and from
garages
• Need to drive by and see where to shop and businesses are there
• Need grand entrance
• Look for opportunities for pick-up and drop-off for TNC, family members, friends
• Concern regarding decline in general of retail and know it is a national trend not associated
with street closure, need to bench mark national trends
• Perhaps one-way vehicle traffic from El Camino Real
• Why all or nothing options for street closure
• Want to change behavior of how people use space
• Want this to be a go-to destination, 3rd place
• Need to be visually interesting
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• Require emergency vehicle access lane on farmer’s market days with a minimum 12-foot lane,
but this is always an ugly slab of concrete in the middle of the street
• Need equity on who gets access to the parklets and outdoor dining spaces, ¼ business get
parklets
C ONCERNS
• Bicycle facilities on street, connectors to El Camino Real and the tunnel
• Concerned that street will not remain car free
• It has been an important place
• Back alleys not attractive and should be included
• Improve the functionality
O PPORTUNITIES
• Shade, landscaping, trees
• Unification, consistency, beautification
• Attraction to back alleys
• Outdoor entertainment
• Outdoor living rooms
• Add housing
TABLE 4
F ACILITATOR H IGHLIGHTS A LLY
• California Avenue has changed a lot and feel loss of retail
• Typically go to California Avenue for one purpose, not multiple things at one time
• Community feels it is really different, reminisce about loss of bakery, movies, flowers
• Need to add new retail [price competitive]
• Some places failed were too pricy
• Too many bike/pedestrian conflicts with closed street, bicyclists feel pedestrians in way and
pedestrians scared of bikes going too fast
• Suggest parallel street for bikes solution, like outdoor living rooms, bring back summer
concerts
• Italian restaurant has live music, big draw
• Need business focus group
• Add lighting so safer at night
C ONCERNS
• Control for bikes (commuter bikes especially) – conflict with peds
• Cut off from closed ca lave
• Love that California Avenue is closed
• Cleaned streets, planters not maintained, more trees
• Prices increasing
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• Loss of retail – prices need to be competitive to succeed.
• Movie theater, bookstore, bakery, pharmacy, bank
• Narrow tunnel – bikes can’t get thru
• Parking minimum restricts retail
• E-bikes, scooters, skateboards are too fast
• Communication with residents and businesses – booth/poster at farmer’s market
• Smoke shop – nonsmoking street
• Dogs without consequences
• Restaurants busy during the day on Friday
• Dive bar/amusement activities
• Wants things to stay open later
• Lack of staffing
• No medical offices
O PPORTUNITIES
• Outdoor patios and seating
• Store stalls outside (e.g., hardware store)
• Yogurt shop
• Communication at farmer’s market
• Bike lane on parallel street
• Retail – coffee, ice cream
• Outdoor summer concerts (love music from restaurants)
• Art/movie theaters
• Outdoor tents for restaurants
• Establishing business district
• Community feel of car-free
TABLE 5
F ACILITATOR H IGHLIGHTS S TEVE
• Too many of the same uses salon, gyms
• Need more diverse uses and services such as low cost food options
• Closure of Nut House, now restaurant row
• Need discussion on access walking through dining rooms on sidewalk, even with on-street
options not comfortable and too narrow a space, also narrow for wheel chair access
• People walk down middle street, but retailers want people on sidewalk, others not care
where walking
• Need signage and way finding, when you park don’t know where to go
• Need to address “haphazard” look and feel
• Barriers are temporary need to get to next stage
• Tents are cold through winter, need to sustain patrons
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• Both bikes ped use same space, need to regulate that
• Need public restrooms, including Sunday Farmer’s Market which surge with people but to
succeed, need to get people there
• Need ambiance, that is welcoming with music, events that features music, to draw people in
• Need variety of shops, across use and price points, such as a local bar
• Need space to gather, like the 3rd space public living room
• Enjoy music, people congregate, more likely to get food, start virtuous cycle
• Need anchor stores, such as Apple Store
• Encourage circulation, alleys more welcoming space
• Create pub culture or tapas as in Spain.
C ONCERNS
• Don’t bring cars back
• Not allowing bikes inconsistent with city bike
• Viability and loss of retail
• Open cross streets to improve access, circulation concerns, back-ups on ash
• Poor signage, low visibility of shops and options
• Continuous changes to policies for outdoor dining are hard on businesses
• Nothing to get them thru the winter, need short-term solutions.
• No tents and no heaters will mean loss of outdoor dining for winter while covid grows
• Need to get emergency-order level dining back
• Design consistency, allow outdoor dining while addressing original issues with more concrete
and consistent policy/guidelines
• Emissions from heaters not consistent with vision zero aspirations
O PPORTUNITIES
• Add housing between Caltrain and ash to activate
• Loading and ADA access along ash.
• Signage to shopping center (Cambridge and Sherman) plus wayfinding on street (like a mall
map)
• Stripe for bikes and add rules like bike speed limits
• Retail outdoors, will benefit from having people walk in front of the stores
• Meandering bikeway thru emergency lane?
• Raised crosswalks
• Enliven the alleyways (Mimosa Lane) with stage, games, murals, general beautification
• Use country sun as the hub for renting games
• Farmer’s market during the weekdays
• Event programming, fashion shows
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• Music! Allow for restaurants to communicate their scheduling, add public music venue
• Convert the theater to a theater
• Destination tenant
• Kid-friendly businesses and attractions
• Ice cream store (relax parking requirements)
• Playground
T ABLE 6
F ACILITATOR H IGHLIGHTS N INA
• Restaurants need supportive policies to get through winter, covid cases rising, address tents,
heaters and electricity issues
• California Avenue is a bicycle corridor, need to connect Caltrain to Stanford
• Emergency order needs to return
• Need official bike infrastructure, like State Street in Santa Barbara
• Want opportunities for more music, public kid play stations, playgrounds, ice cream store
• Need to get rid of parking requirements
• Need hardware stores to put items out on the street to draw clientele
• To remain closed, need event programing
• Need economic development to create a destination, no main draw, no main business, no
destination getting people there – that is the priority.
C ONCERNS
• Center street for bikes and peds mixing:
• Bikes going fast
• Lots of pavement
• Obvious as a throughway
• How to attract pedestrians to sidewalks
• Like Castro where bike space is not established
• 5 stories of housing to activate
• Parking available
• Train station nearby
• New ballet school, game store, hardware store to emphasize
• Concerned closure will go away
• Convert theater back to a theater
• Farmer’s market successfully attracting people to California Avenue
• Performers are a draw
• Performance space at Ash and Cal
• Regular events and activities, surprised there’s no programming
• California Avenue competes with university, Stanford mall, Castro
• Events could help distinguish
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• Bummer that trick or treating didn’t happen this year
O PPORTUNITIES
• Housing (small units for young people) could help revitalize
• Living room space on-street
• Street still feels like a street, tents coming down didn’t help
• Chars, variety of music (amps not required)
• Big trees on the corridor
• Transition to more park-like
• Programming needed for events and activities
• Add housing for young and old to activate
TABLE 7
F ACILITATOR H IGHLIGHTS N ATE
• Concerned street closure could go away, support for it itself
• Not like a center lane for bikes, feels throughway not fitting for a plaza or closed street
experience, movement at odds of use of space
• Need to decide where to walk and bike
• Encourage use of sidewalk for pedestrians
• Support programming
• Need holiday tree lighting, music
• Enthusiasm for Gamelandia, hardware store
• Need mix of shopping at different price points 5-story housing [can bring people to] activate
space with [loss of] office workers
parking pain point is a visit over 2 – 3 hours, no way to park longer and have to pay for a $25
day permit
• Could do curb pricing
• Need better ways to serve youth – park space, living room, programmable space
• Need farmer’s market booth before end of year.
C ONCERNS
• Can’t get to stores and bank
• Bank closed and relocated out of the way
• Street is not as convenient
• Retail is suffering
• Older people need shorter walking distances from parking
• Disabled access – could design be better?
• Add rear entrances from parking lots so that parking is more convenient, shorter walking
distances
• Cyclists don’t feel accommodated, add a bike lane
• Add something where bikes and scooters coexist
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• Don’t like disobeying the walk your bike signs
• Alternative routes are not safe or convenient, there’s a tunnel at one end
• Cyclists not in favor of speed bumps
• Orange barriers are ugly and tacky
• No signage directing customers to the parking garage or special single lane traffic leading to
the garage (new customers are 60-65% of base)
• Farmer markers: Cambridge for cyclists is dangerous, remove parking from Cambridge for
cyclists during farmer’s market
• 2:15pm is dead on California Avenue
O PPORTUNITIES
• Events, live music, art, things to do
• Bookstore, knitting store, stores with workshops and classes
• Yoga converted to ballet school, hardware store is here now
• Change out the landscaping to improve ambiance, big trees in the middle
• More bike racks where people need them
• Youth center for the interim period between lunch and dinner to activate the street
• Boba shop is attracting youth on bikes
• A place to watch sporting events
• Seasonal events, especially winter events (skating rink, xmas decor)
• Loss of the art store
• California Avenue merchants should restart their organizations
• Walking tour with wine party on California Avenue after
• Downtown Los Altos has good events, Mountain View has its cross-streets open
• Don’t let store fronts become office/tech co’s
• Theater with beer and couches – entertainment like that
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Option Value and Storefront Vacancy in New York City∗
Erica Moszkowski†
Job Market Paper
Daniel Stackman‡
November 16, 2023
Click here for most recent version.
Abstract
Why do storefronts remain empty for more than a year in some of the world’s highest-rent
retail districts? Landlords with vacancies derive option value from two sources of uncertainty.
First, increasing downstream retail demand may drive up market rents tomorrow. Second,
different tenants may have different willingness to pay for the same space, creating an incentive
for landlords to wait for a particularly high rent offer. High move-in costs, search frictions,
and high contract dissolution costs for landlords amplify this option value. We estimate the
model parameters by matching quarterly vacancy rates, lease-up rates, and tenant exit rates
from a comprehensive, high-frequency storefront tracking service, combined with micro data on
commercial leases. In a counterfactual exercise, we find that reducing the variance of the match
quality distribution by 50% reduces long-run vacancy rates by 33% on average, while reducing
the variance of the aggregate state variable has almost no effect. Finally, we use the estimated
model to quantify the impact of a retail vacancy tax on long-run vacancy rates, average rents,
and social welfare. Vacancies would have to generate negative externalities of $18.72 per square
foot per quarter (about 30% of average rents) to justify a 1% vacancy tax on assessed property
values.
1 Introduction
Why do retail vacancies persist in high-value urban areas, where landlords with vacant storefronts
appear to forgo quarterly rents of $50 or even $100 per square foot? In Manhattan, the average
vacancy spell between 2015 and 2019 lasted 16 months, and only 50% of vacancies were filled after
one year. We build and estimate a structural model of storefront leasing to test possible reasons why
∗We are grateful to our advisors (Moszkowski: Edward Glaeser, Myrto Kalouptsidi, Robin Lee, Michael Luca,
and Ariel Pakes; Stackman: Christopher Conlon, Daniel Waldinger, Lawrence White, and Stanley Zin) for their
guidance and support. We also thank Sarah Armitage, Pedro Degiovanni, Elizabeth Engle, Harris Eppsteiner, Simon
Essig Aberg, Sarah Jacobson, Stephanie Kestelman, David Luberoff, Frank Pinter, Steve Sheppard, Yin Wei Soon,
Ron Yang, Anthony Yu, and participants at the Harvard Industrial Organization Workshop and the 2020 Boston
University Women’s Mentoring Workshop. Moszkowski gratefully acknowledges financial support from the National
Science Foundation Graduate Research Fellowship and the Harvard University Joint Center for Housing Studies.
†Harvard Business School. Corresponding author. Contact: erica.l.moszkowski@frb.gov.
‡NYU Stern. Contact: ds4584@stern.nyu.edu.
1
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Study 2023 (Erica
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Retail Vacancies Persist
May 2023 full paper)
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rents do not adjust more quickly to clear the market and fill vacancies. One possible explanation
is that search frictions make it difficult for landlords and tenants to find each other to transact.
Another is that landlords believe that they will be able to charge higher rents tomorrow relative
today because of changes in downstream retail demand. We find that a third story explains the
bulk of long-run vacancy rates: for (often unobservable) reasons, different tenants have different
earnings potential, and this different willingness to pay, for the same space. Because leases are long,
and eviction is costly, the value of waiting for a tenant with a high match quality for a particular
space can be very high. In a counterfactual exercise, we show that reducing the variance of the
match quality distribution by 50% would reduce the long-run vacancy rate by about 33% on average.
Reducing the variance of demand shocks plays a much smaller role.
In our model, vacant landlords search for potential tenants, who vary in expected profitability
and therefore willingness to pay for space. Agents receive new information about downstream retail
demand each period. When landlords encounter tenants, they make take-it-or-leave-it rent offers for
10-year leases, conditioning the rent offer on current and expected future market conditions. If the
tenant accepts the rent offer, they pay an up-front move-in cost and begin operating. Consistent
with the market norm in New York City, we assume that landlords cannot evict tenants who are
in compliance with their lease contracts.1 This constraint, combined with long lease lengths, makes
landlords highly selective when choosing among potential tenants. Search frictions prevent landlords
from examining all potential future tenants at once, so landlords choose to keep their spaces vacant
until they encounter a tenant with a sufficiently high willingness to pay.
While landlords’ exercise of option value determines when a vacancy ends, tenants’ exercise of
option value often determines when a vacancy begins. Unlike landlords, tenants in Manhattan can
unilaterally exit a lease at a low cost.2 In the model, tenants choose whether to continue or exit
each period. The asymmetric nature of lease dissolution costs creates option value for landlords and
tenants at different times: landlords have option value while vacant, and tenants have it while the
lease is in effect.
1 Anecdotal evidence from many market participants suggests that lease renegotiation before expiration is ex-
tremely rare (the exception being the months following the onset of the COVID-19 pandemic, which occurred after
our study period). This appears to be due to the fact that lease contracts underlie the loans landlords take out from
lenders, which are then securitized and sold to investors. See Glancy et al. (2022) for a longer discussion of constraints
to loan modifications for commercial mortgage-backed securities.
2 The basis for this assumption is discussed in section 3.
2
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Study 2023 (Erica
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Retail Vacancies Persist
May 2023 full paper)
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We leverage a dataset which tracks storefront vacancy and occupancy at a high frequency with
near-universal coverage of Manhattan storefronts. These data were collected by a mapping service
which employed and trained staff to verify storefronts’ status every four to six weeks. The high
frequency nature of this data not only allows us to compute vacancy rates for different neighborhoods
with a high level of accuracy, but also to observe individual storefronts’ transitions into and out
of vacancy. For estimation, we extend our time series of neighborhood-level vacancy rates with
vacancy rates reported by the New York City Office of the Comptroller. We observe contractual
rents and lease durations from a dataset which is crowdsourced from brokers. Our combined dataset
is essential for this analysis because vacancy and commercial rent data for most cities is not widely
available. City governments hold tax filings closely — New York has collected data on vacancy rates
from tax filings since at least 2007, but did not make this information public until 20193 — and
real estate brokerage firms cover much smaller, more highly selected retail corridors.
Our data generate several facts which ground the assumptions that we make when constructing
our model. First, retail leasing markets have substantial heterogeneity on both sides: different
tenants offer differentiated goods and services, and the highest and best use of each retail space
may differ based on location, size, zoning restrictions, and other characteristics. Much of this
heterogeneity is not attributable to characteristics observable to researchers, leading to unexplained
rent variation (which our model attributes to unobservable match quality and search frictions).
Second, leases in this market are long: 58% of retail leases in our sample have a contractual term of
10 years.4 However, most tenants exit prior to their contractual lease term: conditional on having
a 10-year lease, 20% of tenants have exited after two years, and 54.8% of tenants have exited after
five years.
We estimate the model using simulated method of moments, and develop a novel method which
allows us to handle unobservable heterogeneity in landlords’ individual states (including their current
match quality). Previous search-and-matching models of this type either assume a steady-state
environment so that the distribution of states in the market never changes (Brancaccio et al., 2020)
or observe heterogeneity (Vreugdenhil, 2020).
Our model allows us to quantify the extent to which our two sources of option value contribute
3 2019 is also the year the city began its public storefront registry in 2019 under Local Law 157.
4 By comparison, residential leases usually have a term of one year, and office leases have a term of five to seven
years.
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to long-run vacancy rates. In a counterfactual exercise, we scale down the variances of uncertainty in
downstream demand and heterogeneity in match quality. These variances are the sources of option
value – if there was no variation in downstream demand over time or in the match quality associated
with new tenants arriving each period, landlords would have no incentive to keep their properties
vacant. We find that heterogeneous match quality is the primary driver of vacancy rates over long
time horizons: scaling down the variance of the match quality distribution by 50% reduces long-run
vacancy rates by 33% on average, while reducing the variance of the aggregate state variable has
almost no effect.
Finally, we impose a counterfactual vacancy tax as a flow cost of vacancy for landlords and solve
for the new vacancy rate, distribution of rents, and distribution of tenant quality in the market. This
type of vacancy tax is currently under consideration in the New York State legislature.5 Proponents
of the tax argue that landlords who keep storefronts vacant depress local economic activity and pose
a threat to neighborhood safety by reducing the number of "eyes on the street" (Jacobs, 1961). They
view the tax as a Pigouvian measure which would cause landlords to internalize the impacts of their
vacancies on urban vibrancy. Retail vacancy taxes of this nature have been implemented over the
last decade in Washington D.C., San Francisco, and Oakland, California.
We find that the proposed commercial vacancy tax would indeed encourage landlords to fill
vacant spaces more quickly, reducing vacancy rates and retail rents. However, the tax would also
distort the set of stores present, with lower-earnings stores arriving at opportune moments crowding
out higher-earnings stores that might have arrived later. These lower-earnings stores are more likely
to exit, increasing retail churn and reducing welfare. We find that, in order to justify the proposed
tax, each vacant square foot would have to generate a negative externality of $18.72. This represents
about 30% of average rents, and is probably larger than the actual externality associated with retail
vacancy.
Related literature. Methodologically, our paper grows out of the recent literature estimating
dynamic search and matching models in various contexts. Dynamic search and matching models of
labor markets (Mortensen and Pissarides, 1994; Hosios, 1990) have been recently adapted to and
estimated in other settings, including taxis (Fréchette et al., 2019; Buchholz, 2022), global shipping
(Brancaccio et al., 2020), and oil and gas drilling (Vreugdenhil, 2020). We extend these models by
5 Senate Bill S2005/Assembly Bill A670.
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allowing for one-sided early contract exit, as well as developing an estimation method for contexts
in which agents’ individual states are not fully observed.
Because landlords are unable to exit leases unilaterally once they have been signed, our work
relates to the modern literature on the importance of uncertainty, adjustment costs, and irreversible
investment in various settings. Economists have studied these forces in the context of individual firm
investments (Dixit and Pindyck, 1994) as well as in business cycles (Christiano et al., 2005). In urban
contexts specifically, Capozza and Helsley (1990) examine the effect of uncertainty on equilibrium
land prices and housing rents in a growing city, finding that uncertainty affects prices even when land
owners are risk neutral. There is a growing literature quantifying the magnitude of these forces in
particular industries, including shipping (Kalouptsidi, 2014), manufacturing (Caballero and Engel,
1999), and, most relevant to this paper, real estate (Bulan et al., 2009).
We also build upon the long history of papers on industry dynamics. This literature consists of
many theoretical (Jovanovic, 1982; Ericson and Pakes, 1995) and empirical works (Pakes et al., 2007;
Bajari et al., 2007; Aguirregabiria and Mira, 2010; Kalouptsidi, 2014), in a variety of settings. In
retail, Jia (2008) studies the impact of Walmart entry on the exit of small firms, and Fang and Yang
(2022) study an entry game of competing chains. We focus not on competition between retailers
directly, but rather on how tenant entry and exit dynamics give rise to retail vacancy.
While growing literatures study the response of retail amenities to neighborhood demograph-
ics (Almagro and Domínguez-Iino, 2021; Couture and Handbury, 2020), gentrification (Su, 2022;
Couture et al., 2021; Glaeser et al., 2020), information externalities (Caplin and Leahy, 1998) and
the rise of e-commerce (Quan and Williams, 2018), most lack data on storefront vacancy. Our
work is not general equilibrium model of neighborhood choice with endogenous amenities, but is a
partial equilibrium investigation into the market between firms and consumers which retailers must
participate in before they can sell to final consumers in brick and mortar stores.
Finally, our paper belongs to a growing literature on the commercial real estate industry. Stan-
ton and Wallace (2009) show that a no-arbitrage lease pricing model is unable to explain the extent
of rent variation observed in the data across multiple property types. We document similar large
unexplained rent variation, and micro-found that rent variation with unobservable match quality
variation. Gyourko (2009) investigates similarities and differences between income-producing prop-
erties of all kinds and owner-occupied housing, finding that real price growth for commercial and
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single-family properties are strongly positively correlated. Liu et al. (2018) study vertical rent gra-
dients within office buildings, and Gupta et al. (2022) investigate the impact of remote work on
the commercial leasing sector during and after the onset of the COVID-19 pandemic. Other papers
(Glancy et al., 2022; Dinc and Yönder, 2022), focus on real estate financial markets. In the retail
sector, leasing in suburban malls is comparatively better-studied than in downtown urban areas like
Manhattan (Konishi and Sandfort, 2003; Benjamin et al., 1992; Brueckner, 1993; Burayidi and Yoo,
2021).
The paper proceeds as follows. Section 2 describes our data. Section 3 documents the insti-
tutional context we build into our model, which we present in section 4. Section 5 estimates the
model and reports the estimated parameters. In section 6, we quantify the relative strengths of
the frictions in our model by counterfactually shutting them down one at a time and looking at
the effect on long-run vacancy rates. Section 7 performs the counterfactual vacancy tax exercise.
Section 8 concludes.
2 Data
We leverage a novel dataset which tracks storefront vacancy and occupancy at a high frequency
with near-universal coverage of Manhattan storefronts. This dataset, constructed by mapping firm
Live XYZ, explicitly records the location and duration of vacancies, as well as detailed information
about tenants (when present). The Live XYZ dataset covers a limited time span, so we supplement
it with vacancy rates from the New York City Comptroller’s Office. We gather information on
rents and other contractual features from CompStak. Finally, to capture aggregate uncertainty in
downstream retail demand, we add industry-level GDP data from the Bureau of Economic Analysis
and the e-commerce share from the Census’s Monthly Retail Sales Report.
Data on commercial vacancy rates and rents has historically been very difficult for economists
to obtain. Without our dataset, there are two natural places to obtain it: city governments and
brokerage firms. City governments collect information on rent rolls in confidential tax filings, but
do not make this information publicly available. Real estate brokerage firms publish semi-annual
reports on high-rent retail markets, but these reports are not ideal for economic research. They focus
exclusively on highly selected retail corridors rather than on the city as a whole. These reports tend
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to report on asking rather than taking rents, and track storefront availability rather than vacancy.6
2.1 Vacancy and occupancy data
We employ novel data from Live XYZ on the occupancy or vacancy status of the near-universe of
Manhattan storefronts between 2016 and 2019. This dataset is key to our study of retail vacancy
because data on neighborhood retail vacancy rates is generally not publicly available. In many
cities, the government does not systematically collect vacancy data or (as in New York City’s case)
does not make it available to the public. Real estate associations such as the Real Estate Board of
New York publish quarterly market reports, but often report “availability” rather than vacancy, and
only for specific retail corridors (for example, Fifth Avenue between 42nd Street and 49th Street)
rather than entire neighborhoods (such as the Upper East Side) or zip codes. While many papers
studying retail rely on store trackers (such as Infogroup, Yelp, or Google Reviews), those datasets
do not record vacancies directly, and would have required us to infer vacancy from a lack of data on
occupancy. With the Live XYZ dataset, we do not have to infer that a storefront is vacant when
data on a given store is not included.
The Live XYZ panel allows us to observe not only the vacancy rate in each period, but also the
flow in to and out of vacancy, which are key moments we will attempt to match when we estimate
our structural model. The dataset tracks detailed information about each storefront’s occupant, or
lack thereof, over time, allowing us to construct a panel on storefront vacancy and occupancy at the
quarterly level. Specifically, Live XYZ’s dataset consists of a sequence of changes to a storefront’s
“state” over time. The state vector consists of an indicator for whether the storefront is occupied,
under construction, or vacant; the tenant that occupies it, if there is one; and whether or not the
tenant is operating, coming soon, closing soon, temporarily closed, or permanently closed. Each
state is labeled with its start and end date. The dataset also records the industry of the tenant
(for example, whether it is a restaurant or an apparel store), subcategory (for example, the type
of cuisine a restaurant serves), and its parent chain if it has one. Live XYZ tracks changes in a
storefront’s state by scraping individual store websites and Facebook pages, calling storefronts, and
physically visiting store locations.
6 Available spaces are those for which landlords are actively looking for new tenants. The availability rate tends
to be much higher than the actual vacancy rate because of direct store-to-store transitions.
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The main challenge with the Live XYZ dataset is that it covers a relatively short period of
time: the end of 2016 through February 2022.7 Therefore, most of the tenants we observe are either
installed in a space already by the time the dataset starts, are still in the space when the dataset
ends, or both. To avoid selection bias as the dataset is build up, we only use Live XYZ to compute
vacancy rates beginning in 2017Q1.
We report summary statistics on this dataset in table 1. We report the number of storefronts we
observe in each community district we estimate our model for. We observe a total of 21,811 store-
fronts across our 8 neighborhoods, and the average vacancy rate across quarters and neighborhoods
is 5.23%.
2.2 New York City Comptroller’s Report
We augment the Live XYZ occupancy data using zip code level data on retail vacancy rates from a
city report on retail vacancy (Office of the New York City Comptroller, 2019). The report provides
vacancy rates for each borough over the 2007-2017 period, as calculated from landlords’ annual
property tax filings. It provides the same statistic for select (but not all) zip codes.
2.3 Lease contract data
We combine our Live XYZ data with micro data on lease contracts from CompStak. These data allow
us to observe contractual rents for different retail spaces and in different time periods. In addition
to contractual rents, we observe a lease’s execution date (when the lease is signed), commencement
date (when the tenant moves in) and expiration date, the identity of the tenant, and the address of
the property. Our CompStak sample contains leases executed between 2005 and 2019.
The benefit of this data is that it gives us a broader picture of rents in a neighborhood than
data reported by commercial real estate (CRE) agencies. CRE agencies often publish quarterly or
semi-annual reports on the state of the leasing market, but they focus on relatively small and highly
selected retail corridors. The Live XYZ data contain leases from the retail corridors that CRE
brokers report on, but also contain leases for retail stores in more residential areas. CRE agencies
also typically do not report on other contractual features, including commencement and expiration
dates.
7 The dataset actually begins in 2015, but rapidly adds observations through the end of 2016.
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Rents are almost always quoted in nominal dollars per square foot, and are either constant over
the lease term or include fixed step-ups at predetermined dates. The main rent variable we use in
our analysis is “net effective rent”, which factors in both contractual rent increases and concessions
the landlord grants to the tenant. Where reported, rent step-ups usually occur every 1 to 3 years,
and are usually an increase in rent of a few percentage points. Landlord concessions take the form of
either tenant improvements (payments the landlord agrees to make to help the tenant renovate the
space) or months of free rent (time at the beginning of the lease when the tenant occupies the space
without making rent payments). Leases are usually executed the quarter before commencement.
Although the CompStak dataset gives us a relatively broad view of contractual rents within
a neighborhood, the data do have a few drawbacks. CompStak crowdsources lease information
from commercial real estate brokers, which means our dataset is likely to reflect a selected sample
of properties. Brokers are incentivized to share details from contracts they were involved with
because doing so allows them to access more lease comparables themselves. This means our sample
contains lease information primarily about deals that brokers were involved with and which are not
so sensitive that brokers are unwilling to share information about them. Anecdotally, though we do
not have data on the volume of non-brokered deals in New York, the majority of lease transactions
are mediated by brokers.
The crowdsourced nature of the CompStak dataset also means that our rent observations are
likely to contain measurement error. For example, brokers do not always report the full contractual
rent schedule or the lease concessions.
Although these data are imperfect, we believe they are the best data available for this analysis
(short of the Real Property Income and Expense filings which the New York City Department of
Finance holds very closely). From the CompStak microdata, we extract a time series of average
rents from leases executed in each quarter. When we estimate our structural model, we will treat
this time series as a moment to match.
Table 1 reports summary statistics from this dataset alongside the summary statistics for the
Live XYZ dataset. We have a sample of 7,991 leases for properties located in our 8 community
districts, all of which were executed between 2005 and 2019. Given that the CompStak data is
a sample of leases while Live XYZ covers the near-universe of storefronts, we observe many fewer
leases than storefronts in each neighborhood. We can see that some neighborhoods are better
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represented in our dataset than others: in particular, we observe the most leases in the three high-
end retail districts: Midtown (which contains Times Square and Fifth Avenue), the Lower West Side
(which contains SoHo and the Village), and the Upper East Side (which contains Madison Avenue).
There is also some selection over time. Figure 2 shows the number of leases executed each quarter.
CompStak itself entered in 2012, and the size of their dataset grows over time.
We note that, consistent with a standard notion of market clearing, there is a negative correlation
between average rent and vacancy rates: the neighborhood with the highest average vacancy rate
and the lowest average rent is the Lower East Side, while the Upper East Side has the highest rents
and the second-lowest retail vacancy rate.
2.4 Downstream retail demand
To incorporate aggregate uncertainty in downstream retail demand, we use industry-level GDP from
the Bureau of Economic Analysis (BEA). We also collect the brick-and-mortar share of retail sales
from the Census’s Monthly Retail Sales report.
3 Institutional Detail
We document four main features of the commercial real estate leasing market that contribute to
retail vacancy and will inform our structural model in section 4. First, commercial real estate leasing
markets have heterogeneous agents on both sides, and there is reason to believe this market has
substantial search frictions. search frictions. Second, renovating a storefront for a new tenant is
costly, and lease terms are long (10 years is most common) in order to create time to recoup these
costs. Third, tenants can unilaterally exit leases more easily than landlords. This creates option
value for the two parties at different times during their relationship: landlords have option value
while vacant, while tenants have option value while the lease is in effect. Finally, during our sample
period, the 90th percentile of rents is rapidly falling.
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3.1 Heterogeneity and search frictions result in rent dispersion
Real estate markets in general are characterized by high search frictions.8 These are markets in which
both landlords and tenants are heterogeneous, and finding a “good match” can be challenging. The
real estate brokerage industry exists to help ameliorate these search frictions, and make substantial
profits doing so.
Furthermore, rent dispersion across New York City retail leases is large, and cannot all be
explained by observable characteristics of landlords or tenants. Figure 3 shows the histogram of
real rents for each neighborhood in our sample, pooled across all periods. It shows that, in all of
our neighborhoods, rents have a long right tail. While most tenants pay between $10 and $50 per
square foot, in most neighborhood there is a small number who pay upwards of $75 or even $100
per square foot.
We use our matched sample of tenants to run a hedonic regression of rents on observable tenant
and landlord characteristics. Table 2 shows the results of this regression. Column (1) includes
transaction quarter fixed effects, column (2) adds tenant industry fixed effects at the 3-digit NAICS
level, column (3) adds zoning fixed effects, and column (4) adds census tract fixed effects. As
expected, statistical significance of the correlation between building-related characteristics and rents
mostly vanish once zoning and census tract fixed effects are added. The most persistently significant
coefficients are on the dummy for whether a store opens on to an avenue (a large thoroughfare
running north-south, rather than the smaller east-west street) and on whether the tenant is a chain
store. The term premium is statistically significant, which we expect to see because longer lease
lengths increases tenants’ option value. Finally, we find that there is a significant quantity discount
(tenants who rent more square feet of space pay less per square foot).
Even when we saturate the regression with fixed effects, these observable characteristics account
for 62% of rent variation overall and only 15% of rent variation in each cell. In our structural model,
we will explain this residual rent dispersion using search frictions and tenant heterogeneity.9
8 Han and Strange (2015) reviews several models of search and matching models in housing markets.
9 Deng et al. (2012) study the equilibrium effects of housing price dispersion on asking prices, using a theoretical
model similar to the structural model we will posit in the next section. We do not attempt to model this channel in
this paper, but note it as a possible area for future research.
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3.2 High move-in costs necessitate long lease terms
The retail real estate market is characterized by very long-term leases, even relative to other com-
mercial real estate markets. Figure 4 shows a histogram of lease lengths in our CompStak dataset.
Nearly 60% of leases have a contractual term of 10 years. The second most common lease length is
15 years (accounting for about 12% of leases in our data), followed by 5 years (accounting for about
9% of leases). By comparison, most residential leases carry one year terms, and office leases usually
have terms of five to seven years.
Retail leases carry long contractual terms in order to allow time for tenants to recoup high
up-front move in costs. Storefronts are a key part of a store’s visual brand, so retailers are willing to
invest in custom build-outs that help convey that image. This is especially the case in New York’s
high-rent retail districts (such as Madison Avenue, Fifth Avenue, Times Square and SoHo) where
large chains place their flagship establishments. Move-in costs can also include items other than
renovations, such as specialized equipment (restaurants often rent their large appliances), permit
fees, and advertising costs. Unfortunately, data on move-in costs is hard to obtain. We will treat
them as a parameter in our structural model.
3.3 Asymmetric contract dissolution costs exacerbate option value
Because tenants can exit leases unilaterally at any time during the lease term while landlords are
more constrained, tenants and landlords have option value at different points in their contractual
relationship: the tenant has option value during the lease, while the landlord has option value while
vacant. We seek to study the effect of a counterfactual vacancy tax on both the flow into vacancy
(tenants’ exit decision) and the flow out of vacancy (landlords’ lease-up decision). In this section,
our goal is to characterize the nature of the option value that landlords and tenants are able to
exercise, and how their option value contibutes to vacancy.
Although lease terms are long, most tenants actually exit prior to their lease’s expiration date.
Figure 5a plots a histogram of the tenant’s lease age at the time of exit. This plot is made from
the sample of 3,248 stores we are able to match across the occupancy dataset and the leasing
dataset, from which we observe 2,107 with 10-year leases and 462 exits over Live XYZ’s four years
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of observation.10 We can see that only about ten percent of the tenants in this sample actually
exit at exactly the ten-year mark. A very small sample of tenants (composing less than 5% of the
matched sample) appear to have renewed their leases, since we see them exit after their contractual
lease term. By far the majority of tenants exit early. Exit is more common at the beginning of the
lease; the most common age at exit is 2 to 2.5 years. Figure 5b shows that 20% of tenants have
exited after two years, and 54.8% of tenants have exited after five years.
Tenants are able to exit early at low cost because of a standard lease clause called the “good guy
guarantee.” This provision allows the tenant to provide the landlord with advance notice (usually
about 3 months) that they will leave the space on a given date, called the surrender date. The
tenant then pays all their rent obligations to the landlord through the surrender date, and vacates
the space. All rent obligations after the surrender date are then cancelled. This clause is common
because it benefits both parties: the tenant gains limited liability in the case of bankruptcy, while
the landlord does not have to worry about evicting a bankrupt tenant and is able to fill the space
again more quickly. Of course, the landlord does face a cost when the tenant exits (he stops earning
rents, and has to find a new tenant to fill the space), but the ubiquity of the good guy guarantee
suggests that on net landlords find it worthwhile to provide tenants with a cheap exit option rather
than risk needing to evict a nonpaying tenant.
By contrast, it is costly in time and money for landlords to unilaterally dissolve a lease. To evict
an unwilling tenant, they must go to court and show the tenant has broken the terms of the lease.
The eviction process takes a long time, and lawyers are expensive. This inability to unilaterally
dissolve an ongoing lease means that landlords are very selective when signing leases in the first
place. It is often worth it for landlords to remain vacant for several quarters if there is a good
chance that a high-paying tenant may come along later. The value of remaining vacant that results
from long lease terms and landlords’ inability to unilaterally exit from existing leases is what we
will refer to as "landlord option value" for the remainder of the paper.
Because landlords cannot exit a lease whenever they choose, signing a lease is similar to making
an irreversible investment under uncertainty, a la Dixit and Pindyck (1994). A central premise of
the real options literature is that there is option value in waiting for new information to arrive,
10 CompStak dataset only gives us contractual lease length and not the ex post amount of time the store stays in
the space. To determine ex post duration, we match leases to stores in the Live XYZ occupancy dataset, using name,
address, and dates of occupancy.
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so capital owners often delay investment and/or require compensation for that option value in the
form of higher rental rates. Bulan et al. (2009) show this mechanism is quantitatively important in
real estate development; our goal is to illustrate a similar mechanism at work in leasing markets for
existing buildings.
4 Model
In this section, we present our model of the storefront leasing market which incorporates the market
features described in section 3: search frictions, move-in costs, tenant heterogeneity, endogenous
tenant exit, and aggregate uncertainty. After estimating the model in section 5, we quantify the
relative importance of our two sources of option value in section 6. We will evaluate the consequences
of a counterfactual vacancy tax in section 7.
Our model is most similar to those of Vreugdenhil (2020) and Brancaccio et al. (2020), but we
differ in several ways. Vreugdenhil specifies a two-sided search and matching model with observable
heterogeneity on both sides of the market, and seeks to explain a pro-cyclical assortative match-
ing pattern. We assume that there is unobservable heterogeneity on one side of the market, and
focus on recovering the distribution of the unobservable match qualities. Our model also explains
endogenous early contract dissolution, which (as we documented in the previous section) is an im-
portant feature of the commercial real estate market that is not observed in other markets in which
search-and-matching models of this type are usually estimated. For example, the shipping model
of Brancaccio et al. (2020) assumes that traveling ships arrive at their destination with a fixed,
exogenous probability each period. Labor market search-and-matching models often assume that
job arrangements are at will. Our model of endogenous contract dissolution is relevant for other
settings with long contract terms where market participants cannot commit to a contract. This is
a prominent feature of life insurance markets (Hendel and Lizzeri, 2003) as well as many consumer
lending markets (for example, residential mortgages and auto loans).
4.1 Environment
We model the formation and dissolution of leases between landlords and tenants within a neigh-
borhood (which we refer to as a "market"). Each tenant needs only a single storefront to operate
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their business. Time is discrete and infinite-horizon. There is no information asymmetry between
landlords and tenants, and all leases have a contractual term of T periods. We assume that the
set of storefronts is fixed.11 Within a market, all landlords and tenants face the same distribution
of possible match qualities, but we allow the distribution of match quality to vary across neighbor-
hoods.
Every period prior to lease expiration, tenants choose whether to continue operating or exit the
market. Tenants base this decision on the realizations of two stochastic state variables: downstream
retail demand gt (which is constant across all tenants and follows a known Markov process), and an
opportunity cost φit (which is drawn iid for all tenants each period from a known distribution). If the
tenant continues, they earn gross profits (a function of the aggregate state and the tenant’s quality),
pay rent, and continue to the next period. If the tenant chooses to exit, they cease operating, and
earn their opportunity cost. Exiting tenants remain obligated to pay the current period’s rent under
the good guy guarantee. When a tenant’s lease ends, either by endogenous early exit or by reaching
the lease expiration date, the tenant exits forever.
At the beginning of each period, each landlord is either vacant or has an incumbent tenant i.
When the landlord is vacant, the lease is in its final period before expiration, or i has invoked the
good guy guarantee, the landlord draws a new potential tenant n with some probability. If the
landlord successfully draws or "matches with" a potential tenant n, they draw their match quality
with n,θln , from a fixed, exogenous distribution of potential tenants. Observing θln the landlord
either makes n a take-it-or-leave-it rent offer for a lease of fixed length T , or rejects them. If n
accepts the rent offer, they move in, sink move-in costs and begin paying rent in period t + 1.
The idiosyncratic state variable of a landlord includes its contractual rent due this period,r,
and the age of its current lease,j . If the landlord is vacant, then jlt =vacant and rlt = 0.
The aggregate state follows an AR(1) process:12
gt −μg =ρg (gt−1 −μg ) +εt εt ∼ N (0, σ 2
g )(1)
11 Davidoff (2010) notes that there is almost no vacant land left in Manhattan. Though existing buildings could
be redeveloped, especially if zoning restrictions were relaxed, we abstract from entry and exit of storefronts in this
model.
12 Note that this AR(1) process can be re-written as gt =δ +ρg gt−1 +εt where μg =δ
1−ρ . We choose to express
the transition of the aggregate state in terms of μg since μg is the long-run mean of gt .
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4.2 Payoffs and Behavior
Tenant flow payoffs Each landlord-tenant pair li draws a match quality θli which is drawn from
an exogenous distribution F θ after the tenant enters the market and is fixed for their lifetime. For
estimation, we assume F θ is lognormal with parameters μθ and σθ .
Let sit = (jit , rit , gt )denote tenant i’s state in period t.jit is the tenant’s lease age in period
t,rit is the rent the tenant owes in period t, and gt is the aggregate state in period t.jit and rit
evolve deterministically: rent is simply fixed over the lease’s term and jit increases by 1 in period
t + 1 if the tenant chooses not to exit in period t.
Per-period tenant gross profits are a multiplicative function of the aggregate tenant profitability
state gt , and match quality θli . The deterministic portion of gross profits is given by
π(gt ;θli ) =θli gt (2)
In Appendix A we microfound this multiplicative functional form with a model of downstream
retail in which consumers have CES utility over varieties and retailers engage in Cournot competi-
tion. In this leasing model,θ corresponds to a function of retailer costs and consumer preferences
across varieties in the CES demand model.θ is increasing in consumer preferences for a tenant’s
own good, and decreasing in the tenant’s own marginal costs. Variation in our model’s aggregate
state g corresponds to pure demand shocks in the CES retail demand model.13
Existing tenant continuation/exit payoffs Incumbent tenant i observes the current period’s
aggregate state gt and opportunity cost φit and chooses whether to continue or exit. If they stay in,
they earn net profits (gross profits minus rent), continue to the next period, and repeat the process
again. We denote tenant i’s value function when entering state sit by W (sit ;θli ).
The conditional value of choosing to continue on lease is
W continue (jit , rit , gt ;θli ) =π(gt ;θli )−rit +β Et
W (jit + 1, rit , gt+1 ;θli )|gt ](3)
If the tenant chooses to exit, they immediately cease operations, pay rent rit , and exit, receiving
13 We do not separately estimate landlord marginal costs and consumer preference parameters because we lack
data on retail sales or profits.
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a continuation payoff of 0:
W exit (jit , rit , gt , φit ;θli ) =−rit +φit (4)
In the final period of the lease, there is not time for the tenant to invoke the good guy guarantee,
so the tenant has no exit choice. They simply operate and receive flow profits, so their terminal
value is
W (Tit , rit , gt , φit ;θli ) =π(gt ;θli )−rit (5)
For all ages j < T (prior to the final period of the lease), the tenant’s value W (sit , φit ;θli )is the
value of choosing between staying in and exiting:
W (sit , φit ;θli ) = max{W continue (sit ;θli ), W exit (sit , φit ;θli )}(6)
The tenant’s continuation value of staying operational is given by the expected value of making
the same choice at period t + 1, where the expectation is taken over the t + 1 draws of the aggregate
state and opportunity costs:
Et [W (si,t+1 , φi,t+1 ;θli )|gt ] =Egt+1 ,φit+1
max{W continue (si,t+1 ;θli ), W exit (si,t+1 , φi,t+1 ;θli )} |gt
(7)
Existing tenant’s continuation/exit probabilities In state sit , tenant i will choose to exit if
and only if their current opportunity cost draw exceeds a threshold φ∗(sit ;θ ):
φit > π (gt , θli ) +β Et [W (si,t+1 )|sit ]≡φ∗(sit ;θli )(8)
so his exit probability is
px (sit ;θli ) = 1 −F φ
j (φ∗(sit ;θli ))(9)
where F φ
j is the cdf of the opportunity cost distribution.
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We index the opportunity cost distribution by the lease age j in order to mimic the empirical
distribution of tenants’ age at exit in Figure 5. In our model, tenants’ continuation value functions
are decreasing in their lease age: the older the lease is, the fewer future periods the tenant has
remaining in which to earn profits. If we assumed opportunity costs were drawn from the same
distribution every period regardless of age, tenants would only exit at the end of their leases, in
contrast with the empirical distribution of lease ages at the time of tenant exit which we observe in
Figure 5.
Specifically, we assume that when a lease is of age j , the tenant draws their opportunity cost
from an Exponential distribution with a mean equal to
σφ (T −j )(10)
so the mean opportunity cost is highest at the beginning of the lease, and lowest at the end.
The mean opportunity cost has this downward trajectory over the course of the lease for both
an intuitive and a mechanical reason. Intuitively, the opportunity cost represents the value of an
activity that the tenant could be doing if they were not running their current retail business (for
example, they could start and operate a different retail business in New York City). If the tenant
were to close their current business earlier (with a lower j and thus more time left on their current
lease), they would be able to start on their other business sooner, and so the opportunity cost of
the current business is higher. With only one period left to go on the current lease, there is not
much gain from exiting the current lease early to start the new business. Mechanically, the mean of
the opportunity cost distribution is downward-sloping with respect to the age of the lease in order
to mirror the downward-sloping trajectory of the tenant’s continuation value. Since tenants exit at
the end of the lease period with a terminal value of zero, their value function is (in expectation)
highest at the beginning of the lease (when j is low) and lowest at the end (when j =T ).
The empirical distribution of tenants’ age at exit is consistent with Jovanovic (1982)’s theory of
industry evolution: tenants learn about their own quality over time, and the high-quality tenants
survive while the low-quality tenants fail. However, a model like Jovanovic’s is difficult to estimate
without data on firm sales or profits, which we lack. Therefore, rather than modeling θli as a
learning process, we stick with persistent but fixed unobservable tenant heterogeneity, and allow
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the opportunity cost distribution to vary with tenant age.
Potential tenant’s participation constraint If the tenant accepts a rent offer, they will move
in at the beginning of the following period (sinking their move-in cost m) and then begin a lease in
its first period. The tenant’s value of accepting rent offer r in period t (for move-in in period t + 1)
is therefore given by
W accept (r, gt ;θli ) =β
−m +Et
W (1, r, gt+1 , φi,t+1 ;θli ))|gt
(11)
and we normalize the tenant’s value of rejecting a rent offer to 0.
We can characterize the tenant’s value function and behavior using the following propositions,
whose proofs can be found in Appendix B.
Proposition 4.1.The tenant value function W (j, r, g ;θ)is strictly decreasing in rent r for all
j, g, θ . The exit probability px (j, r, g)is strictly increasing in r for all j < T, g, θ.
Landlord payoffs We now turn to describing the landlord’s payoffs and behavior. In the following
desciption of landlord actions and payoffs, we use i to refer to a landlord’s incumbent tenant, and
n to refer to a new potential tenant drawn during the period.
A landlord l who is on lease has state slt = (jlt , rlt , gt , θli ), where (as for the tenant)jlt is the
age of the current lease (or an indicator for vacancy),rlt is the contractual rent owed to l in period
t, and gt is the aggregate state in period t. We note that while θ is a fixed match quality for
each landlord-tenant pair, since landlords have multiple tenants over time, they treat θli as a state
variable which evolves deterministically over the course of a lease and only is uncertain when they
are searching for a new tenant.
In all periods in which the landlord has a tenant, the landlord earns contractual rent as a flow
payoff. Their continuation value depends on the tenant’s continue/exit decision. If the tenant
continues (which occurs with probability 1 −px (slt )), the landlord’s contination value is simply the
discounted expected value of a lease one period older, with the same rent and the same tenant.
If the tenant exits (either because their lease expires or the tenant endogenously exits), then the
landlord searches, receiving the value of searching given the current value of the aggregate state
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(U (gt ), which we define below). The landlord’s value function when in state slt can thus be written:
V (slt ) =rlt + (1 −px (slt ;θli ))
β Et [V (sl,t+1 )|slt ]
+px (slt ;θli )U (gt )(12)
Upon reaching the final period T of a lease with a tenant, the tenant pays the contractual rent
and the landlord searches for a new tenant. Therefore the value of a lease in its final period is
simply equal to the flow rent payment plus the value of searching:
V (T, rlt , gt , θli ) =rlt +U (gt )(13)
Once a searching landlord has observed a new potential tenant’s move-in cost, they choose rent
to maximize the value of a first-period lease with that tenant subject to the tenant’s participation
constraint. Therefore, the value of accepting a tenant of quality θ is:
V accept (gt , θ) = max
r
β ·Et [V (1, r, gt+1 , θ)|gt ]
subject to W accept (r, gt ;θ )≥0
(14)
Let r∗(gt , θ )denote the solution to this problem.
If a searching landlord rejects a tenant, they simply repeat the search process again in the next
period. Searching is costless and carries no flow payoff, so landlords who can search always do.
Therefore, the conditional value of rejecting a tenant for a vacant landlord is:
V reject (gt ) = 0 +β ·Et [U (gt+1 )|gt ](15)
where the expectation is taken over next period’s aggregate state.
Matching function and the value of searching Landlords search whenever they enter the
period vacant (jlt =vacant), when their incumbent tenant’s lease is expiring (jlt =T ), or the
incumbent tenant has announced their intention to exit this period (φi,t > φ∗(sit )).We model
search very simply: in each period in which the landlord searches, they match with a tenant drawn
randomly from the exogenous match quality distribution with probability pm . We allow pm to
depend on the aggregate state, and assume it is given by the following functional form:
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pm (gt ) =exp
λ0 +λg (gt −μt )/σg
1 + exp
λ0 +λg (gt −μt )/σg
(16)
The λ0 parameter adjusts the average probability of drawing a tenant each period. When λ0
goes to infinity, the probability of drawing a tenant each period goes to 1; when it goes to negative
infinity, the probability of drawing a tenant each period goes to 0.
The λg parameter induces variation in search frictions across levels of the aggregate state. If λg
is positive, then it will be easier for landlords to find a tenant when the aggregate state is high, and
harder to match when the aggregate state is low (and vice versa if λg is negative). There are two
ways to interpret a positive value of λg . One interpretation is that more retailers enter and look
for retail space when the aggregate state is high. The other is that search frictions are lower when
the aggregate state is high. Since we do not observe searching tenants before they lease a space, we
cannot distinguish between the two interpretations.
The λg parameter also adjusts the degree of dispersion in V reject and U across levels of the
aggregate state. When λg = 0, the landlord’s outside option is highest in the highest aggregate
state and lowest in the lowest aggregate state. This is because landlords can command higher rents
when the aggregate state is high and tenants earn higher profits. Even though the aggregate state is
likely to mean-revert during the term of the lease, the more that mean-reversion can be discounted,
the higher the rent that landlords can extract. When λg >0, all else equal,V reject increases for the
highest levels of the aggregate state and decreases for the lowest levels of the aggregate state. This
increases the landlord’s outside option in the good state, and for large enough λg s, can generate
procyclical vacancy.
If the landlord matches with a tenant, they observe θln and choose to either reject n outright
or make them a rent offer. Regardless of the landlord’s decision about n, they earn flow payoffs ri
according to the contract with their incumbent tenant i (if they have one) and then i exits.
The value of searching, before observing θln , is therefore
U (gt ) =pm (gt )Eθ
max{V reject (gt ), V accept (gt , θ)}
+ (1 −pm (gt ))V reject (gt )(17)
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Landlord leaseup policy The landlord accepts a tenant with match quality θ whenever V accept (gt ;θ )≥
V reject (gt ). The leaseup probability is therefore given by
pl (gt ) =Pr(V accept (gt ;θ)≥V reject (gt ))(18)
4.3 Equilibrium
Equilibrium is defined by a set of rents, lease-up probabilities, and exit probabilities such that
landlords accept only tenants who are preferable to vacancy (conditional on the aggregate state),
rents maximize V accept (g, θli ); tenants exit only when φit > φ∗(sit ;θli ), and all agents have rational
expectations.
There is a key distinction between policies which are optimal for individual agents and market-
level equilibrium outcomes. While individual agents’ policies depend only on the current state (and
expectations over future states conditional on the current state), some aggregate equilibrium objects
depend on the composition of agents in the market, which depends on the history of states. For
example, the number of leases of age 2 at time t depends on the number of vacancies at time t −2,
which itself depends on exit rates and lease-up rates at time t −3, and so on. That our model
generates a non-Markov vacancy rate is a choice: we could expand the state space to include the T
most recent values of the aggregate state. However, this dramatic expansion of the the size of the
state space would make our model much more difficult to solve.
Throughout the paper, we will use the term "probability" to refer to an individual agent and
"rate" to refer to an aggregate quantity. So, for example, we use "exit probability" to refer to an
individual tenant’s probability of exit in a given state. We will use the term "exit rate" to refer
to the share of incumbent tenants who exit in a given period. We will use bold text to indicate
aggregate quantities in mathematical notation. For example, individual tenant exit probabilities
(px (st )) are a function of the current state st only. However, the overall market exit rate (the
share of incumbent tenants who exit in a given period) is obtained by integrating px (st )over the
distribution of tenants in the market, conditional on the aggregate state g :
px
t =
j,r,θ
px (j, r, g ;θ )dFt (j, r, θ)(19)
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where Ft (j, r, θ )is the joint distribution of lease age, contractual rents, and match quality at
time t. This joint distribution depends on the last T periods worth of history: there may still be
tenants in the market who signed leases T periods ago, and the share of leases of each age j which
survived until period t depends on the entire path of the aggregate state from period t −j until t.
The vacancy rate is also a non-Markov equilibrium object. The vacancy rate at the beginning
of period t depends on the vacancy rate in period t −1, the share of vacant landlords who signed
leases in t −1, and the share of occupied landlords in period t −1 whose tenants exited and who
failed to sign new leases. Specifically, the transition of the vacancy rate is given by
νt =νt−1 −pl (gt−1 )νt−1 + (1 −νt−1 )(1 −pl (gt ))px
t (20)
4.4 Solving the Model
Because our model is a combination of two single-agent dynamic optimization problems (one each
for landlords and tenants), we are able to solve the model sequentially. The key idea is that once
rent has been set in the contract, the tenant’s exit policy does not depend on the landlord at all.
We can therefore solve the tenant’s and landlord’s problems sequentially.
We first discretize the state space. We discretize the aggregate state g into 10 bins, and allow
for 40 rent values and 40 match quality values. We compute discrete approximations to the match
quality distribution given the parameters, and compute the aggregate state transition matrix. We
then solve each tenant’s value and policy functions for each state s = (j, r, g )and each match quality
θ by backward induction from the end of the lease. Finally, we perform a contraction mapping to
solve the landlord’s value function, taking tenant behavior as given. We start the contraction
mapping with a guess of the value of searching,U (g ), for each value of g . Given that guess, we
backward-induct the value of a lease with each match quality θ at each rent r, from the final period
(j =T ) back to its first period (j = 1). Then we find the rent which maximizes the landlord’s value
of a lease in its first period for each match quality, subject to that tenant’s participation constraint.
Finally, we update the guess of U (g)and repeat until convergence.
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4.5 Identification
We conclude this section with some intuition about the identification of the model parameters. In
estimation, we will recover the parameters associated with the transition of the aggregate state
(ρg , μg , σg ), the match quality distribution (μθ , σθ ), the opportunity cost distribution (σφ ), and the
matching function (λ0 , λg ). The parameters associated with the aggregate state are identified from
its transition over time. The mean of the match quality distribution is identified from average
rents. The shape parameter of the match quality distribution is identified from landlords’ lease-up
probabilities. The opportunity cost parameter σφ is identified from exit rates.λ0 is also identified
from average lease-up rates. The matching parameter λg is identified by variation in the lease-up
probability across levels of the aggregate state.
The move-in cost parameter m is formally identified by the assumption that tenant profits
covary with the aggregate state, but that the match quality distribution itself is fixed over time.
This co-variation of profits with the aggregate state means a tenant with a given quality θ may be
accepted at some levels of the aggregate state and rejected at others. However, we are currently
having trouble estimating m separately from μθ . We therefore calibrate m and test the sensitivity
of the model to changing the calibration.
5 Estimation
We estimate a discrete approximation to the continuous model described in section 4. Estimation
proceeds in 2 stages. In the first stage, we estimate the aggregate state process by maximum
likelihood. As we saw in the model section, this process is the primary driver of changes in tenant
profits, and thus landlords’ leasing policies, over time. In the second stage, conditional on the
estimated aggregate state process, we recover the remaining model parameters: the distribution of
unobserved tenant heterogeneity (μθ and σθ ), the parameter of the scrap distribution σφ , and the
matching function parameters λ0 and λg .
Market Definition We estimate the model separately by neighborhood. Our 8 neighborhoods
correspond to Manhattan community districts 1 through 8. Community districts are large, geo-
graphically contiguous neighborhoods that are represented by community boards. New York City
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has 59 Community Districts across all 5 boroughs, ranging in population from 50,000 to 200,000
residents. We focus on the 8 community districts in Manhattan south of 110th street, since these
are the areas in which we have sufficient occupancy and leasing data to compute our moments each
quarter. While our 8 community districts do not cover the whole city, they do make up the areas
with the densest and most valuable retail space. While we would like to estimate the model at
a more spatially disaggregated level, the number of leases we observe per market in each quarter
begins to rapidly decline as we split the markets into smaller and smaller neighborhoods.
5.1 Estimating the aggregate transition process
The aggregate state variable in the model,g , is meant to represent exogenous downstream retail
demand. To construct our empirical aggregate state variable, we select the industry-level GDP series
corresponding to our tenants’ NAICS categories and average them. Our tenants fall into three main
categories: retail trade, consumer services, and what we call "business services." The retail trade
category corresponds to NAICS codes beginning with 44 and 45, including for example furniture,
hardware, apparel, grocery and hobby stores. Consumer services corresponds to tenants who provide
hospitality, entertainment, repair, or personal services. It includes NAICS codes beginning with 7
and 8, such as restaurants, salons, spas, and shoe repair stores. Finally, many of our tenants fall in
a category we call business services, which includes banks, real estate agencies, doctors’ offices, and
lawyers’ offices. This final group of tenants fall in NAICS codes beginning with 5 and 6.
Before taking the average of GDP across industries, we adjust the BEA’s industry-level GDP
measure for the goods industry in order to account for the growth in e-commerce over our sample
period. We compute the national, quarterly, brick-and-mortar share from the Monthly Retail Sales
report, and then apply it to each quarter’s goods GDP measure.
Our aggregate state variable requires a few modifications before it can be brought to our struc-
tural model. Our model is stationary, so we first remove the trend from our aggregate state measure.
We then convert the level of real GDP to per-square-foot units using a two-step process. First, we
use establishment counts by NAICS code from the County Business Patterns to obtain output per
establishment. Then, we use the average square footage of a storefront in each category in our
CompStak sample to compute average output per square foot.
Using national data for our aggregate state variable constrains our estimation by ruling out
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variation in aggregate uncertainty across neighborhoods. For example, retailers in the Financial
District and on the Upper West Side face the same g at all times and have the same expectations
about the future evolution of g . However, we feel this assumption is not terribly restrictive because
of the multiplicative structure of tenant gross profits. The mean and variance of quality θ varies
freely across neighborhoods, so tenants in different markets face systematically different flow profit
distributions. Similarly, the unobservable type distribution absorbs level differences between our
aggregate state measure (GDP per square foot) and tenant profits (π (g, θ)in the model).
We estimate the parameters of the AR(1) process governing the aggregate state using maximum
likelihood. The estimated parameters are reported in table 3, and the empirical and fitted series are
shown in figure 6. The aggregate state is highly persistent, with an estimated persistence parameter
of 0.95. The average value of the aggregate state is $333.75 per square foot. Our sample period
contains a substantial business cycle corresponding to the Great Recession. The aggregate state
only recovers to its mean value in about 2015, just 2 years before the Live XYZ dataset begins.
5.2 Estimating remaining model parameters
We estimate the remaining parameters separately for each market by matching the simulated method
of moments. Specifically, for each market, we recover the parameters governing the distribution of
unobserved tenant heterogeneity (μθ and σθ ), the scrap value distribution (σφ ), and the matching
function (λ0 and λg ). Because we do not observe match quality (and lease ages in many cases), we
cannot compute empirical choice probabilities for landlords or tenants in every state. We therefore
estimate the parameters using a full solution method, matching four aggregate moments over up to
60 quarters each.
Our first moment is the average contractual rents for leases signed in each quarter. We construct
this moment from the sample of leases in our leasing dataset, which contains leases signed between
2005Q1 and 2019Q4. We are therefore able to match average contractual rents over this entire
60-quarter period.
Our second moment is the vacancy rate in each quarter, which is simply the number of vacant
storefronts in the market divided by the total number of storefronts. We concatenate the time series
of vacancy rates reported by the Comptroller’s office with the time series of vacancy rates that we
calculate from the Live XYZ dataset. The property tax filings ask landlords to report on vacancy
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rates as of January 5, so we assume the reported vacancy rates correspond to first-quarter vacancy
rates, and linearly interpolate to estimate vacancy rates in the intermediate quarters for 2007-2017.
There are 2 community districts for which we do not observe vacancy rates for any contained zip
codes. For these zip codes, we substitute Manhattan’s overall vacancy rate.
We construct exit and lease-up rates (our third and fourth moments) from our occupancy dataset.
The comprehensiveness of this data is what allows us to compute these moments at all, but this
dataset covers a relatively short period of time (2017Q1 through 2019Q4). We define the exit rate
as the share of incumbent tenants who exit in each quarter. We define the lease-up rate as the share
of searching landlords who sign leases in a given quarter. We assume that a storefront has leased
up in period t −1 if a new tenant appears in period t, and assume that they are searching in t if
they are either vacant or their incumbent tenant exits during period t.
Finally, we match the correlations of the aggregate state with each of the moments described
above: the exit rate, leaseup rate, vacancy rate, and average rents.
Our moment condition corresponding to period t simply takes the difference between the model-
predicted moments and the observed moments. To construct the GMM moment condition, we
stack the period-level moment conditions into a vector, and then append the correlation moments.
Our estimated parameters are those that minimize the weighted mean squared error of the model-
predicted moments. We weight each moment by the reciprocal of the number of quarters for which
it is observed. For example, we observe 60 quarters of average rent for each market, so the average
rent moments each receive a weight of 1/60. Since we are estimating only 5 parameters for each
market, the model is over-identified.
Initial Condition The main challenge we address in our estimation is a variant of the initial
conditions problem of Heckman (1981). In order to match moments, we need to start our model
simulation at some initial distribution of individual landlord states. This state vector includes the
aggregate state g , as well as (for occupied storefronts) the age of the lease j , the contractual rent
r, and the tenant’s type θ . Because we do not observe the distribution of individual states at the
beginning of our sample period, we use our model to simulate it. Our approach is similar to those
taken by Pakes (1986) and Ho and Lee (2022), but we adapt it for aggregate uncertainty.
While we do not observe landlords’ full individual state vectors, we do observe the aggregate
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state g beginning in 2005Q1. We therefore construct an algorithm to draw paths of landlord states
which are consistent with the observed aggregate state from 2005Q1-2019Q4.
First, given a draw of the parameters, we solve the model and simulate it for many periods, start-
ing all landlords as vacant. The purpose of this simulation is to reach and explore the recurrent class
of landlord states (which Ericson and Pakes (1995) show exists). From this simulation, we compute
the long-run distribution of individual landlord states. Next, we use the estimated aggregate state
parameters (ρg , σg , and μg ) to simulate a large number of pre-period aggregate state paths that all
end at the the observed aggregate value in 2005Q1. For each simulated aggregate state path, we
assume there is a fixed number of landlords, and draw their initial states from the long-run distri-
bution of individual landlord states, conditional on the aggregate state. From this initial state, we
simulate the model forward along each aggregate state path, transitioning in 2005Q1 from following
the simulated path to the observed path of the aggregate state. In each period between 2005Q1 and
2019Q4, we compute the lease-up rate, exit rate, average rent on new leases, and vacancy rate.
5.3 Results
The estimated parameters for each market are reported in table 4.
As discussed in section 4.5, move-in costs m are formally identified, but we are having trouble
estimating them separately from μθ . In our model,m captures not just the fixed cost of renovating
a space, but also any up-front investment involved in starting their store. Market participants
have told us that renovation costs are often between $300 and $400 per square foot. To account
for additional costs of starting a retail business, including advertising, hiring costs, and obtaining
permits, we calibrate move-in costs at $650 per square foot.
Table 4 shows that in most markets, the unconditional probability that searching landlords get
to draw a tenant is 94% or higher. We do not interpret this as evidence that search frictions are not
strong; rather, we believe that landlords are in reality able to inspect multiple (but finite) potential
tenants per quarter. If landlords could inspect an infinite number of potential tenants each quarter,
they would not need to wait for a tenant with high θ to arrive.
The Upper East Side is the only exception, where the probability of matching with a tenant in
any given quarter is only 32%. This occurs because vacancies on the Upper East Side occur less
frequently than in the rest of the city, but last longer on average. However, the model fit in general
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for the Upper East Side is poor, because its average rents are so much higher than any other market
in our data. We believe this is due to the fact that these tenants are not small businesses serving
local residents, but rather are large (usually luxury) chain tenants who view their flagship Madison
Avenue stores as a status symbol that they are willing to operate at a loss. Though we lack data
on renewal rates, we believe that most Madison Avenue stores have occupied their spaces for a long
time and renewed their leases multiple times. Our model does not account for this behavior, leading
to poor fit in this particular market.
6 Quantifying the Sources of Vacancy
In this section, we perform a series of counterfactual exercises with our structural model to quantify
the degree to which aggregate uncertainty in downstream demand and match quality each contribute
to long-run vacancy rates. In each exercise, we scale the parameters associated with each source of
landlord option value to reduce the intensity of its effects. We find that, while reducing the variance
of downstream retail demand shocks by 50% has a negligible effect on the long-run vacancy rate,
reducing the variance of match quality by 50% reduces long-run vacancy rates by about 33%.
First, we reduce the role of aggregate demand uncertainty by scaling down σg from its estimated
quantity to 0, while holding μg (the long-run average of downstream retail demand) constant.
Simulating the model under the assumption that the aggregate state stays at its mean value forever
is a helpful benchmark for two reasons. First, removing aggregate uncertainty completely shuts
down variation in tenant profits over time. This means that the only uncertainty tenants face each
period comes from their idiosyncratic opportunity cost draws. Furthermore, there is no longer any
dispersion in landlords’ value of rejecting a potential tenant across periods. This means that, when
σg = 0, landlords have the same match quality threshold in every period.
Second, we reduce the role of uncertain future match quality by scaling down the variance of
the match quality distribution from its estimated level, while holding the mean match quality value
constant. Intuitively, when var(θ ) = 0, there is no reason to wait for a better tenant to come
along because all tenants are ex ante the same. However, vacant spaces may remain unfilled, either
because the landlord fails to match with a tenant or because they want to wait for downstream
retail demand to improve.
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Results from these exercises, as well as the case where we scale down both estimated variances
at the same time, are presented for each neighborhood in figure 7. In each subfigure, the x-axis
ranges from 0 to 1, and indicates the constant by which the estimated variance is multiplied in
each simulation. When x = 0, we show the long-run vacancy rate for the case when the indicated
variance is taken all the way to 0. When x = 1, the long-run vacancy rate is plotted from simulating
the model at the estimated parameters. Note that this long-run vacancy rate does not equal the
average observed vacancy rate over our study period, but rather represents the average share of
properties that are vacant over a much longer horizon (thousands of periods).
Reducing the variance of demand shocks has only minor effects on the long-run vacancy rate,
but reducing the variance of match quality by approximately 50% reduces the long-run vacancy rate
by 33% on average. Figure 7 shows that these results hold across most neighborhoods. In most
neighborhoods, completely eliminating any variation in match quality takes long-run vacancy rates
to approximately zero. This is primarily due to the fact that our estimated search frictions are very
small – as noted in section 5 our landlords’ estimated match probabilities are almost 1 in every
period – and that landlords are fairly unresponsive to the variance in aggregate demand shocks.
The only neighborhood where the long-run vacancy rate is positive is the Upper East Side, where
the estimated probability of matching is very low.
7 Vacancy Tax Counterfactual
Given the parameter estimates from section 5, we impose a counterfactual vacancy tax (a flow cost
of vacancy for landlords) and solve for the new vacancy rate, distribution of rents, and distribution
of unobserved tenant profitability conditional on entry. We find that the vacancy tax reduces the
vacancy rate and average rents, but distorts the retail mix towards tenants with lower profitability
and increases tenant churn. We also use our model to infer the size of the externality implied by
the proposed vacancy tax, under some assumptions.
A commercial vacancy tax is currently being debated by the New York State Senate as State
Senate Bill S2005 (Jackson, 2021). This bill was originally introduced in the 2019-2020 legislative
session, but was tabled for several years during the COVID-19 pandemic. It proposes to tax vacant
commercial storefronts in New York City an amount equal to one percent of the assessed value of
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the property including the vacant storefront. We use our model to predict what would happen to
long-run vacancy rates, average rents, and welfare if New York State’s proposed vacancy tax were
to go into effect.
Why is the state legislature considering imposing a vacancy tax? Policymakers, journalists, and
residents often argue that vacancy imposes negative externalities on pedestrians. They argue that it
is therefore appropriate to implement a Pigouvian tax which forces landlords to internalize the effect
of the vacancy. Many residents think of vacant storefronts as an eyesore or a waste of valuable real
estate. Some are concerned that higher retail vacancy poses a threat to neighborhood safety via a
reduction in "eyes on the street" (Jacobs, 1961), though there is mixed empirical evidence on whether
real estate vacancy is actually associated with increased crime. Chang and Jacobson (2017) find that
a short-term mass closing of medical marijuana dispensaries in Los Angeles lead to an immediate
increase in crime near those stores. They find similar results for temporary restaurant closures
due to health code violations. However, in a study of urban vibrancy and crime in Philadelphia,
Humphrey et al. (2020) find that neighborhoods with more vacant land have higher crime rates,
but that crimes tend not to occur at vacant properties themselves.
Because of the market features we model (search frictions, move-in costs, tenant heterogeneity,
and aggregate uncertainty), the presence of vacant storefronts is not necessarily evidence of ineffi-
ciency in the leasing market. In fact, it may even be socially optimal for landlords to exercise their
option value in the interest of signing long-term tenants who will best meet local retail demand.
Landlords’ exercise of option value is inefficient only if vacancies impose an externality on other
market participants (tenants, landlords, or consumers).
New York City is not the only city which has proposed a vacancy tax on some types of real estate
in recent years, though the structure of the tax varies widely across municipalities. Washington,
D.C. has had a vacancy tax of $5 per $100 of assessed value on vacant commercial and residential
properties since 2011. In March 2020, a supermajority of San Francisco voters approved a tax on
commercial storefronts that remain vacant for more than 182 days. The tax went into effect on
January 1, 2022, and is calculated based on a building’s street frontage and how long the property
has been vacant.14 Oakland, California levies a fixed tax of $3000 per vacant property containing a
14 The tax rate is $250 per foot of frontage in the first year, $500 in the second year of vacancy, and $1000 if the
vacancy lasts for 3 or more years.
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ground-floor commercial retail vacancy.15
7.1 Incorporating the vacancy tax in the model
We incorporate the vacancy tax into our model by adding a flow cost τ of rejecting a tenant to
equation 15 when the landlord is vacant:
V reject (st , gt ) =−τ × 1(vacantt ) +β ·Et [U (gt+1 )|gt ](21)
Intuitively, a positive value of τ reduces the landlord’s outside option, so the tax makes landlords
less selective and reduces average rents. Specifically, the tax decreases the landlord’s accept/reject
threshold θ∗(gt )for each value of the aggregate state and increases the probability that a searching
tenant signs a lease. Since the marginal tenants have lower match quality, their participation
constraint binds at lower rents. Rents offered to inframarginal tenants are unchanged, because
rents hold all tenants to their individual participation constraints. Therefore, average contractual
rents fall relative to a world with no vacancy tax. The vacancy tax decreases vacancy at the cost
of increasing retail churn and crowding out some high-quality matches.
7.2 Vacancy Tax Consequences
In this section, we quantify the degree to which the proposed tax would reduce long-run vacancy
rates and rents.
The parameter τ represents a constant tax in dollars per square foot, while the proposed tax is
1% of the assessed value of the property. For each market, we therefore set τ equal to 1 percent of
the landlord’s expected value of searching. We feel the value of searching is the appropriate quantity
from our model to use proxy for assessed value, since New York City’s assessed values for commercial
properties are based primarily on the rents landlords report on their annual Real Property Income
and Expense filings. When vacant, landlords are by definition not earning any rent, so we expect
their property’s assessed values to fall relative to periods in which they are occupied. We could
instead use the average assessed value of buildings in each neighborhood, but New York City’s
15 Residential vacancy taxes are also being embraced by some cities, though usually because of concerns about
housing supply and affordability. For example, Vancouver, British Columbia introduced a residential vacancy tax in
2017. In 2021, the Vancouver "Empty Homes Tax" was 3% of assessed taxable value.
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publicly available data on assessed property values does not identify which buildings contain vacant
storefronts.
We next simulate the model given the proposed tax to determine the quantitative impact of the
tax on long-run vacancy rates and average rents. We first simulate the model for a many periods, in
order to reach the recurrent class. For each level of the aggregate state g , we compute the average
vacancy rate and average rent for each lease signed across all periods in which the aggregate state
was g. Finally, we arrive at the long-run average outcomes by averaging the expected outcomes
conditional on g over the long-run stationary distribution of g .
We show the effects of the vacancy tax on long-run vacancy rates and average rents in table 5.
Long-run vacancy rates fall by 2.89 percent on average. Average rents fall by 0.44 percent. This is
driven entirely by the change in landlords’ acceptance threshold: the marginally accepted tenants
are lower quality and so can only afford lower rents, but higher quality tenants are still held to their
outside options and thus pay the same rent regardless of whether the vacancy tax is in effect or not.
The tax also increases the pace of retail churn and leads to crowd-out of high quality matches
in favor of lower-quality matches which materialize sooner. Panel (a) of 8 traces out the response
of both lease-up rates and exit rates to increases in the vacancy tax. The calibrated vacancy tax
we use to compute the results in table 5 is shown by the vertical dashed line. We can see that, as
the tax increases, both lease-up rates and exit rates increase.
In Panel (b), we show the change in the long-run share of leases associated with each value
of match quality under the calibrated vacancy tax, as compared with our baseline scenario with
no vacancy tax. There is no change in the long-run presence of matches with quality lower than
0.225, because matches with such low qualities are always rejected by landlords in both the baseline
scenario and under the vacancy tax. However, there is a substantial increase in the share of leases
with match qualities between 0.25 and 0.3. This occurs because landlords accept these matches
under the tax, but did not accept these tenants if there is no penalty associated with vacancy.
7.3 Welfare
We can also use our structural model to infer the size of the externality implied by the proposed
vacancy tax. To do this, we must first define a welfare function. The surplus associated with a lease
in our model is given by the discounted ex post gross profits generated by the tenant, plus the scrap
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value they receive upon exit, less move-in costs. Mathematically, this can be written
S ({gt }, θi ) =
tx
i
t=t1
i
β t π (gt , θi )
profits
+β tx
i E[φ |exit at age tx
i −t1
i ]
scrap values
−β t1
i m
move in costs
(22)
where t1
i denotes the period that tenant i enters the market and tx
i denotes the period that i
exits.
We assume a social welfare function which is the discounted expected value of the surplus from
all future leases (starting from some initial date t = 0), less an externality e of vacancy each period,
expressed on a per-square-foot basis. This welfare function is given by
W (e;τ ) =
i
S (gt , θi ;τ )
−
∞
t=0
β t Lνt (τ )× e
(23)
Here we have specified a social welfare function where the total externality from vacancy is linear
in the number of vacant square feet (Lνt ), for simplicity of interpretation. However, there is an
argument to be made that the total welfare loss from vacancy is convex in vacant square footage.
7.3.1 Optimal policy with no vacancy externalities
Given the social welfare function defined in equation 23, two key frictions lead to an inefficient level
of vacancies even when there is no externality from vacancy (e = 0). These two frictions push in
opposite directions: in some markets, the prevailing vacancy rate may be too low, while in others,
it may be too high.
The first friction is that landlords do not capture tenants’ option value once they have moved
in, but the social planner does. Landlords do take tenant exit policies into account when setting the
rent, but since they cannot renegotiate any part of the lease after the tenant has moved in, they do
not capture any potential tenant upsides to remaining in place. If the realization of the aggregate
state is higher than expected in any given period, all incumbent tenants (and the social planner)
benefit through higher profits, but their landlords do not capture any of these gains. However,
landlords partially capture downside risk, because tenants exit at higher rates when the aggregate
state realizations are low. Because the social planner captures the upside risk, the social planner will
want to fill vacancies more quickly than landlords, and thus (in the absence of any other frictions)
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the optimal vacancy rate would be lower than the equilibrium rate.
The second friction is that there is a wedge between the move-in costs internalized by landlords
and by the social planner. Tenants (and the social planner) experience the full value of move-in
costs at the beginning of the lease, when the tenant incurs them. Landlords, however, amortize
move-in costs over the expected duration of the contractual relationship, via the rents they charge.
By assumption, all tenants pay the same move-in costs, but the high-match-quality tenants are
expected to last longer. As a result, in the absence of other frictions, the social planner would want
landlords to be more selective than they would be in equilibrium and the optimal vacancy rate
would be higher than the equilibrium rate.
These two frictions push the optimal tax rate in opposite directions. The friction which domi-
nates depends on market-level parameters, and we map the optimal tax (or subsidy) across the city
in figure 9. This map shows us that the move-in cost friction dominates in the high-rent markets
(Upper East Side, Midtown, and Lower West Side), and the welfare-maximizing policy is actually
to subsidize vacant landlords. This occurs because the high-quality tenants in these neighborhoods
have such high earnings that, from the social planner’s point of view, they are worth waiting for.
On the other hand, the welfare-maximizing policy is a tax in the more residential, medium-rent
neighborhoods, especially the Upper West Side. This indicates that in these neighborhoods, asym-
metric internalization of tenant upside is the more quantitatively important friction distorting the
vacancy rate from its efficient level.
To resolve inefficiencies from both frictions, an additional policy instrument is required. For
example, policymakers could address the asymmetric internalization of option value friction by
forcing landlords and tenants to write contracts with profit-sharing agreements rather than constant
rents. They could address the wedge in move-in costs by enforcing cost-sharing of move-in costs.
7.3.2 Estimating the externality from vacancy
We back out the per-vacancy externality e for each market under the assumption that the proposed
vacancy tax is the welfare-maximizing Pigouvian tax. Under this assumption, the actual externality
per storefront e∗is given by
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τ proposed = argmax
τ
W (e∗;τ )(24)
We compute welfare by simulating our model for many periods, for different simulated paths of
the aggregate state. For each simulation, we keep track of the surplus generated by each lease, and
the vacancy rate in each period. We then compute welfare for each simulation, and average over all
simulations.
We estimate e∗by computing welfare for many combinations of e and τ . For each value of e,
we find the value τ (e)which maximizes W (e;·). We can then interpolate, for any proposed tax
τ proposed , the e∗for which τ is welfare-maximizing.
Table 5 presents the effect of the proposed vacancy tax on long-run average vacancy rates and
rents, as well as the implied externality associated with the tax. We find that on average, to justify
a vacancy tax of 1% of assessed values, a vacant storefront would have to impose an externality of
$18.72 per square foot, or about thirty percent of observed average rents.
8 Conclusion
In this paper, we leverage novel data to begin to understand the key market forces that drive long-
run retail vacancy rates and rents. We show that the asymmetry of landlords’ and tenants’ ability to
commit to long-term leases, combined with tenant heterogeneity, up-front move-in costs, and search
frictions, create option value for different market participants at different times, and that this option
value fluctuates with the business cycle. We use our model to investigate the potential impacts of
commercial vacancy taxes, a much-discussed urban policy. We view our work as a starting point
for future work on the dynamics of commercial real estate leasing markets.
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Figure 1: Empirical Cumulative Distribution of Vacancy Durations
Note:Here we plot the empirical cumulative distribution of vacancy lengths in our Live XYZ
dataset. This dataset is censored, and here we include all vacancies, including those storefronts
which were vacant at the time they are first observed and those storefronts which were still vacant
at the time they were last observed. The earliest observations in the Live XYZ dataset are from
late 2015, and the last observations were in March 2020. We therefore do not observe any vacancies
that last longer than four and a half years. If anything, therefore, we under-estimate the duration
of the longest-lived storefront vacancies.
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Table 1: Summary Statistics by Community District
Community District Rent ($/sqft) Vacancy (%) Total #
Storefronts
Total # Leases
Financial District 35.21 5.64 1433 645
Lower West Side 60.47 6.37 3740 1778
Lower East Side 31.68 5.39 3381 406
Midtown West 39.16 5.08 2207 658
Midtown 69.26 5.32 3954 2565
Midtown East 38.48 3.77 1918 533
Upper West Side 54.99 4.76 1888 505
Upper East Side 101.80 4.67 3290 901
Weighted Average 60.88 5.23
Total 21811 7991
Note:We report summary statistics by neighborhood. From the CompStak dataset, we report the
average quarterly rent per square foot and the total number of leases we observe from each market.
Vacancy rates for 2007Q1-2017Q1 period come from the New York City Comptroller’s report on
retail vacancy; from 2017Q2 onward we compute vacancy rates from the Live XYZ dataset. The
Comptroller’s report provides vacancy rates at an annual frequency (corresponding to the first
quarter of the year); we linearly interpolate to fill in quarterly vacancy rates in missing quarters.
We also report the number of unique storefronts and leases observed in each market. To compute
the average rent across neighborhoods, we weight each neighborhood’s average rent by the number
of leases we observe in that market. Similarly, we weight market-level vacancy rates by the number
of storefronts in each market.
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Figure 2: CompStak Leases Executed Per Quarter
Note:We plot the number of leases in the CompStak dataset that were executed in each quarter.
The vertical line indicates the date CompStak was founded. CompStak’s dataset is composed
of transactions reported by commercial real estate brokers. Brokers are incentivized to report
transactions because sharing information allows them to learn more about transactions they were
not involved with. However, we want to be wary of leases reported prior to CompStak’s entry, since
brokers who report these transactions may be selected.
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Figure 3: Rent Distribution By Community District
Note:We plot the distribution of real quarterly net effective rents (expressed in dollars per square
foot) for each market from CompStak. Each observation is a lease, and we pool all leases observed
over our whole 2005-2019 sample period.
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Table 2: Correlates of Rent
(1) (2) (3) (4)
Dependent Variable log(rent/sqft) log(rent/sqft) log(rent/sqft) log(rent/sqft)
Log Transaction Sqft -0.20*** -0.22*** -0.23*** -0.23***
(0.02) (0.01) (0.02) (0.02)
Log Median Income 0.22*** 0.14*** 0.12*** -0.05
(0.04) (0.03) (0.03) (0.05)
Log Years Since Built 0.08** 0.02 0.001 -0.02
(0.02) (0.02) (0.02) (0.02)
Avenue Address 0.23*** 0.24*** 0.23*** 0.24***
(0.04) (0.03) (0.03) (0.04)
Log Building Frontage -0.06 -0.06* -0.06** -0.03
(0.03) (0.03) (0.02) (0.03)
Log Building Floors 0.17*** 0.14*** 0.06 0.02
(0.04) (0.03) (0.03) (0.04)
Residential Share -0.48*** -0.33*** -0.13 -0.07
(0.09) (0.08) (0.07) (0.06)
Office Share -0.38*** -0.20* -0.11 -0.07
(0.10) (0.08) (0.08) (0.07)
Special Purpose District 0.16*** 0.19*** 0.03 0.13
(0.03) (0.03) (0.04) (0.07)
Chain 0.36*** 0.24*** 0.24*** 0.21***
(0.04) (0.03) (0.03) (0.03)
Lease Term Years 0.0005 0.02*** 0.02*** 0.02***
(0.005) (0.005) (0.004) (0.004)
Fixed Effects
Transaction Quarter Yes Yes Yes Yes
Tenant Industry No Yes Yes Yes
Zoning No No Yes Yes
Census Tract No No No Yes
Observations 2,630 2,630 2,630 2,630
R2 0.22518 0.40147 0.52022 0.62460
Within R2 0.20193 0.20548 0.14973 0.15012
Note : We regress log monthly rent per square foot on observable landlord and tenant characteristics
using OLS. Our sample is the set of leases from the CompStak datast that we can match to tenants
active in the Live XYZ dataset, so that we can include industry fixed effects and a dummy for
whether the door is on a street (a small east-west side street) or an avenue (a major north-south
thoroughfare). Standard errors are clustered at the transaction quarter and census tract level.
Transaction square footage refers to the total amount of space being rented by the tenant. Median
income is the income of the census tract in 2016 from the American Community Survey. Residential
share and office share refer to the share of the entire building floor space devoted to residential
and office uses, respectively, as reported by New York City’s Primary Land Use Tax Lot Output
(PLUTO) dataset. Special purpose districts have additional, unique zoning rules that vary on a
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Figure 4: Contractual Lease Term Distribution
Note:
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Figure 5: Lease Age at Exit
(a) Empirical Distribution
(b) Empirical Cumulative Distribution
Note:These figures are constructed from the sample of 462 tenants for whom we are able to match
their lease in CompStak to their exit date in the Live XYZ dataset.
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Figure 6: Aggregate State Path
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Table 3: Aggregate State Transition Parameter Estimates
Parameter Estimate
ρg 0.95
(0.04)
μg 333.75
(6.65)
σ2
g 6.8
Table 4: Model Parameter Estimates
Community District σφ μθ σθ λ0 λg
Financial District 2.21 (0.414) -1.818 (0.002) 0.178 (0.003) 10.514 (5.222) 0.184 (0.003)
Lower West Side 2.185 (0.398) -1.549 (0.01) 0.25 (0.007) 2.84 (0.551) 0.073 (0.009)
Lower East Side 2.433 (0.637) -1.803 (0.011) 0.163 (0.005) 6.273 (0.651) 0.286 (0.01)
Midtown West 1.867 (0.169) -1.682 (0.047) 0.174 (0.042) 15.635 (7.671) 0.131 (0.021)
Midtown 1.923 (0.331) -1.528 (0.011) 0.281 (0.008) 8.175 (3.605) -0.047 (0.032)
Midtown East 1.965 (0.099) -1.697 (0.032) 0.17 (0.002) 21.035 (2.889) 0.249 (0.11)
Upper West Side 2.268 (0.443) -1.596 (0.023) 0.232 (0.003) 12.092 (0.446) 0.17 (0.028)
Upper East Side 3.184 (2.115) -0.859 (0.095) 0.156 (0.071) -0.782 (0.628) -0.157 (0.043)
Estimated parameters for each of our markets.μθ and σθ are the parameters of the lognormal
distribution from which tenant types are drawn.σφ governs the mean of tenant opportunity costs;
a tenant of age j has an average opportunity cost of σφ × (T −j ). Move-in costs m are calibrated
to $650 per square foot.λ0 and λg are parameters of the matching function. Standard errors (in
parentheses) are computed using a discrete approximation to the gradient of the moment condition.
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Figure 7: Effects of Reducing Variance
Table 5: Effect of Vacancy Tax on Long-Run Moments
Community
District
Vacancy Tax τ
($/sqft)
Δ Vacancy Rate
(%)
Δ Average Rent
(%)
Implied
Externality (per
vacant sqft)
Financial District 0.98 -0.92 0.00 13.23
Lower West Side 1.93 -1.09 -0.16 12.26
Lower East Side 0.96 -0.98 -0.23 2.14
Midtown West 1.29 -0.61 0.00 20.33
Midtown 2.17 -3.05 -0.50 36.20
Midtown East 1.24 -1.71 -0.25 15.00
Upper West Side 1.74 -1.51 -0.18 5.00
Upper East Side 3.48 -13.25 -2.20 45.56
Average 1.72 -2.89 -0.44 18.72
This table reports the effects of a 1% tax on vacant assessed values for each of our 8 neighborhoods.
We proxy for assessed value of vacant properties using the value of search in the model,E[U (g )].
The levels of tax and the implied externality of vacancy are reported in dollars per square foot at a
quarterly level. Relative to the estimated model, we report the percentage change in the long-run
vacancy rate and in average rents.
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Figure 8: Effect of Vacancy Tax on Churn and Crowd-Out
(a) Establishment Churn
(b) Crowd-Out
These figures show the effect of increasing the vacancy tax on quarterly lease-up and exit rates on
the Lower West Side. Results for other neighborhoods are similar. Large discrete jumps in both
probabilities occur because we solve a discrete approximation to the continuous model presented in
section 4.
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Figure 9: Optimal Tax with No Vacancy Externalities
Figure 10: We map the optimal tax policy (in dollars per square foot) by community district in the
absence of vacancy externalities (e = 0 in equation 23).
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A Microfounding Tenant Profits
We assume a representative consumer with CES utility across the retail tenants i within a market.
Each retailer offers a unique variety of retail goods or services:
U =
i
α
1
σ
i x
σ−1
σ
i
σ
1−σ subject to
i
pi xi =B (25)
where xi is the quantity of variety i,pi is the price of variety i,σ is the elasticity of substitution,
B is the budget constraint, and αi is a preference parameter for variety i.
We derive consumer demand in the usual way and obtain the standard demand curve:
xdemand
a =Bp−σ
a
i
αi
αa p1−σ
i
(26)
Tenants engage in Cournot competition. Specifically, the tenant producing variety a chooses
a quantity xa to produce to maximize static profits, given marginal costs ca and a vector x−a of
quantities produced by all other varieties:
πa (xa , x−a ) = max
xa
xa ·(pa (xa , x−a )−ca )(27)
The resulting supply curve is
xsupply
a =
B
i
αi
αa p1−σ
i
1
σ σ (pa −ca )σ
(28)
Setting demand (26)and supply (28)equal to each other allows us to solve for equilibrium prices
and quantities. We obtain the familiar Cournot markup formula
p∗
a =σ
σ −1 ca (29)
and plug this into the supply curve to get equilibrium quantities:
x∗
a =B
(σ
σ−1 )ca +P−a (σ
σ −1 )σ cσa
(30)
Finally, we solve for equilibrium static flow profits by plugging equilibrium prices and quantities
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into the profit function for variety a:
π∗
a =B
σ +Acσ−1a
(31)
where A =σP−a σ1−σ (σ −1)1−σ .
In the structural leasing model of section 4, tenant quality θa represents 1
σ+Acσ−1a
. The aggregate
state variable g in the structural model corresponds to consumer budgets B . We therefore assume
in the structural model that tenant profits take a multiplicative form:π(g, θ) =gθ.
B Model Proofs
Claim:W (j, r, g, φ;θ )is strictly decreasing in r for all j, g, φ, θ.
Proof.Consider two arbitrary rent values,r and r, such that r> r.
For lease age j =T , we have
W (T, r, g, φ;θ ) =π(g, θ)−r > π(g, θ)−r=W (T, r , g, φ;θ)
for all g, θ, φ.
Suppose for lease age j + 1,W (j, r, g, φ;θ)> W (j, r, g, φ;θ)for r> r and all g, θ, φ.
Then taking expectations over φ and g , we get
Eφ,g[W (j + 1, r, g, φ, θ )|g ] =
g,φ
W (j + 1, r, g, φ;θ )dF (φ, g |g)
>
g,φ
W (j + 1, r, g , φ;θ)dF (φ, g |g )
=Eφ,g[W (j + 1, r, g , φ, θ)|g ]
We now back up to compare the conditional values of exiting and staying in the lease in period j
at rents r and r. Since −r >−rand Eφ,g[W (j +1, r, g, φ, θ )|g ]>Eφ,g[W (j +1, r, g , φ, θ)|g],
we have
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W continue (j, r, g ;θ) =π(g, θ)−r +β Eφ,g[W (j + 1, r, g, φ, θ )|g]
> π(g, θ)−r+β Eφ,g [W (j + 1, r, g , φ, θ)|g]
=W continue (j, r, g;θ)
and
W exit (j, r, g, φ;θ) =−r +φ >−r+φ =W exit (j, r, g, φ;θ)
Since W continue (j, r, g ;θ)> W continue (j, r, g;θ)and W exit (j, r, g, φ;θ )> W exit (j, r , g, φ;θ),
W (j, r, g, φ;θ ) = max{W continue (j, r, g ;θ ), W exit (j, r, g, φ;θ)}
>max{W continue (j, r, g ;θ ), W exit (j, r, g, φ;θ )}
=W (j, r , g, φ;θ)
Claim:φ∗(j, r, g;θ)is strictly decreasing in r and px (j, r, g ;θ )is strictly increasing in r for all
j < T, g, φ, θ.
Proof.We know from the previous proof that Eg,φ [W (j, r, g, φ;θ )]>Eg,φ [W (j, r, g, φ;θ)]for r> r.
Therefore
φ∗(j, r, g;θ) =π (g, θ ) +β Eg,φ [W (j + 1, r, g, φ;θ )]
< π (g, θ ) +β Eg,φ [W (j + 1, r, g, φ;θ)] =φ∗(j, r, g, θ)
So φ∗(j, r, g, θ )is strictly decreasing in r . As long as the CDF of φ is strictly increasing, then
the tenant’s exit probability px (j, r, g ;θ)is increasing in r for all j, g, θ.
Claim:W (j, r, g, φ;θ)is weakly increasing in θ for all j, r, φ, g >0.
Proof.Consider two different tenant qualities θ and θsuch that θ> θ.
In the terminal lease period
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W (T, r, g, φ;θ ) =π(g, θ)−r
=gθ −r
> gθ −r
=π(g, θ)−r
=W (T, r, g, φ;θ)
Suppose for lease age j + 1 we know that W (j + 1, r, g, φ;θ )≥W (j + 1, r, g, φ;θ )for θ > θ.
Then taking expectations over φ and g, we get
Eφ,g[W (j + 1, r, g , φ, θ)|g ] =
g,φ
W (j + 1, r, g, φ;θ)dF (φ, g|g )
≥
g,φ
W (j + 1, r, g, φ;θ)dF (φ, g |g)
=Eφ,g[W (j + 1, r, g , φ, θ)|g ]
We now back up to compare the conditional values of exiting and staying in the lease in period
j for tenants of types θ and θ.W exit doesn’t depend on θ, but W continue does and is strictly
increasing in θ since π(g, θ)is strictly increasing in θ :
W continue (j, r, g ;θ ) =π(g, θ)−r +β Eφ,g [W (j + 1, r, g , φ, θ)|g ]
> π(g, θ)−r +β Eφ,g[W (j + 1, r, g, φ, θ )|g ]
=W continue (j, r, g ;θ)
Since W continue (j, r, g ;θ)> W continue (j, r, g ;θ )and W exit (j, r, g, φ;θ) =W exit (j, r, g, φ;θ ),
W (j, r, g, φ;θ) = max{W continue (j, r, g ;θ), W exit (j, r, g, φ;θ)}
≥max{W continue (j, r, g ;θ), W exit (j, r, g, φ;θ )}
=W (j, r, g, φ;θ)
Claim:φ∗(j, r, g;θ)is strictly increasing and px (j, r, g;θ)is strictly decreasing in θ for all
j < T, r, φ, g >0.
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Proof.We know from the previous proof that Eg,φ [W (j, r, g, φ;θ)]≥Eg,φ [W (j, r, g, φ;θ)]for θ> θ.
We also know that for g >0,π (g, θ )> π(g, θ). Therefore:
φ∗(j, r, g ;θ ) =π(g, θ) +β Eg,φ [W (j + 1, r, g, φ;θ)]
< π(g, θ) +β Eg,φ [W (j + 1, r, g, φ;θ )] =φ∗(j, r, g, θ)
So φ∗(j, r, g, θ )is strictly decreasing in θ. As long as the CDF of φ is strictly increasing, then
the tenant’s exit probability px (j, r, g ;θ)is decreasing in θ for all j, g, r.
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Planning and Transportation Commission
Ad Hoc Committee Meeting #1
March 5, 2024
Presented by
RETAIL RECOVERY STUDY
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Goal
Recommend changes to
zoning ordinance,
parking, and regulatory
processes to help retain,
strengthen, and facilitate
retail in the key
commercial areas of Palo
Alto.
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Study Contents
•Trends
•Best practices
•Stakeholder engagement
•Vacancy trends
•Zoning evaluation
•PTC and CC meetings
•Recommended Zoning Strategies
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Study Findings (preliminary)
TRENDS:
•E-commerce large and increasing portion of retail sales
•Reduced demand for existing and new physical retail space
•Decreased office worker population
BEST PRACTICES:
•Reduce regulatory constraints
•Make retail permitting easy, user/business-friendly
STAKEHOLDER ENGAGEMENT:
•Michael Baker International Interviews
•Car-free California Avenue Engagement report
•Staff and PTC interviews (if available)
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Study Findings (preliminary)
VACANCY TRENDS:
•Palo Alto lowest total vacancies in Q3 2015
•Increasing since 2015 RPO
•Downtown and total Palo Alto at 10-year high (Q1 2024)
•Steady and low rates in smaller, neighborhood serving areas
•Increasing rates in other areas (Downtown, California Ave, etc.)
since 2014 lows
•Lease/rent rates steady, slowly increasing, somewhat
independent of vacancy rates
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Defining the Problem –E-Commerce Growth
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Defining the Problem –Streetsense Findings
RETAIL OVERSUPPLY
•461,000 square feet vacant retail
•4 times the 10-year projected growth
LOSS OF OFFICE WORKERS
•Equal to 111,000 square feet of demand for retail space
COMPETITION
•Stanford Mall
•Big Box Retailers at Palo Alto border
•Neighboring Communities
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Possible Zoning Strategies (preliminary)
•Allow market to right-size
•reduce total retail
•increase non-retail
•Limit RPO to core areas (DT, Cal Ave, Nb centers)
•Allow non-retail on ground floor/former retail spaces
•where not street facing
•Where vacancies exceed threshold (sf, %, duration)
•Subject to limits (concentration, e.g.)
•Allow increased Formula Retail uses:
•limit to restaurants (vs all franchises)
•Increase franchise threshold
•Some by right, without CUP
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0%
5%
10%
15%
20%
25%
202
9
Q1
202
8
Q3
202
8
Q1
202
7
Q3
202
7
Q1
202
6
Q3
202
6
Q1
202
5
Q3
202
5
Q1
202
4
Q3
202
4
Q1 EST
202
3
Q4
202
3
Q2
202
2
Q4
202
2
Q2
202
1
Q4
202
1
Q2
202
0
Q4
202
0
Q2
201
9
Q4
201
9
Q2
201
8
Q4
201
8
Q2
201
7
Q4
201
7
Q2
201
6
Q4
201
6
Q2
201
5
Q4
201
5
Q2
201
4
Q4
201
4
Q2
PA DT
(CD-C/GF)
PA Cal Ave
(CC2/R)
PA ECR- T&C
(CC)
PA ECR- Cal Ave
(CN, CS)
PA ECR- South PA Midtown
(CN/GF)
LA CRS Zone SM Main Street SM 3rd ST
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Retail Trends -Vacancy Rates
PA DT
(CD-C/GF)
PA Cal Ave
(CC2/R)
PA ECR-T&C
(CC)
PA ECR-Cal Ave
(CN, CS)PA ECR-South PA Midtown
(CN/GF)LA CRS Zone SM Main Street SM 3rd ST
TOTAL 740,000 295,000 175,000 54,300 463,000 104,000 433,000 461,000 1,300,000
2029 Q1 17% 12% 11% 12% 2% 4% 2% 12% 25%
2028 Q4 17% 11% 11% 12% 2% 4% 2% 12% 25%
2028 Q3 17% 11% 10% 12% 2% 4% 2% 12% 25%
2028 Q2 17% 11% 10% 12% 2% 4% 2% 12% 25%
2028 Q1 17% 11% 10% 11% 2% 4% 2% 12% 25%
2027 Q4 17% 11% 10% 11% 2% 4% 2% 11% 25%
2027 Q3 17% 11% 10% 11% 2% 4% 2% 11% 25%
2027 Q2 17% 11% 10% 11% 2% 4% 2% 11% 25%
2027 Q1 16% 11% 10% 11% 2% 4% 2% 11% 25%
2026 Q4 16% 11% 10% 11% 2% 4% 2% 11% 25%
2026 Q3 16% 11% 10% 11% 2% 4% 2% 11% 25%
2026 Q2 16% 11% 10% 10% 2% 4% 2% 11% 25%
2026 Q1 16% 10% 10% 10% 2% 4% 2% 11% 25%
2025 Q4 16% 10% 10% 10% 2% 4% 2% 11% 25%
2025 Q3 16% 10% 10% 10% 2% 4% 2% 11% 25%
2025 Q2 16% 10% 10% 10% 2% 4% 2% 11% 25%
2025 Q1 15% 10% 9% 10% 2% 4% 2% 11% 26%
2024 Q4 15% 10% 9% 10% 2% 4% 2% 11% 26%
2024 Q3 15% 10% 9% 10% 2% 4% 2% 11% 25%
2024 Q2 15% 10% 9% 9% 2% 4% 2% 11% 26%
2024 Q1 EST 15% 10% 11% 9% 2% 4% 2% 10% 26%
2024 Q1 QTD 15% 10% 12% 9.1% 2% 4% 3% 10% 26%
2023 Q4 14% 9% 12% 9.1% 2% 5% 3% 11% 25%
2023 Q3 14% 9% 12% 0% 1% 5% 2% 10% 26%
2023 Q2 14% 13% 12% 0% 1% 5% 2% 8% 24%
2023 Q1 9% 15% 13% 0.00% 1% 5% 2% 11% 23%
2022 Q4 8% 13% 10% 1.6% 2% 4% 3% 5% 23%
2022 Q3 10% 14% 10% 2% 2% 4% 2% 6% 22%
2022 Q2 9% 15% 11% 2% 3% 4% 3% 8% 24%
2022 Q1 12% 13% 12% 2% 3% 4% 2% 6% 22%
2021 Q4 10% 15% 13% 0% 3% 3% 2% 5% 19%
2021 Q3 8% 13% 14% 0% 3% 3% 4% 8% 22%
2021 Q2 11% 12% 12% 0% 2% 3% 3% 11% 21%
2021 Q1 9% 12% 12% 0% 2% 1% 2% 9% 12%
2020 Q4 6% 11% 14% 4% 3% 1% 3% 11% 12%
2020 Q3 5% 11% 11% 4% 2% 1% 4% 11% 12%
2020 Q2 4% 9% 7% 4% 1% 1% 3% 7% 11%
2020 Q1 4% 9% 6% 4% 1% 1% 3% 5% 12%
2019 Q4 4% 6% 3% 17% 1% 1% 2% 5% 9%
2019 Q3 4% 6% 0% 19% 1% 1% 1% 6% 9%
2019 Q2 5% 6% 2% 0% 1% 1% 1% 2% 8%
2019 Q1 4% 6% 2% 1% 1% 2% 0% 4% 10%
2018 Q4 5% 3% 3% 0% 1% 0% 0% 4% 9%
2018 Q3 3% 3% 1% 0% 1% 0% 1% 5% 7%
2018 Q2 3% 1% 2% 0% 1% 0% 0% 5% 8%
2018 Q1 3% 2% 2% 0% 1% 0% 0% 6% 7%
2017 Q4 4% 6% 0% 0% 1% 0% 0% 5% 4%
2017 Q3 4% 1% 1% 0% 0% 0% 2% 4% 4%
2017 Q2 4% 7% 0% 0% 1% 1% 2% 4% 3%
2017 Q1 6% 6% 4% 0% 1% 2% 3% 3% 3%
2016 Q4 2% 0% 1% 2% 1% 1% 2% 2% 4%
2016 Q3 3% 2% 1% 2% 1% 4% 1% 3% 5%
2016 Q2 1% 1% 1% 0% 0% 0% 2% 2% 3%
2016 Q1 3% 3% 1% 0% 1% 0% 2% 2% 4%
2015 Q4 1% 4% 1% 0% 2% 0% 2% 1% 5%
2015 Q3 1% 0% 1% 0% 1% 0% 2% 1% 5%
2015 Q2 1% 2% 0% 0% 2% 3% 3% 1% 4%
2015 Q1 2% 2% 0% 0% 2% 3% 2% 1% 4%
2014 Q4 1% 2% 1% 0% 1% 3% 0% 0% 5%
2014 Q3 0% 2% 1% 0% 1% 3% 1% 1% 6%
2014 Q2 3% 0% 0% 0% 1% 3% 1% 1% 6%
2014 Q1 1% 1% 0% 16% 2% 3% 1% 4% 4%
LEGEND:
Green = <6%
Yellow = 6-10%
Red = >10%
Item 4
Attachment C: MBI Retail Recovery
Slides to Share Goal, Study Contents
and Findings
Packet Pg. 204
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Retail Trends -Vacant Floor Area
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
20
2
9
Q1
20
2
8
Q3
20
2
8
Q1
20
2
7
Q3
20
2
7
Q1
20
2
6
Q3
20
2
6
Q1
20
2
5
Q3
20
2
5
Q1
20
2
4
Q3
20
2
4
Q1 ES
T
20
2
3
Q4
20
2
3
Q2
20
2
2
Q4
20
2
2
Q2
20
2
1
Q4
20
2
1
Q2
20
2
0
Q4
20
2
0
Q2
20
1
9
Q4
20
1
9
Q2
20
1
8
Q4
20
1
8
Q2
20
1
7
Q4
20
1
7
Q2
20
1
6
Q4
20
1
6
Q2
20
1
5
Q4
20
1
5
Q2
20
1
4
Q4
20
1
4
Q2
PA DT
(CD-C/GF)
PA Cal Ave
(CC2/R)
PA ECR- T&C
(CC)
PA ECR- Cal Ave
(CN, CS)
PA ECR- South
PA Midtown
(CN/GF)
LA CRS Zone SM Main Street SM 3rd ST
Item 4
Attachment C: MBI Retail Recovery
Slides to Share Goal, Study Contents
and Findings
Packet Pg. 205
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Retail Trends -Months Vacant
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
20.0
22.0
24.0
20
2
4
Q1 QT
D
20
2
3
Q3
20
2
3
Q1
20
2
2
Q3
20
2
2
Q1
20
2
1
Q3
20
2
1
Q1
20
2
0
Q3
20
2
0
Q1
20
1
9
Q3
20
1
9
Q1
20
1
8
Q3
20
1
8
Q1
20
1
7
Q3
20
1
7
Q1
20
1
6
Q3
20
1
6
Q1
20
1
5
Q3
20
1
5
Q1
20
1
4
Q3
20
1
4
Q1
PA DT
(CD-C/GF)
PA Cal Ave
(CC2/R)PA ECR- South
PA Midtown
(CN/GF)LA CRS Zone
SM Main Street
SM 3rd ST
PA ECR- T&C
(CC)PA ECR- Cal Ave
(CN, CS)Linear (PA DT
(CD-C/GF))Linear (PA Cal Ave
(CC2/R))Linear (PA ECR- South)
Linear (PA Midtown
(CN/GF))Linear (LA CRS Zone)
Linear (SM Main Street)
Linear (SM 3rd ST)
Linear (PA ECR- T&C
(CC))Linear (PA ECR- Cal Ave
(CN, CS))
Item 4
Attachment C: MBI Retail Recovery
Slides to Share Goal, Study Contents
and Findings
Packet Pg. 206
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Retail Trends -Months Vacant
Period PA DT
(CD-C/GF)
PA Cal Ave
(CC2/R)
PA ECR-T&C
(CC)
PA ECR-Cal Ave
(CN, CS)PA ECR-South PA Midtown
(CN/GF)LA CRS Zone SM Main Street SM 3rd ST
TOTAL 740,000 295,000 175,000 54,300 463,000 104,000 433,000 461,000 1,300,000
2024 Q1 QTD 8.5 40.6 2.3 23.1
2023 Q4 11.5 15.1 39.2 0.9 21.7 2.2 4.8
2023 Q3 13.0 22.3 32.1 18.7 11.1 10.9 12.1
2023 Q2 11.5 27.8 15.6 20.8 4.0 10.0
2023 Q1 29.2 24.8 12.6 6.4 23.1 16.5
2022 Q4 6.3 5.1 23.4 10.9 9.7 15.1 3.8 10.5
2022 Q3 5.8 19.1 7.9 12.4 0.5 5.7 2.1
2022 Q2 5.7 29.6 16.3 4.8 11.5 2.4 14.2 6.1
2022 Q1 4.9 6.8 15.9 1.8 8.5 6.8 11.4
2021 Q4 13.6 15.5 12.8 7.4 12.6 2.6 16.9
2021 Q3 17.4 13.3 4.4 10.2 31.0
2021 Q2 6.0 8.3 12.2 13.3 10.4 7.4
2021 Q1 14.6 9.2 10.3 13.3 5.7
2020 Q4 7.6 6.3 17.2 17.4 17.4 4.2 8.2
2020 Q3 6.0 5.2 14.2 14.4 5.0
2020 Q2 17.8 4.1 11.2 11.4 9.4
2020 Q1 15.1 2.0 8.2 8.4 5.0 2.5 8.1
2019 Q4 7.0 3.8 4.4 5.2 7.4 3.0 6.5
2019 Q3 4.0 1.8 2.2 4.4 3.6 4.0
2019 Q2 4.1 3.2 18.8 3.9 8.0
2019 Q1 3.5 1.7 1.0 3.8 2.7 6.2
2018 Q4 5.1 5.3 0.4 0.9 3.1 6.0 16.4
2018 Q3 6.4 5.5 15.5 2.0 5.2
2018 Q2 16.5 4.1 2.9 4.2 8.8 4.8
2018 Q1 2.3 6.5 9.5 19.2 2.4 10.1
2017 Q4 13.8 0.3 5.5 8.9 12.0 4.3 16.1
2017 Q3 6.3 3.6 9.4 6.5 2.9 5.5
2017 Q2 4.6 5.3 2.1 10.2 6.2 1.6 4.7 10.0
2017 Q1 10.2 7.2 15.4 1.1 0.5
2016 Q4 7.0 7.2 3.3 4.2 6.7 3.4 4.4
2016 Q3 9.3 17.1 3.2 0.3 4.1 3.2 18.1 3.8
2016 Q2 5.0 3.5 6.7 8.6 9.0 1.4 7.0
2016 Q1 5.0 6.0 6.7 6.4 4.5 6.9
2015 Q4 34.6 3.7 6.1 10.1 4.0 11.5
2015 Q3 4.9 6.9 7.4 4.3 5.8 6.9
2015 Q2 5.6 3.9 4.3 17.0 7.0
2015 Q1 1.6 0.9 1.8 3.9 5.1
2014 Q4 2.7 3.3 1.4 7.6 1.8 8.5
2014 Q3 3.9 0.2 5 4.5 2.1 9.8
2014 Q2 2.9 0.9 2.5 9.3 5.1 5.0
2014 Q1 6.1 5.5 3.8 6.0
LEGEND:
Red = > 12 Months Vacant
Item 4
Attachment C: MBI Retail Recovery
Slides to Share Goal, Study Contents
and Findings
Packet Pg. 207
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Retail Trends-Rent Per Square Foot
14
$30
$35
$40
$45
$50
$55
$60
$65
$70
$75
$80
$85
$90
20
2
9
Q
1
20
2
8
Q
3
20
2
8
Q
1
20
2
7
Q
3
20
2
7
Q
1
20
2
6
Q
3
20
2
6
Q
1
20
2
5
Q
3
20
2
5
Q
1
20
2
4
Q
3
20
2
4
Q
1
E
S
T
20
2
3
Q
4
20
2
3
Q
2
20
2
2
Q
4
20
2
2
Q
2
20
2
1
Q
4
20
2
1
Q
2
20
2
0
Q
4
20
2
0
Q
2
20
1
9
Q
4
20
1
9
Q
2
20
1
8
Q
4
20
1
8
Q
2
20
1
7
Q
4
20
1
7
Q
2
20
1
6
Q
4
20
1
6
Q
2
20
1
5
Q
4
20
1
5
Q
2
20
1
4
Q
4
20
1
4
Q
2
Market Asking Rent Per SF -RETAIL
PA DT
(CD-C/GF)
PA Cal Ave
(CC2/R)
PA ECR- T&C
(CC)
PA ECR- Cal Ave
(CN, CS)
PA ECR- South PA Midtown
(CN/GF)
LA CRS Zone SM Main Street SM 3rd ST
Item 4
Attachment C: MBI Retail Recovery
Slides to Share Goal, Study Contents
and Findings
Packet Pg. 208
Item No. 5. Page 1 of 1
Planning & Transportation Commission
Staff Report
From: Planning and Development Services Director
Lead Department: Planning and Development Services
Meeting Date: March 13, 2024
Report #: 2402-2678
TITLE
November 8, 2023 Draft Summary & Verbatim Minutes
RECOMMENDATION
Staff recommends that the Planning & Transportation Commission (PTC) adopt the meeting
minutes.
EXECUTIVE SUMMARY
Draft summary and verbatim minutes from the November 8, 2023 Planning & Transportation
Commission (PTC) meeting was made available to the Commissioners prior to the March 13,
2024 meeting date. The draft PTC minutes can be viewed online on the City’s website at
bit.ly/PaloAltoPTC.
ATTACHMENTS
There are no attachments
AUTHOR/TITLE:
Veronica Dao, Administrative Associate
Item 5
Staff Report
Packet Pg. 209