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SUBJECT:
HONORABLE CITY COUNCIL
CITY MANAGER DEPARTMENT: PLANNING AND
COMMUNITY ENVIRONMENT
CMR: 110:11
JANUARY 10,2011
STUDY SESSION
Update on Snstainable Commnnities Strategy (SB375) and Regional
Housing Needs Allocation (RHNA) Process
RECOMMENDATION:
Staff recommends that the City Council discuss the status of the Sustainable Communities
Strategy (SCS) and the Regional Housing Needs Allocation Process (RHNA) and provide
comments in anticipation of further actions in February through August.
EXECUTIVE SUMMARY:
This staff report describes Senate Bill 375, the Sustainable Communities Strategy (SCS) and the
effect of the law on local goverrunents as well as the Bay Area as a region, and is based largely
on information provided by the Metropolitan Transportation Commission (MTC) and the
Association of Bay Area Goverrunents (ABAG). The SCS will be developed in paJinership with
regional agencies, local jurisdictions and Congestion Management Agencies (CMAs), such as
the Valley Transportation Authority (VTA), through an iterative process. The regional agencies
have acknowledged that input from local jurisdictions with land use authority is essential to
create a feasible SCS. The SCS does not, however, alter the authority of jurisdictions over local
land use and development decisions.
The pUlpose of this report is to provide Palo Alto City Council members with an overview of the
SCS in relation to local land use policies, transportation implications, and implementation needs,
and will address key policy considerations for the City of Palo Alto. The City will provide input
to several components of the SCS and RHNA processes in the next 6 months, including: a) the
formulation of the regional housing allocation methodology; b) whether to form a subregional
housing allocation effort with other Santa Clara County cities; c) characterization of the "place
types" in Palo Alto that might accommodate increased development over the next 25 years; and
d) response to the Initial Vision Scenario and subsequent iterations to outline the form of
development throughout the region.
CMR: 110:11 Page 1 of 9
BACKGROUND:
Senate Bill 375 (SB375) was enacted in 2008 and is considered landmark legislation for
California relative to land use, transportation and environmental planning. SB375 is intended to
help to implement AB32 (Global Warming Solutions Act), approved in 2006 and requiring
actions to reduce greenhouse gas emissions to 1990 levels by 2020 and by 80% below 2005
levels by 2050. While much of AB32 focuses on emissions from stationary sources (industrial
facilities) or diesel trucks, SB375 is focused on emissions from automobiles and light trucks and
the reduction in vehicle-miles traveled due to more compact land use patterns and potential mode
shifts. A summary of the impacts ofSB375 has been prepared by the Urban Land Institllte (ULI)
and is included as Attachment E.
The legislation calls for the development of a Sustainable Communities Strategy (SCS) in all
metropolitan regions in California. Within the Bay Area, the law assigns joint responsibility for
the SCS to the Metropolitan Transportation Commission (MTC) and the Association of Bay
Area Governments (ABAG). These agencies will coordinate with the Bay Area Air QlIality
Management District (Air District) and the Bay Conservation and Development Commission
(BCDC).
The SCS integrates several existing planning processes and IS reqllired to accomplish the
following objectives:
I. Provide a new 25-year land use strategy for the Bay Area that is realistic and identifies
areas to accommodate all of the region's population, including all income groups;
2. Forecast a land use pattern, which when integrated with the transportation system,
reduces greenhouse gas emissions from automobiles and light trucks and is measured
against the regional target established by the California Air Resources Board (CARB).
The California Air Resources Board (CARB), in response to the mandates of SB375, has set
target GHG emissions from light trucks and passenger vehicles for each of the region's subject to
the provisions of SB375. For the ABAG area, the CARB set targets for a 7% reduction in
emissions by 2020 and a 15% reduction in emissions by 2035.
The SCS is also required to be included as part of the Bay Area's 25-year Regional
Transportation Plan (RTP). By federal law, the RTP must be internally consistent and, therefore,
the $200+ billion dollars of transportation investments typically included in the RTP must align
with and support the SCS land-use pattern. SB375 also requires that an updated eight-year
regional housing needs allocation (RHNA) prepared by ABAG is consistent with the SCS. The
SCS, RTP and RHNA will be adopted simultaneously in early 2013.
The Council and Planning and Transportation Commission have each conducted study sessions
in the past year to better understand the background of SB375, and staffs Comprehensive Plan
Speaker Series included a presentation by ABAG representatives regarding the legislation. In
addition, four Councilmembers and the City Manager and Planning Director attended a meeting
sponsored by the Santa Clara County Cities Association, also involving an ABAG overview of
the objectives and process for developing the Sustainable Communities Strategy.
CMR: 110:11 Page 2 of 9
DISCUSSION:
The goal of the SCS is not only is to reduce greenhouse gas emissions, but to build a Bay Area
that continues to thrive and prosper under the changing cireumstanees of the twenty-first century.
By directly confronting the challenges associated with population growth, climate change, a new
economic reality and an increasing public-health imperative, the SCS is intended to support a
Bay Area that is both more livable and more economically competitive on the world stage. A
successful SCS will:
• Recognize and support compact, walkable places where residents and workers have
access to services and amenities to meet their day-to-day needs;
• Reduce long commutes and decrease reliance on fossil fuels, increasing energy
independence and decreasing the region's carbon consumption;
• Support complete communities that remain livable and aflbrdable for all segments of the
population, maintaining the Bay Area as an attractive plaee to reside, start or continue a
business, and create jobs;
• Support a sustainable transportation system and reduce the need for expensive highway
and transit expansions, freeing up resources for other more productive public
investments;
• Provide increased accessibility and affordability to the most vulnerable populations;
• Conserve water; and
• Decrease our dependence on imported food stocks and their high transport costs.
In recognition of the importance of these other goals, ABAG and MTC will adopt perfonnance
targets and indicators that will help infonn decisions about land usc patterns and transportation
investments. These targets and indicators will apply to the SCS and the RTP and will not weigh
as heavily as greenhouse gas reduction, but will provide additional criteria for use in comparing
the alternative SCS scenarios. The targets are scheduled for adoption by the Joint Policy
Committee (ABAG, MTC) in early 2011 and the indicators will be adopted in the spring of2011.
Planned Development Areas (PDAs)
In many respects the SCS builds upon existing efforts in Bay Area communities to encourage
more focused and compact growth while recognizing the unique characteristics and differences
of the region's many varied communities. FOCUS Priority Development Areas (PDAs) are
locally-identified and regionally adopted infill development opportunity areas near transit. The
City of Palo Alto has identified a PDA for the California Avenue/Park Blvd.lFry's area around
the California Avenue Caltrain station. The PDAs provide a foundation upon which to structure
the region's Sustainable Communities Strategy. PDAs encompass only three percent (3%) of the
region's land area whereas, based upon existing plans, resources, and incentives, the PDAs can
collectively accommodate over fifty percent (50%) of the Bay Area's housing need through
2035.
PDAs have been supported by planning grants, capital funding and technical assistance grants
from MTC. The current RTP allocates an average of$60 million a year to PDA incentivc-related
funding. Future RTPs, consistent with the SCS, will be structured to provide policies and funding
CMR: 110:11 Page 3 of 9
that is supportive of PDAs and potentially other opportunity areas for sustainable development in
the region.
In Palo Alto, the California Avenue Area PDA is coterminous with the City's ongoing Concept
Area Plan for that area. City staff has provided input to ABA G regarding both the existing
development levels and the potential for growth in housing and employment. The PDA analysis
identifies "place types" for different land uses and densities, and the "Transit Neighborhood"
place type has been tentatively designated for the California Avenue Area PDA. This plan
envisions a broad range of development possibilities, with up to 20-50 units per acre of
residential and floor-to-area ratio (FAR) of up to 2.0. These are estimates based on existing
Pedestrian-Transit Oriented Development (PTOD) zoning for the area. If the ongoing planning
for the area results in increased intensity levels, staff will forward that information to ABAG.
In addition to the City'S PDA for the California Avenue Area, VTA has designated all of the El
Camino Real corridor and the University Avenue station area as potential opportunities for
further development ("potential PDAs"). Staff has identified the El Camino Corridor as a "Mixed
Use Corridor" place type and the University Avenue transit area as a "Transit Town Center" for
initial forecasting. Staff has notified ABAG that the City does not consider the San Antonio
Avenue transit station to result in a place type with increased development in Palo Alto.
Attachment D depicts the concept of "pI ace types" used in the fornmlation of the SCS.
Partnership with Local Jurisdictions
To be successful, the SCS will require a partnership among regional agencies, local jurisdictions,
Congestion Management Agencies (CMAs), transit agencies, and other regional stakeholders.
MTC and ABAG are engaged in an exchange of information with County-Corridors Working
Groups throughout the Bay Area. These Groups are organized by county, by sub-regions within
counties, and by corridors that span counties. They typically include city and county planning
directors, CMA staff, and representatives of other key agencies such as transit agencies and
public health departments. Working Group members are responsible for providing updates and
information to their locally elected policymakers through regular reports like this one and
eventually through recommended councilor board resolutions that acknowledge and respond to
the implications of the SCS for each jurisdiction.
Each county has established an SCS engagement strategy and the composition of a
County/Corridor Working Group according to its needs and ongoing planning structure. The City
of Palo Alto Planning Director is working with the Santa Clara County Association of Planning
Officials (SCCAPO), primarily composed of planning directors from each city and from Santa
Clara County, to address these issues. Other City staff members are involved in working groups
of planners and transportation officials coordinated by and supported technically by the Valley
Transportation Authority (VTA). The City/County Managers Association and the Santa Clara
County Cities Association are also active in reviewing key policy actions related to the SCS. In
addition to the County-Corridor Working Groups, a Regional Advisory Working Group
(RA WG), composed of local government representatives and key stakeholders throughout the
region, provides technical oversight at the regional level. The Planning Director is a participant
in those meetings on a monthly basis.
CMR: 110:11 Page 4 of 9
Development of SCS Scenarios
The SCS will be the product of an iterative process that includes a sequence of growth and
supportive transportation scenarios. An Initial Vision Scenario will be presented in February
20 II, followed by more detailed SCS scenarios that refine the Initial Vision Scenario (Spring
and Fall 2011), with a final draft for review in early 2012. The draft project timeline is outlined
in more detail in the "Next Steps" section below and a draft schedule of 2011 milestones and
opportunities for City input is provided as Attachment A.
Initial Vision Scenario
ABAG and MTC will release an Initial Vision Scenario in February 201 1, based in large part on
input from local jurisdictions through the county/corridor engagement process and information
collected through December 2010. The Vision Scenario will encompass an initial identification
of places (place types), policies and strategies for long-term, sustainable development in the Bay
Area. Local governments will identify places with potential for sustainable development,
including PDAs, transit corridors, and employment areas, as well as infill opportunity areas that
lack transit services but offer opportunities for increased walkability and reduced driving.
The Initial Vision Scenario will:
• Incorporate the 25-year regional housing need encompassed in the SCS;
• Provide a preliminary set of housing and employment growth numbers at regional, county,
jurisdictional, and sub-jurisdictional levels;
• Be evaluated against the greenhouse gas reduction target as well as the additional
performance targets adopted for the SCS.
For Palo Alto, the place types factored into the Vision Scenario will include the California
Avenue Area PDA and the El Camino Real corridor and University Avenue transit area, as
outlined previously. The intent of this initial Vision Scenario is to show a development pattern
"unconstrained" by public service limitations, fiscal, transportation, or other infrastructure.
Detailed Scenarios
By the early spring of2011, local governments and regional agencies will evaluate the feasibility
of achieving the Initial Vision Scenario and will produce a series of Detailed Scenarios for
review. The Detailed Scenarios will take into account constraints that might limit development
potential, and will identify the infrastructure and resources that can be identified and/or secured
to support the scenario. MTC and ABAG expect to release a first round of Detailed Scenarios by
July 2011, following multiple discussions and workshops in response to the Initial Vision
Scenario. The County/Corridor Working Groups as well as the RA WG will facilitate local input
into the scenarios, with the release of a Preferred Scenario by the end of 20 II. The analysis of
the Detailed Scenarios and Preferred Scenario will evaluate benefits of the land use alternatives
in reducing greenhouse gas emissions and vehicle-miles traveled, and will also consider the
Perfonnance Targets and Indicators as additional criteria.
Regional Housing Needs Allocation (RHNA)
As described above, the eight-year RHNA must be consistent with the SCS. Planning for
affordable housing in the Bay Area is one of the essential tasks of sustainable development. In
the SCS, this task becomes integrated with the regional land use strategy, the development of
CMR: 110:11 Page 5 of9
complete communities and a sustainable transportation system. The county/corridor engagement
process will include discussions ofRHNA, since both the SCS and RENA require consideration
of housing needs by income group.
The process to update the RHNA will begin in 20 11:
o A Housing Methodology Committee for the region will be appointed in January 2011.
Meetings will continue through September 2011.
o Cities must detennine whether they want to fonn a sub-regional RHNA group by March
2011. If so, they must follow the same timeline for fonnulation as the Methodology
Committee.
o Local jurisdictions will provide input prior to the adoption of the RHNA methodology by
September 20 II.
o The final housing numbers for the region will be issued by the State Department of
Housing and CommWlity Development (HCD) by September 2011.
o The Draft RENA will be released by spring 2012.
o ABAG will adopt the Final RHNA by the end of summer 2012.
o Local governments will address the next round of RHNA in their next Housing Element
update (2014-2022).
The distribution of housing needs will then infonn the Detailed SCS Scenarios.
Councilmember Scharff has been nominated (and has a good likelihood of being appointed) to
the RHNA Methodology Committee. The Committee will include 2 staff from cities (San Jose
and Morgan Hill) and 2 alternates (Cupertino and Sunnyvale), and a staff member from Santa
Clara County. Staff hasn't heard if any City Managers will be selected. While still not
proportional to the County's population or employment, this is an improvement over the last
round of housing review, when only I city staff, 1 county staff, and I Council member were
included across the entire Santa Clara County. The County Planning Directors emphasized the
need for increased numbers and diversity across the representatives from this county, including
an elected official from north County.
Regional Transportation Plan (RTP)
The SCS provides an explicit link between land use choices and the transportation investments in
the region. The regional agencies indicate they will work closely with the VTA and other CMAs,
transportation agencies and local jurisdictions to define financially constrained transportation
priorities in their response to a can for transportation projects in early 2011 and a detailed project
assessment that will be eompleted by July/August 2011. The project assessment will be an
essential part of the development of Detailed SCS Scenarios. The RTP will be analyzed through
2012 and released for review by the end of 2012. ABAG is expected to approve the SCS by
March 2013, and MTC would follow with adoption of the final RTP and SCS by April 2013.
Environmental Review
Regional agencies will prepare one Enviromnentallmpact Report (ErR) for both the SCS and the
RTP. This EIR might assist local jurisdictions in streamlining the environmental review process
for some of the projects that are consistent with the SCS. Regional agencies are investigating the
CMR: llO:l1 Page 6 of 9
scope and strategies for an EIR that could provide the most effective support for local
governments.
Additional Regional Tasks
MTC, ABAG and the Bay Area Air Quality Management District are coordinating the impacts of
CEQA thresholds and guidelines recently approved by the Air District. The Air District is
currently developing tools and mitigation measures related to the CEQA thresholds and
guidelines to assist with development projects in PDAs. The four regional agencies will be
coordinating other key regional planning issues including any adopted climate adaptation-related
policy recommendations or best practices suggested by BCDC,
Palo Alto Role in Developing and Implementing the Sustainable Communities Strategy
The City staff, Planning and Transportation Commission, and Council will be asked to respond
to several key questions over the coming year and beyond, such as (but not limited to):
I. How much housing and employment should/can the City accommodate to provide a
meaningful contribution to smart growth and sustainable development mandates of the
Bay Area and balance new growth opportunities with the existing character of the City of
Palo Alto?
2. Where does the City desire/expect to accommodate new housing and employment within
the next 25 years?
3. What are the key local sustainable development issues/strategies that might be advanced
through the SCS (e.g., type (clean tech) and extent of employment growth, affordable
housing, enhanced commercial revenues, etc.)?
4. What are the primary constraints to providing for sustainable development opportunities
in Palo Alto (e.g., enhanced school facilities, open space, transportation and transit
infrastructure, etc.)'1 What key investments would be needed?
5. How should Councilmembers, the Planning and Transportation Commission, and staff
participate in this process?
The SCS provides an opportunity for the City of Palo Alto to advance local goals as part of a
coordinated regional framework. The SCS may help comlect local concerns-such as new
housing, jobs, and traffic-to regional objectives and resources. As such, it may serve as a
platform for cities and counties to discuss and address a wide spectrum of challenges, including
high housing costs, economic development, affordable and accessible transportation, and public
health, and identify local, regional, and state policies to address them. The bottom line is that the
SCS is likely to reward those cities whose decisions advance not only local goals but also benefit
quality of life beyond their borders-whether to create more affordable housing, new jobs, or
reduce driving.
TIME LINE AND NEXT STEPS:
The Next Steps below outline and as shown in Attachment A outline the City of Palo Alto's
expected timeline for key participation and response in the coming year (2011). The City
Council, Planning and Transportation Commission, staff, and the Palo Alto community will be
actively engaged at several points in the SCS and RHNA process over the coming year:
CMR: 110:11 Page 7 of9
COURTESY COPIES:
Planning and Transportation Commission
Ezra Rapport, Executive Director, Association of Bay Area Governments
Ken Kirkey, Director of Planning, Association of Bay Area Governments
CMR: IIQ:II Page 9 of9
January 9, 2008
ABAG Executive Board
c/o Henry Gardner, Secretary -Treasurer
Association of Bay Area Goverrunents
P.O. Box 2050
Oakland, CA 94604-2050
Dear Mr. Gardner:
ATTACHMENT B
G!tx O~ Palo~t~
Department of Planning and
Community Environment
The City of Palo Alto thanks you for providing us with the opportunity to review and comment
on the revised Draft Regional Housing Needs Allocation (RHNA), which was adopted by the
ABAG Executive Board on November 15,2007. ..
The City acknowledges ABAG's modificationio Palo Alto's RHNA to address the City's Sphere
of Influence circumstance with the County ,of Santa 'Clara and Stanford Ulliv~rsity.,However,
our City Council, the Planning and Transportation Comm.ission and slaffhave alldeteimined that
the RHNA of 2,860, even after the reduction of 645 units, is completely unachievable in Palo
Alto given the lack of available land, the high cost of land acquisition, and·the impacts of that .
amount of growth on the City's neighborhoods and infrastructure. Setting these requirements
that cannot be achieved threatens the credibility and viability of important public institutions and
becomes simply an exercisdnfutility. .
Palo Alto has an extensiveand long history ofleading and implemen(i)lg affordable housing in
an area highly impacted by tltehigh cost of housing. We I'o,'¢i'f .the first to implement
inclusionary zoning in this region and Palo. Alto Housing Corpor~t!.9~ was established back in
1970 as a non-profit affordable housing provider. Although the .Cityof Palo Alto has adopted
zo ning and programs supporting core concepts behind the allocation method such as smart
growth, infill developmen't, protection of open space and rurakwe~s,i~l:ricting urban sprawl,
and transit oriented development, there should be a reasonable expei:ialioJio[ success in meeting
goals when assigning allocations to cities. . .... ,.. .
'; ','.
Factors such as essential infhlstruchire ne.eds and service reqiiit~i,lienls~lsd:i):e~¢ to be taken into .....
consideration. Many comp,qnents of the City's infrastructur,;¥~'aii~adyatta;pacity and another
critical factor is the capacity limitations of the Palo Alto UnitiedSchpol Dis(rict. The cutrent
school population has already pushed the present facilities bey6nd capacity so that every
elementary school now has muliiple portables. Stlldents from an additftmal 2,860 .housing units
simply cannot be accommodated with The eiiistiQg'fac:ilities"and budget. . Given that the s"hoo\
district is at capacity, and there is n()a~ailabl~ funding ' toaccommOdateihe increased'stUdent
population from the allocation, these requirements Wouldampunt to an unfundedtnandate fPr
Palo Alto. '.
Planning
250 Hamilton Avenue
P.O. Box 10250
Palo Alto, CA 94303
650.329.2441
650.329.2154
Transportation
250 Hamilton Avenue
P.O. Box 10250
Palo Alto, CA 94303
650.329.2520
650.617.3108
BUilding
285 Hamilton Avenue
P.O. Box 10250
Palo Alto, CA 94303
650.329.2496
650.329.2240
Mr. Henry Gardner
Page 2 of4
January 9, 2008
As staff has indicated previously in transmittals to ABAG, the population and household growth
projections for Palo Alto will not be realized and should be adjusted to reflect a population
growth rate of approximately 3.0 % over the next RHNA period within our jurisdictional
bOlmdary. ABAG's Projections 2007 assumes a population growth rate of approximately 7%
during the next 7 years in our jurisdictional boundary. Historically, the City of Palo Alto's
population has grown only by approximately 4.7% over the last thirty years. We understand that
the methodology uses Sphere of Influence population projections but we believe that the
population trend within our Sphere of Influence is proportional to the historic jurisdictional
boundary population trends. Although the City has experienced a growth rate of approximately
8% during the last seven years, this has been a period when Palo Alto has constructed significant
new housing development well in excess of historic averages and that rate cannot be sustained
given Palo Alto's limited land availability and redevelopment potential. Therefore, it's very
likely that the, City'S population growth will remain far below ABAG's projections since it will
be very difficult for Palo Alto to continue the housing development it has experienced in the last
seven years.
During the last RHNA period, the City's popUlation growth was largely attributable to a single
development of approximately 1,000 units on the City's only remaining vacant large residential
site. This City's housing growth occurred during a temporary period of substantial decline in the
market for commercial development and increasing demand for housing. Taking this anomaly
and extrapolating this into the future is not appropriate. By using its own overestimated
Projections 2007 population numbers, the RHNA methodology compounds this error by
assigning a 45% weight to the population projections that ABAG itself created. This logic
appears circular in that the driver behind this growth appears to be the mandate from ABAG.
Additionally, the City should receive credit in this RHNA cycle for the 1,036 units that were
built during that last RHNA period that exceeded the City's assigned allocation. The City
exceeded its above moderate allocation by 1,282 units and its low allocation by 14 units with a
deficit of 51 units in the very low category and 208 in the moderate category. Palo Alto has also
protected and retained existing units that are more affordable and should receive further credit to
offset the City's RHNA requirements.
The City also continues to oppose the inclusion of an additional Transit Oriented Development
(TOD) factor in the allocation methodology to the extent that it would disproportionately assign
housing to cities like Palo Alto that have shown a commitment to TOD, in effect penalizing
cities that have developed smart growth policies. Additional growth requirements for built out
cities like Palo Alto should be predominantly TOD housing, not the core ABAG allocation plus
TOD housing.
The emphasis of transit use in the methodology is illlrealistic at least for Palo Alto. Transit at the
University and California Avenue stations is used more efficiently by commuters and not
Mr. Henry Gardner
Page 3 of 4
January 9, 2008
so efficiently by residents; many more people take transit TO Palo Alto than FROM Palo Alto.
A greater eoncentration of jobs in the vicinity of transit will promote mass transit in Palo Allo
more effectively than the eoncentration of housing. Furthennore, Palo Alto has been assigned
additional units based on transit access from the San Antonio Avenue station. However, this
station is located in and serves primarily Mountain View, not Palo Alto. Also, Caltrain only
services the San Antonio Cal train station once per hour during rush hours further reducing its
TOD effectiveness.
Palo Alto has promoted smart growth in its Comprehensive Plan policies and its Pedestrian and
Transit Oriented Development (prOD) zoning all in the midst of VTA reducing bus services to
Palo Alto neighborhoods and with little or no projected additional funding for transit to support
the TOD aspects ofRHNA. However, Palo Alto's diligence and success in implementing smart
growth policies appear to have led ABAG to assume that the City has no limit to further
intensifying with infill development.
Given the RHNA mandate to provide housing for all income levels, it is impossible for the City
to provide the 1,875 units assigned for below market rate income levels. Palo Alto prioritized
affordable housing as one of the City's top five goals and built over 90 percent of the City's very
low and low income housing allocation for the last RHNA cycle. However, the current RHNA
methodology uses 2000 Census ineome distribution data for allocating housing based on
affordability, and does not reflect the City'S success in building affordable housing over the last
seven years. Instead, the current methodology allocated more affordable housing to Palo Alto
compared to the region as a Whole.
Additionally, due to the extraordinary cost of land in Palo Alto, all very low and low income
rental housing that has been developed recently has required significant Cily subsidy. The cosl
of low and very low income projects in Palo Alto are averaging $400,000 to $500,000 per unit.
Recently the City has had to subsidize approximately 50% of the project cost for most low
income and very low income projects. . This is in large part due to the exorbitant land costs in
Palo Alto which average $10 million an acre but have been as high as $16 million an acre. In
order to develop the assigned 1,234 units of low and very low income housing under current
funding conditions, the City would be expected to provide a subsidy of approximately $245 to
$3!O million, which is clearly unrealistic and unattainable as the City stmggles to maintain
revenues adequate to support basic services to its residents and businesses. Given state subsidy
restrictions, and because of the high land cos Is in Palo Alto, moderate income units are achieved
only through the City's inciusionary zoning program, which requires 15 -20% affordability. As
a result, approximately 70% of the ABAG allocation would need to be subsidized by Palo Alto.
In order to provide the assigned 641 moderate income level units, the City would have to
develop 3,205 -4,272 market rate units. The high cost to the City of providing this housing as
well as supporting services and facilities, schools, transit and parks, is an unfunded state
mandate. There may also be insufficient water resources available to serve this additional
popUlation. Until there is state
Mr. Henry Gardner
Page 4 of 4
January 9,2008
subsidy available for affordable units, identifying adequate sites to meet proposed RHNA
housing for lower income levels in communities like Palo Alto will be a paper exercise.
The City requests that you confirm that the job growth anticipated with the proposed Stanford
Shopping Center and Medical Facility expansions are included in ABAG's projections for the
City's job growth for the 2007 -20 14 period, and the City will not be assigned these jobs a second
time in a future RHNA regardless of those projects' occupancy dates.
Finally, much discussion has occurred about thc impact of commute emissions on climate
change. Palo Alto has just concluded a comprehensive climate change impact analysis. A
significant finding of that report is that 11 % of Palo Alto's C02 emissions are attributable to trips
into Palo Alto. Consequently, the report indicates that even an additional 2,860 units with
similar commuting characteristics would impact Palo Alto C02 emissions by less that 0.1 % or
111 OOO'h Palo Alto's total C02
In closing, the City requests that ABAG revise Palo Alto's RHNA to reflect a 3% population
growth over the seven-year RHNA period, exclude the San Antonio station from our transit
factor, adjust the transit factor to eliminate any "double counting" and credit the City with the 1,
036 units the City built in excess of our last RHNA assignment. The City also urges ABAG to
consider factors such as land costs and availability as well as community needs to provide
adequate open space and essential services in developing a realistic RHNA. Given that there was
no representative from the 250,000 residents of North Santa Clara County on the Housing
Methodology Committee, we were not adequately represented and, therefore, unique factors
prevalent in our area were not sufficiently considered in the ABAG allocations. If ABAG adopts
more realistic and achievable RHNA allocation goals, this will enable cities to focus on actually
providing adequate housing for Ii diverse population, a goal strongly supported by the City
Council and the Palo Alto community.
The City of Palo Alto appreciates your consideration of our appeal of the assigned allocation.
Sincerely,
..---( ~. ~' .. " ... ----J$e-.
Larry Klein
Mayor
cc: Paul Fassinger, ABAG Research Director