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HomeMy WebLinkAbout2003-07-28 City Council (7)City of PI Alto City Manager’s R l[ort TO:HONORABLE CITY COUNCIL FROM:CITY MANAGER DEPARTMENT: PLANNING AND COMMUNITY ENVIRONMENT DATE: SUBJECT: JULY 28, 2003 CMR: 386:03 SOUTH OF FOREST COORDINATED AREA PLAN PHASE 2 - ANSWERS TO COUNCIL QUESTIONS This memorandum is meant to answer questions asked by the City Council at the July 21, 2003 meeting regarding the South of Forest Area, Phase 2 (SOFA 2) Coordinated Area Plan (CAP). The answers are grouped by topic and attached to this memorandum. What follows is a table of contents: Attachment A General Questions A. 1 What happens if no plan is passed? A.2 How many housing units would be built under the CAP? (Realistic and maximum projections) A.3 Matrix comparing the Commission/Staff proposal with the Working Group proposal and existing zoning. A.4 What in the plan might cause the loss of Whole Foods or automotive service uses? A.5 How many CD-S residential units currently exist? A.6 Does commercial area built in SOFA2 count under the Downtown development cap? A.7 How much did the creation of this plan cost? Attachment B Historic Preservation B. 1 General information about historic preservation B.2 January 15, 2003 HRB Staff Report B.3 Chart comparing proposed historic provisions with existing zoning B.4 Proposed historic preservation code language B.5 Map of SOFA 2 historic resources Attachment C Homer/Emerson Corridor (Topic 2 of CMR:365:03) C.1 C.2 C.3 How does the retail market work in the area? How do we make sure the plan ensures flexibility for property owners? What are "ground-floor-dependent" businesses? Give examples. What is the difference between the Homer!Emerson provisions and the (P) overlay? Attachment D Planned Community (PC) Districts (Topic 4 of CMR:365:03) D.1 D.2 D.3 Shouldn’t there be an office component available for affordable housing PC District projects? How would a rental project become eligible for a PC District? Why only allow the PC District for 100% affordable housing, and not for other projects? Why put restrictions on the PC District? Attachment E Housing unit size and affordability (Topic 5 of CMR:365:03) E.1 E.2 Discuss affordable/attainable housing, the need for a variety of housing types, the need for family units, and the reason for choosing a 1250 square foot maximum average unit size. Discuss the idea that "loss of development potential on housing sites is to be discouraged. Attachment F Housing units added to existing buildings (Topics 1 and 7 of CMR:365:03) F.1 How would the process work for adding units to existing commercial buildings? How many of these would realistically be built? Respectfully submitted, STEVE EMSLIE, Diree, tor Planning and Community Environment EM14Ly HARRISON Assistant City Manager ATTACHMENT A GENERAL QUESTIONS A.1 What happens if no plan is passed? If the CAP is not passed, the existing CD zoning and the citywide ground floor use restrictions will apply in the area. Most of the provisions of the proposed SOFA 2 CAP do not add restrictions beyond those of existing zoning. Generally, not passing the CAP will mean that incentives to achieve certain goals for the area will not be put in place: Homer/Emerson uses: On Homer and Emerson, if no CAP is passed, no regulations will be put in place to encourage new street-friendly uses or protect existing ones. Office uses will be allowed to continue locating in street facing ground floorspace and may replace other existing ground floor uses. Historic preservation: Attachment B discusses, in great depth, the differences between the proposed CAP historic preservation provisions and the current historic preservation provisions of the PAMC (Chapter 16.49). As stated in Attachment B, the proposed historic preservation provisions are more protective of historic resources than what currently exists. If the Council does not pass the CAP, the less restrictive provisions of PAMC Chapter 16.49 will continue to apply. Housing: The CAP contains many incentives for housing, none of which would apply if it is not passed. Current CD-S zoning has generated virtually no housing since 1986. Almost all housing that has been built or proposed in the area has required a PC district, and this would be the most likely way housing would be built in this area in the future, if the CAP is not passed. PC Districts: If no CAP is passed, the PC District will continue to be available in SOFA 2 in its current form. Parking: Under current zoning, it is difficult, if not impossible, for an underparked building to switch from office use to retail or personal service use, because most underparked buildings cannot provide the additional parking that is required for the more intensive retail or personal service use. Approximately 53 of the 60 buildings in SOFA 2 are underparked. If the Commission!Staff- proposed parking ratios are not approved, this situation will continue to exist in the area, creating a large disincentive for new retail-type uses. Retail Preservation Ordinance (Ord. #4730): The retail preservation ordinance, which prevents ground floor retail, personal service, restaurant, automotive, and housing uses from being replaced by office, currently applies in SOFA 2. The Commission recommended not continuing the ordinance in SOFA 2, if the CAP is adopted. If the CAP is not adopted, the ordinance would continue to apply. A.2 Design guidelines and c’ornpatibility standards: The Design Guidelines and Compatibility Standards developed for the area and contained in the CAP would. not apply if the CAP is not adopted. How many housing units would be built under the CAP? (Realistic and maximum projections) Because development decisions are made on such an individual basis, and because there are over 50 different property owners for the approximately 70 parcels in SOFA 2, it is very difficult to make "realistic" projections of the number of housing units that will be built under the different plans. The area is not large enough to do analyses that would be statistically reliable, so any projections are by necessity somewhat subjective. In contrast, because of the development agreement in SOFA 1, negotiated with a single owner, projections were easy to make. Nevertheless, some general projections have been made. Freedman, Tung, and Bottomley, working with staff, have established development prototypes for sites considered likely to develop under the two recommendations (Working Group and PTC/Staff). These prototypes were designed for sites in SOFA 2 considered likely to develop, and took into account the constraints of each site, including parking requirements. The designs that used a 1.5:1 FAR in the RT-35 district and 2:1 FAR in the RT-50 district yielded 120 dwelling units. When a 1.15:1 FAR was used throughout the area, the designs yielded 90 units. With respect to growth impacts, the SOFA Environmental Impact Report (EIR) analyzed and proposed mitigation measures for the impacts of up to 391 housing units throughout the area. Approximately 160 units were approved in SOFA, Phase 1, and an additional 90-120 housing units in Phase 2 would be within the range analyzed in the EIR, and well below the upper level of development analyzed in that document. It is possible to determine the maximum number of housing units that could be built under the plan there are several reasons why this maximum would not likely be reached. The feature of the area that most affects extensive redevelopment is the grandfather clause, created in 1986 and proposed to be included in the CAP. Approximately 50 of the 60 buildings in SOFA 2 have more than 0.4:1 commercial FAR. The grandfather clause allows commercial FAR to remain on these sites indefinitely, and because of the relative value of commercial to housing use, will likely result in many of these sites remaining in exclusively commercial use. The theoretical maximum number of units can also be calculated. These numbers assume that all of SOFA 2 that is currently CD is demolished, including the historic buildings, and housing units are built on every site to the maximum FAR allowed, with an average unit size of 1250 square feet, and ignore other site- specific constraints such as parking: Existing zoning (.6:1 residential FAR permitted throughout) would result in a theoretical maximum of 300 units. The Working Group proposal (1.15:1 FAR limit throughout) would result in a theoretical maximum of approximately 590 units. Under the PTC/Staffproposal (1.15:1 FAR in RT-35 and 1.5:1 in RT-50), the theoretical maximum would be 640-units. If every single property took advantage of the proposed FAR bonus program presented to the Council on July 21, 2003, which would permit a maximum of 1.5:1 FAR in the RT-35 district, and 2:1 in the RT-50 district, the theoretical maximum number of units throughout SOFA 2 would be 840. x 0N uX r~ i_,2 a::o d E~ EE0 ~0 t~ A.4 What in the plan might cause the loss of Whole Foods or automotive service uses? Staff does not believe that anything in this plan would cause the loss of Whole Foods. The plan continues the existing.,5,000 square foot limit on office in the area (and may provide further protection of some ground floor uses, if Council adopts the proposed Homer/Emerson restrictions). Since Whole Foods is in a 20,000 square foot building, and only 5000 square feet could become office, it is not likely to happen. The proposed 1.15:1 housing FAR is also unlikely to make Whole Foods leave; as stated by BAE, a 1.15:1 FAR development would be economically feasible, but only on vacant sites or sites with obsolete buildings that could not effectively house businesses. And though under the PTC/Staff proposal bonuses could be used to raise the FAR on the site to 1.5:1, this additional FAR would not be as profitable because of the public benefit required to reach that upper limit. Whole Foods has said that switching Homer Avenue to two-way flow would harm the business, but that change is currently on hold, and is not part of the proposed CAP. As for automotive uses, owners of these businesses have said that a changing marketplace, rather than harmful zoning regulations, is causing the loss of automotive businesses. Many of the business owners own their buildings, and so do not feel pressure from landlords raising rents. The proposed recommendations permit the continued operation of these uses as long as they can viably remain in the area. A.5 How many CD-S residential units currently exist? A.6 A.7 There are four known residential structures zoned CD in SOFA 2: the duplex at 731 Emerson Street, and one unit each at 929, 933, and 949 Emerson. Under the existing Retail Protection Ordinance (#4730), none of this housing can be converted to office. The Commission made a motion to continue to prohibit conversion of housing to office in SOFA 2 during the June 25, 2003 meeting, but that motion failed on a 3-3 vote, and was therefore brought forward to the Council without a recommendation. Does commercial area built in SOFA 2 count under the Downtown development cap? Yes, all commercial area built in SOFA 2 counts under the Downtown monitoring cap. How much did the creation of this plan cost? This question will be addressed at the City Council meeting on July 28. ATTACHMENT B HISTORIC PRESERVATION B.1 General information about historic preservation: In response to questions raised by Council members at the July 21, 2003 Council meeting, staff is requesting confirmation on an eighth topic: historic preservation. At the City Council meeting of October 7, 2002, the Council expressed concern over aspects of the historic provisions. The plan presented at that meeting had required preservation of all historic resources in SOFA 2, without exception. At that meeting, staff recommended adoption of two exceptions that are virtually standard for preservation ordinances. Staff also brought forward an alternative third exception that would give the Council some discretion to allow demolition of historic structures if doing so would greatly advance other, conflicting goals of the plan. Council requested that these historic provisions and staff-recommended exceptions be reviewed by the HRB. On January 15, 2003, the HRB reviewed the historic provisions, and largely accepted them, with two modifications. First, they added a sentence to the third demolition finding introduced by staff, which read "Examination of alternatives is required, including, but not limited to, preservation, alteration, demolition, and relocation". They also modified proposed code language 6.050(f) to read "Properties on the SOFA 2 Potential Historic Resource List shall undergo a study by a qualified historic preservation expert to determine eligibility for the SOFA 2 Historic Resources List". Staff supports these recommendations. The Planning and Transportation Commission agreed with the recommendations of the HRB at their meeting of February 5, 2003. Attachment B.2 contains the HRB staff report (without attachments), which provides a thorough description of the historic provisions. Attachment B.3 is a chart comparing the proposed provisions with what currently applies. Attachment B.4 is the code language that would be added to the CAP, as updated by the HRB. Lastly, Attachment B.5 is a map showing the SOFA 2 Historic Resources. Staff requests that the Council confn-m or modify the HRB/PTC recommendations on historic preservation. Attachment B. 2 Historic Resources Board Staff Report Date: To: From: Subject: January 15, 2003 Historic Resources Steve Emslie, Director of Planning Community Environment Phase 2 of the South of Forest Area Coordinated Area Plan Department: Planning and Community Environment RECOMMENDATION Staff requests that the Historic Resources Board (HRB) review and comment on the South of Forest Area Coordinated Area Plan, Phase 2 (SOFA 2 CAP) recommended to the City Council by the Plalming and Transportation Commission, including the following: ¯A Staff-recommended modification to the historic preservation standards, ¯A massing model of the SOFA 2 area, and ¯Proposed procedures for conduct of the Joint ARB/HRB Review Board that would review some projects under the SOFA 2 CAP. BACKGROUND The SOFA 2 CAP is the culmination of a planning process that began in 1997. Originally, the, planning area comprised the 18 blocks bounded approximately by Alma Street, Addison Avenue, Forest Avenue, and Kipling and Cowper Streets. The area was subsequently divided into two phases, and Phase I was approved in March 2000. Phase 2 includes the iline blocks approximately bounded by Forest Avenue, Addison Avenue, Alma Street, and Ramona Street. A Working Group of residents, developers, and other interested parties had been appointed to advise the Council on SOFA 1, and this goup continued to work on SOFA 2. On April 17 and 18, 2002, the ~ and the Architectural Review Board (ARB) reviewed the proposed SOFA 2 CAP, which consisted of the Working Group recommendations and some alternative standards recommended by staff. Their comments were forwarded to the Plalming Commission for further review. The Planning Commission reviewed the CAP in meetings on May 8 and 16, June 5 and 31, August 7 and 21, and September 5, developing a version of the Page I plan that adopted some of the staff-recommended alternatives while maintaining the majority of the Working Group plan. Nevertheless, the CAP recommended by the Planning and Transportation Commission to the Council differs from the Working Group recommendation in several respects, including floor area ratios, the option to approve Planned Community Districts, height limits in certain areas, and ground floor office restrictions. On October 7, 2002, the City Council held a public hearing regarding the two recommendations, and requested additional, focused review by the ARB and HRB on specific issues. DIFFERENCES BETWEEN Tl~l]g RECO~NDATIONS The Planning Commission recommendation differs from the Working Group recommendation maiNy in the development standards. The Commission recommendation permits greater height, FAR, and residential density than the Working Group recommendation in some areas. The differences between the two recommendations are summarized in Attachment A. In order to aid the City in making decisions regarding the design issues in the two recommendations, a 1" to 30’ scale model of the existing SOFA 2 area has been created. Sample buildings show what redevelopment might look like under the two recommendations on sites suggested by staff. Staff chose those sites in the area whose owners have expressed the desire to redevelop in preliminary meetings with staff, or for which economic analysis suggested redevelopment potential. ItISTORIC PRESERVATION STANDARDS Both the Working Group and Planning Commission recommendations are more restrictive than the existing historic regulations in the area, since they would prohibit demohtion of any structures on the Palo Alto Historic Inventory or ehgible for the California or National Registers of Historic Resources. Currently, demohtion is prohibited for only Category I and 2 Historic Inventory structures in the CD district. Single-family homes and duplexes may be demohshed, genera!ly without even CEQA review. Other historic structures might require CEQA review and a Statement of Overriding Considerations before demohtion, but the City Council has the power to authorize demohtion. Both plans would require that alterations or additions be in comphance with the Secretary of the Interior Standards for Rehabihtation of Historic Buildings. Attachment B shows how the SOFA 2 CAP historic preservation provisions compare to existing provisions. STAFF RECOMMENDATION REGARDING DEMOLITION Both the Working Group and Commission recommendations prohibit demohfion of historic resources, but neither allows for rehef from the prohibition under extraordinary circumstances. Such relief is necessary for legal and pubhc safety reasons. As a result, staff recommends that the following provisions be added to both recommendations: Page 2 Provision 1: Demolition to Prevent a Regulatory Taking of Property Rehabilitation of a structure may be infeasible from a technical standpoint, or may require an unreasonable expenditure that leaves the prop~ with no reasonable economic value. In such cases, under this provision, Council could permit demolition to prevent a regulatory.taking of property. This provision is in the current Palo Alto historic preservation ordinance, and is standard for city historic preservation ordinances. Provision 2: Structure Presents an Imminent Threat to Public Safety In the event of an earthquake or other natural disaster, a historic structure may become so damaged that it poses a public safety hazard that would only be eliminated by demolition of the building. Either the Chief Building Official or the Fire Chief would make such a determination. This provision also is in the current historic ordinance, and is a standard provision. Provision 3: Preservation Prevents Substantial Furtherance of a Competing Coordinated Area Plan Goal At the Council meeting of October 7, 2002, staff also recommended a third finding, which allowed demolition of a historic resource if Council found that doing so would not interfere with the overall goals of historic preservation in Palo Alto. This language was taken directly from the City’s current historic preservation ordinance, and was meant to g-ire the Council the same discretion it currently has in other areas of the City. The language was also intended to implement the following statement from the 1997 SOFA Policy Framework, in which the Council laid out its vision for the area: Historic Preservation Identify historically significant and contributing structures in the South of Forest Area and encourage the preservation and viable continued uses of landmark structures. Evaluate preservation and continued use of contributing structures that compose the heritage of the South of Forest Area. Recognize that in order to achieve other plan objectives, not all historical structures may be able to be preserved, and examine alternatives including preservation, alteration, demolition, and relocation. Upon further advice from the City’s Historic Preservation Planner, staff determined that more specific language was needed than what was suggested on October 7. Staffnow recommends the following language: (The Council may only permit demolition if) the Council finds, after review and recommendation from the historic resources board, that (a) demolition of a SOFA 2 Historic Resource would allow the achievement of a competing Coordinated Area Plan goal at a level that would be of greater public benefit than historic preservation, and (b) that preservation of the historic resource would be a substantial impediment to achievement of that public benefit. Page 3 This lang-uage allows Council the flexibility to permit demolition in the case that a project Nlfills the goals of the SOFA 2 CAP to such an extent that the public benefits outweigh the impact on the historic character of the SOFA 2 area. Council discretion would be limited to cases in whict~ the proposed project fulfills the goals specific to the SOFA 2 Coordinated Area Plan, and would not be available to fulfill other Comprehensive Plan goals or to achieve other objectives that might be considered of substantial public benefit. In the absence of such a provision, the Council could not authorize demohtion of a historic resource, no matter how compelling the reasons for doing so. Of the projects currently proposed in the SOFA 2 area there is one, the project at 800 High Street, which proposes demohfion of a historic structure. For the complete text of the langamge implementing these changes, see Attachment C. SOFA 2 HISTORIC RESOURCES LIST Because the historic preservation standards of SOFA 2 are different from the rest of the Downtown and surrounding areas, staffhas developed a set of procedures specific to SOFA 2 in order to achieve clarity in the regulations and avoid confusion with the citywide historic ordinance. These procedures preserve the intent and effect of the Working Group historic standards. In the SOFA 2 area, the Palo Alto Historic Inventory is replaced with a SOFA 2 Historic Resources List. Initially the List would contain all structures on the Palo Alto Historic Inventory, ¯ and it could be expanded from time to time. Demolition of structures on the List would be prohibited. A SOFA 2 Potential Historic Resources List would also be established. This list would contain all structures not on the Inventory, but known to be eligible or potentially eligible for the California or National Register of Historic Resources. These structures may be as historic and well-documented as structures currently on the Inventory, but they have not been the subject of a public hearing to determine their historic status. These structures would not be permitted to undergo alterations or demolitions until their historic status was determined, at which time they would be removed from the Potential List and, if determined historic, added to the SOFA 2 Historic Resources List. In order to streamline the administration of the Lists, staff recommends the following procedures: ¯The criterion for addition to or removal from the SOFA 2 Historic Resources List would be eligibility for the California or National Registers of Historic Places, as determined by an independent historic preservation consultant, hired by the City and paid for by the applicant. ¯The determination to add or remove a building would be made by the Director, based upon the evidence presented by the applicant and the consultant, and after a public hearing before the HRB. Page 4 For properties on the SOFA 2 Potential Historic Resources List, either the owner or the Director could initiate the process to add the site to the SOFA 2 Historic Resources List. If there are historic properties in the SOFA 2 area that the City is not yet aware of, only the owner of these properties may initiate the process to add the site to the SOFA 2 Historic Resources List. Some alternatives to the staff recommendation would be: ¯Require the Council to make the determination to add or remove a building from the SOFA 2 Historic Resources List. ¯Allow parties other than the owner of a property to apply to have the property added to the List. Attachment D contains language creating the Lists and the procedures for administering them. JOINT ARB/HRB REVIEW PROCESS At the October 7, 2002, Council agreed to send any additional questions and comments to the Director. Among the items was a request for more specific procedures regarding the joint ARB/HRB review board (Joint Board), which are currently left to the Director to determine. In addition, the ARB and HRB raised concerns about the Joint Board in their April meetings. In response, staff has drafted procedures that could be added to either plan (see Attachment E). The procedures address specifi~ concerns raised during execution of the SOFA 1 CAP, including the concern that all Joint Board members should be current members of the ARB or HRB, and the need for training to help board members from the two differently-focused review boards conduct efficient simultaneous design and historic review. The draft procedures do not address the issue of tie votes on the board, which currently would result in the project being sent to the City Council. If tie votes are considered a frequent likelihood, one alternative would be to add a Planning Commissioner as a seventh member. The Joint Board would conduct design review for projects on historic structures and projects adjacent to or across the street from historic structures. Though the Planning Commission approved of this plan as a group, individual Commissioners, as well as ARB members, raised concerns that the Joint Board would be reviewing too inany projects. In response, staffhas developed the following alternatives, and has established the number of projects that would be subject to review in each case: 1.Projects on historic structures, and all projects adjacent to or across the street from historic structures (current proposal) - 67 of 87 properties 2.Same as number 1, but eliminate rear-adjacent properties - 64 of 87 properties 3.Same as number 1, but elimJ_uate review of single-family and duplexes - 52 of 87 properties 4.Joint Board reviews only projects on historic structures - 28 of 87 properties 5.Same as number 4, but eliminate review of single-family and duplexes - 20 of 87 properties Page 5 ERRATA There are some corrections that should be made to the SOFA 2 Historic and Potentially Historic Resource Lists: ¯The building at 137 Forest Avenue should be added to the Potential list on recommendation from the historic preservation planner. ¯181 Addison is potentially eligible for the California Register only, and should not be labeled as potentially National Register eligible. POLICY IMPLICATIONS Specific Comprehensive Plan Policies relevant to the development standards of the two recommendations are shown in the table in Attachment A. TIMELINE This item is scheduled to be reviewed and commented on by the HRB on Wednesday, January 15, 2003, the ARB on Thursday, January 16, 2003, and the Planning Commission on February 4, 2003. This item is tentatively scheduled to return to Council in March 2003. ATTACHMENTS B. C. D. E. F. G. Summary Chart- Comparison of Recommendations Summary Chart- Comparison of Historic Preservation Standards Proposed historic preservation language Proposed language for administration of the SOFA 2 Historic Resources List Proposed lan=m.mge for Joint ARB/HRB Review Board SOFA 2 CAP: Working Group Recommendations (HRB Members Only) SOFA 2 CAP: Planning Commission Recommendations (HRB Members Only) COURTESY COPIES: Interested Parties Planning and Transportation Commission Members PREPARED BY: Jon Abendschein, Management Specialist (/ M.A_aNAGER REVIEW: Julie Capowao, Advance Planning Man Page 6 o© Chapter V Development Standards Attachment B .g- Historic Preservation 5.11 (a) Historic Preservation in the SOFA 2 area Preservation of Historic Resources SOFA 2 Historic Resources shall be maintained and preserved, except as provided below. Restoration, additions and alterations shall be in substantial conformance with the Secretary of the Interior’s Standards. Adaptive reuse is permitted and encouraged. (b)Demolition Under Special Circumstances No permit shall be issued to demolish or cause to be demolished all or any part of a SOFA 2 Historic Resource unless one of the followinq occurs: The city council, in compliance with the procedures in Section 6.060 of this CAP, determines that under the historic desi.qnation, takin.q into account the current market value, the value of transferable development ri,qhts, and the costs of rehabilitation to meet the requirements of the buildinq code or other city, state or federal laws, the property retains no reasonable economic use; or (2)The chief buildinq official or the fire chief, after consultation, to the extent feasible, with the department of plannin,q and community environment, determines that an imminent safety hazard exists and that demolition of the buildinq is the only feasible means to secure the public safety; or (3)the Council finds, after review and recommendation from the historic resources board, that (A) demolition of a SOFA 2 Historic Resource would allow the achievement of a competin.q Coordinated Area Plan .qoal at a level that would be of greater public benefit than historic preservation, and (B) that preservation of the historic resource would be a substantial impediment to achievement of that public benefit, fHRB Addition: Examination of altematives is required, includinq, but not limited to. preservation, alteration, demolition, and relocationl 7/28/03 Staff!HRB/PTC Proposal Chapter VI Implementation 6.050 SOFA 2 Historic Resource List Procedures 6.050 SOFA 2 Historic Resource List Procedures (a)Historic Resource Lists The director shall maintain the followingf (1) (2) the SOFA 2 Historic Resource List, a list of historic resources in the SOFA 2 area. The initial list includes those properties in the SOFA 2 area that were on the Palo Alto Historic Inventory at the time of adoption of this CAP, and may be updated from time to time in compliance with this section. The initial list is set forth in Appendix B-1. Category 3 and 4 residences in the R-2 District are not included in Appendix B-I. the Potential SOFA 2 Historic Resource List, a list of sites in the SOFA 2 area that may, upon further study, qualify for inclusion on the SOFA 2 Historic Resource List. The initial list includes those properties that, prior to adoption of this CAP, were determined by qualified experts to be potentially eligible for the National or California Register, and Category 3 and 4 residences in the R-2 District. The initial list is set forth in Appendix B-2. (b)Owner-Initiated Additions to the SOFA 2 Historic Resource List The owner of any property may request that the property be added to the SOFA 2 Historic Resource List. For such a request, application shall be made to the Director in a manner specified by the Director. If the Director determines, after review and recommendation by the historic resources board, and evidence from a qualified expert, that a property meets the criteria for inclusion on the SOFA 2 Historic Resource List, the property shall be added to the List. Such determination shall be made within 90 days of receipt of a completed application. The criteria for inclusion on the SOFA 2 Historic Resource shall be substantial evidence, in light of the record as a whole, that the property is eligible for the National or California Register. (c)Removal from the SOFA 2 Historic Resources and Potential Historic Resources Lists The owner of any property on the SOFA 2 Historic Resource List or Potential SOFA 2 Historic Resource List may request removal from either list at any time. For such a request, application shall be made to the Director in a manner specified by the Director. In addition, the Director may initiate a request for removal of any property from either list at any time. If the Director determines, after review and recommendation by the historic resources board, and evidence from a qualified expert, that a property does not meet the criteria for inclusion on the SOFA 2 Historic Resource List, the property shall be removed from the applicable List. Such determination shall be made within 90 days of receipt of a completed application, in the case of an owner-initiated review. The criteria for removal from the SOFA 2 Historic Resource List or the Potential SOFA 2 Historic Resource List shall be substantial evidence, in light of the record as a whole, that the property is not eligible for the National or California Register. (d)Transfers from the SOFA 2 Potential Historic Resources List to the SOFA 2 Historic Resources List 7/28/03 Staff!HRBiPTC Proposal Chapter VI Implementation 6.050 SOFA 2 Historic Resource List Procedures The Director may initiate review of a property on the SOFA 2 Potential Historic Resources List at any time to determine its eligibility for the SOFA 2 Historic Resources List. If the Director determines, after review and recommendation by the historic resources board, and evidence from a qualified expert, that a property meets the criteria for inclusion on the SOFA 2 Historic Resource List, the property shall be added to the List. If the Director determines, after such review and recommendation, that the property does not meet the criteria for inclusion on the List, the property shall be removed from the SOFA 2 Potential Historic Resources List. The criteria for inclusion on the SOFA 2 Historic Resource shall be substantial evidence, in light of the record as a whole, that the property is eligible for the National or California Register. (e)Review of SOFA 2 Historic Resources Properties on the SOFA 2 Historic Resource List are subject to the review procedure set forth in 6.020(e). (f)Review of SOFA 2 Potential Historic Resources Properties on the SOFA 2 Potential Historic Resource List shall undergo a study fHRB addition: bY a qualified historic preservation expertl to determine eligibility for the SOFA 2 Historic Resource List prior to undergoing any major external alteration, addition, or demolition, as set forth in 6.020(g). 7/28/03 Staff/HRB/PTC Proposal Chapter V Development Standards 5.110 Historic Preservation 6.060 Procedures for Demolition of SOFA 2 Historic Resources (a)Application for a Permit to Demolish." An application for a permit to demolish any SOFA 2 Historic Resource shall comply with Chapter 16.04 of the Palo Alto Municipal Code. In addition to the contents specified under Chapter 16.04, any application for a permit to demolish a SOFA 2 Historic Resource, on the grounds specified in Section 5.110(b)(1) of this CAP shall contain any appropriate and relevant economic information which will enable the council to make the necessary determination. (b) Review of Application. (1) Review by Historic Resources Board Applications which are accepted as complete for a permit to demolish a SOFA 2 Historic Resource on the ,qrounds specified in Section 5.110(b) of this CAP shall be placed on the a.qenda of the historic resources board for hearinq and recommendation. If the historic resources board does not act on the application within thirty days of referral to it, the city council may proceed without a recommendation from the historic resources board. (2)City Council Hearinq and Decision. Any application for permit to demolish a s SOFA 2 Historic Resource on the grounds specified in Section 5.110(b) of this CAP shall be heard by the city council. Notice shall be given by mailed notice to all owners of property immediately adiacent to the property that is the subiect of the application, and by publication at least once in a local newspaper of .qeneral circulation. The applicant shall have the burden of establishinq that the criteria set forth in Section 5.110(b) of this CAP have been met. The council may approve, disapprove or approve the application with conditions, and shall make findings relating its decision to the standards set forth in Section 5.110(b). The decision of the council shall be rendered within thirty days from the date of the conclusion of the hearin,q. (c)Permit to Move a SOFA 2 Historic Resource. In reviewinq an application for a permit to demolish a SOFA 2 Historic Resource on the grounds specified in Sections 5.110(b) of this CAP, the historic resources board may decide that the buildinq may be moved without destroyin,q its historic or architectural inteqrity and importance, and may recommend to the city council that the demolition permit be denied, but that a permit to relocate be processed. pursuant to Chapter 16.32 of this code. 7/28/03 Staff/HRB/PTC Proposal Attachment B. ~ SOFA II Historic Resources 60g-t0g anuaAV uos!ppv anuaAV 6u!uueqO onuo^V JOLUOH BnUOAV ),seJO4 LEt ATTACHMENT C HOMER/EMERSON CORRIDOR (TOPIC 2 OF CMR:365:03) C.1 How does the retail market work in the area? How do we make sure the plan ensures flexibility for property owners? What is the planning rationale for restricting some uses on Homer/Emerson? One difficulty the community faces when having this discussion is the use of the word "retail". This word has sometimes been used as a substitute for "neighborhood-serving uses" (which includes retail, personal services, business services, commercial recreation, restaurants, and sometimes even some types of offices), and, at times, is even used to mean "everything except offices". A misconception that has resulted from this confusion is that the CAP would require all businesses on Homer/Emerson to become retail (in the strict sense of the word). There has never been any such proposal. Other, non-office uses such as personal services, general business services, and commercial recreation have always been permitted or conditionally permitted in all proposed plans. The staff proposal presented to the Council at their last meeting on July 21, 2003 proposes only to preserve the existing non-office uses along Homer and Emerson. It does not force existing office spaces to become retail or even street-friendly, does not prevent owners of such spaces from changing from one office tenant to another, does not require such offices to interact with the street, and does not prevent them from returning to office use at any time, even if they rent to a street- friendly use for a period of time. Three market studies have provided some information about this topic: BAE economic analyses of February 17, 1998, and June 20, 2002, and the Sedway economic analysis of July 31, 2002. However, all of these only analyzed retail (as opposed to all neighborhood-serving uses), and for this and other reasons have limited relevance to what is being proposed. The BAE study addresses the advantage of"retail synergy" and recommends that if there is a desire to develop more retail in the area it should be focused around the Homer/Emerson node. The Sedway report assesses the demand for retail using a proprietary demand model, but does not include the demand for personal services, commercial recreation, or business services. None of the reports considered the additional foot and bike traffic that would be added from the Homer pedestrian and bicycle undercrossing. The Sedway study is useful in that it deterlnined that there was enough demand in the area to support the existing retail and restaurant businesses on Homer and Emerson (see the final paragraph of page 2 of the Sedway study, Attachment K of the information packet sent to Council prior to the July 21, 2003 meeting). The staff proposal recommends preserving these neighborhood-serving commercial spaces, and not allowing them to convert to office. The Sedway study confirmed that there would be adequate demand to maintain the existing businesses in retail or restaurant use. C.2 C.3 What are "ground-floor-dependent" businesses? Give examples. Ground-floor-dependent businesses are those that interact with the street. The definition, as given in topic 2d, on page 8 of the July 21, 2003 CMR:365:03, is any business that benefits from a street,facing ground floor location in one or more of the following ways: 1) window displays promote goods or services provided at the place of business; 2) a significant number of customers, whether the general public or other businesses, come to the place of business for goods or services; and/or 3) goods or services are for sale to the general public at the place of business. Ground-floor-dependent business include, but are not limited to, real estate agents, medical and health-care providers such as skincare, acupuncture, chiropractors, nutritionists, and psychotherapists, tax services, travel agents, employment and placement services, public service providers such as offices of elected officials, legal aid, and senior assistance, insurance agents, and other uses that would fulfill any of the three criteria above. What is the difference between the Homer/Emerson provisions and the (P) overlay? The current zoning in the SOFA 2 area is CD-S (P). The (P) overlay requires new construction and alterations to existing buildings adjoining sidewalks or pedestrian ways to provide design features to create pedestrian or shopper interest and to provide weather protection for pedestrians with the following three requirements: display windows; recessed areas equal to at least 1.5 times the length of the street frontage; and landscaping or architectural features to preclude blank walls. A proposal for the SOFA 2 CAP, item #2.g. on page 9 of the CMR, would require all newly constructed street facing ground floor commercial space and remodels to street facing facades to be designed in a way that facilitates easy conversion to retail uses in the future. The purpose of this proposal is broader than the (P) overlay, and intends to assure that in this mixed use area even buildings that are constructed for a non-retail commercial use will be designed with sufficient flexibility for conversion to retail use in the future. In addition to this general policy, more specific guidelines may need to be included in the SOFA 2 CAP, such as are now provided by the (P) overlay. ATTACHMENT D D.I D.2 D.3 PLANNED COMMUNITY (PC) DISTRICTS (TOPIC 4 OF CMR:365:03) Shouldn’t there be a social service office component available for affordable housing PC District projects? The staff proposal for Planned Community Zones provides for inclusion of a small retail or social service component in housing PC projects. See topic #4.a on page 11 of the CMR. How would a rental project become eligible for a PC District? There are two ways a market rate rental project would be eligible for a PC Zone. Rental projects may take advantage of the additional FAR available under PC Zoning if the average size of the units does not exceed 1250 square feet, thus assuring that the units would be available to a range of market rate tenants. A rental project would also be eligible for PC zoning if it qualifies as a mixed income tax exempt bond financing rental project. These projects are financed through a federal tax exempt bond program, and they include both market rate units as well as below market rate units. Because of the structure of this program, a larger average unit size may be required, so the average size limit would not apply. Why only allow the PC District for 100% affordable housing, and not for other projects? Why put restrictions on the PC District? As described above in D.2, market rate rental projects would also be eligible for PC zoning if average unit size does not exceed 1250 square feet. A Bonus Floor Area program is being proposed for some public benefit projects other than housing. See discussion of the Bonus Floor Area Program on pages 10-11 in CMR:365:03. In preparation for the Zoning Ordinance Update, the City commissioned preparation of a discussion paper to explore the issues of flexibility and certainty inherent in zoning. This paper, Flexibility Vs. Certainty, by Dyett & Bhatia, includes a section on Planned Community Zoning. Council members may find this discussion helpful in addressing the issue of Planned Community Zones in the SOFA 2 CAP. In summary, the paper finds that in a mature, built out community like Palo Alto, granting of such broad authority to private developers may not be consistent with current policy direction of the Comprehensive Plan and the community’s desire for more certainty in the development process. A solution that is suggested would be to develop a formula that links additional FAR to specific commitments to housing or other public benefits. This approach is similar to that being proposed in the Bonus Floor Area program for the SOFA 2 CAP. An excerpt of Flexibility Vs. Certainty, pages 9-10, addressing Planned Community Zones is attached to this memorandum. The entire document can be found on the City’s web site. City of Palo Alto - Zoning Ordinance Update - Issues Identification Attachment D--.~ Search:’~" Advanced rowse To c Home_ ~-÷ Departments ;~ Plannino. & Community Environment ~-- Planning ’* Zon_£9i~ ~- Discussion Papers FLEXIBILITY Vs. CERTAINTY DISCUSSION. PAPER Prepared by Dyett & Bhatiar Urban and Regional Planners 3uly 2001 TABLE OF CONTENTS INTRODUCTION PURPOSE AND KEY QUESTIONS HISTORICAL PERSPECTIVE THE BASIC DILEMMA: FLEXIBILITY VS. CERTAINTY USERS’ PERSPECTIVES TRADEOFFS CURRENT ZONING FRAMEWORK TYPES OF ZONES PROVISIONS FOR FLEXIBILITY AND RELIEF ROLE OF DESIGN GUIDELINES OPTIONS FOR INCREASING FLEXIBILITY APPROACHES TO ZONING BASE VS. COMBINING OR OVERLAY DISTRICTS RELATED CONSIDERATIONS http ://www.cityofpaloalto.org/zoning/flexibilityvscertaintydp.htrnl 7/9/03 Alto - Zoning Ordinance Update - Issues Identification Page 9 of 13 defined areas. "Combining districts" and "overlay districts" are often selected for this purpose, and Palo Alto has used them quite extensively to achieve specific objectives. Combining districts are lain over the base district to modify the uses permitted or the standards required in the base district. Combining districts currently are used to regulate building height and minimum site area in residential neighborhoods, retail frontages in the City’s shopping areas, locations for hotel development, and ground floor uses within Downtown. Overlay or combining districts also are used in other communities in the regulation of floodplains, historic preservation areas, hillsides, and transit-station areas. Combining districts make effective use of the Zoning Map; as a result, they can reduce the complexity of the text and the rules that apply. For example, instead of having a complicated formula for calculating average setbacks and variations in setbacks that may be appropriate, Zoning Map designations can be used to indicate specific frontage where different setback standards apply. Where combining districts address similar subjects, however, it may make sense to combine them, as in the case of the ’R’ retail shopping and the ’P’ pedestrian shopping combining districts, or to merge them into a base district, as in the case of the ’GF’ ground floor combining district or the ’H’ hotel combining district. Combining districts are most effective when they apply to two or more base districts; when they are limited to a single base district, it may make more sense to merge the standards and map designation into the base district regulations. RELA TED CONSIDERATIONS Other ¯ considerations related to providing flexibility in the basic zoning framework may include: Whether to maintain a 1:1 correspondence between Comprehensive Plan land use designations and zoning districts, or to allow greater flexibility through zoning? How to protect residential neighborhoods, while also providing incentives for appropriate alterations and additions that add variety, street life and vitality either with a simplified residential districting scheme using housing prototypes and performance standards, or with land use districts that rely on updated residential design guidelines and case by case review? ¯Whether to maintain the current system of combining districts, or to consolidate and simplify them, where appropriate? ¯How to establish development prototypes and performance standards.for residential and commercial uses in mixed use areas and in new zoning categories suggested in the Comprehensive Plan? ¯Whether to incorporate a stronger geographic focus into the zoning ordinance and eliminate flexibility provided by the PC Planned Community District? Because the Planned Community District introduces so much flexibility into the current zoning framework, further discussion of this approach is warranted. PLANNED COMMUNITY ZONING In thinking about how to achieve flexibility in zoning, a key question is whether the City’s PC (Planned Community) zoning is a model that should be retained. The PC zoning offers the flexibility of a planned development with a mix of uses; as such, it works well for "greenfield" http://www.cityofpaloalto.org/zoning/flexibilityvscertaintydp.html 7/9/03 2ity of Palo Alto - Zoning Ordinance Update - Issues Identification Page 10 of 13 development in rapidly growing communities where a city wants to defer to private developers the details of site planning. In a mature community like Palo Alto, this broad grant of authority to the private sector may no longer be consistent with current policy direction in the Comprehensive Plan or may not satisfy the community’s desire for some greater degree of certainty in the process. Approval of development under PC zoning does requirea finding that the PC (Planned Community) district "wil! result in public benefits not otherwise obtainable" through applicable zoning districts. PC zoning must be consistent with the Comprehensive Plan; and the Planning and Transportation Commission and the City Council also are to cite the specific "public benefits" that are to be obtained. The PC district regulations do not have a list of specific public benefits desired, such as affordable housing, public amenities or extraordinary contributions to financing public improvements beyond the amount normally required for a project’s fair share. As a consequence, the community may be concerned that when the City is asked to allow increased density, as an example, the applicant is not providing a significant community value in return. A solution would be to clarify what the City’s specific expectations are if an increase in development density/intensity is requested. This could be in the form of a menu of public benefits o~ a formula that links additional FAR or density to specific commitments to housing, open space protection or other public benefit. Alternatively, the PC zoning could be restructured so that there is no presumption that increased density or FAR would be granted and the primary purpose is limited to allowing flexibility in meeting physical development standards. With this approach, the underlying zoning remains, but the PC (Planned Community) process could allow for some variations in standards affecting building relationships, height or massing within a project. Buffering or transitional requirements would still apply, as they now do with PC zoning, where a project abuts a residential neighborhood. Another idea would be to recast PC zoning so it focuses specifically on implementing new urban land use concepts, such as Village Residential, Transit-Oriented Residential, and Mixed Use. The zoning ordinance update would define when planned community zoning can be used for these land use designations and explain to what extent flexibility can be provided and how applications will be judged. The new ordinance would rescind the broad grant of authority for planned communities, replacing it with more specific and limited authority for specified types of land use. The new zoning ordinance also could provide explicitly for specific plans, area plans and neighborhood conservation plans to be incorporated into the City’s regulatory framework through Zoning Map amendments. Zoning Map designations (e.g. SP-1, SP-2, NC-1, NC-2, etc.) would show where these plans apply. The process envisioned here would include more opportunities for public participation, design workshops and charrettes than with the current developer-driven PC zoning, which would be consistent with the public participation policies of the Governance Element of the Comprehensive Plan. It also would allow for multiple property owners to participate in the process and development plans would not be limited to sites under unified control. If the development community is concerned about possibly losing flexibility if PC zoning were eliminated, offering new provisions for specific plans, area plans and neighborhood conservation plans may allow for a reasonable alternative. There is, however, extensive upfront time and cost associated with preparing specific plans or other area plans. The current effort anticipates that area plans would be a follow-up to the zoning update. USE REGULATIONS AND STANDARDS A certain degree of flexibility is inherent in the way that zoning ordinances treat land uses, including permitted and conditional uses, special uses and nonconforming uses. Permitted Vs. Conditional Uses http ://w~vw.cityofpaloalto.org!zoning/flexibilityvscertaintydp.html 7/9/03 ATTACHMENT E HOUSING UNIT SIZE AND AFFORDABILITY (TOPIC 5 OF CMR:365:03) E.1 Discuss affordable/attainable housing, the need for a variety of housing types, the need for family units, and the reason for choosing a 1250 square foot maximum average unit size. SOFA already has, in existence or under development, a wide variety of housing types on both ends of the income spectrum, from the low-income "affordable" units of the Alma Place SRO and the Oak Court project in SOFA 1, to the larger, higher-income units of the Summerhill developments. Creating incentives for "attainable" housing would fill the middle gap, and ensure a wide range of people and families living in the area. In Palo Alto, the market tends to serve high income levels. For instance, the average market rate unit sizes for the Summerhill condominium projects in SOFA 1 are approximately1500 and 2000 square feet. At a $500-per-square-foot sales price (from the BAE study, may be a conservative estimate), a 1500 square foot condominium would sell for $750,000, and a 1975 square foot unit would sell for $1,000,000. A family would need to make 150-225% of the Palo Alto median income to afford such a unit. There is a clear gap in new housing in Palo Alto for those with moderate income levels, who do not qualify for subsidized housing, yet carmot afford the type of housing the market is generating. This is what is meant by "attainable" housing, and is needed for people with incomes from around 100% to 150% of Palo Alto median family income. A 1250 square foot unit would serve a Palo Alto family who made about 125% of median income (see the attached chart). The range of units generated by a 1250 square foot maximum average unit size would therefore represent housing "attainable" to families with incomes in the range of 100% to 150% of Palo Alto median (see the attached Housing Affordability Chart). Some question has been raised about whether these unit sizes would generate housing for families. Staff believes that it would; many families in Palo Alto live in houses or other units smaller than 1250 square feet. Palo Alto is a desirable community to live in for families; the main obstacle is the ability to afford housing here. Creating more "attainable" housing will make it easier for them to live here. Moreover, larger unit sizes will not necessarily generate three or four bedroom units, or other "family" units. Though most of the three and four bedroom condominium units in the area surveyed by staff are larger than 1500 square feet, approximately 70% of the units above 1500 square feet are two- bedroom units. Larger units do not appear to result reliably in "family" units. 0 0 E.2 Discuss the idea that "loss of development potential on housing sites is to be discouraged. This statement is found in Program H-5 of the Housing Element that addresses zoning modifications to help increase the amount of affordable housing. Two zoning code changes that are identified are to make floor area ratios more flexible and to consider maximum unit sizes. The Bonus Floor Area program being proposed for the SOFA 2CAP and the proposed retention of PC Zoning for affordable housing and rental housing are ways to use floor area flexibility to create more affordable housing. With regard to maximum unit size, the PTC has identified a cap on the average unit size as the most effective approach because it is more flexible and would produce a wider range of unit sizes. Program H-5 states that the purpose of these and other programs is to insure that the City’s limited land supply is used efficiently and to make the most of oppommities to provide both market rate and affordable housing. See attached copy of Program H-5. Attachment Palo Alto Comprehensive Plan Chapter 4: Y[ousing Element PROGRAM H-4: Allow increased residential densities and mixed use development only where adequate urban services and amenities can be provided and, in cases where the change in zoning is likely to lead to traffic congestion that will reduce levels of service below those acceptable to the City, adopt mitigation measures that will avoid this impact. Palo Altans have expressed the concern that additional residential growth including mixed residential/non-residential forms of development may strain the City’s ability to provide adequate urban services and amenities,, such as parks, and may reduce the quality of life of the City’s residents and neighborhoods. There is also a concern about increased traffic congestion. This program seeks to balance the City’s need toprovide housing with its abilities to provide the services and environmental conditions needed to adequately support that housing and provide attractive places to live and work. The City has adopted fees to address the impact of new development on parks, libraries and community centers; it anticipates adopting citywide transportation impact fees to mitigate traffic impacts. Pt~oc~ H-5: Consider the following modifications during the Zoning Ordinance Update currently underway and incorporate those modifications in the revised Zoning Ordinance that are conducive to increasing the production of affordable housing by the year 2004. Density Limits and Residential Uses ¯ Specify the range of housing densities appropriate for each commercial and industrial Comprehensive Plan land use designation and zoning district that permits housing. For proposed projects located within 2, O00 feet of an existing or planned rail transit station not adjacent to a single family neighborhood with a substantial proportion of a proposed project ’s units affordable to very low-, low-, or moderate-income households, development may be allowed at a higher density than that normally allowedunder these land use designations and zoning districts. Development at the high end of the density range should only be permitted where it is demonstrated that the project wil! make significant use of existing transit facilities or other alternative modes of transportation, thereby avoiding significantly degrading existing traffic levels of service on nearby intersections. Consider allowing higher densities on sites that are not precisely within 2, 000 feet of a rail transit station but that may be suitable for transit oriented development due to exceptional access to other transit opportunities or alternative modes of transportation. Development of these sites should be compatible with surrounding densities and intensities of development and should be designed to preserve neighborhood character. Development of these sites at the high end of the density range should only be permitted where it is demonstrated that the project will make significant use of existing transit Page 9 of 41 Palo Alto Comprehensive Plan Chapter 4: Housing Element facilities or other alternative modes of transportation and will not significantly degrade existing traffic levels of service on nearby intersections. Allow the construction of affordable housing on surplus sites designated Major !nstitution/Special Facilities under the Comprehensive Plan or zoned for Public Facilities, excepting those areas that are used for open space or playgrounds. Development of these sites shouM be compatible with surrounding densities and intensities of development and should be designed to preserve neighborhood character. Consideration should also be given to encouraging the conversion of portions of buildings or sites (e.g., religious institutions) to allow ancillary residential uses, such as caretaker quarters, by modifying pertinent sections of the Zoning Ordinance and Building Code. Allow a high or very high residential density under the Mixed Use land use designation for those sites within 2, O00 feet of an existing or planned rail transit station unless adjacent to single family neighborhoods. In areas adjacent to single family neighborhoods, require lower densities as a buffer. Development at the high end of the density range should only be permitted where it is demonstrated that the project will make significant use of existing transit facilities or other alternative modes of transportatT"on and will not significantly degrade existing traffic levels of service on nearby intersections. Restrict the size of main units under the DHS Zoning District and ensure that second units are adequate to accommodate a second household. Address the loss of housing due to the combination of single family residentia! lots. Consider modifying the R-J Zoning District to create a maximum lot siz~ to prevent the loss of housing or housing opportunities. Permit higher densities under the R-1 Zoning District to accommodate smaller lots for courtyard homes or other similar types of housing. ~rncrease the minimum density of the RM-) 5 Zoning District to at least eight dwelling units per acre consistent with the multi-family land use designation under the Comprehensive Plan. New Development Standards and Zoning Districts ¯ Forprojects that are YO0% affordable, allow for increasedflexibility in the application of development standards, such as parking and height, to better implement the housing programs contained in this chapter and to encourage the production of affordable housing. Floor area ratio limits should be made flexible for the purpose of creating " affordable housing. Maximum unit sizes should also be considered to encourage the production of more affordable housing. The use of a "form "’ code to achieve these objectives should be considered during the Z6ning Ordinance Update. Page 10 of 41 Palo Alto Comprehensive Plan Chapter 4: Housing Element Create new zoning districts to implement the Transit-Oriented Residential and Village Residential land use designations and establish development standards that allow the maximum amount of housing, particularly for affordable housing projects, permitted under the alloweddensity range while preserving the character of adjacent neighborhoods. Create development standards for permitted mixed residential/non-residential uses that would permit a number of dwelling units, including a minimum number of affordable housing units, to be built with each project. Mixed uses with an office component should be discouraged. The definition of mixed use development and the standards .to be utilized in such developments will be addressed during the Zoning Ordinance Update: Over the past few years, Palo Alto has not been able to take full advantage of the housing opportunities provided by the variety of lands that allow residential use, particularly in terms of achieving the levels of development allowed by the City’s permitted density ranges. Development standards contained in the City’s Zoning Ordinance have not allowed the full residential development potential of mixed use projects permitted in industrial and commercial zoning districts to be achieved. Certain Comprehensive Plan land use .designations, such as Transit-Oriented Residential, have not been implemented because the City has no corresponding zoning district which can be used to take advantage of sites near transit stations. The creation of new zoning districts is essential to Palo Alto’s strategy of reusing non-residential developed lands for residential use to increase the City’s housing supply and more efficiently use the limited land available for housing. Palo Alto also lost irreplaceable housing oppommities due to single family lot combinations resulting in larger lots but fewer dwelling units. Since housing supplies are so limited, the loss of development potential on any residential site must be discouraged. The purpose of the progams listed above is to ensure that Palo Alto efficiently uses its limited land supply and makes the most of its opportunities to provide both-market rate and affordable housing. Palo Alto is updating its Zoning Ordinance, which provides a timely mechanism for implementing the progams described above. During the review process for the Zoning Ordinance, the City should carefully examine allowing densities of up to 50 dwelling units per acre, on mixed use sites, sites near transit stations, and sites along two major transportation corridors, E1 Camino Real and San Antonio Road, to both provide more affordable housing and to support transit use. Fifty dwelling units per acre is currently the highest density allowed by the Comprehensive Plan and is limited to sites designated Transit-Oriented Residential and located within 2,000 feet of a transit station. There may be other sites, however, that are suitable for this density, or higher densities than the current zoning allows, and near transit facilities that are not precisely within the 2,000-foot radius of a transit station but that have good access to rail.or major bus transit facilities and not adjacent to single family neighborhoods. The City should evaluate its options to accommodate such oppommities, such as creating development standards that would allow such densities to be achieved while still maintaining the desirable character of Palo Alto. Page11 of 41 ATTACHMENT F HOUSING UNITS ADDED TO EXISTING BUILDINGS (TOPICS 1 AND 7 OF CMR:365:03) F.1 How would the process work for adding units to existing commercial buildings? How many of these would realistically be built? Addition of housing on top of or within existing commercial buildings would be done as a Conditional Use Permit. As mixed uses, these projects would undergo ARB approval as well, but a CUP would allow the City to impose any necessary conditions related to the use of the residential area. The CUP would also allow the City to consider parking on an individual basis. Most of these grandfathered commercial buildings are underparked, meaning a parking exemption may be required to accommodate the housing. The CUP process would give the City a chance to determine if an exemption is actually necessary. As discussed on pages 15-16 of CMR:365:03, this proposal is being suggested because of the nature of the CD-S grandfather clause, which will continue to apply in SOFA 2. The grandfather clause allows commercial buildings over 0.4:1 FAR to remain, and even be demolished and rebuilt to the same size, so long as they are not enlarged. Because of the value of commercial area, there is a disincentive to replace these buildings with mixed use or exclusively housing projects, because the excess grandfathered commercial area would be lost. This proposal removes that disincentive, and should promote some mixed-use projects. Because of the eclectic nature of the buildings in the area, it is difficult to tell how often this program could or would be used. If all of the buildings converted, the area would see at most 100 units, but staff expects the actual number to be much lower, probably under 10 units. If all the units were built as two-bedroom units, and assuming two spaces per unit, giving residential parking exemptions to these types of projects may create a deficit of around 20 unparked spaces. However, because the area is near a transit station, there may be fewer cars for the residential uses, and due to shared use, the cars that are there may not worsen the parking situation significantly. Another benefit, in addition to increasing the housing supply, would be the retention of existing buildings that would help to preserve the scale and character of the area. The exceptions to parking would not be available if the existing building is demolished.