HomeMy WebLinkAbout2002-02-04 City Council (6)City of Palo Alto
City Manager’s Report
TO:HONORABLE CITY COUNCIL
1
FROM:CITY MANAGER DEPARTMENT: PLANNING AND
COMMUNITY ENVIRONMENT
DATE:FEBRUARY 4, 2002 CMR:136:02
SUBJECT: HOUSING ELEMENT OF THE COMPREHENSIVE PLAN
REPORT IN BRIEF
The City Council reviewed the draft Housing Element on October 9, 2001. Key concerns
raised by the Council included:
¯The Element allows too much market rate housing.
¯Environmental impacts may result from increased housing.
¯New housing will strain City services.
¯The Element should address the jobs/housing imbalance.
The draft Housing Element recommends a variety of strategies to provide all types of
housing opportunities, including increasing the following:
¯Residential land supply,
¯Allowed densities,
¯The BMR requirements, and
¯The commercial development in-lieu fees.
The Housing Element also encourages the production of second units in single family
areas and smaller units in multi-family projects. The draft Element includes
environmentally sensitive policies to locate higher density development. The Element
also proposes to convert non-residential to residential, thereby reducing jobs and
providing more housing.
CMR:136:02 Page 1 of 9
RECOMMENDATION
Staff recommends that the City Council direct staff to forward the revised draft Housing
Element to the State Department of Housing and Community Development for review
and comment, beginning the state-mandated 60-day review period.
BACKGROUND
On October 9, 2001, the City Council conducted its first public meeting regarding the
direction of the draft Housing Element. The Housing Element describes Palo Alto’s
housing needs and identifies policies and programs to stimulate the production of
housing, especially affordable housing. Given the City’s existing jobs/housing imbalance
and the high cost and limited availability of iand, adopting and implementing a strong
Housing Element is critical to Palo Alto. Promoting the preservation and production of
housing, especially affordable housing, will help determine the future direction of Palo
Alto. The proposed Housing Element strengthens the policies in the existing
Comprehensive Plan and balances housing production with service demands. In addition,
the Housing Element responds to the state requirement that all cities provide their "fair
share" of housing for the region. Palo Alto’s regional allocation is 1,397 units; 52
percent of that must be affordable to families making less than 120 percent of the County
median ($87,000). The City has already met its market-rate requirement with the
Stanford West housing development; the City has an unmet need of 616 affordable units.
The Council identified specific concerns at the October 9th meeting regarding key
components of the Housing Element and requested further information from staff
regarding these issues.
The key concerns raised by the-City Council at the October 9th meeting are summarized
below:
The draft Housing Element focused on providing more market rate housing as a
means of increasing the supply of affordable housing rather than only focusing on the
provision of more affordable housing.
¯The Housing Sites Inventory was too inclusive and contained sites that may be
inappropriate for high-density residential or mixed-use development.
¯New housing development may not keep pace with new job growth.
¯Additional housing production may increase traffic and noise and have other
environmental impacts.
¯New housing would generate urban service demands that the City would not be able
to adequately address.
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The draft Housing Element did not adequately address the problem of the jobs
generated by new commercial development and the impact of these jobs on the City’s
housing needs.
In addition, the Council raised concerns about three existing Comprehensive Plan
programs. These included:
¯For the application of the Detached Housing on Small Lots (DHS) zoning district,
increasing the minimum density requirements for multi-family housing,
¯Limiting site and design to ARB review for mixed use projects, and
¯Allowing higher densities within 2,000 feet of a transit station.
The Council stated that these issues needed to be addressed before the element could be
forwarded to’the State Department of Housing and Community Development (HCD) for
review and comment as required by law.
The Council also directed staff to expand the public outreach and conduct another
community forum, particularly to elicit comments from neighborhood groups. Since
these efforts would delay the submission of the draft Housing Element by the statutory
deadline required by state law, the City Council directed staff to inform HCD of the
status of the element review. Staff contacted the State Department of Housing and
Community Development (HCD) to inform them of the City’s inability to meet the
December 31, 2001 deadline for adoption of the Housing Element. The State
representative indicated that a short delay in the submission of the draft would be
acceptable but that the City should use the extension to ensure that the draft Housing
Element complies with all pertinent provisions of StaLe law.
On December 13, 2002, staff conducted a third community forum to collect comments
from neighborhood groups and others on the direction of the draft Housing Element.
Approximately 60 people attended this forum. A forum summary report is attached to
this staff rePort as Attachment A.
DISCUSSION
The concerns raised by the City Council at its October 9th meeting are discussed below.
A brief statement summarizing the concern is followed by a description of how the draft
Housing Element responds to this. concern. It is important to note, however, that no
single program described below will meet the City’s housing needs and that all housing
programs must be seen as part of an integrated strategy to produce affordable housing.
Further, each of the programs listed below serves to support and reinforce the key
provisions and goals of the Comprehensive Plan related to transportation (e.g.,
encouraging transit use), land use (e.g., improving the City’s jobs/housing imbalance),
CMR: 136:02 page 3 of 9
and housing (e.g., providing adequate housing for all economic segments of the
community).
Affordable Housing
Concern: The City is encouraging too much high-end market-rate housing development
in order to enable limited below-market-rate housing.
As indicated in the draft Housing Element, the focus for new housing production is on the
provision of affordable housing or housing that is more attainable for the average middle-
class worker. In addition, the City must provide sufficient opportunity for the
development of 616 units of housing affordable to very low-, low- and moderate-income
households in order to meet the City’s regional "fair share" allocation determined by the
Association of Bay Area Governments (ABAG). The City does not have sufficient
resources to subsidize, even partially, the construction of these units. For example, the
53-unit Oak Court South of Forest Area (SOFA)-affordable housing project is estimated
to cost about $21 million, of which the staff is recommending a 40 percent subsidy or
.about $160,000 per unit. If the City were to expand this level of subsidy to the 616
affordable housing units, the total cost to the City would be approximately $100 million
over the next five years.
Clearly, the City cannot provide this level of funding on its own. Furthermore, it is
unlikely that the City would be able to effectively obtain sufficient long-term loans or
grants given the level of competition and limited availability of this type of funding. The
draft Housing Element, therefore, recommends a variety of approaches to provide all
types of housing, including opportunities for affordable as well as middle-income buyers
and renters. The key techniques proposed to accomplish this in the draft Housing
Element include" the following:
¯Increase the supply~of land capable of accommodating higher density housing, which
tends to be the most affordable type of housing.
¯Encourage development at the high end of the density range for affordable housing
proposals; and limit size of units.
¯Increase the supply of land planned and zoned for higher density housing by
converting non-residential land to residential use (e.g., the Sun Microsystems site on
San Antonio Road).
¯Increase densities on existing residential lands to produce more units and allow
market forces to reduce housing costs.
¯Increase BMR requirements from 10 percent to 15 percent of all units for smaller
residential projects and from 15 percent to 20 percent for larger projects.
¯Increase the housing in-lieu fees for commercial and industrial development, which
would provide funding for new affordable housing development.
¯Encourage the production of second units, which tend to be more affordable.
CMR: 136:02 Page 4 of 9
¯Encourage the production of smaller units for multi-family development to ensure that
these projects will generate affordable units rather than luxury units.
¯Restrict the size of the main unit in the DHS zoning district and ensure that the
auxiliary unit is sufficient to accommodate a separate household.
In addition to the points above, the draft Housing Element calls for increasing minimum
densities for multi-family land uses to ensure that the limited supply of the City’s
residential land is used efficiently and effectively to provide housing. This does not
increase the maximum number of units allowed under any land use designation, but it
does ensure that a minimum level of housing development occurs consistent with the
City’s housing and other goals.
Housing Sites Inventory
Concern." The Housing Sites Inventory identifies too many sites and sites that may be -
inappropriate for high-density development in the short-term.
Initially staff proposed two tiers of potential housing sites that would have provided
housing opportunities for over 4,000 housing units of various types. Staff has since
reduced the Housing Sites Inventory to a list that would provide about 1,110 new
dwelling units. (see Attachment B) Although the 1,110 units on the Inventory is about 65
percent more units than the minimum required by ABAG, this surplus is necessary to
provide sufficient opportunities for the unmet need for affordable housing, as well as
allow for market flexibility and competition. In addition, the Housing Sites Inventory
does the following:
¯Identifies the sites the City believes are the most suitable for the production of
housing, including existing residential sites that could support higher densities and
non-residential sites that could be converted to higher density residential use and
mixed use development.
¯Highlights the most promising sites that will reinforce the City’s commitment to
encouraging more transit use, reduce automobile traffic and make efficient use of
existing urban services.
¯Identifies the sites most likely to be developed with housing over the term of the
Housing Element.
It should be noted that most of the sites listed on the Housing Sites Inventory are already
planned and zoned for residential use so there will be no significant change in the overall
character of Palo Alto nor will there be any significant change in overall development
impacts as a result of developing housing on these sites. In addition, since Palo Alto has
such a limited supply of vacant land, almost all of these sites are currently developed.
Sites proposed to redevelop from a non-residential land use to housing will improve the
jobs/housing imbalance and eliminate environmental impacts resulting from those jobs.
CMR:136:02 Page 5 of 9
Jobs/Housing Imbalance
Concern: Any new housing development will not keep pace with new job growth.
Palo Alto already suffers from a substantial jobs/housing imbalance heavily in favor of
the jobs side of the ratio. Currently, there are over 2.4 jobs for every employed resident
in Palo Alto: this means that the City must import over half its workers, resulting in
considerable peak hour traffic congestion and immense competition for the limited
housing available in Palo Alto. Realistically, given the land available and other factors,
Palo Alto will never rectify this imbalance, but it may reduce its severity. The draft
Housing Element proposes the following to improve the City’s jobs/housing imbalance:
¯The conversion of non-residential job-generating land to residential use that will:
o Reduce peak hour traffic generated by the non-residential uses
o Reduce the number of jobs in Palo Alto
o Bring housing closer to jobs thus reducing commute times, and
o Reduce the number of workers that have to be "imported" to the City.
¯The conversion of non-residential land on sites listed in the Housing Sites Inventory,
which could eliminate more than 2,300 potential jobs in Palo Alto while providing a
net change of at least 800 new housing units (see Attachment C).
Traffic Congestion and Other Environmental Impacts (Air Quality, Noise)
Concern:Additional housing production will increase traffic and result in traffic
congestion,noise and air quality impacts.
A major concern of the public and elected officials in Palo Alto and the region are the
traffic and other environmental impacts associated with new development and the impact
on quality of life of existing neighborhoods. The draft Housing Element is designed to
address these concerns based on the premise that new residential development will help
to reduce traffic congestion in the City and the region. This will be accomplished by
encouraging the use of transit; by bringing new housing closer to existing jobs and, thus,
"internalizing" commute trips within the City; and encouraging mixed-use development
with retail uses that reduce automobile trips. When more people that work in Palo Alto
live in Palo Alto, traffic congestion and air pollution will be reduced.
More specifically, thb following programs and policies in the Housing Element are
"smart growth"/environmentally sensitive policies:
Locate new housing near transit stations and along the E1 Camino Real and San
Antonio Road transportation corridors to reduce dependence on the automobile and
encourage transit use.
CMR: 136:02 Page 6 of 9
¯Convert commercial and industrial lands to residential use to reduce the number of
new jobs in Palo Alto and reduce peak hour commute traffic.
¯Increase residential densities and allow mixed-use development only on those sites
where it is determined that such development will be consistent with the City’s traffic
level-of-service policies.
¯Develop policies and standards for higher density and mixed-use developments that
preserve neighborhood character. (For example, further study along E1 Camino Real
to examine the potential for higher density housing and to ensure the preservation of
the character and quality of life of adjacent neighborhoods should be completed
before any major changes in zoning or other development requirements are
permitted.)
¯Permit development at the high end of the density range only where it is demonstrated
that the project will make significant use of existing transit facilities and will not
significantly worsen existing traffic levels of service on nearby intersections.
¯Minimize possible environmental impacts associated with increasing the supply of
housing. Since there is only a small supply of vacant residential land, new housing
development will occur on non-residential sites that have already been developed and
tliat are already provided with urban services. These sites already generate traffic,
noise, air quality and other environmental impacts. New residential developments, at
the levels envisioned in the draft Housing Element, should have beneficial
environmental effects.
Ensure Adequate Provision of Community Services for New As Well As Existing
Housing
Concern: New housing results in additional service demands.
Palo Alto is essentially a built-out community, which means that all possible future
housing sites are located in areas that are already provided with urban services. The City
will not have to expand its urban service area to provide for its housing needs. Most new
housing will be developed on former commercial or industrial sites that are already
adequately served by streets, sewers, and other infrastructure and already have police and
fire protection, although some adjustments may have to be made in these services.
Residential development will demand more or different services than the commercial or
industrial uses it replaces, including the need for increased school classrooms. The draft
Housing Element proposes to address some of these needs by adopting programs that do
the following:
¯Support working collaboratively with the school district to ensure adequate school
facilities for any increases in student populations.
¯Retain workers who provide key community services by providing more affordable
housing.
CMR: 136:02 Page 7 of 9
Limit New Office and Some Retail Development
Concern: New commercial development creates more jobs.
The Housing Element does not address problems created by new job growth. That is an
issue that is addressed in the Land Use Element of the Comprehensive Plan. The draft
Housing Element, however, indirectly contributes to reducing the number of jobs likely
to be accommodated in the City by proposing the policy and program changes described
in Item 3 above and the following:
Encourages the conversion of suitable non-residential sites to residential use,
particularly along major transportation corridors.
¯Identifies retail commercial sites suitable for housing and proposes conversion to
residential or mixed-use, thus reducing the number of potential commercial jobs.
, Identifies sites zoned for office development and proposes them for housing, resulting
in the creation of fewer new office buildings and jobs.
¯Proposes a program to work with Stanford to evaluate joint use projects to include
housing on industrial land within the Stanford Research Park.
RESOURCE IMPACT
No funding is required for adoption or implementation of the draft Housing Element.
POLICY IMPLICATIONS
The proposed Housing Element is consistent with existing City policy, especially the
Comprehensive Plan.
ENVIRONMENTAL REVIEW
An Addendum to the Comprehensive Plan Update Final Environmental Impact Report
will be prepared prior to adoption of the draft Housing Element by the City Council. The
Comprehensive Plan Environmental Report was certified by the City Council on July 20,
1998. The Addendum will be prepared in conformance with Section 15164 of the
California Environmental Quality Act Guidelines. An Initial Study has been prepared to
confirm that the project does not result in significant new environmental impacts and,
therefore, an Addendum can be prepared for this project.
ATTACHMENTS
Attachment A:Summary of Third Housing Element Community Forum of 12/13/01
Attachment B:Housing Sites Inventory
Attachment C:Changes in Jobs/Housing Figures Resulting from Proposed Housing
Sites Inventory
Attachment D: Palo Alto Comprehensive Plan Chapter 4: Housing Element - Revised
01/12/02
Attachment E: Draft Housing Element Technical Document
CMR: 136:02 Page 8 of 9
PREPARED BY: ~~~an c~C~a P’O~ G O
Planning Manager
DEPARTMENT I-I~AD REVIEW:
CITY MANAGER APPROVAL:
LES WHITE
Interim Director of Planning and
~~.nity Environment
EMI[~Y HARRISON
Assistant City Manager
CMR:136:02 Page 9 of 9
ATTACHMENT A
SUMMARY OF THIRD HOUSING ELEMENT COMMUNITY FORUM-
DECEMBER 13, 2001
On Thursday, December. 13,2001, the City of Palo Alto convened a third Housing
Element Community Forum to discuss housing needs for Palo Alto. The primary purpose
of the meeting was to solicit public input particularly from the residential neighborhoods
regarding solutions to the City’s housing challenge. The data collected in the forum were
considered in the revision to the Housing Element. A packet of information related to
current housing issues and the Housing Element update was distributed at the community
forum to all forum attendees.
I.Overview
Vice Mayor Vic Ojakian welcomed approximately sixty community forum attendees.
Following the Vice Mayor’s welcome, City Manager Frank Benest provided meeting
participants with an overview of housing challenges in Palo Alto and Housing Element
requirements mandated by the State. Mr. Benest explained that the provision of more
affordable housing is identified as a key goal in the City’s Housing Element and the
highest housing priority in Palo Alto.
City Manager Benest explained that the Housing Element is the City’s chief housing
policy document of its Comprehensive Plan. The Housing Element describes the long-
term policies and programs the City will use to address its housing needs. Consequently,
the Housing Element guides all housing development activities in the City. The City’s
current focus for the Housing Element Update is twofold: to reinforce existing strategies
in the City’s Comprehensive Plan for increasing the housing supply and to identify land
that will accommodate 1,400 affordable housing units in order to meet the Association of
Bay Area Governments’ (ABAG) Regional Housing Needs Assessment.
II.Strategies and Concerns
At the conclusion of the overview, forum participants were asked to fill out a card
included in their packets identifying both a strategy for better promoting affordable
housing in Palo Alto ,and the biggest concern about promoting affordable housing in Palo
Alto. The responses are attached to this report.
III. Breakout Sessions
During the second half of the forum, community members split up into four small
discussion groups with a group facilitator and recorder. The groups were asked to
address three out of six concerns raised by the City Council in October during its first
discussion on the draft Housing Element. The group discussions were to focus on
solutions to the housing challenge. At the end of the discussions, group participants
selected a preferred solution for each issue discussed. Tabulations 0fthese selections are
provided at the end of this report. After the discussions, the group facilitator briefly
reported their group’s comments to the full forum.
IV.Next Steps
It was announced that the Housing Element revisions would be reviewed by the City
Council on February 4, 2002. If the Council accepts the draft element and directs staff to
forward the element to the state Department of Housing and Community Development,
the state will then have 60 days to review the element. It is anticipated that the City
Council will then adopt the Housing Element with revised strategies, programs and
policies in the spring of 2002.
A)
City of Palo Alto
Third Community Housing Forum on the Housing Element Update
December 13, 2001
Individual Responses from Forum Cards
ONE STRATEGY FOR BETTER PROMOTING AFFORDABLE HOUSING IN
PALO ALTO IS ......
1.)The City must. co-sponsor and be a patron for affordable housing. It should be a point of pride that
the Cit_X is able and committed to doing this. The City can create joint venture partnerships with
charities, the county, the state, the other hybrid organizations like Peninsula Open Space District,
Water Authority, etc. Parking lots can be used more efficiently be converting some lots to multi-
level lots thus freeing up some lots for building.
2.)Buy inexpensive land in another city (Mountain View, Gilroy, East Palo Alto, etc.) and build
there.
3.) Pay the fine! (Penalty for not complying)
4.)Build the 200 units per year in a single building ourselves or with Palo Alto Housing Corporation.
Simply refuse to go along with ABAG! Who owns our city anyway?
5.)Pass a law requiring 200 Palo Alto houses each year to rent out part of their home to low-income
people.
6.) Convert some of Stanford’s Industrial Park to low-cost housing.
7.) Pay another city to do this for us. (Atherton does this!!!)
8.)Set a goal for percentage of housing dedicated to low-income (20%, 30%) then convert that much
Palo Alto residential units to meet this goal.
9.)To very seriously consider and use a redevelopment agency for development of retail
establishments and affordable housing in appropriate locations.
10.)Allocate a significant amount of city revenue to buy land and u;e the land for below market rate
housing.
11.) Some increase in allowable density for multi-family developments.
12.) Allow second unit on R-1 property (mother-in-law or rental)
13.)Require new industrial/commercial development or significant size to provide/contribute to new
housing units.
14.) Requiring maximum unit size in some developments.
15.) Allow some relaxation of second units in residential zones.
16.) Convert office space to housing.
17.) Stop erosion of existing housing stock.
18.)Mixed use development to allow rental units to be placed over commercial establishments. This
would allow houses, which are now rented to become on the market and sold. Additionally,
conversion of industrial zoning to residential would have twice the influence on the job/home
ratio.
19.) Affordable housing should have a range of sizes - studio for singles, one bedroom for couples, etc.
20.)Just build the affordable units because we cannot handle the volume created by set-asides (4,000 -
6,000 units).
21.) Tax job providers so they will help pay for housing their jobs create demand for.
22.) Increase the ratio of<50% and 50% to 90% (BMR) units compared to higher end units.
23.) Distribute, so far as possible, the location of BMR throughout the city.
24.)Stop the job growth! I.e., limit office development that helps fuel the demand and raises rents for
housing.
25.)Give preference to affordable housing only, no market rate housing should be built in the limited
space left available.
26.) Enact rent control and just-cause eviction ordinances.
27.)1 think we should approach the problem by building exactly what is required - 500 low income
units - if this means we need $3million/a year for 5 years then how de we get the money. Some of
the ideas would entail building quite a lot of expensive housing just to get 500 low income.
28.)Zoning and incentives to build above as many buildings as possible in corridors like E1 Camino
Real and Bayshore.
29.)Incentives and money available to apartment landlords to create more opportunities like the
Sheridan Apartments and buy more apartment buildings.
30.) Limit unit size.
31 .) Well balanced zoning plan.
32.) More incentives for builders, tax, P.R., etc.
33.)Use commercial zoned areh for residential construction. In other words, stop building offices and
build housing. For example, the Jim Baer office building in SOFA should be kept residential as
planned by CAP.
34.) Put more parking underground, build over parking lots.
35.)Allow more flexibility for mixed used projects where housing units are at least 2/3rds or 75% of
the entire project.
36.) Increase density in TOD areas.
37.) Have the city itself build some housing, which could be rented at an affordable cost.
38.) To communicate and have open discussion with neighborhoods where housing site is proposed.
39.)Housing over retail, mixed-use and increased density in specific and appropriate sites near transit -
in area that do not impinge on established single family neighborhoods.
40.)Update zoning to permit second units, greater density, less parking, etc. as appropriate to the
location.
41.)Increase economic feasibility by changing zoning to encourage mixed use development and
increase densities primarily by raising height limits to insure green space within development.
This would also enable development of needed housing and maintain a commercial tax break and
commercial services.
42.)Increase density and ratio affordable housing adjacent to maj or transit centers. Minimize
dependence on automobile and parking allocation.
43.) Using city and county land which will, should, lower one major item of cost.
44.) Enforcing minimum densities in multi-family zoned area - could be by limiting size of units.
45.)Establish minimum density requirements, so our limited available land won’t be wasted on fewer,
presumably more luxurious and expensive units.
46.)To increase density of multi-family developments within walking distance of transportation - bus
lines, train stations; to allow density bonuses to developers building well-designed multi-family
housing within these tran~sportation-oriented parts of the city.
47.)To combine neighborhood-serving commercial opportunities, e.g., ground floor retail, with the
residences.
48.)Rezoning land to residential and/or mixed-use (e.g., near transit) and including minimum density
requirements. Doing this on a very timely basis! Soon. Others: buy land now when price is low;
build parmership with JCC for Sun Site housing and Stanford for Mayfield housing.
49.) Be realistic rather than altruistic.
B)MY BIGGEST CONCERN ABOUT PROMOTING AFFORDABLE HOUSING IN
PALO ALTO IS ....
1.)If the city has an inventory of land or land it has purchased in the past it should use the land and
sponsor or build affordable housing.
2.)The city should also fred out if there are any foreclosures of land or houses from the banks, and
buy, renovate or tear down and build anew. The city could be a landlord for those properties and
charge reasonable, affordable rents or arrange leases with an option to buy from the renters.
Another solution is the city needs to be much more liberal, helpful, flexible regarding zone rules.
Perhaps an incentive program that allows homeowners to add a second story or build cottages in
their backyards.
3.)We, Palo Alto, is already too crowded, too built-up, too much traffic. We don’t want any more
residents ! ! ! !
4.)There will be increased nimbyism emerging to fight affordable housing efforts and causing
increased divisiveness in our community.
5.)Imposing substantial financial and other restrictions on private sector development for minimal
gains in housing supply.
6.) Increased population is clearly going to reduce quality of life in Palo Alto.
7.)Increased affordable housing will reduce the cost of housing, reducing the accumulated worth of
the city.
8.) Increase affordable housing will have a tendency to increase the crime rate in Palo Alto.
9.) Palo Alto can avoid this issue by simply choosing to pay a tax/fee. This should be a ballot issue.
l 0.) Affordable housing will have the net effect of increasing property taxes for PAUSD needs -
educating kids cost over $10,000/child at PAUSD.
11.)Affordable housing will likely bring people to Palo Alto who will expect increased government
services - hence higher taxes.
12.) Potential for lack of maintenance and future blighted areas.
13.) Emphasize well-planned projects.
14.) Large developments will crop up with large units - compatibility will be lost, privacy will be lost.
15.) Traffic will worsen and infrastructure (including schools will be strained).
16.)Large mixed-use projects with minimal amounts of affordable housing, thus exacerbating the need
for affordable housing.
17.) Congestion on roadways.
18.)Must keep guidelines flexible, way that totality of architecture can be considered - such as
providing lowest density along borders with R-1 and making sure aggregate impacts are kept
reasonable.
19.) Keep all site and design review.
20.) Do not make Palo Alto more crowded and increase traffic, we don’t want to be a big city.
21.) Impacts on infrastructure, schools, services, traffic, etc.
22.) 48% more high-end housing is excessive!
23.) Allowing increased office, commercial development as an incentive to create affordable housing.
24.)I also believe that lower income folks shouldn’t be pushed offinto the noisier, polluted areas of the
city in tight, living quarters, without a garden or decent open space.
25.)I’m afraid we will end up with too little too late, it will take too long and too many affordable units
will disappear and too many low-income people and households will lose the battle to hang on.
26.)The approach seems very unfocused and I don’t see that big a commitment from the city, i.e., why
isn’t 100% of the revenue f~om the redevelopment agency going to low income housing.
27.)That meeting ABAG requirement will do very little to affect the scarcity of housing in Palo Alto,
and increase the supply of attainable housing.
28.) We won’t demand what we need from developers. We’ll end up with luxury units only.
29.) Creating quality experiences with: services, access to schools, services, commercial support.
30.) Preserving quality experiences for all types of housing.
31 .) The people who should qualify, teachers, police, firemen, may not get highest priority.
32.)That we build more housing in certain places than we can absorb successfully. We need to
provide services, we need to do what we can to avoid traffic grid locks. (Remember that affordable
housing has to be subsidized by someone.)
33.) There is not enough political will on City Council to ensure this happens.
34.) There is a minority of vocal nimbys who use phony arguments to prevent progress in this area.
35.)If too many units are place in some areas, it could cause too much traffic. This could happen
because using the Below Market Rate system to attain some affordable units might mean putting
in more housing resulting in traffic congestion.
36.) Traffic issues. Adequate transportation for those who do not drive or have cars.
37.) Balance school enrollment.
38.) Lack of political will in community to work for a diverse inclusive community that houses some
of the valuable workers who contribute to the community and make it a healthy community.
39.)The growing distance between the definition of affordable and the reality thereof. And of course,
nimbys.
40.)Developments will be just units with small square footage. This will only result in problems
deferred because the units will be too small when tenants wish to start a family.
41 .) What good is building units for teachers if they need to still move away, 5 years later? Or can’t
qualify because income is too high.
42.) Traffic management and environmental impact.
43.)Anything t~roposed will be "tallied" and revised until it is dead or a very minor increase in the
supply.
44.)Having high density housing concentrated in certain areas of the city, especially when the
increased traffic impacts have not been adequately planned for (provide services, schools nearby,
with easy access).
45.)That our strategies will merely increase the population, but not serve people of lower incomes as
well as the above average.
46.) That we talk the talk but don’t walk the walk.
47.)That we need to also focus on proving market rate housing for those that don’t qualify for
affordable.
48.)That the city will lose its nerve and not champion the affordable housing it desperately needs.
Local neighborhoods and developers are important, but must not block our acquiring this housing.
49.) Needs to be one of the "Top 5" priorities for PACC.
50.)Increased density translates into decrease in quality of life. Greater traffic, congestion, pollution,
stress, stretching overtaxed city services. I am opposed to any increase of zoning density.
Results From
COMMUNITY FORUbl BREAK OUT SESSIONS
12/13/01
Group A
1. ISSUE: The city is encouraging too much high-end market-rate
housing development in order to enable limited below-marl~et-rate
housing.
RESPONSES:
¯ Place high density in areas that don’t impact R-1.
¯ Avoid aggregate impacts - disperse higher density housing
throughout the city.
¯Don’t build along transit corrid6rs unless a bus usage survey
verifies bus ridership in these areas.
¯ Verify E1 Camino bus ridership.
¯ Require more EIRs for projects that generate traffic and address
cumulative environmental impacts.
¯Strengthen significant criteria for EIRs.
¯Increase BMR requirement by 10%.
¯Zone carefully- don’t create too much development potential in
any one area.
¯Encourage more family housing- require amenities suitable for
families.
¯ Increase commercial in lieu fee over the proposed$12 and establish a
business license fee. Use both fees for affordable housing
development.
¯Businesses should pay for housing demand.
2.ISSUE: The Housing Sites Inventory identifies too many sites
may be inappropriate for high-density development in the short-
term.
RESPONSE:
o.Locate high density development only in areas that will not impact
single-family neighborhoods.
3. ISSUE: Any new housing development will not keep pace with
new job growth.
RESPONSE:
¯Support mixed use development consisting of retail with housing
component.
Group B
1. ISSUE: The City is encouraging too much high-end market-rate
housing development in order to enable limited below-market-rate.
housing.
RESPONSES:
¯Housing provision is a priority for teachers, city workers, critical
contributors.
¯Use redevelopment funds as a tool for more affordable housing.
¯Utilize many different ways to get more housing: (small lot size,
less desirable locations, i.e., trains stations, etc.).
¯ Place a Bond meaSure on the ballot to fund affordable housing.
¯Establish a service/housing tax on corporations.
¯Establish a business license tax.
¯Create a permanent source of funding for the city’s housing trust
fund.
¯Modify zoning to encourage mixed-use and raise height limit in
suitable places.
¯Sell development rights for added height allowance.
2. ISSUE: The Housing Sites Inventory identifies too many sites
that may be inappropriate for high-density development in the
short-term.
RESPONSES:
¯Add Mayfield site to inventory.
¯City shoilld look for and acquire housing sites all the time. ’
¯Only allow housing on potential housing sites (i.e., no private schools)
-stand firm; limit conditional uses, be ver~ specific about zoning
matching the use with properties on the inventor. Do it now in the
Zoning Ordinance Update.
¯Put Zoning Ordinance and Housing Element updates on the same
track.
3.ISSUE: Any new housing development will not keep pace with
new job,growth.
RESPONSES:
¯Tax increase in incremental jobs- especially office jobs.
¯Re-zone as much commercial/industrial propertg as possible for
housing.
¯Encourage/provide better regional transportation to jobs outside of
city.
¯Encourage companies to provide housing for workers.
¯Create tax incentives to encourage mixed-use developments.
Group C
4.ISSUE: Additional housing production will increase traffic and
result in traffic congestion, noise and air quality impacts.
RESPONSES:
¯Look at what projects generate fewer motor vehicle trips per unit
(e.g. - single family homes create more trips per unit than
apartments).
¯ Change our way of life.
¯ Need to balance new retail with new housing - provide shopping
near housing.
¯South E1 Camino Real is very deficient in retail; need more to
accommodate housing.
¯ Rezone industrial sites along 101 instead of along E1Ca,nino Real.
¯ E1 Camlno Real has existing transit and is a preferred location for
new housing.
5. ISSUE: New housing results in additional service demands.
RESPONSES:
¯Stop the creation of jobs.
¯Develop more shuttle services throughout the cltv and Stanford.
¯Provide close/local grocery shopping.
¯Learn to live with less services.
¯Large projects should provide facilities/amenities like parks on-site.
¯Build infrastructure before the housing.
¯Build ,nixed-use consisting of neighborhood serving commercial with
the housing.
Group D
4.ISSUE: Additional housing production will increase traffic and
result in traffic congestion, noise and air quality impacts.
RESPONSES:
¯Expand the shuttle service; use to shuttle both children to school
(public and private) and employees to work
¯Charge a small fee
¯Establish good Pubhc Relations campaign to pubhcize and
generate support
Create policies and standards for higher density and mlxed-use that
recognize preservation of neighborhood character and result in a
walhable mixed-use communitg with an emphasis on providing retail
services for nearby residential areas.
5. ISSUE: New housing results in additional service demands.
RESPONSE:
¯Retain workers who provide key community services [~y providing
more affordable housing.
6. ISSUE: New commercial development creates more jobs.
RESPONSE:
¯Rezone commercial and industrial properties to multl-family
residential uses.
Note: Italics denotes most important solution for group under a specific,
topic.
ATTACHMENT B
Site No.
3-01
5-01
5-02
5-06
5-21
5-28
8-06
8-09(a)
8-09(b)
8-11
8-14
10-02
12-01
12-06
12-07
12-08
12-09
Housing Sites Inventory
Sites Zoned, or that are Proposed to be Rezoned,
for Residential Use Prior to 2004
Site Address
1101, 1161 Embarcadero;
2080 W. Bayshore
Bryant, Channing &
Ramona
400/430 Forest Ave. at
Waverly St.
800 High St.
657-663 Alma St. (north
comer of Alma St. and
Forest Ave.)
33 & 39 Encina Ave. near
E1 Camino Real
2650 Birch St. at Sheridan
Ave.
2701 E1 Camino Real
2755 E! Camino Real
E. side Sheridan Ave.
btwn. SPRR and Park
Blvd.
1515 E1 Camino Real at
Churchill
901 San Antonio Rd.
4102 E1 Camino Real at
Vista
4219 E1 Camino Real
4249 E1 Camino Real
4315-4329 E1 Camino
Real
4146 E1 Camino Real
Description
Edgewood
Plaza
Oak Court site
CSAA
Office/Surgi
Center
Creamery site
Former Craft
and Floral bldg.
Opportunity
Center
2 vacant lots
and 4 houses
Greenworld
Nursery
VTA Park &
Ride Lot
Underutilized
industrial
bldgs.; portion
of Page Mill
Rd. r.o.w.
Medical Office
Sun
Microsystems
Former
Blockbusters
Hyatt Rickey’s
Hotel
Elk’s Lodge
Palo Alto
Bowling Alley
Vacant
Existing
Zoning
PC1643
AMF
(Development
Application
Pending)
RM-40
CD-S(P)
CD-C(P)
CD-S(P)
CS
RM-40
RM-40, CN
PF
GM(B)
RM-15
GM
RM-30
CS(H)
RM-30,
RM-15, R-1
RM-30, RM-
15, CS
RM-15
Proposed
Zoning
TBD
AMF
RM-40
PC
(Application
pending)
Mixed Use
PC
(Application
pending)
RM-40
RM-40 or
Mixed Use
RM-40
RM-40
RM-15
RM-40
RM-30
CS(H)
(Development
application
pending)
RM-30,
RM-15, R-1
RM-30- 1.57
ac.; RM-15 -
0.62 ac.
RMo30
Site Size
in Acres
4.49
(portion)
1.23
0.98
0.96
0.48
0.25
0.57
0.98
0.48
3.92
0.48
12.92
(portion)
0.65
15.98
(portion)
8.08
2.19
0.77
Potential
Dwelling
Unit Yield
20-25
53
30-38
60-65
10-12
55
15-20
30-35
15-18
120-150
5-7
250-300
10-15
200-300
100-175
30-55
10-20
Site No.
12-11
12-12
12-15
13-02
Total
Site Address
3445 Alma St.
NE comer Maybell &
Clemo
4131 E1 Camino Real
525 San Antonio Rd.
Description
Alma Plaza
Vacant orchard
and 4 homes
Mostly vacant
site.
Religious day
care center
Existing
Zoning
PC
R-2, RM-15
CN
R-1(743)
Proposed
Zoning
PC
(Application
pending)
RM-30 (1.9
at.); RM-15
(0.6 ac.)
CN (8 Units -
in approved
Mixed Use
project)
RM-40
Site Size
in Acres
4.21
(portion)
2.51
0.48
2.74
62+
Potential
Dwelling
Unit Yield
10-15
35-65
45-85
1.110+
* PTN = Portion of Larger Parcel
ATTACHMENT C
Palo Alto Comprehensive Plan Chapter 4: Housing Element - Revised 01/12/02
Vision Statement ATTACHMENT D
Palo Alto will aggressively pursue a variety of housing opportunities that enhance the
character, diversity and vitality of the City. The City is committed to increasing the
development of affordable and market-rate housing~ including converting non-residential
lands to residential or mixed use. Existing housing, particularly rental units, will be conserved
and rehabilitated or replaced. Palo Alto will continue its strong commitment to supporting
agencies that assist households with special needs. The City will foster an environment free of
discrimination and the barriers that prevent choice in housing. It will place special emphasis
on family housing and housing that addresses the health care, child care, transit, recreation
and social service needs of all Palo Alto residents.
Introduction
State law mandates that the Housing Element contain specific data, address certain topics,
and establish a workable strategy for meeting the City’s share of the region’s housing
d Th 1271 ....+ ....+ 1~ ....;~A;~nll ......; .....A t~ ....~;~on+i~ ~A ..........Anee s.e ..................v ..........,, .............................u~,~,,~ ....
.... 1~+ .....u,, +u~ State Depa~ment of Housing and Comm~ity Development ~
must periodically review the Housing Element for adequac7 ~d completeness. Because
much of the info~ation required for State ceXific~icn review of the Housing Element is
statistical ~d must be updated every five years, Palo Alto has .prepared a sep~ate
Tec~ical Document thN supplements the Comprehensive Ply. TNs document includes
the data required for ~ HCD review to dete~ine compliance with Stme law, is
inco~orNed by reference as pa~ of the Comprehensive Plan~ and is included in the
appendix.
This chapter begins with a synopsis of the more detailed info~ation fo~d in the
Tec~ical Document. It proceeds with the City’s housing goals, policies, ~d progr~s
and briefly describes the Citg’s five-year implementation program including t~gets for
the housing production and conse~Nion. Additional text on the City’s programs~
including * ....,~ ~. u ....; .....n,,~+; ....n .........*;~- may be found in the Tec~ical
Document.
Existing Conditions
POPULATION
Palo Alto’s population has Seen very staS!e increased only slightly during the last g-5 30
The number of residents ....... ;.~,,nm, +~. ..... ;.. ~aa~ ~o it ..... ~,, l a’myears. , ............ ~ ..............................
r~Ny g6~NMncreased by 4.7% from 55,966 in 1970 to 58,598 in 2000 with most of
this growth occurring between 1990-2000. While the average number of people per
household declined from 2.7 in 1970 to g-.g4 2.~3 in -IX)90 2000, the number of housing
units increased.
Although ......,~,...~÷~’-: ................... ,~n ~. ~ ^ ~+~ ~’~ 72.8 percent of the Palo
Alto’s population is white, the City is becoming more ethnically diverse. Asians and
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Palo Alto Comprehensive Plan Chapter 4: Housing Element - Revised 01/12/02
Pacific Islanders mak-e~ increased their share of the City’s population growing from 10
percent to 17.3 percent ~4~ +~, ......~÷:~....... v~,v ........, while ~i 4.6 percent are Hispanic~ ~ g 2
percent are black and 3.3 percent identify themselves as other*.
City of Palo Alto 2000 Populatio.n by Race/Ethnicity
White 72.8%
Black 2.0%
Hispanic 4.6%
Asian!Pacific Islander 17.3 %
Other*3.3%
Source: ~000 U.S. Census.
*The other category is remnant of population not positively identified under any other racial or ethnic category.
Ci.ty of Palo Alto 2000 Population by Age
Pre-School (Under 5)
School Age (5-17)
Child Bearing (18-44)
Middle Age (45-64)
Senior (65 and over)
Source 2000 U.S Census
5.1%
16.1%
37.3%
25.9%
15.6%
The median age of Palo Alto’s population has increased dramatically over the last few
decades. In 1970, the median age was 29.5 for men and 33.7 for women. By 1990, these
figures had increased to 36.7 and 40.0 respectively. In the year 2000, the median age for
the entire population of Palo Alto was 40.2 years, which is considerably higher than the
County median age of 34 years. The increase in median age has been accompanied by an
increase in Palo Alto’s senior population; the number of persons over 65 increased from
10 to -1-6 15.6 percent of the population between 1970 and -t-990 2000. The number of
older adults is expected to continue to increase in the future. At the other end of the age
spectrum, the number of children under five has increased significantly over the last two
decades and has resulted in an increase in the number of children entering child care and
school. However, the number of women a~ o__f child bearing age has ~mve Seth increased
decreased markedly after gee4i~ increasing during the ~ 1980s and 1990s and
the middle-aged population has increased significantly indicating that Palo Alto will
continue to grow older during the next decade, w~,;~ r, ....... 1~ ;, n, ~ ....... ~ ,r,~
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Palo Alto Comprehensive Plan Chapter 4: Housing Element - Revised 01/12/02
As ~ r~ .... ~-~ ~ 1 1 aa~ ÷r, ......... "~ <Qo The 2000 Census indicated that there were
26,048 housing units in Palo Alto. This was an increase of 400 860 units from 1990.
About one-third of the City’s homes were built during the 1950s, the period of greatest
housing construction in Palo Alto’s history. Since 1960, the rate of production has
generally declined. From 1970 to 1980, homes were added at a rate of about 240 units
per year. By the 1990’s, the annual rate had decreased to l~gan40-about 86 units per
year as a result of economic factors and the limited availability of residential land.
1970
1980
1990
2000
Population~ Household Size and Housing Units 1970-2000
Population Percent
Change
=
55 225 -1.3%
55,900 +1.2%
58 598 +4.8%
Household Percent
Siz~e Change
2.7 -
2.3 -14.8%
2.2 -4.3%
2.3 +4.5%
Housing Percent
Units Change
:
~+11.3%
25,188 +6.1%
26_~_~048 +3.4%
197.__9_0
1980
1990
2000
Income~ Rent and House Values 1970-2000
~Percent
~Change
Home
Value
$33,900 -
$148,900 +339%
$457,800 +207%
$1,006,600 +120%
Rent/Month Percent
Change
$162 :
$348 +115%
$825 +137%
$2512 +204%
Median
Income
$12,200
$24,700
$53,300
$111,360
: espy.
Percent
+102%
+116%
+109%
Palo Alto is an affluent community with incomes considerably higher than the regional
average. In 1996, median family of four income was $77,500, compared to $67,400 in
Santa Clara County. In 2000, Count5, median income for a family of four was $87,000
according to the U.S. Department of Housing and Urban Development (HUD). Year
2000 Census income information is not vet available for Palo Alto b~ut, assuming Palo
Alto households maintained their 1996 proportional advantage in higher family incomes
(about 28%), we can estimate that the median income for a family of four in the City in
2000 would have been about $111,360.
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Palo Alto Comprehensive Plan Chapter 4: Housing Element - Revised 01/12/02
_ The City also has a significant number of lower income households. In 1990,
about 20 percent of Palo Alto’s households reported an income of under $25,000 which
was almost the same proportion as in the County as a whole. Although year 2000 data is
not yet available to update this analysis of lower income households, it is likely that Palo
Alto has maintained its proportion of lower to higher income households. It should be
noted, however, that a $25,000 annual income would not be an accurate reflection in the
year 2000 of the number of lower or "limited" income households in Palo Alto. For
example, HUD considers a family of four earning $43,500 or less and a single person
earning $30,450 or less to be very low income. A $25,000 income would be inadequate
to meet the housing and other needs of most households in Palo Alto.
There is also a disparity between income levels based on the type of household. For
instance, the average income for married couples in 1990 was nearly three times the
figure for female-headed single parent households. Year 2000 Census data is not yet
available to confirm these same proportional income differences between married couple
and single parent households but it is probable that such differences continue since a
substantial proportion of married couple households will have two wage earners while
single parent households, by definition, only have one.
HOUSING ,o.~OST
Housing in Palo Alto is expensive. The median sales price for a single family detached
home in -1-996 2000 was $d90,000 $1,006,600. Using traditional underwriting criteria, an
annual income of approximately $i~~,,000 $275,000 would be required to purchase such
a home. Even the median priced condominium, at ~ $546,000, would require an
annual income of~,,~,vvv~’m ntm $163,000. Home ownership is only affordable to households
with above moderate incomes. The cost of rental housing has also risen sharply. In fact~
housing costs doubled between 1996 and 2000 for all types of housing in Palo Alto. At
the same time, vacancy rates have remained low, traditionally less than 3 percent for both
owner- and renter-occupied units. Housing costs have risen at a much greater rate than
family or household incomes.
HOUSING OPPORTUNITIES
Palo Alto has an extremely limited supply of vacant residential land. Most of the City’s
development potential consists of infill on small vacant lots, redevelopment of existing
properties, and conversion of underutilized non-residential lands to new higher density
residential or mixed use projects. The City will continue to seek opportunities to rezone
commercial lands to residential uses and strongly discourage the conversion of residential
lands to,,u..._~,~,.~ non-residential use. ~r~÷~,~.,...,.. ~’~,~ P°~÷~.~.~o In appropriate locations,
mixed use will be encouraged to provide housing opportunities. Although the City’s
1978 Zoning Ordinance recognizes mixed use as a viable housing type, the lack of clear
mixed use zoning regulations has been an obstacle to housing production in such projects.
This Comprehensive Plan ~ encourages innovative ideas for creating new
housing, including mixed use zoning, the use of smaller lots, live/work projects, and
other emerging housing prototypes. In particular, the City has engaged in, and will
continue to conduct, a Housing Opportunities ~tud¥ that identifies non-residential sites
appropriate for conversion to residential or mixed use and is committed to rezoning
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Palo Alto Comprehensive Plan Chapter 4: Housing Element - Revised 01/12/02
sufficient of these sites by 2004 to meet the City’s fair share of the region’s 1999-2006
housing need.
Palo Alto has been very active in promoting and supporting affordable housing. Since
the late 1960s, the City has aggressively used local, state, and federal housing assistance
programs for very low-, low-, and moderate- income households. These programs
resulted in the construction of 745 subsidized affordable units in the 1970s, 196 in the
1980s, and 2-9 about 380 in the 1990s ~ -1-99-5. Curtailment of many state "and
federal programs during the 1980s and 1990s has meant fewer affordable housing
opportunities and greater reliance on local funding to supplement state and federal
programs.
Local programs include the City’s Inclusionary Housing or Below Market Rate (BMR)
program. The program was initiated in 1974 as a means of increasing the supply of
housing affordable to individuals and families with low to moderate incomes. It
continues to be an extremely important part of the City’s strategy to meet its housing
needs. The City also maintains a "Housing Development Fund" that can be used for
acquisition, construction, and rehabilitation of housing. The-funds are primarily ayailable
to nonprofit groups who agree to maintain the long-term affordability of the housing
units.
State Housing Element law requires that localities provide for their "fair share" of the
region’s housing need. The Association of Bay Area Governments (ABAG) determined
that Palo Alto’s projected need for -1-988-t-99g the period from January 1, 1999 - June 30,
2006 was ~ ~ units. This number has been reduced to 4-,-,-,-,-,-,-,-,-,~4 616 by new
completed and occupied or approved (building permits issued) housing construction
through the end of 499g 2000. T÷ ....... ;~;~n11,, ;~,~A~ ÷~.~, ABAG ...... 1,~ ; ..........
these remaining units must be affordable to very low-, low- and moderate-income
households as described below.
r~ou~mg Needs by ~ncome Level
In addition to projecting overall housing needs, ABAG also projects housing needs by
income category. The intent of this action is to equitably distribute households by
income category so that no one City or County is "impacted" with a particular income
group. Four income categories are defined by the federal government and are used by
ABAG, as defined in the following box.
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Palo Alto Comprehensive Plan Chapter 4: Housing Element - Revised 01/12/02
Standard definitions of Household Income (-t997) (2000)
Very Low-Income: Households with incomes between 0 and 50 percent of ~ Count2 median
family income. 499~ 2000 limit for a family of 4: ~ $43 500.
Low-Income: Households with incomes between 51 and 80 percent of area~de Country median family
income. ~ 2000 limit for a family of 4: $-560~ $69 600.
Moderate-Income: Households with incomes between 81 and 120 percent of ~ Coun~ median
family income. -1-99-7- 2000 limit for a family of 4: $84-,-,-,-,-,-,-,-,g~$104 400.
Above Moderate-Income: Households with incomes greater than 120 percent of ar-ea~ County median
fmnily income: over ~ $104,400.
Some agencies and programs use different definitions of household income. In Palo Alto, the following
modifications applied in 4-997- 2000: For the HUD Section 8 rental programs and the CDBG Program, the
499~ 2000 limit for a family of four was $4-3-,:500 $53 853. For the Low-Income Housing Tax Credit and
HUD HOME Programs, the Low-Income maximum is 60 percent of the ~ County median. The
1997 2000 limit for a family of four was $42vt-20 $52,200. For the City of Palo Alto BMR Program,
Moderate-Income for home ownership is 80 to 100 percent of the are~4~ County median. The -t99g
2000 limit for a family of four was ~$87 000.
The table below shows how the City of Palo Alto’s -1-990 1999-2006 Housing Element
allocated the ABAG new construction need by income category. One hundred and forty-
three (143) of the 843 units built or approved have been constructed and are already
occupied or are ready for occupancy. The remaining 700 units have received building
permits and are in the process of being built. Most of these units should be ready for
occupancy by the end of 2001.
ABAG Fai~ Share Housing Needs Table~ 1999-2006
Income Level 1999-2006 Need
Very Low 265
Low 116
Moderate 343
Subtotal of 724
Affordable Units
Above Moderate 673
TOTAL 1,397
1999-2000 Built or Unmet Need
Approved Units
24 241
66 50
18 325
108 616
735 None
843 616
In reviewing the totals shown in the table above, it appears that Palo Alto has already
constructed, or approved for construction, about 60% of its fair share of the region’s
housin~ need. However, it should be noted that the totals include 76 more above
moderate income traits than required by ABAG’s assessment of Palo Alto’s fair share of
the region’s housing need for 1999-2006. Only 108 of 724 affordable units needed, or
H VevPAHEtext01-12-02 doc 01129102 11 51 AM Page 6 of 31
Palo Alto Comprehensive Plan Chapter 4: Housing Element - Revised 01/12/02
about 15% of Palo Alto’s total need for affordable housing, have currently been built or
approved for construction. Palo Alto’s current unmet housing need for 1999-2006
consists of 616 housing units that need to be affordable to very low-, low- or moderate-
income households
Goals, Policies, and Programs
OPPOF TU mES
A Supply of Affordable and Market Rate Housing That
Meets Palo Alto’s Share of Regional Housing Needs.
The Mid-Peninsula area of the San Francisco Bay region has limited housing
opportunities relative to the number of jobs. The Comprehensive Plan’s policies and
programs promote a variety of housing opportunities for all income ranges. Housing
diversity will enhance Palo Alto’s social and economic strength. A commitment to the
increased production of housing for all income levels will help the City continue to be a
distinctive, diverse and desirable place to live. Residents will benefit from an increased
awareness about housing needs, diversity and opportunities.
POLICY H-1:
Meet community and neighborhood needs as the supply of housing is
increased.
Increasing the housing supply meets an important citywide need. However, to be truly
beneficial for all Palo Altans, new housing must be designed and located in a way that
enhances the character of existing neighborhoods. Increases in the housing supply should
be accomplished without diminishing the quality of City services or surpassing the
capa~city of infrastructure and transportation facilities.
POLICY H-2:
Consider a variety of strategies to increase housing density and diversity
in appropriate locations.
PROGRAM H- I." (REVISED)
Allay;j~.,~" Increased housing density immediately surrounding commercial
areas and particularly near transit ce,nters stations bF either increasing
allowed densities or encouraging development at the higher end of the
existing density range for sites within 2, 000 feet of an existing or planned
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Palo Alto Comprehensive Plan Chapter 4: Housing Element - Revised 01/12/02
transit station or_/"or sites along two major transit corridors, El Camino Real
and San Antonio Road, wherever appropriate.
Palo Alto has a variety of commercial and mixed commercial/residential areas (such as
California Avenue), two multi-modal transit centers, and a network of bus routes serving
its commercial areas. Allowing increased density in these areas achieves a number of
important objectives. It allows the housing supply to be increased while minimizing
visual and physical impacts on nearby lower density areas. It also encourages the use of
transit, reduces auto dependency, and supports the City’s air quality goals.
PROGRAM H-2. (REVISED)
Encourage development densities at the higher end o_f allowed density ranges
in multiple family zones. Consider .....÷;~-......... ~, increasing minimum density
requirements in multiple family zones as well as in all Comprehensive Plan
land use designations that permit housing.
Most recent housing developments in Palo Alto have not been constructed to the
maximum densities allowed by zoning. Market conditions, bank financing, and insurance
requirements have favored the construction of single family detached houses. To
increase housing supply and obtain densities closer to those envisioned by zoning
policies, the City should,.,,~v.,_,~l ........ ~,.,~...._~,~:-- establish increased minimum density standards
in all multiple family zoning districts +~"....1+;~I~ 4"~;1 .................. v ..........~ ......as part of the Zoning
Ordinance Update currently underway. This is particularly important given the limited
number of vacant ~,,l+;~’~;h,._~.,~.__.~ sites remaining in Palo Alto and their potential
contribution towards meeting the City’s housing needs.
P~OGP~AM H-3." (NF~W)
Encourage the conversion o[ non-residential lands to residential use to both
increase the supply of housing, particularly a__/:fordable housing, and decrease
the potential _for the creation of new iobs that exacerbate the need_for new
housing.
Palo Alto has a significant surplus of jobs compared to its housing supply which has
contributed to the City’s inability to provide an adequate supply of affordable housing.
This program attempts to redress the ]obs/housing imbalance by reducing potential iob
growth while increasing the supply of housing, including affordable housing through the
conversion of non-residential iob generating uses to residential uses. This type of
conversion should assist the City in reducing traffic congestion and poor air quality by
bringing housing ~loser to employment centers. This would allow for the internalization
of commute trips and encourage the use of alternative modes of transportation due to the
increased proximity of housing and iobs.
PROGRAM H-4: (NEW)
Increase residential densities and allow mixed use development only on those
sites where it is determined that such development will be consistent with the
City’s traffic level of service policies and adequate urban services and amenities
can be provided.
Palo Altans have expressed the concern that additional residential growth and mixed
residential/non-residential forms of development may strain the City’s ability to provide
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adequate urban services and amenities, such as parks, and may reduce the quality of life
of the City’s residents and neighborhoods. This program seeks to balance the City’s need
to provide housing with its abilities to provide the services and erivirolmaental conditions
needed to adequately support that housing and provide attractive places to live and work.
PROGRAM H-5: (~EW)
Consider the following modifications during the Zoning Ordinance Update and
incorporate those modifications in the revised Zoning Ordinance that are most
conducive to increasing the production of affordable housing.
DensHy Limits and Residential Uses
¯ Spec!fF the range o_fhousing densities appropriate for each commercial and
industrial Comprehensive Plan land use designation and zoning district that
permits housing. Sites located within 2, O00 feet of an existing or planned rail
transit station iznd not adiacent to a single familF neighborhood may be
allowed a maximum density higher than that normally allowed under these
land use designations and zoning districts ~f a substantial proportion of a
proposed proiect ’s units are affordable to verF low-, low-, or moderate
income households. Development at the high end of the density range should
onlF be permitted where it is demonstrated that the project will make
significant use of existing transit facilities and will not significantlF worsen
existing traffic levels o_f service on nearby intersections.
Consider allowing higher densities on sites that are notprecisely 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.
Development of these sites should be consistent with surrounding densities
and intensities of development and should be designed to preserve
neighborhood character. Development o_f these sites at the high end of the
densi_ty range should on!F be permitted where it is demonstrated that the
proiect will make significant use o_f existing transit_facilities and will not
significantlF worsen existing traffic levels of service on nearbF intersections.
Allow the construction of affordable housing on surplus sites designated
Ma/or Institution/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 should be consistent 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., churches) to
allow ancillarF residential uses, such as car-etaker quarters, by mod!~ing
pertinent sections o_f the Zoning Ordinance and Building Code.
Allow a very high residential density under the Mixed Use land use
designation_for those sites within 2, 000 feet Of an existing or planned rail
transit station unless ad]acent to single famil~ neighborhoods. In areas
adjacent to single familF 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 sign!ficant use of existing
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transit_facilities and will not sign!ficantly worsen existing tra_ffic 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 residential
lots. Consider modifFing the R-1 Zoning District to create a maximum lot size
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.
¯Consider increasing the minimum density qfthe RM-15 Zoning District to at
least eight dwelling units per acre.
New Development Standards and Zoninq Districts
¯ Allow for increased flexibility 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 also 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 ob/ectives should be considered during the
Zoning Ordinance Update.
Create new zoning districts to implement the Transit-oriented Residential and
Village Residential land use designations and establish development
standards that provide the maximum amount of housing, particularly for
affordable housing proiects, permitted under the allowed density range while
preserving.the character of ad[aeent neighborhoods.
Create development standards for permitted mixed residential/non-residential
uses that would permit a number of dwelling units, including a minimum
number olaf_fordable housing units, to be built with each pro[ect. Mixed uses
with an office component should be discouraged. The definition o_f mixed use
development and the standards to be utilized in such developments will be
addressed during the Zoning Ordinance Update.
Over the past few gears, 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 proiects 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 opportunities due to single family lot
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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 programs 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 programs 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 opportunities, such as creating development standards that
would allow such densities to be achieved while still maintaining the desirable character
of Palo Alto.
PROGRAM H-6." (REVISED," FORMERLY H-3)
During the Zoning Ordinance Update, create Eva!uatc zoning incentives that
encourage the development of diverse housing types, ~1,o,~ such as
smaller, more affordable units and two- and three-bedroom units suitable for
families with children. Consider us!ng a "form" code to achieve these
ob/ectives.
A variety of housing types is desired in Palo Alto to address the broad spectrum of needs.
By providing incentives to develop housing units of less than 1,200 square feet, the
affordability and number of potential units can be increased. Incentives to develop such
housing should be pursued. Incentives might include reduced parking or open space
requirements, density bonuses, reduced lot coverage standards, flexible height limits,
increased floor area ratios, or City.financial participation. Certain locations near schools,
parks, and quiet streets provide the best sites for households with children.
PROGRAM H-7." (REVISED; FORMERLY H-4)
During the Zoning Ordinance Update, modify Evaluate the provisionsL such
as parking requirements, minimum lot size, and coverage and floor area ratio
limits, fo~ that govern the development of second dwelling units~ in single
family areas to "~" ....;~ t. .....~m,; ....t ....;,o ~;~, t. ......;.~........ ,o,. ...........~,,,,, ......o ,,-6,- ~"~ ~" .......encourage
the production of such units. Consider using a "form" code to achieve these
objectives.
Second units can provide additional rental housing that is both desirable and unobtrusive.
The current cottage regulations should be evaluated to determine how additional units
might be provided through increased flexibility in the regulations such as reduced parking
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requirements, limiting the maximum size of the unit, allowing for attached units, and
reducing the minimum lot size requirement. Appropriate development controls and
review procedures should ensure compatibility with adjacent properties.
PROGRAM H-8. (NEW)
During the Zoning Ordinance Update, allow second dwelling units that are
incorporated entirely within the existing main dwelling, or that require onlF a small
addition (200 square _feet or less) and limited exterior modifications, to be approved
through a ministerial permit (i.e., no design review or public hearing) on sites that
meet the minimum development standards, including the parking requirement.
PROGRAMH-9."
Explore creating an amnest~ program to legitimize existing illegal second units
where appropriate and consistent with maintaining the character and quality ofl~fe
Of existing neighborhoods. The grant of amnesty should be contingent on
compliance with minimum building, housing and other applicable code standards
and on maintaining the affordability of the second unit to ver)) low-, low- or
moderate-income households.
PROGRAM H-I O: (REVISED," FORMERL r H-5)
During the Zoning Ordinance Update, create a Planned Development zone
that allows the construction of smaller lot single family units and other
innovative housing types without the requirement for a public benefit finding
provided that the pro/ect significantl~ increases the number of affordable
housing units on the site over what would otherwise be allowed bv existing
zoning.
A designation similar to the existing "Planned Community" zone would allow flexibility
in design while providing a highly inclusive public review process. Because there is such
a strong need for housing in the City, the requirement for a public benefit finding can be
eliminated if the project significantly increases the affordable housing supply over what
would otherwise be allowed by existing zoning. While new zoning regulations are
anticipated to implement the "Village Residential" land use designation, it is not possible
to predict all of the prototypes the market will invent. Therefore, a flexible zoning
designation is desirable.
PROG~M H-11: (REviSED; FOmUERLr H-6)
During the Zoning Ordinance Update, amend zoning regulations to permit
residential lots of less than 6, 000 square feet where smaller lots would be
compatible with the surrounding neighborhood.
Many Palo Alto neighbor.hoods have lots that are smaller than the 6,000 square foot
minimum currently required by zoning. Allowing additional smaller lots would result in
more units, and create greater housing opportunities, and remain compatible and
consistent with existing development patterns.
PROGRAM H-12. (REVISED," FORMERLY H- 7)
During the Zoning Ordinance Update, reduce modify parking requirements ~
attovc of_pz higher density development,..,..,o....,,’~°~’; ..... ,.,,o,.,’4 reduced ........ ~" .... ..... a ..... "° in
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appropriate areas ~,~,~,~,~ ..... j ......... ~, ....... ,s ,,-~ ............ thus
reducing development costs and producing housing that is more affordable..
The potential consequences of reducing parking will be evaluated for
particular _types of projects during the Zoning Ordinance Update, but parking
reductions should primarily be considered for transit-oriented development or
developmentss that can demonstrate that its need for parking is less than the
required parking standard called for by the Zoning Ordinance.
POLICY H-3: (REVISED)
Continue to 8support the re~-designation of suitable vacant
underutilized lands for housing or mixed uses containing housing.
or
PROGRAM H-13 : (NEW)
Implement the Housing Opportunities Study that identifies vacant and underutilized
sites and sites with existing non-residential uses that are suitable for future housing
or mixed use development focusing particularly on sites near an existing or planned
transit station, along ma]or transportation corridors with bus service, and in areas
with adequate urban services and supporting retail and service uses..
Suitable housing sites currently planned and zoned for non-residential use
should be designated for residential or mixed use in sufficient quantities to
accommodate the City ’s_fair share of the region’s housing needs.
Convert sites near transit and other ma/or transportation facilities to higher
density residential and mixed use to reinforce the City’s policies supporting
transit use, create a pedestrian friendly environment, and reduce reliance on
the automobile as well as increase the supply of housing, consistent with the
City’s policies of encouraging compact, infill development and optimizing the
use of existing urban services.
¯Work with Stanford University to identi~ sites suitable for housing that may
be located in the Stanford Research Park.
PROGRAM H-14: (NEW)
Rezone those sites identified on the Housing Sites Inventory, using appropriate
residential or mixed use zoning districts, prior to 2004.
The Housing Sites Inventory contained in the Housing Element Technical Document
identifies a list of potential housing sites and contains those sites that are the most
suitable and likely to be developed for residential purposes in the time frame of this
Housing Element. The rezoning of the sites listed on the Inventory must be accomplished
by 2004 to provide sufficient opportunity for the development community and the City to
process and build new housing developments prior to the June 30, 2006 planning horizon
of this Housing Element.
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PROGRAM H-15: (NEW)
Conduct a special studv qf the El Camino Real transportation corridor to examine in
detail the potential for developing higher densi_ty housing, especiallv affordable
housing, on specO% residential or non-residential sites consistent with the City’s
traffic level of service policies, the City’s ability to provide urban services and
amenities and the preservation of the character and quality of life of adjacent
neighborhoods.
The E1 Camino Real transportation corridor provides a significant opportunity to plan for
new residential or appropriate mixed uses that can support affordable housing and take
advantage of the frequent bus service provided along this corridor. A substantial portion
of the City’s future housing supply may be provided on the underutilized commercial
sites located along this cgrridor, but such development requires careful evaluation by. the
City in terms of potential environmental constraints, such as traffic and potential visual
and other impacts on adiacent neighborhoods, and the City’s limited ability to provide
additional urban services. Residential developments that are designed to encourage the
use of bus transit, or that use bus transit to access rail transit, would be particularly
beneficial and desirable for affordable housing proiects.
POLICY H-4:
Encourage mixed use projects as a means of increasing the housing
supply while promoting diversity and neighborhood vitality.
Commercial areas and parking lots offer some of the best opportunities for new housing.
Residences can be built over stores, ~gf-mes, parking lots and even some industrial
buildings. Parking lots may be able to serve a dual purpose, serving businesses by day
and residences by night. Mixed use projects Should not be limited to "vertical" integration
in a single building, but should also include locations where residential and commercial
uses exist side by side. Mixed use proiects including an office component should be
discouraged since office development tends to increase the City’s existing traffic
congestion and air quality problems.
PROGRAM H-16." (REVISED," FORMERLY H-8)
During the Zoning Ordinance Update, evaluate the~jj~.~::o:’~.~,o~oo and improve
of existing incentives that encourage mixed use (with a residential component)
and residential development on commercially zoned land and determine~.~.~÷~ ....t ~ ....,~ ....÷~ t. ......~.4~.~ establish development standards that will
encourage development of the maximum amount Of housing permitted under
the allowed density range, particularlv .for projects that provide affordable
housing.
The City’s current zoning regulations have been ineffective in encouraging significant
numbers of mixed use projects, particularly those that are designed to provide affordable
housing, and oRen Typically, proiects require many variances from current development
standards to be feasible from the market’s standpoint. ~’~+" .... ;w~ .... ~ .... ~ ..... ¯ o.~
Joe~ppm,,~. The regulations should be evaluated and revised to improve clarity, remove
overly restrictive requirements and provide new incentives for mixed use.
PROGRAM H-17. (FORMERLY H-9)
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Use coordinated area plans and other tools to develop regulations that
support the development of housing above and among commercial uses.
Coordinated area plans are intended to provide more specific guidance for development
in areas where change is desired.
PROGRAM H-18." (REVISED; FORMERLY H-1 O)
Encourage the development of housing on or over parking lots by adopting
incentives that will lead to housing production while maintaining the required
parking.
One possible incentive to enable more housing is allowing the use of air rights to develop
housin~ over parking. There may other incentives as well which the City will explore.
PROG~M H-19: (REviSED; FOmUE~" H-11)
Consider eliminatin_~g_the requirement for Site and Design review ~3~ the
Planning Commission and City Council for mixed use projects a_a~ter
development standards have been established for mixed use projects during
the Zoning Ordinance Update.
Presently, mixed use projects require site and design review by the Architectural Review
Board (ARB), Planning Commission, and City Council. Eliminating this ~equirement
would expedite project approval and remove an impediment to housing production.
Projects would still be subject to ARB review, providing opportunity for public comment
and design review. Eliminating Planning Commission and City Council review of mixed
use proiects should not be considered until new development standards have been
effectively implemented for mixed use projects.
POLICY H-5: (REVISED)
Discourage the conversion of lands designated as residential to
nonresidential uses and the use of multiple family residential lands by
non-residential uses~ such as schools and churches, unless there is no net
loss of housing potential on a community-wide basis.
Residentially-zoned land is a valuable commodity that should be preserved whenever
possible. Since the 1960s, Palo Alto has changed the zoning of many parcels from non-
residential to residential. The reverse situation--rezoning or approving use permits on
residential land for ~ non-residential purposes--should only be approved when new
housing opportunities that meet or exceed the number of potential units t~ eliminated
can be ensured.
PROG~4M H-20." (NEW)
During the Zoning Ordinance Update, disallow uses other than residential uses in a
multiple-family residential zone unless the proiect can demonstrate an overriding
benefit to the public or the project results in no net planned or existing housing loss.
Planning Commission and City Council approval wouM be required in such
instances.
Conversion of multiple family residential lands to non-residential uses can significantly
reduce the City’s housing supply. The City must ensure that such lands are not converted
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Palo Alto Comprehensive Plan Chapter 4: Housing Element - Revised 01/12/02
to non-residential use unless there is an overarching public benefit from the project or the
housing lost by development of a non-residential use on a multiple family site is replaced.
POLICY H-6:
Support the reduction of governmental and regulatory constraints to the
production of affordable housing.
Zoning requirements, development review and approval procedures, fees, and building
codes and standards will be reviewed regularly to eliminate barriers to affordable housing
construction.
PROG~M H-21: (REVISED; FONWE~ZF H-12)
Where appropriate and feasible, allow waivers of development fees as a
means of promoting the development of housing affordable to very low- and
low-, and moderate income households.
!’ROa~4ac H-2 2 :
Exempt permanently affordable housing units from anF in_frastructure impact fees
that may be adopted bF the City.
Housing units that are subiect to long-term (forty years or greater) restrictions to maintain
affordabilit¥ and occupancy by very low-, low-, and moderate-income households should
be exempt from future impact fees. Units provided under the Below Market Rate (BMR)
Program should be included in the impact fee exemption.
PROG~aC H-23 : (NEW)
Require all City departments to expedite all processes, including applications,
related to the construction of affordable housing above minimum BMR requirements.
,P.OLICY H-7: (NEW)
Monitor, on a regular basis, the Ci .ty’s progress in iucreasing the suoplv of
housing and monitor the preservation of BMR rental units for very low- and
low- income residents.
PROGRAM H-24: ~Erg)
Establish an annual monitoring program to review the progress made in the
construction of housing for all income levels, the rezoning of suitable housing sites,
and the implementation of policies to encourage the production of affordable
housing.
~a~.~.~.~.:.~ Conse~ation and Maintenance of Palo Alto’s Existing
Housing Stock and Residential Neighborhoods.
Palo Alto has many fine neighborhoods with a variety of housing styles ~d types.
Conserving and maintaining this housing will help preserve the character of the City’s
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Palo Alto Comprehensive Plan Chapter 4: Housing Element - Revised 01/12/02
neighborhoods. Older housing may also be more affordable than newer housing.
Preservation of this older housing stock will help maintain Palo Alto’s limited supply of
affordable housing.
POLICY H-8: (FORMERLY H-7)
Promote the rehabilitation of deteriorating or substandard residential
properties.
The general condition of the housing stock in Palo Alto is very good, partially due to the
high price of homes. However, there are isolated structures and small sections of the
community that may begin to turn downward unless the normal processes of deterioration
are reversed. These areas need rehabilitation now, before major problems arise.
PROGRAM H-25: (FORMERLY H-13)
Continue the citywide property maintenance, inspection, and enforcement
program.
PROGRAM H-26." (REVISED, FORMERLY H-14)
Enact development regulations that encourage retention and rehabilitation of
historic residential buildings,o~’~oo,,,~,,~,I~0 o folder multifamily rental buildings
and rete;Ttia;7 af smaller single family residences.
The City promotes code inspection as a se~ice to residents and a dete~ent to
ne or oo eter or on ........~ ......~*.~ ~v ...............~~w~.~-. ~
POLICY H-9: (R~vISE~); FORMERLY H-8)
Maintain the number of multi-family rental housing units~ including
BMR units~ in Palo Alto at no less than its current level the number of
multi-family rental and BMR units available as of December 2001 and
vchite continue to supporting efforts to increase the r-enid supply of these
units.
Palo Alto has a limited supply of rental housing relative to market demands. Very few
private market rental projects have been built since the 1960s. Not surprisingly, the City’s
residential vacancy rate has consistently been below three percent over the last 20 years.
Reeem _Sharp increases in rents in the last half of the 1990s indicate that the City should
continue to take the steps necessary to retain the supply of rental units and encourage the
construction of new units.
PROGRAM H-27: (FORMERLY H-15)
Continue implementation of the Condominium Conversion Ordinance.
This Ordinance, enacted in 1974, restricts the conversion of apartments to condominiums
and thereby helps the City maintain its rental stock. Palo Alto has not had a condominium
conversion since 1980.
PROGRAM H-28." (REVISED," FORMERLY H-I 6)
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Palo Alto Comprehensive Plan Chapter 4: Housing Element - Revised 01/12/02
Where a proposed subdivision or condominium would cause a loss of rental
housing, grant approval only if at least two of the following three
circumstances exist."
¯The project will produce at least a 1 O0 percent increase in the number of
units currently on the site and will comply with the City’s Below Market
Rate (BMR) program (described in Program t4--2-0 H-30); and/or
¯The number of rental units to be provided on the site is at least equal to the
number of existing rental units," and/or
¯No less than -2-0 25 percent of the units will comply with the City’s BMR
program.
Many existing developments in Palo Alto contain units that are smaller and more
affordable than those that would be built today. This program limits the removal of such
units unless there is a significant net gain of housing or a replacement of rental units or
affordable units. The program applies to the most recent number of rental units on the site
whether or not they have been demolished. All units after the first unit are considered
rentals.
POLICY H-10: (NEW)
Preserve the existing legal~ non-conforming rental cottages and duplexes
currently located in the R-1 and R-2 residential areas of Palo Alto~ which
represent a significant portion of the City’s affordable housin~
PROGRAM H-29: (NE~)
Require developers o_f new residential projects in the R-1 and R-2 Zoning Districts to
preserve and incorporate, where feasible, existing rental cottages or duplexes within
the pro/ect. Explore the feasibilit~ of requiring the developer to replace any units
being demolished as a result of new construction.
In recent years, Palo Alto has lost some affordable housing due to the demolition of small
cottages, houses and duplexes that are located on lots zoned for single family homes or
duplexes. With the increasing cost of housing in Palo Alto and other threats to the City’s
affordable housin~ supply, Palo Alto must make every effort to prese~e these types of
units, which provide relatively affordable rental housing for small households.
POLICY H-11: (FORMERLY H-9)
Encourage community involvement in the maintenance and enhancement
of public and private properties and adjacent rights-of-way in residential
neighborhoods.
PROGRAM H-30. (Fo~vIEmr H-17)
Create community volunteer days and park cleanups, plantings, or similar
events that promote neighborhood enhancement.
PROGRAM H-31." (FORMER~ r H-18)
Conduct City-sponsored cleanup campaigns for public and private properties.
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Palo Alto Comprehensive Plan Chapter 4: Housing Element -Revised 01/12/02
Housing Opportunities for a Diverse Population,
Including Very low-, Low- and Moderate-income Residents,
and Persons with Special Needs.
The City’ will use public and private resources to provide housing that meets the City’s
"fair share" of the region’s housing needs. These needs can not be met by the private
market alone. Local, state, and federal resources will help the City achieve this goal.
PoLzc¥ H-12: (R~wsEo; Fom4E~I~y H-10)
Encourage~ and foster and preserve diverse housing opportunities for
very low-, low-, and moderate-income households.
PROGP~4M H-32." (NE~)
Take all actions necessary to preserve the 92-unit Terman Apartments as part
of Palo Alto’s affordable housing stock and to continue the renewal of the
existing HUD Section 8 rental assistance contract that provides rental
subsidies for up to 72 units in the project.
The Terman Apartments is the last major rental project located in Palo Alto that is
at risk of conversion to market rate housing.
PoLicy H-13: (Fo~rm~v H-11)
Provide for increased use and support of tenant/landlord educational and
mediation opportunities.
P R O G RAM H- 3 3 ." (F O RMERL Y H-19)
Implement the "Action Plan" of the City of Palo Alto’s Consolidated Plan or
its successor documents.
The Consolidated Plan is a required document for the receipt of federal funds through the
U.S. Department of Housing and Urban Development (HUD). It outlines actions to be
taken to provide housing opportunities for very low- and low-income households. The
overall Plan is updated every five years. The Plan and the Annual Action’ Plan are
adopted by the City Council.
PROGRAM H-34." (REVISED," FORMERLY H-20)
Modi~ and implement P~-÷; .... ;~t .... ÷~÷~- e, f the City’s "Below Market
Rate" (BMR) r,011,o~ ......~ ....~,-~ ........~, Program that ’".............rcqu:rcs by requiring at
least f!_fteen ¢en percent of all housing units built in for-sale projects of three
units or more~ and rental projects of five units or more~ to be provided at
below market rates to very low-, low-, and moderate-income households.
Projects on sites o_~five acres or larger must set aside 20 percent of all units
as BMR units. When the calculated BMR requirement results in a_fractional
unit, the pro/ect should provide a whole unit for any fraction of one-half unit
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Palo Alto Comprehensive Plan Chapter 4: Housing Element - Revised 01/12/02
or larger.
The City of Palo Alto’s BMR program is intended to increase the supply of for-sale
housing and rental housing for individuals and families whose incomes are !ess than
the median inccme insufficient to afford market rate housing. Since the program
was initiated in 1974, 443 151 for-sale units and ;P3 38 rental units have been created.
Continued affordability of the units is a major goal of the program. Deed restrictions
control the resale price and limit rent increases. Occupancy for BMR units is
determined according to City Council guidelines. The Palo Alto Housing
Corporation, under contract to the City, has administered the program since its
inception. Since the current rates of production of affordable housing in Palo Alto
are very low, the City should increase its minimum BMR requirement in order to
help meet its need for affordable housing.
The Palo Alto Below Market Rate ("BMR") Program
Developers of for-sale housing projects with three or more units or rental projects of five or more units,
~ must comply with Palo Alto’s BMR requirements for an application to be determined complete,
the developer must agree to one or a combination of the following alternatives:
For-Sale Units:
Fer each ten units deve!c.ped, net !ess than one Fifteen percent of the units developed must be provided as a
BMR unit_s. The BMR units must be comparable to other units in the development. The initial sales price
for two-thirds of the BMR units should be consistent with what a household making 80 to 100 percent of
the Santa Clara County median income can afford in housing expenses, such as mortgage payment, taxes,
insurance and association dues. The remaining units should be affordable to households earning 100 to 120
percent of the CounW’s median income. Further, the price should be sufficient to cover the developer’s
estimated direct construction and financing cost of the unit, exclusive of land, marketing, off-site
improvements, and profit. If on-site BMR units are not feasible, the second priority is for off-site units. In
such cases, one BMR unit must be provided for each nine units developed, or vacant land suitable for
affordable housing must be provided to the City. Off-site units may be new or rehabilitated existing units
and must be pre-approved by the City. The third priority is a cash payment in-lieu of providing BMR units.
The in-lieu payment is equal to 5 percent of the greater of the actual sales price or fair market value of each
unit sold and must be paid to the City’s Housing Development Fund at the time of first sale or transfer of
the unit.
Rental Units:
At least 4:0 15 percent of the units in a rental project must be provided as BMR units to households earning
between 50 and 80 percent of the County median income. The rents are initially established based on HUD
Section 8 (or its successor program) Fair Market Rent and may be adjusted annually based on one-third of
the Consumer Price Index or other comparable formula agreed to by the City. Alternatives include payment
by the developer of an annual in-lieu fee to the City’s Housing Development Fund based on the difference
between the initial Section 8 Fair Market Rent and the market rate rents of the units, or a one-time fee
based on 5 percent of the appraised value of the rental portion of the project.
Sites Larger Than Five Acres:
Projects on sites larger than five acres in size, except in the OS District, will provide a 4-5 20 percent BMR
component.
Subdivision of Vacant Land to be Sold Without Development:
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Palo Alto Comprehensive Plan Chapter 4: Housing Element - Revised 01/12/02
Vacant land that is subdivided into three or more lots and sold without construction of housing must
provide buildable parcel(s) equivalent to 40 15 percent of the development to the City or the City’s
designee. The land is to be used for the purpose of developing affordable housing units. The City may sell
the property, with the funds placed in the City’s Housing Development Fund for future housing
development. A comparable in-lieu fee may be agreed to by the City and the developer based on 5 percent
of the greater of the actual sales price or fair market value of the improved lots with houses.
lieu ~v ~ercen*a"e
Equivalent Alternatives:
The BMR program objective is to obtain actual housing units or buildable parcels within each development
rather than off-site units or in-lieu payments. However, the City may consider equivalent alternatives to any
of the above provisions.
PROG,~AM H-35: (NEar)
Modify the City’s "Below Market Rate" (BMR) Program to allow all newl_y
constructed BMR ownership units to be a~ordable to those moderate-income
households earning between 80% and 120% of the County median income.
Approximately one-third of the BMR units in a for-sale pro/ect may be sold at prices
affordable to households with incomes between 100% and 120% of the County
median income. The remaining units may be sold at prices a~ordable to households
earning between 80% and 100% of the County median income.
PROG~AM H-3 6." (REVISED; FoPawE~ r H-21)
Adopt a revised density bonus program that allows the construction of up to
three additional market rate units for each BMR unit above that normally
required, up to a maximum zoning increase of 2-5 50percent in density. Allow
an equivalent increase in square footage (Floor Area Ratio)for projects that
meet this requirement.
Given Palo Alto’s limited supply of land suitable for housing, the City must encourage
housing opportunities particularly if one-fourth of all additional units would be affordable
to low or moderate income households.
PROGRAM H-3 7."
Encourage the use of flexible development standards and creative architectural
solutions in the design of pro/ects with a substantial BMR component. The intent of
this program is to allow individual projects to develop individual solutions to create
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Palo Alto Comprehensive Plan Chapter 4: Housing Element - Revised 01/12/02
an attractive living environment both_for the project and adjacent development and
to address specific project needs, such as the provision o_f open space.
PROGRAM H-38." (NEw)
Consider allowing the development of duplexes in R-1 Zoning Districts as the
required BMR units for a new sin~le_familF residential subdivision sub[ect to
appropriate development standards. Development standards will be prepared,
evaluated, and implemented durinj~ the Zoning Ordinance Update.
PROG~M H-39: (REVISED," FORMER~g H-22)
Recognize the Buena Vista Mobile Home Park as providing low- and
moderate-income housing opportunities. AnF redevelopment of the site must
be consistent with the City’s Mobile Home Park Conversion Ordinance
adopted to preserve the existing units.
POLICY H-14: (FORMERLY H-12)
Support agencies and organizations that provide shelter, housing, and
related services to very low-, low-, and moderate-income households.
The City should work with nonprofit housing organizations and the local development
community to ensure that all affordable housing, including family housing and units for
seniors on fixed incomes, remains affordable over time. Palo Alto is committed to
providing continued support to local groups that serve the housing needs of lower income
households.
PROGRAM H-40: (FORMERLY H-23)
Promote legislative changes and funding for programs that facilitate and
subsidize the acquisition, rehabilitation, and operation of existing rental
housing by housing assistance organizations, nonprofit developers, and for-
profit developers.
PROGRAM H-41: (FORMERLY H-2 4)
Use existing agency programs such as Senior Home Repair to provide
rehabilitation assistance to very low- and low-income households.
PROGRAM H-42." (FORMERL Y H-25)
Support the preservation Of existing group homes and supported living
facilities for persons with special housing needs. Assist local agencies and
nonprofit organizations in the construction or rehabilitation of new facilities
for this population.
POLICY H-15: (FORMERLY H-13)
Pursue funding for the construction or rehabilitation of housing that is
affordable to very low-, low-, and moderate-income households. Support
financing techniques such as land banking, federal and state tax credits,
mortgage -revenue bonds, and mortgage credit certificates to subsidize the
cost of housing.
In the past, the development of affordable housing has relied primarily on federal and
state funding sources. While the City should continue to pursue such funds, local funding
HArevPAHEtex|01-12-0Z doe 01/29/02 11"~1 AM Page 22 of 3 1
Palo Alto Comprehensive Plan Chapter 4: Housing Element - Revised 01/12]02
options should be broadened.
PROG~M H-43." (Fo~ERLr H-26)
Maintain a high priority for the acquisition of new housing sites, acquisition
and rehabilitation of existing housing, and housing-related services in the
allocation of Community Development Block Grant (CDBG) funds or similar
programs.
PROG~AM H-44." (FORMERL Y H-2 7)
Support and expand the City’s Housing Development Fund or successor
program.
Palo Alto has established its Housing Development Fund largely from housing mitigation
fees from commercial and industrial developers, and residential developers who provide
funds in-lieu of BMR units. Other housing-related revenues also have been placed in the
fund. With funding becoming more limited, the City should seek to expand opportunities
for additional funds:
PROG~M H-45" (NEW)
Consider requiring 30% of all revenues generated by the Redevelopment Agency to
be used for the provision of a_ffordable housing.
PnOG~AM H-46." (REVISED; FORME1~Y H-28)
,~,.~ ~.,.~ an ge, ing u,o,o,n"";o Continue to seek funding ~om state and federal
programs ...................~, ~ ............................~,
......... ~, ~ ....../, to support the development or rehabilitation of housing
for very low-, low-, or moderate-income households.
P~OG~AM H-47: (REVISED," Fom4ER~y H-29)
Continue to require developers of employment-generating commercial and
industrial developments to contribute to the supply of low- and moderate-
income housing.
P~OG~AM H-48." ~FAV)
Periodically review the housing nexus formula as required under Chapter 16. 47 of
the Municipal Code to better reflect the impact of new/obs on housing demand and
cost.
Commercial and industrial development continues to generates new jobs, thereby
increasing the demand for housing. Some A significant number of these jobs are or will
be filled by lower- to moderate-income wage earners, increasing the demand for more
affordable units. Developers who contribute to the current j obs/housing i~nbalance and
the accompanying housing shortage should assist the City in solving this problem. This
has been partially accomplished by,. - ~;÷-’.~_., ~-’~;,_.~ ~.~,._.~,~ ..... ~-~,~,~ Chapter 16.47 of the Palo Alto
Municipal Code, which requires developers of commercial and industrial projects of
fleer area to either provide housing units or pay an
in-lieu fee to the Housing Development Fund fer any new fl~or area. Over the last few
gears the increase in the in-lieu fees have not kept pace with the actual increase in the
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Palo Alto Comprehensive Plan Chapter 4: Housing Element - Revised 01/12/02
cost of providing housing in Palo Alto. This undercuts the purpose of the in-lieu fee.
Periodically reviewing and updating the housing nexus study and fee formula will ensure
that commercial and industrial developments will continue to contribute a consistent
amount towards their low- and moderate-income housing demand.
POLICY H-16: (FORMERLY H-14)
Encourage the preservation, rehabilitation, and
Room Occupancy (SRO) hotels and SRO housing.
construction of Single
PROGRAM H-49: (NERO
Permit Single Room Occupancy (SRO) units in industrial, commercial, and high
density residential zoning districts using development standards that would
encourage the construction of the maximum number of units consistent with the
goals of preserving the character of adjacent neighborhoods.
SROs are hotels or residential structures that provide short-term and transitional housing.
They may or may not have kitchens or bathrooms within each individual unit. Palo Alto
has three SROs (Barker, Craig, and Palo Alto Hotels) and they are a valuable, necessary
part of the housing stock. A fourth SRO with 107 rooms and sponsored by the Palo Alto
Housing Corporation opened for occupancy in March of 1998. The City should work
with SRO owners to ensure the continued viability of these projects and should support
opportunities for new SROs in appropriate locations.
POLICY H-17: (FORMERLY H-15)
Support opportunities for Shared Housing and other innovative housing
forms to promote diversity and meet the needs of different household
types and income levels.
Shared housing for seniors and single parent households has been supported through a
portion of the City’s Community Development Block Grant (CDBG) Funds. Other
housing types might include co-housing and limited equity partnerships.
POLICY H-18: (FORMERLY H-16)
Support housing that incorporates facilities and services to meet the
health care, transit, or social service needs of households with special
needs, including seniors and persons with disabilities.
PROaZ4M H-50: (NEW)
During the Zoning Ordinance Update, develop zoning modifications which would
allow higher densities and create other incentives_for pro/ects proposing 100%
affordable senior rental housing.
The elderly population of Palo Alto has and will continue to increase substantially.
Households containing elderly persons also tend to have limited fixed incomes and to pay
proportionally more (overpay) for housing than other segments of the City’s population.
Creating an incentive to provide more higher density rental housing for seniors will help
to increase the supply of housing and to limit future housing cost increases.
POLICY H-19: (FORMERLY H-17)
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Palo Alto Comprehensive Plan Chapter 4: Housing Element - Revised 01/12/02
Support family housing that addresses resident needs for child care,
youth services, recreation opportunities and access to transit.
Meeting the housing needs of seniors may require selecting sites near shopping areas,
social activities, medical services, and transit lines. Housing needs for people who are
physically disabled must be addressed in the design of all projects. Other groups with
special needs include homeless persons, persons with AIDS, people with emotional or
mental disabilities,, and victims of domestic abuse. Family housing may require locations
near schools and parks and provisions for child care. Amenities for youth, such as
transportation and recreation, should be accommodated.
POLICY H-20: (FORMERLY H-18)
Support legislation, regulatory changes, federal funding, and local efforts
for the permanent preservation of HUD-assisted very low- and
low-income units at risk of conversion to market rate housing or loss of
federal rental assistance.
Palo Alto has 728 units in 13 projects of very low- and low-income housing of which
only one project, representing 92 units (the Terman Apartments), is at significant risk of
being converted to market rate housing. The remaining projects are held by non-profit
corporations which are considerably less likely to convert their units to market rate
housing
;,, However, given that the future of the HUD Section 8 Program and
its ongoing funding continue to be uncertain, the units held by the non-profits may be
subiect to rent increases if Section 8 subsidies are lost or reduced in the future.
Preservation of these units as affordable housing is a key priority and will require
coordination and cooperation, as well as imaginative solutions.
POLICY H-21: (Fo]~JUERLV H-19)
Support the provision of emergency shelter, transitional housing and
ancillary services to address homelessness.
Emergency shelters located in places of worship or National Guard Armory sites provide
immediate, emergency short-term housing. There is also a need for transitional housing
with supportive services to bridge the gap between emergency beds and community
reintegration. The types of services that are most helpful are the basic necessities of food,
clothing, mail, job training, counseling, case management, payee services, physical and
mental health services, vocational training, job placement and permanent, affordable
housing.
PROGRAM H-51." (NEV/)
During the Zoning Ordinance Update, allow homeless shelters in the CS,. CD and
industrial zoning districts with a Conditional Use Permit.
POLICY H-22: (FO~MERLY H-20)
Provide leadership in addressing homelessness as a regional issue.
POLICY H-23: (FORMERLY H-21)
Work closely with appropriate agencies in the region to develop and
implement policies and programs relating to homelessness.
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Palo Alto Comprehensive Plan Chapter 4: Housing Element - Revised 01/12/02
PROGR~M H-52: (FORMERL Y H-30)
Continue to participate in the Santa Clara County Homeless Collaborative as
well as work with adjacent jurisdictions to develop additional shelter
opportunities.
The Homeless Collaborative provides a regional approach to homelessness prevention
based on the federal continuum care model.
PROGRAM H-53 : (FORMERLY H-31)
Continue to participate with and support agencies addressing homelessness.
An End to Housing Discrimination on the Basis of Race,
Religion, National Origin, Age, Sex, Sexual Orientation,
Marital Status, Physical Handicap,, or Other Barriers that
Prevent Choice in Housing.
Palo Alto has a long-standing record of supporting and working towards the elimination
of all barriers to housing. Discrimination in any form is not acceptable. The City is
committed towards improving access to housing for all of its citizens.
POLICY H-24: (FORMERLY H-22)
Support programs and agencies that seek to eliminate housing
discrimination.
PROGRAM H-54: (FORMERL Y H-3 2)
Work with appropriate state and federal agencies to ensure that fair housing
laws are enforced.
PROGRAM H-55: (FORMERLY H-33)
Continue to support groups that provide fair housing services, such as Mid-
Peninsula Citizens for Fair Housing.
PROGRAM H-56." (FORMERLY H-34)
Continue the efforts of the Human Relations Commission to combat
discrimination in rental housing, including mediation of problems between
landlords and tenants.
PROGRAM H-5 7 : (FORMERL Y H-3 5)
Continue implementation of the City’s Ordinances prohibiting discrimination
in renting or leasing housing based on age, parenthood, pregnancy or the
potential or actual presence of a minor child.
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Palo Alto Comprehensive Plan Chapter 4: Housing Element - Revised 01/12/02
AND COST R~:DU,~TION
Reduced Housing Expenses for Energy
POLICY H-25: (FORME~LY H-23)
Reduce the cost of housing by continuing to promotev.,....,.~-~....s energy
efficiency, resource management, and conservation for new and existing
housing.
By owning and operating its own utility system, Palo Alto can offer its residents high
quality service at the lowest possible cost. The City has invested in a mix of new energy
and water supply projects, provided consumer-oriented conservation and solar services
and programs, and promoted operating efficiencies that allow residents to meet their
resource needs at a lower cost than in most cities in the region.
PROGRAM H-58." (FORMERL Y H-3 6)
Continue providing staff support and technical assistance in energy
conservation and demand management to architects, developers, and utility
customers.
PROGRAM H-59." (NEW)
Review State programs encouraging energy efficiency and incorporate appropriate
programs in Palo Alto’s energy conservation programs and outreach efforts.
PROGRAM H-60." (NEW)
Continue to develop a proactive public outreach program to encourage Palo Alto
residents to conserve energy and to share ideas regarding energy conservation.
PROG~4M H-61." (NEV/)
Encourage developers and builders to construct sustainable residential build!ngs
that increase energy eff!ciencv bF at least 15% above the ener_gy standards o[Title
24.
POLICY H-26:
Reduce the cost of housing using the Utilities Residential Rate Assistance
Program (RAP).
PROGRAM H-62. (NEVg)
Continue to assist verv low-income households in reducing their utility bills through
the RAP.
The Utilities Residential Rate Assistance Program (RAP) was adopted by the City
Council in 1993 to provide rate relief to residents who lack adequate financial resources
to pay utility bills. Level of income and disability are used to determine if a household
qualifies for the program. Qualifying residents currently receive a 20% discount on their
utility bills. In May 2001 the City Council expanded the reach of the RAP to allow three
times more residents to qualify for the program than were allowed the year before.
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Palo Alto Comprehensive Plan Chapter 4: Housing Element - Revised 01/12/02
Implementation
Palo Alto has, or plans to have, sufficient land to accommodate its fair share of the
re~ion’s housing needs. However, given the significant costs involved with the
production of affordable housing, it is not clear that Palo Alto will be able to build all the
very low-, low-, and moderate income housing needed. Such housing cannot be built
without substantial subsidies, which are not readily available to Palo Alto due primarily
to the limited amount of federal and state subsidies set aside for the production of
affordable housing and the extensive competition for these limited funds, such as the
HOME Program, which use selection criteria that place communities like Palo Alto at a
competitive disadvantage. Although Palo Alto does have a BMR Program, the number of
low- and moderate-income units this program is expected to generate will not meet all of
the City’s affordable housing needs. The City must, therefore, use its limited resources
wisely to encourage the production of the maximum number of affordable housing units
possible and to preserve as many existing affordable housing units as possible. The
following table summarizes the City’s quantified objectives for the next five years (2001-
2006).
New
Construction
Rental
Owner
Total
Existing Units
Preservation
Rental
(Terman
Owner
Total
Rehabilitation
Rental
Owner
Total
Quantified Affordable Housing Objectives 2001-2006
Very, Low
Income
25
24
0
13 beds
0
13 beds
Low Income
50
48
0
0
Moderate
Income
50
110
20
0
0
Total
125
6O
185
92
0
,13 beds
0
13 beds
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Palo Alto,Comprehensive Plan Chapter 4: Housing Element - Revised 01/12/02
Over the next five years, Palo Alto intends to produce 125 units of affordable rental
housing with the highest priority being the provision of rental housing for families with
children as called for in the City’s 2000-2005 Consolidated Plan. Single Room
Occupancy (SRO) and transitional or other permanent rental housing are secondary
priorities. Besides families with children, the City intends to assist the homeless and
those at-risk of becoming homeless, persons with special needs (especially the mentally
ill), and elderly persons. The City will work with non-profit organizations to meet the
goals listed above, particularly in the preservation of the Terman Apartments. Only by
combining resources with these organizations can the City have a reasonable expectation
of achieving these goals.
Palo Alto intends to have all of its new housing programs operational prior to 2004 to
ensure that the City have sufficient time to create the necessary housing opportunities and
to enable the development community to build the housing units needed to accommodate
the CitY’s fair share of the regional housing need within the timeframe of the Housing
Element. Programs H-1 through H-5, which deal with residential densities and
development standards, will be implemented through the Zoning Ordinance Update
currently underway in Palo Alto. Draft ordinance revisions are expected by October
2002. Programs to encourage more mixed use development, such as H-5 and H-16, will
also be considered in the Zoning Ordinance Update.
Other programs that will be implemented through the Zoning Ordinance Update include:
¯Program H-20 - modify Zoning Ordinance to discourage the use of residential
lands for non-residential purposes.
¯Program H-26 - create development regulations to encourage rehabilitation of
historic residential buildings, older multiple family buildings and smaller
single-family residences.
¯Program H-34 through H-38 - modify Zoning Ordinance to increase the
number of BMR units required, revised density bonus program, and revised
development standards to encourage the production of BMR units.
¯Program H-50 - develop zoning modifications to allow higher densities and
other incentives for 100% senior rental housing.
¯Program H-51 - allow homeless shelters in more commercial and industrial
districts.
The Housing Opportunities Study described in Programs H-13 and H-14 is an ongoing
program to seek new housing opportunities. The Housing Sites Inventory will be updated
as new land is identified or as the circumstances or condition of each site on the inventory
chan~e. Individual sites identified in the firfit tier of the Housing Site Inventory should be
rezoned for residential or mixed use development before 2004.
H:\revPAHEtex101-12-02 doc 01129102 11-51 AM Page 29 of 31
Palo Alto Comprehensive Plan Chapter 4: Housing Element - Revised 01/12/02
Other ongoing programs include:
¯Program H-17 - use coordinated plans to promote housing over commercial
USES.
¯Program H-21 - determine which affordable housing pro~ects qualify for fee
waivers.
¯Program H-22 - exempt affordable housing projects from any infrastructure
impact fees.
¯Program H-23 - require all City Departments to expedite the processing of
affordable housing projects that propose more than the minimum level of
BMR units.
¯Program H-24 - establish an annual housing progress monitoring program.
¯Program H-25 - continue citvwide property maintenance, inspection and
enforcement program.
¯Programs H-27 and H-28 - continue implementation of Condominium
Conversion Ordinance.
¯Programs H-30 and H-31 - continue community clean up programs.
¯Program H-33 - implement of the City’s Consolidated Plan or successor
documents.
¯Program H-39 - encourage the preservation of the Buena Vista Mobile Home
Park.
¯Programs H-40 through H-42 - continue to support the agencies and
organizations that provide shelter and other services to very low- to moderate
income households.
¯Programs H-43 through H-46 - continue to pursue funding for affordable
housing.
¯Programs H-52 and H-53 - continue to work with other agencies on the
problem of homelessness.
¯Programs H-54 through H-57 - continue to support agencies and programs
that seek to eliminate housing discrimination.
¯Programs H-58 through H-61 - continue to encourage energy conservation in
new and existing housing,
¯Program H-62 - continue to assist very-low income households in reducing
their energy bills.
Some programs and policies will require changes to other portions of the Municipal Code
or other regulations. These programs and policies should be implemented b¥ 2004.
These policies and programs include:
Program H-45 - consider use of 30% of Redevelopment Agency funds for the
production of affordable housing.
Programs H-47 and H-48 -revise Chapter 16.47 of the Municipal Code to
require housing contributions from employment generating development that
reflect their impact on housing demand and cost and that keep pace with
housing cost increases.
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Palo Alto Comprehensive Plan Chapter 4: Housing Element - Revised 01/12/02
The Department of Planning and Community Environment will take the lead in
implementing nearly all of the City’s housing programs or team up with other City
Departments in their implementation with a few exceptions. Programs for which
Planning is solely responsible include H-18, H-24, H-25, H-27, H-28, H-32 through H-
34, H-39 through H-43, H-46 and H-47. Planning will coordinate with the City
Attorney’s Office on Programs H-1 through H-17, H-19, H-20, H-22, H-23 (with the City
Manager’s Office), H-26, H-29, H-35 through H-39, H-44, H-48 through H-51, and H-54
(with Community Services). Planning will coordinate with the Community Services
Department on Programs H-52 and H-55. The Planning and Utilities Departments are
jointly responsible for Programs H-59 through H-61.
Some housing programs are the sole responsibility of other individual City Departments
or combinations of Departments. The City Attorney’s Office is responsible for Program
H-21 and for Program H-57 in con]unction with the Community Services Department.
The Community Services Department is responsible for implementing Programs H-53
and H-56 and iointly responsible for Program H-31 with the Department of Public
Works. The City Manger’s Office is responsible for Programs H-30 and H-45 and the
Utilities Department for Programs H-58 and H-62.
More information on the implementation of these housing programs can be found in the
Implementation Appendix of Palo Alto’s 1998-2010 Comprehensive Plan.
Palo Alto/HE Text Rev/revPAHEtext01-12-02
Rev.: 10/10/01
H \revPAHEtex101-12-02 doc 01129/02 11 51 AM Page 31 of 31
DRAFT
Housing Element Technical
Document
Ci~ of Palo Alto Comprehensive Plan
1999-2006
City of Palo Alto
Housing Element Technical Document
1999-2006
This document is the full and complete 1999-2006 Housing Element and
serves as a technical appendix to the Housing E~ement chapter of the City of
Palo Alto’s Comprehensive Plan.
Adopted by City Council:
Approved by State of California,
Department of Housing and
Community Development:
Housing Element Prepared by:
Michael J. Flores
Planning Consultant
City of Palo Alto
Dept. of Planning and Community Environment
Julie Caporgno, Advance Planning Manager
Catherine Siegel, Housing Coordinator
Suzanne Bayley, CDBG Coordinator-
Roland Rivera, Planning Technician
Joan Taylor, Planning Manager
Anna Caraaraota, Planning Technician
Executive Summary
Following are some of the highlights or more significant information contained in the
-1-997 1999-2006 Housing Element Technical Document:
Household and Housing Data
Housing Costs and Income
Housing costs for ownership units more than doubled between 1996 to 2000 and rental
housing costs nearly doubled between 1996 and 2001. Countywide household median
income increased only 29% between 1996 and 2000. This means that more households
are probably overpaying for housing in 2000 than in 1996.
Palo Alto’s Population Mix Will Change:
While Pale Alto’s total population is not expected to increase significantly in future years,
it is anticipated.that certain groups within the population will change in size and
proportion. In specific, the number and percentage of older adults is expected to continue
to increase. Additionally, although the number of families with children have increased.
over the last 10 years, the number of persons of childbearing age has inc-r-eased decreased
in recent years and this may affect the percentage and number of children in the
population.
More Single Parent Households and Seniors
The number of single parent households grew rapidly in the 1990s increasing from 7% of
all family households to 12%. These households have considerably less income than
other family households and are more at risk of becoming homeless. The population of
those aged 65 years or older increased b7 5.8%, slightly higher than the overall 5%
population growth of the City. Seniors, many of whom are on fixed incomes, continue to
need more affordable housing.
Draft Housing Element Technical Document 1999-2006 i
Rate of Housing Production Has Decreased:
Palo Alto’s highest rate of housing production was during the decade between 1950-60
when approximately one-third of all of Palo Alto’s housing units were constructed. Since
then, however, the rate of housing production has continued to decrease. From 1970-80
the annual rate of housing production was 240 units per year, however, by499g from
1990-2000 the annual rate of housing production had decreased to 6-1- 86 units per year.
Palo Alto Is Essentially A "Built-Out" Community:
Only 4=4 0.5% of the land area in the City is vacant and there are few opportunities to
annex additional lands in the future.
Housing Is Expensive:
,,, ÷~,~ ~,~o, ~,~1 ~ 1 an~gl familyThe median sales price .......................for a sin e , detached home in
Palo Alto in the year 2000 was $1,006,600~J,,,vv,,.A ~ nnn This sales price would require an
annual income of approximately $275,000 4-24)~ in order to purchase a unit using
traditional underwriting criteria. A condominiurn/townhome sold for a median sales
price of $546,600 ~-~,,,, ,-,,,~nn in the same time period and would require an annual income
of approximately $163,000 80000 in order to afford the unit.
Home ownership Is Only Available To Higher Income Households:
Without a public subsidy, home ownership is only affordable to households with above
moderate-incomes. Very low-, low- and moderate-income households cannot afford the
median sales price home ownership units.
Rental Units Are Only Affordable to ~Ac.a..cratc Iacomc Households Earning 115%
or More of the County Median Income ~"÷ ~- T~ ~*~ ~ ~a.~.÷. ~.~.
Above moderate-income households and moderate-income households earning 115% of
the County median income in Palo Alto can afford average rental rates but most
moderate-, ~¢ery low-income and ver~ low-income households are being priced out of the
market.
Housing Achievements (199~~...r~ ....~-......~’~-, ~ aa~ 1998 -2000)
The City has actively supported the development and preservation of affordable housing
opportunities through the following activities:
ii Draft Housing Element Technical Document 1999-2006
1. "Below Market Rate" (BMR) Program
Between 1998 and 2000 the City added 5 new rental units for low-income households
and 7 new ownership units for moderate-income households under its Below Market Rate
I-’~~m*’~’’~’~’°’~’. I ~ ,~+ ............~A~A +~ .....~ +~ ~ffO D ......~ ~ OOA +~ ~ ....K~
2. Assistance to Non-Profit Organizations
Financial and technical assistance has been provided to assist non-profits in:
Providing housing services, such as:
o Senior Home Improvement Repair Program
o Shared Housing Programs
o Homeless Assistance
o Accessibility Improvements. to Existing Housing Developments
o Fair Housing and Information Services
Developing Affordable Housing
o Acquisition and Rehabilitation ,~" ^ ~no,~,~ ^_n.-~.+. r,:~ T T~:÷,~ the
Palo Alto Gardens (156 units) and the Sheridan Apartments (57 units).
o Construction ofL;,~on o~...~.~ r¢~ ~ ~,~÷o~ 1~,o Al~ Place Single Room
Occupancy very-low income rental housing facility (107 units).
o Construction of Page Mill Court (24 units), which provides permanent,
affordable rental housing for very-low income persons with developmental
disabilities.
3. Funding Assistance
a!!oco~ed 85% of the total Between 1995 and 2000, Palo Alto expended $4.7 ~
million in CDBG funds for housing development, housing programs and administrative
costs for housing related services. In fiscal years 1998-1999 and 1999-2000, Palo Alto
expended nearly $2 million of its Residential and Commercial Housing Reserve funds in
loans or permanent funding of affordable housing projects.
4. Rehabilitation Assistance
The City provided assistance to very low- and low- income households to rehabilitate
their housing units through the Rental Rehabilitation Program and the CDBG Program.
The proiects assisted included the following:
Draft Housing Element Technical Document 1999-2006 iii
¯Rehabilitation of the water system for the 66 unit Arastradero Park Apartments. New
water lines were provided for each unit under this project.
¯Rehabilitation of the Waverley Street House to provide affordable housing for 26
lower income persons with mental illness.
¯Re-roofing Building "A" which contains 59 units of the 120 unit Stevenson House for
low income seniors
Housing Needs
Affordable Housing Is Needed:
Affordable housing is the most significant housing need for very low-, low- and moderate
income households and for "special need" households such as the elderly, the disabled,
single parent households that are the most risk of becoming homeless, large families in
overcrowded conditions, and thee homeless. More higher density rental housing,
practically the only affordable housing in Palo Alto, is needed to meet the needs of these
Majo~New Construction Projects In The Future Must Contain Affordable Housing
Units:
There will be several opportunities in the future for the City to review proposals for
targer~, residential developments. Affordable housing, consistent with City policies, shall
be included as a requirement in approving any of these proposals.
Palo Alto’s Existing Housing Stock Needs To Be Preserved and Maintained:
Existing units in the housing stock must continue to be maintained and affordable units
must be monitored to ensure that they continue to be preserved as affordable housing for
very low- and low-income households.
More Non-Residential Lands Must be Converted to Residential Use
There is only about 15 acres of vacant residential land in Palo Alto. To meet the City’s
housing needs, more non-residential lands must be converted to residential use or mixed
use with a minimum component of residential development. The City will implement an
aggressive Housing Opportunities Study to designate and rezone the lands most
appropriate for this conversion process.
Continue to Support Non-Profit Organizations Providing Housing Services:
Non-profit groups are very active in the Palo Alto area in providing housing related
services. The City should continue its tradition of supporting those organizations with
technical and financial support.
iv Draft Housing Element Technical Document 1999-2006
Continue and Assess Current Housing Programs:
The City’s BMR Program has been operative since 1974. While it is recognized as being
successful in providing affordable housing ,opportunities, it is an appropriate time to
review and evaluate the overall results of the program and identify possible new
directions for the future. Current requirements for Below Market Rate Housing will need
to be increased if the City is to be able to create a substantial number of affordable
housing units. Program policies and requirements need to be coordinated so that all
program documents reflect the same information. The City should assess the
effectiveness of programs such aft the second unit or "cottage" provisions, incentives for
mixed use projects, allowing for small lot subdivision and requiring minimum densities.
Evaluate Existing and Proposed Ordinances:
The City should evaluate the A Planned Development process should be eva!’e.~ed
e~pecially...; ...... .,~e,~,~’~ +~,~ ..~.,~..~,~’~"; .... ~,, and its requirement of a "public benefit" finding
~ that is perceived as adding to housing cost. The City should assess the need
for a "Single Room Occupancy" (SRO) Ordinance or special provisions within the
Zoning Ordinance to more readily enable the construction of SROs. The City should
c~ate modifyin~ its parking requirements to encourage more housing where jobs,
services and transit decrease the parking need and where parking costs can contribute to
excessively high housing costs. The City must also amend the Zoning Ordinance to
implement the programs of the Housing Element to ensure that all residential lands are
utilized as fully as possible and that development standards in the Zoning Ordinance will
allow maximum development potential to be achieved.
Increase the Contribution from Commercial/Industrial Development to Meeting
Affordable Housing Needs
The CiW continues to have a severe jobs/housing imbalance creating a huge unmet
demand for housing that contributes to increased housing costs. New job generating
development continues to exacerbate this situation. The commercial and industrial
housing in-lieu fee for projects impacting housing needs to be modified to ensure that
new commercial/industrial development contributes its share to the City’s efforts to
produce affordable housing.
Draft Housing Element Technical Document 1999-2006 v
Chapter 1: Introduction
Comprehensive Plans and Housing Elements
Cities and counties in California are required to develop Comprehensive or General
Plans, which are long-range planning documents. A community’s Comprehensive Plan
typically provides an extensive and long-term strategy for the physical development of
the community and any adjoining land. There are seven subject areas that must be
addressed in a community’s Comprehensive Plan, although other subjects can be added
based on the community’s needs and objectives. The seven mandated "Elements" that
each Comprehensive Plan must contain include Land Use, Circulation, Conservation,
Open Space, Noise, Safety and Housing Elements.
The Housing Element of the Comprehensive Plan is mandated by State law to contain
i ubj di i dby ~n÷ ........~" ..... ......tc,~n~l ....a’~.~certa n s ect areas an s rev ewe a ......s ....~ ...................~ ~~..,-~.~ --.,.
~.~-’~ ~ P-~;~;-~._~., the State’s Depa~ment of Housing and Co~uni~ Development
to dete~ine if it com es with
State Housing Element Law, specifically ~icle 10.6 of the Gowr~ant Cod~. ~icle
10.6 requires co--unities to include the following info~ation in their Housing
Element:
¯evaluation of existing housing needs,
¯estimates of projected housing needs,
¯review of previous Housing Element goals and programs,
¯inventory of adequate sites for housing and evaluation of infrastructure condition and
requirements,
¯identification of governmental and non-governmental constraints on housing
pro uc on, ..........s a ............................a ...........................,
¯development of housing programs’to address identified needs, and
¯quantifiable objectives for a~airanent .......the construction, rehabilitation and
conservation o__f housing needs.
State law also requires Housing Elements to be updated every five-years to ensure each
jurisdiction addresses its changing housing needs and identifies sufficient opportunities to
provide housing for all economic segments of the community. This update covers the
years 1999-2006 and builds on the progress made in previous Palo Alto Housing
Elements.
Draft Housing Element Technical Document 1999-2006 1
Housing Elements: City of Palo Alto
The Technical Document that follows is part of the Housing Element for the City of Palo
Alto. It is anticipated that the ~prer’~-o;-’~ P!an ;..,.1,,,~;.,~ ,~. .... 1o ~m;o~ .... ,~
......... +~.o Housing Element, and including this Technical Document, will be
adopted by the Ci_ty Council in 4098 December 2001. The Housing Element covers the
frye seven and a half year period from ~’ae~tO9g January 1, 1999 to ~,~200-3-June 30~
2006. ThisTechnical Document was prepared pursuant to Article 10.6 of the
Government Code (State Housing Element Law) and was developed to address the issues
n~ed listed above.
The City has previously adopted Housing Elements, the most recent being the -tO90 1998-
2003 City of Palo Alto Housing Element. The 1998-2003 version of the Housing
Element was an extension of the 1990 Housing Element and utilized the revised housing °
needs proiected by ABAG for the 1990-1995 time frame since more recent housing need
numbers had not get been developed by ABAG. At that time, the City recognized that
ABAG was in the process of updating its regional housing need proiections and that the
Housing Element would have to be revised once new fair share housing need numbers
were developed. The new fair share numbers were approved by ABAG in May 2000 for
the period of January 1, 1999 and June 30, 2006. This ~ 1999-2006 Housing Element
updates the -1-990 1998-2003 Housing Element and reflects the planning period and
policies of the City’s 1998-2010 Comprehensive Plan. The City’s Housing Element also
includes information not required by Article 10.6 but important to the evaluation of
housing needs. For example, Chapter 4 of the-gteme~ this Technical Document is a
comprehensive inventory of the existing affordable housing resources in .the City. This
inventory was designed so that the reader would be able to acquire a complete overview
of the range of housing opportunities currently available in Palo Alto. This inventory
provides information that is important in order to evaluate housing needs and is
supplemental to that required by State Housing Element Law.
Citizen Participation
2 Draft Housing Element Technical Document 1999-2006
The 1999-2006 Palo Alto Housing Element was prepared with the assistance of
considerable community participation, including three public forums, an ad hoc Technical
Advisory_ Committee (TAC), and a Focus Group. The TAC consisted of eight members
representing a variety of community groups and public entities that had an interest both in
the housing problems facing Palo Alto and in finding solutions to those problems. The
groups represented on the TAC included: the Palo Alto Housing Corporation, Peninsula
Interfaith Action (PIA), the Planning Commission, the League of Women Voters, and the
Palo Alto Unified School District. The TAC provided comments and advice on the
City’s housing needs and the policies the City proposed to use to address those needs. It
also reviewed draft versions of the Housing chapter of the Comprehensive Plan and made
formal recommendations on those documents to the Planning Commission and the City
Council.
The TAC strove to represent, or at least identify, the different housing interests of various
segments of the community. It was a two-way conduit for delivering information
between the City and the community and provided a forum for the members of each
group on the TAC to share their knowledge and perspectives regarding housing needs and
solutions. Although each TAC member represented the views of their respective groups,
they also consulted with other individuals in the community. All TAC meetings were
open to the public.
The Focus Group consisted of 13 members representing for-profit and non-profat
developers, planners, architects, and real estate interests with technical expertise on
housing issues. The Focus Group provided advice on the feasibility and practicality of a
variety of methods that could be used to address housing needs. In particular, the group
was asked to: comment on the barriers to the production of affordable housing; identify
Draft Housing Element Technical Document 1999-2006 3
which City policies and programs did or did not work; and, suggest incentives, policy
changes, and regulatolT, changes would be useful to encourage the production of
affordable housing. The Focus Group met once in August and this meeting was open to
the public.
The first public forum, ActionVfor Affordable Housing, was held on February 10, 2001,
sponsored by the Human Relations Committee. The forum discussed ways to
accommodate affordable housing and resulted in preparation of a Housing Supply Action
Plan. On August 27, 2001 the City held a community forum on the Housing Element.
The purpose of the forum was to inform the public about existing housing programs and
issues facing Palo Alto as well as to elicit ideas regarding strategies to further promote
housing opportunities in the City. About 100 persons .attended the forum. After a
welcome by the Mayor and a background overview by the City Manager of existing
efforts and constraints to providing housing in Palo Alto, all participants were asked to
identify_ individuall7 the most significant issue or concern regarding the housing challenge
in the City of Palo Alto. The forum participants then broke into four groups. The groups
evaluated a range of topics including ways of increasing the number of housing units for
all income levels, methods of preserving the existing housing stock and limiting the loss
of residential units, balancing housing needs with service demands, and changes to the
Zoning Ordinance that would enable increased housing production. At the conclusion of
the group sessions, the group participants selected the top three issues discussed and
reported ~hose to the reconvened forum.
These comments were considered in the preparation of the draft Housing Element and
Technical Document and were forwarded to the Planning Commission and City Council.
Using the comments and recommendations of the TAC, the Focus Group, and the
community, the consultant and City staff prepared an administrative draft Housing
Element and Technical Document. Notice of availability of the draft was published in a
local newspaper and mailed to the individuals and organizations on the Housing Element
update mailing list and posted in accordance with City policy prior to Planning
Commission and City Council discussion. (Each individual who expressed interest in the
Housing Element update process was added to a mailing list and was informed of all
update activities.) Copies were available for review at City Hall and six City branch
libraries as well as the City’s Web page. The Housing Element and Technical Document
were reviewed at public meetings conducted by the Planning Commission and the City
Council.
Housing Element and Technical document were ~ reviewed by the Planning
Commission on October 2, 2001 and by the City Council on October 9, 2001, to confirm
the general policy direction of the draft. At the October 9 meeting the Ci,ty Conneil
raised several concerns re~ardin~ the direction of the draft Housin~ Element and
decided that revisions of the draft Housing Element were necessary. The Council
directed staff to revise the draft to address six key concerns before forwarding it to
4 Draft Housing Element Technical Document 1999-2006
HCD for review. Several neighborhood groups also spoke at the hearing and
requested that a new community forum meeting be conducted. The Council
granted this request and a new community forum was conducted on December 13
which focused on the concerns raised by the City Council and the community
members participating in the October 9 public hearing. The Council’s concerns
and community comments from the December 13 community forum have been
considered in the preparation of the revised draft Housing Element, which was
considered by the City Council at a public hearing on February 4, 2002. The
revised draft Housing Element was submitted to HCD later that month for the
mandatory 60-day review and comment period.
v,44et~The Planning Commission will conduct t,M4 a public hearings-in April/May 2002
regarding the adoption of the draft Housing Element and Technical Document and make
its formal recommendation to the City Council at the end of its public hearing process.,
Recommendations of the Planning Commission ...... v ..........are scheduled to
be considered by the City Council which a!so hem at a public hearings in May/June 2002
at which time the Council will determine what final action to take on the updated
Housing Element and Technical Document. o~a
......... ~, ........................v ...........................v ...........an process
Comprehensi;
Draft Housing Element Technical Document 1999-2006 5
Chapter 2: Population and Households
Population Growth
During the decade between 1980 90 1990-2000, Palo Alto’s population increased by only
-1- 5%. In 4-980 1990, the City’s population was g-Sr2~ 55 900 and by -1-990 2000, that
number had increased by en!y 575 2,698 persons to g-50~ 58,598. This was one of the
lowest rates of population growth for communities in Santa Clara County for that decade.
Santa Clara County’s total population increased by -!-6 12% and the State of California’s
population increased by gg-.-.-.g 13.6% for that same time period.
Illustration #1: Population by City, Santa Clara County, ~)80-90-1990 -2000
City 1990 2000 Growth 1990-2000
Campbell 36,048 38 138 6%
Cupertino 40,263 50,546 26%
Gilroy 31,487 41,464 32%
Los Altos 26,303 27,693 5%
Los Altos Hills 7,514 7,902 5%
Los Gatos 27,357 28,592 5%
Milpitas 50,686 62,698 24%
Monte Sereno 3,287 3,483 6%
Morgan Hill 23,928 33,556 40%
MountainView 67,460 70,708 5%
San Jose 782,248 894,943 15%
Santa Clara 93,613 102,361 9%
Saratoga 28,061 29,843 6%
Sunnyvale 117,229 131,760 12%
Unincorporated 106,193 100,300 -6%
Total County 1,497,577 1~682~585 12%
Source: 1990, 20013 U.S. Census
¯ - F~F ........................y .............................,-~ ...........~ c0nstmcte
Although the 1990-2000 population gro~h rate of Palo Alto was in the lowest tier of
population gro~h in Santa Clara County, it was considerable ~reater than the 1% gro~h
6 Draft Housing Element Technical Document 1999-2006
rate recorder for 1980-1990. This increase in population is due both to an increase in the
number of dwelling and an increase in household size. Palo Alto’s housing stock grew by
860 units between 1990 and 2000, an increase of 3.4%. Average household size
increased from 2.2 to 2.3 persons per household during that same period.
*~ This increase in household size is probably
due to the increase in the number of f~ilg households with children under 18. ~ 1990,
22.4% of all Palo Alto households contained children 18 years old or younger. By 2000,
27.2% of all households contained children 18 years old or younger and represents the
resurgence of the family in Palo Alto. This change in household size was amicipated by a
demographic analysis (the Lapkoff and Gobalet Study) conducted in 1992 for the Palo
Alto Unified School District. In that analysis, the authors reposed that e~ollments in the
kinderga~en and element~ grades were begi~ing to rise in the late 1980s and early
1990s. Pa~ of this increase was a~ributable, they felt, to higher bi~h rates ~ong the
population. Tke Pa!e A ~+~ ~ ~;~ ~m ~:~:~ .... ~n ;~ ~ oa~ ~U~ U;~n .... ~
in household size might also be a~ributable to yo~g adult children staying or retuming
to their family home ("boomer~g kids") because of the high cost of securing housing on
their own.
In addition to the increase in the number of family households with children, there has
been a small decrease in the number of non-family households from 10,865 (44% of all
households) in 1990 to 10,623 (42% of households) in 2000. The combination of more
family households and fewer non-family households helps to explain the increase in
household size although this trend is likely to be short lived since the number of people in
their childbearin~ years dropped from 24,863 in 1990 to 21,872 in 2000, a decrease of
about 12%. Household size is, therefore, likely to decline in the future as the population
of Palo Alto ages.
Palo Alto’s population is not expected to increase,..,.,4 .... "*’*"~’’’**J+;~ll" significantly in the coming
years. One of the primary reasons for this is that the City is essentially "built out" and
there is little available land for new residential construction. In addition, the trend in Palo
Alto has been towards a predominance of households with older household heads and no
children at home despite the recent increase in family households during the last decade,
which, as indicated above, is not likely to continue. The Lapkoff and Gobalet Study
,~ earlier .predicts that "Palo Alto’s
population will get older, not younger, during the coming decades" ~ .... 1 T n~.~*V ~,.,4
~.~U~+~ Study, ~-*~,n ....~..~ ooo~.~. Fu~her, their ~alysis indicates that migrants to Palo
Alto in the Nture will also likely be older, have two incomes and be beyond the child
bearing ages.
Draft Housing Element Technical Document 1999-2006 7
Pale Alto’s population is expected to grow .....................,,, ,~ slow r-ate
over the next decade due to the decline in the child bearing age cohort (18-44) of the
population and limited housing opportunities. Some immigration of higher income
families into Pale Alto will continue given the City’s good schools and good
neighborhoods T~.~ ; ....... ; ...... ln÷;~.. AII~ +6 *~ increased ~" ..... E~IA .; ....
affect ~.euseke!d size. However, as the existing populaion ages, the elderly population
will increase and household size will eventuallg decline.
Population by Race/Ethnicity
In evaluating Pale Alto’s racial distribution, the 4-990 2000 U.S.Census data indicate that
Pale Alto’s population is primarily composed of White persons. Approximately 8-2,
75.8% of the population was identified as White in 4-990 2000. The next largest
population group by race in the City was Asian or Pacific Islanders who comprised 4-0
17.3% of the City population. The remaining population groups were Hispanic who
represented g 4.15% of the population~ ang Black persons who comprised a!mest 3 about
2% of the total citywide population and other or mixed racial categories making up the
remainder of the population. By comparison, in 4-980 1990 Whites represented 89 82%
of the population, Hispanics 4 5%, Blacks 3% and others, including Asian or Pacific
Islanders 4 10%. The fastest growing racial category between 1990 and 2000 was the
Asian or Pacific Islander community which expanded by 74%.
Although Pale Alto’s population has become somewhat more diverse between 1990 and
2000, its T~ compar:ng Pa!e ^
~ share of minority racial groups is still less than the count~ide average in all
categories. For example, ~24% of S~ta Clara County’s populaion is Hispanic while
only ~ 4.6% of the City’s populaion identified themselves as Hispanic in ~ 2000.
Pale Alto’s Asia~acific Islander populaion is moving towards the coun~ide average
%r tha group. T~e illustraion on the next page gaphically illustraes the City’s
etMic/racial propo~ions with a comparison chin included of City ~d County staistics
from the ~ 2000 U.S. Census.
8 Draft Housing Element Technical Document 1999-2006
Illustration #2: Population by Race/Ethnicity, 2000
City of Palo Alto Santa Clara County
Population 58,598 1,682,585
White 72.8%44.2%
Black 2.0%2.8%
Hispanic 4.6%24.0%
Asian/Pacific
Islander 17.3%25.9%
Other 3.3%3.1%
Source 2000 U.S. Census Percentages Rounded. The other catego~ is remnant
of population not positively identified under any other racial or ethnic category.
Asian/Pac.
Islander
17%
Hispanic
5%
City of Palo Alto
Other
3%
Black
2%
Population by Age
The median age of Palo Alto’s population has increased dramatically over the last three
se-vemt decades. In 1970, the median age was 29.5 years for males and 33.7 years for
females. By 1990,the median age of Palo Alto residents had increased by approximately
6.5 years from 1970, climbing to 36.0 years for males and 40.0 years for females. These
the year 2000, the median age for the entire population of Palo Alto was 40.2 years,
which is considerably higher than the County median age of 34 years.
This "aging" of the population is evident in the increase in Palo Alto’s senior population.
In 1970, persons age 65-and over numbered 5,789, constituting 10.3% of the City’s total
population. By -1-990 2000, the senior population had increased by g0-58 3,351 to 8-,-,-,-,-,-,-,-,-,7~
9,140 persons, or 46 15.6% of the City’s total population. Therefore, Palo Alto’s senior
population increased nearly gO 58% over the 1970-90 2000 time period.
White
73%
Illustration #3: Population by Age: 1970, 1980, 1990,2000
Age Groups 1970 1980 1990 2000 Change 1970-2000
Pre-School (Under 5)3,205 2,168 2,764 2,970 -235
School Age (5-17)12,682 8,998 6,999 9,436 -3,246
Child Bearing (18-44)21,472 24,004 24,863 21,872 +400
Middle Age (45-64)12,818 12,647 12,527 15,180 +2,362
Senior (65 and Over)5,789 7,408 8,747 9,140 +3,351
TOTAL PERSONS 55,966 55,225 55,900 58,598
Source: U.S. Census, 1970, 1980, 1990 (Report STF3, P 7 + 13)
Draft Housing Element Technical Document 1999-2006 9
As the table above indicates, the pre-school and school age populations increased between
1990 and 2000 after two decades of decline. The middle age and senior populations also
increased significantly over the last decade. The only age cohort that has decreased in size
is the child bearing age group, which indicates that population growth by natural increase
will begin to decline again over the next decade. The senior population is, given the
substantial increase in the middle age population, likely to increase over the next decade,
perhaps even more rapidly than the last three decades.
Households and Household Size
For purposes of evaluating housing supply and demand, it is useful to translate
information from population figures to household data. According to d~a frem the 2000
Census ~+~+~ ~" ,~;r~;~ r~o~n.~.+ of Finance, there were gS-,g0-1- 58,598 persons
living in Palo Alto as of January !, 1996. Of this total, ~ 668 were living in group
quarters. The remaining g-7;168 57 930 persons were living in households and the total
number of households in the City in 4-996 2000 was g4-,g4g 25 216 houseboY.
Household size is an important consideration when addressing housing issues. The
number of people occupying a housing unit affects the size and condition of the unit, as
well as the demand for additional units in the housing market. For example, a continued
decrease in household size with an increase in population would indicate a demand for
additional housing units to accommodate the new household formations. On the other
hand, dramatic increases in household size could indicate a number of situations such as
"unrelated" members of households living together or an increase in the number of
households with children. The -t-996 2000 household size in Palo Alto was 2.3 persons
per household,which was a slight increase from the 1990 household size of 2.2 persons
per household.
10 Draft Housing Element Technical Document 1999-2006
Illustration #4: Household Size, 1970-tO962000
2000
1990
1980
t970
0.5 1 1.5 2 2.5
1970 Household Size - 2.7 Persons Per Household
1980 Household Size -2.3 Persons Per Household
1990 Household Size - 2.2 Persons Per Household
-1-996 2000 Household Size - 2.3 Persons Per Household
Source:U * S * Census 1970 1980, and 1990 and 2000 data
State afCa!ifem!a, Dept. afFinance, !995 data
Households by Type
According to 4-990 2000 U.S. Census data, approximately ~ 14 593 households or
56 57.9% of all households were "family" households and g0786-5 10 623 households (44
42.1% of total households) were"nonfamily" households. A family household is one in
which a household lives with one or more persons related to him or her by birth, marriage
or adoption. A non-family household is one in which a householder lives alone or with
non relatives only.
Family households are by definition typically larger in size than non-family househol’ds
because family households consist of a minimum of two persons while non-family
households can be single person households. As would be expected, then, in Palo Alto
there are more persons living in family than non-family households. Of the total ggO00
58 598 persons in Palo Alto in 4990 2000, approximately 7-Z--,g 73.5% lived in family
households (40140 43 049 persons) and 26.2% (44fM4 14,881 persons) lived in
non-family households. The remaining 1.5 1.1% of the population (84-5 668 persons)
¯ ,~v .............. j were living in group quarter situations.
In evaluating this data from a historical perspective, it appears that the percentage of
persons living in family households has decreased between since 1970 and 1990 but then
increased slightly in 2000. In 1970, 83% of the population lived in family households
whereas by 1990 that percentage had decreased to 72.3% before increasing to about
73.5% in 2000. Similarly, the percentage of persons in non-family households has
increased from 18% in 1970 to 26.2% in 1990 but then increased to 27.7% in 2000.
Draft Housing Element Technical Document 1999-2006 11
~÷ ;o ;~÷ .... +;~, ÷~ ~,,÷~ ~r,n÷ ~,r,~ family r, ..... ~,~1,~o ;~ ~ nnn ~ ......... The trend of
havin~fewer households with children under the age of 18 years at home than other t~es
of family households was also reversed between 1990 and 2000. suck~o ......
~. In 1990~ only 32.6% of family households were a ma~ied couple with
children ~der the age of 18 years. By 2000, the percentage of such households increased
to 38.8%. ~other, perhaps more significant change for the Nture of housing in Palo
Alto was the increase in the number of single parent households. In 1990, 7% of the
family households were single p~ent households ~rimarily female-headed) with children
under the age of 18 years at home. BY 2000, the percentage of single parent households
(again, primarily female headed) increased to 12% Tkese ¯ .... ~m, ~ .....
+~......~;+.,~ ~n ~oz ~. ~;~., ~ .....~~ App i lv 60 4% f................................... ~ .............rox mate . o
all family households in 1990 were ~households with no cNldren under the age of 18
years. IThese households ~e primarily ma~ied couple households and the assumption is
that either they are living by themselves or with other family members.L In the year 2000,
50.8% of all households in Palo Alto contained children under the age of 18. These
statistics indicate that a resurgence of the f~ilg occu~ed in Palo Alto between 1990 and
2000. This resurgence may have impacts on the CiW’s housing needs in the near N~re
for family households, pa~icularlg those headed by a female single parent.
Households by Income Level
Generally, Palo Alto households have higher than average median family incomes. The
1990 U.S.Census data indicated that the median family household income in Palo Alto
was $68,737. This is was considerably more than the median family household income
of $53,670 for the County of Santa Clara for the same time period. In 2000, County
median income for a family of four was $87,000 according to the U.S. Department of
Housing and Urban Development (HUD). Year 2000 Census income information is not
yet available for Palo Alto but, assuming Palo Alto households maintained their previous
proportional advantage in higher family incomes (about 28%), we can estimate that the
median income for a family of four in the City would have been about $111,360.
According to the 1990 Census, while there are-were many high income households in
Palo Alto, there are were also households on more limited incomes. An interesting
statistic from the 1990 Census data is the-fac4 that 20% of all Palo Alto households
reported that their annual household incomes were less than $25,000. This percentage is
similar to the countywide average of 21% of all Santa Clara County households reporting
incomes of $25,000 or less. In other words, Palo Alto has had the same proportion of
households with limited incomes as the County as a whole in 1989. However, Palo Alto
has also had almost twice as many households proportionally who had incomes over
$100,000 in 1989 than the rest of the County. Although year 2000 data is not yet
available to update this analysis but it is likely that Palo Alto has maintained its
proportion of lower to higher income households. It should be noted, however, that a
$25,000 annual income would not be an accurate reflection in the year 2000 of the
12 Draft Housing Element Technical Document 1999-2006
number of lower or "limited" income households in Palo Alto. For example, considers a
family of four earning $43,500 or less and a single person earning $30,450 or less would
be very low income. A $25,000 income would be inadequate to meet the housing and
other needs of most households in Pal6 Alto.
Illustration #5: Household Income Distribution, 1989
$25,000 $25-50,000 $50-100,000 $100,000+
City of Palo Alto 20%25%34%21%
County of Santa Clara 21%31%37%11%
Source: ’United Way Needs Assessment for Santa Clara County", 1993-94
The definition of income level varies depending on the government entity or the program.
housing pu~oses, the iurisdictions in Santa Clara Count, including Palo Alto, use
HUD’s dete~ination of CounW median income ($87,000 for a family of four in 2000)
~d its definition of household income levels described below:
Very Low-income:
Households with incomes between 0-50% of area-wide County median family income.
-1-997-2000 limit for a family of 4:~,.~o,¢a~ ,~nn, ,,,, $43~500
Low-income."
Households with incomes between 51-80% of~ County median family
income.
4-99-7 2000 limit for a family of4:$5~,%9 $69~600
Moderate-income:
Households with incomes between 81-120% of areawide Countg median income.
4-99g 2000 limit for a family of4:$84v240-$104~400
Above-Moderate Income."
Households with incomes greater than 120% of areawide median family income.
As noted, various agencies and programs use different definitions of household income.
In Palo Alto, the following modifications applied in 499-7 2000:
Federal:
CDBG and HUD Section 8 rental programs: Low-income maximum was 64=9 66% of
County median income with a 4-99g 2000 limit for a family of 4 of $4-3-,-,-,-,-,-,-,g~ $53,853.
Low-income Housing Tax Credit and HUD HOME Program: Low-Income maximum
for rental units is 60% of County median income with a 4-99-7 2000 limit for a family
of 4 ,~Ao ton $52,200.
Draft Housing Element Technical Document 1999-2006 13
Local:
City of Palo Alto BMR Program: Moderate-income for ownership program is
80-100% of areawide median family income.. 4-99-7 The 2000 limit for a family of 4:
~n onn $87,000.
Using 1990 U.S. Census data, there were 3,778 very low-income households and 1,590
low-income households in Palo Alto, based on federal HUD definition of income.
Translating these numbers to percentages of total Palo Alto households, very low-income
households represented 15.3% of all households and low-income households accounted
for 6.4% of the total households. Therefore, together very low- and low-income
households accounted for 21.7% of all households in Palo Alto. Although 2000 Census
data is not yet available to update these figures, it is likely that the proportion of very
low- and low-income households is roughly the same in the year 2000 as the year 1990.
It is possible, however, that there may be a slight increase in these percentages given the
increase in the elderly population which may on fixed incomes and the increase in the
number of single parent households which also tend to have lower incomes.
The federal government adjusts income limits on a regular basis to reflect changes in
household income levels. Listed below are the maximum income levels for very low-
and low-income households for Santa Clara County, including the City of Palo Alto for
q-99~ 2000.
Illustration #6: Annual Household Income Limits, 2000
Persons in Very Low-income Maximum Low-income Maximum
Household (50% of Median Income)(66% of Median Income)
1 $30,450 $39,850
2 $34800 $45,550
3 $39~150 $51,250
4 $43 500 $56,950
5 $47,000 $61,500
6 $50 450 $66,050
Notes: 2000 Santa Clara County median income for a family of four is $87,000
Employment Trends
14 Draft Housing Element Technical Document 1999-2006
In its document entitled Projections 2000, the Association of Bay Area Governments
(ABAG) estimated that 98,450 jobs would be contained within Palo Alto’s jurisdictional
boundary by the year 2000, an increase of over 7,000 jobs from the 91,370 jobs estimated
to be in Palo Alto in 1995. This estimate reflects the economic boom Santa Clara County
was undergoing in the last half of the 1990s. Since the middle of 2000 and through the
first half of 2001, there has been an economic downturn in the high technology and
manufacturing sectors which has reduced the number of jobs in the County and Palo Alto.
The exact job reduction is not yet known and the duration of the economic downturn
cannot be accurately projected. However, it is likely that Palo Alto currently contains at
least 92,000 jobs (slightly more than it had in 1995) and that it will eventually contain
98,000-99,000 iobs within the next several years if the economy recovers in the near
term. ABAG projects that over 50% of all new jobs in the region will be in the service
sector, 11% in the retail sector, 19% in the professional and other sectors. Palo Alto’s job
growth will probably be close to this estimated distribution.
What is important about these employment trends is that Palo Alto will continue to
maintain its jobs/housing imbalance heavily skewed to the jobs side of the ratio. Palo
Alto currently houses about 3.5% of Santa Clara Counts,’s population but contains about
9.1% of all the County’s jobs. According to ABAG’s Projections 2000, Palo Alto was
expected to house 44,300 employed residents in its Sphere of Influence (SOI), the area
the City’s jurisdiction might expand encompass in the future. Total jobs in the SOI were
estimated at 106,690 by the year 2000. These two figures indicate that Palo Alto was
expected to have a job/housing ratio of 2.4 jobs to every employed resident by the year
2000. This, in turn, means that Palo Alto must import most of its workers to meet the
needs of business and industry and indicates that there is probably a large unmet need for
worker housing in the City. Since many of the Palo Alto’s workers can not live in the
City, the situation creates negative impacts such as long commutes for workers both
inside and outside the region, substantially increased traffic congestion during peak
commute periods, and increased air pollution and energy consumption. The production
of additional housing is a means for avoiding these situations.
Households with Special Needs
There are certain households within a community that typically have special housing
needs. In Palo Alto, those households which have been identified as having special
housing needs include:
1.Elderly Households,
2.Single Parent Households,
3.Disabled Households,
4.Overcrowded Households, and
5.Homeless Households.
Draft Housing Element Technical Document 1999-2006 15
In addition to the special needs households listed above which exist in Palo Alto, State
housing element law requrires the City to investigate and describe the needs of
farmworker households which do not exist in Palo Alto.
Information about each of these households is described in more detail in the paragraphs
that follow. A general description of each of these g household types is provided as well
as a summary of the current resources available and a summary of ~il’xq’~N°~l~ their
more significant housing needs.
1. Elderly Households
a) Description of Elderly Households in Palo Alto
The number of elderly persons in the City of Palo Alto has increased over the last ~
three decades. In 1970, elderly (persons age 65 years and older) comprised 10% of the
population but, .by -1-990 2000, that percentage had increased to 15.6% of the total
population. The total number of elderly persons residing in Palo Alto in -IX)90 2000 was
8-,-,-,-,-,-,-,-,-,g~ 9,140 persons an increase of 5.8% since 1990, which is slightly greater than Palo
Alto’s overall population increase of 5%. With longer life spans and age expectancies, it
is anticipated that the proportion of elderly in Palo Alto’s population will continue to
increase in future years, particularly given the substantial increase in the City’s middle
age population over the last decade.
The 1990 Census data indicate that, of the 8,747 total elderly persons, 8,329 (95.2%)
lived in household situations and the remaining 418 persons were living in group quarters
or were institutionalized. Although year 2000 Census data is not yet available to update
these figures, it is likely that these relative proportions of elderly persons in households
versus group quarters is about the same or is perhaps higher since the group quarters
population has appeared to decline over the last decade. There were a total of
6,439 households in the c,;+., ;~ ..,~.;~. ÷~.o ~; ..... r, ..... ~.~ln ....... that contained
individuals 65 years or older. These ~ households represent ;2-4 25.5% of all Palo
Alto households in -t990 2000. "r~.~ ~ Q~, ~. ..... ~.m,~ ..... ~0÷ ..... N ....
~,,,~N ’~*’~’~--J~’~°"~’"--’~’~’~--’~’~o~.~" .....r,,,~,~o~ Approximately 42% of all households with persons 65 years old
or older were non-family households and 58% were in family households. ^
fact is tkat In 1990, approximately. 75% of all elderly non-family household were single
females living alone. These female head of households living alone represented 26% of
all elderly Palo Alto residents in 1990. It is likely that these proportions have remained
the same in 2000 although the absolute numbers have increased. There were 2,591 65-
year old householders living alone in 1990. This number increased to 2,728 in 2000, an
increase of 5.3%.
Approximately 5% of all elderly (293 persons total) had incomes below the poverty level
in 1989 (1989 poverty level for a one person elderly household was an annual income of
$5, 947 or less). The majority of those persons (220)were O, gerty over the age of 75
16 Draft Housing Element Technical Document 1999-2006
years, living alone and primarily female. While there were a very small number of
elderly persons living below the poverty level, it is important to note that many elderly
households in Palo Alto were still living on limited incomes. For example, the 1990 U.S.
Census data also indicates that approximately 41% of all elderly households had incomes
that were at the low- or very low-income level. (See page of this document for
definitions of income level.) There were 1,891 elderly households that had incomes that
could be classified as very low- income and another 583 households that were
low-income.
The majority of Palo Alto elderly households are homeowners. Approximately 69% of
all elderly households live in owner-occupied housing units and the remaining 31% are
renters. Very low- and low-income elderly homeowners represented 30% of all elderly
homeowners, according to the 1990 U.S. Census data.
While renter households represent less than one-third of all elderly households, the
percentage of very low- and low-income households who are elderly and rent is
significant. Approximately 65% of all elderly renters in 1990 were either low- or very
low- income households. Further, more than half (59%) of all very low- and low-income
elderly renters in Palo Alto had incomes that were less than 30% of median income and
are therefore considered to be "extremely low-income" households. Not surprisingly, the
1990 census data also indicates that the most significant housing problem for very low-
and low-income elderly homeowners and renters is overpaying for housing. There were
825 very low- and low-income renter households who were paying more than 30% of
their income for housing in 1990. These 825 households represent 68% of all very low-
and low-income renter households. Of all elderly homeowners who had a "housing
problem" according to the census data, 100% of all very low- and low-income elderly
homeowners reported that overpayment for housing was one of their housing problems.
There were 333 very low- and low income elderlyhomeowners who reported paying
more than 30% of their income for their housing.
Year 2000 Census data is not vet available to confirm that these income and housing cost
trends have continued for the elderly but it is likely that, at a minimum, the proportion of
elderly households overpaying for housin¢ is the same in 2000 as it was in 1990.
However, given the substantial increase in housing costs over the few years and the
increase in the elderly population, it is possible than more elderly households are
overpaying for housing.
b) Resources Available to Elderl.y Households
Listed on the next page (Illustration #7) are existing housing developments in the City of
Palo Alto that are specifically designed for elderly households.
In regard to supportive living facilities for elderly, there are nursing care facilities as well
as non-profit and for-profit residential care facilities in the City of Palo Alto. Lytton III
provides skilled nursing care for approximately 4-2-8 145 elderly persons. Lytton III is
Draft Housing Element Technical Document 1999-2006 17
part of the Lytton Gardens complex (Lytton I, II, III and IV [Lytton Courtyard]) which is
the only development in Palo Alto that provides a full range of living options for lower
income elderly from independent living to assisted living to skilled nursing care.
Illustration #7: Independent Living Facilities for Elderly
City of Palo Alto, 2000
Development Total Units Senior Units Income Level Served
Independent Living (No Meals or Other Services)
1 Palo Alto Gardens 156 units 128 units
2 Sheridan Apartments 57 units 57 unks
3 Terman Apartments 92 units 24 units
4 Webster Wood 68 units 4 units
5 Arastradero Park 66 units 13 units
6 Colorado Park 60 units 8 units
Very Low-income only
Vepy Lew / Low-income
Very Low-income only
Ve~" Low / Low-Income
Ve~" Low / Low-income
Vepy Low / Low-Income
Independent Living (Some Meals Provided)
7 Stevenson House 128 units
8 Lytton I and 11 268 units
9 Lytton Courtyard 51 units
TOTAL 946 units
128 units
268 units
51 units
681 units
VeG’ Le’:,’- Lower-income ~
VeG’ Low Lower-income ~
Ve~’ Le,;,, Lower-income only
Source: City of Palo Alto, "Consolidated Plan July 1 2000 to June 30, 2005", Pg. 25
Listed below are the residential care facilities for elderly in Palo Alto.
Illustration #8: Residential Care Facilities for the Elderly, City of Palo Alto, 2000
Name of Facility Persons Served Type of Facility
Casa Olga 103
Channing House 21
Channing House 285
Lytton Gardens Community Care 55
Lytton Gardens 145
Webster House 74
Palo Alto Nursing Center 6.__6_6
Palo Alto Commons 150
Pleasant Manor.6
Sandy Oak Place 6_
The Birches Residential Care _6
May Care _6
Sevely Manor Guest Home _6
Sweet Little Home 6
Intermediate Nursing Care
Nursing Facility
Residential Care Facility (Asst. Living)
Residential Care Facility (Asst. Living)
Nursing Facili _ty
Residential Care Facility (Asst. Living)
Residential Care Facility (Asst. Living)
Residential Care Facility (Asst. Living)
Residential Care Facility (Asst. Living)
Residential Care Facility (Asst. Living)
Residential Care Facility (Asst. Living)
Residential Care Facility (Asst. Living)
Residential Care Facility (Asst. Living)
Residential Care Facility (Asst. Living)
Source: City of Palo Alto, "Consolidated Plan July 1 2000 to June 30, 2005", Pg. 26
c) Housing Needs of Elderly Households
18 Draft Housing Element Technical Document 1999-2006
As identified earlier on page 17 4g of this document, overpaying for housing is the most
significant housing problem of very low- and low-income elderly households. The 1990
U.S. Census data indicated that there were 825 elderly renter households and 333 elderly
homeowner households who were very low- and low-income and paying more than 30%
of their income for housing. Over half of the elderly renter households who were
overpaying (442 households) had incomes of less than 30% of median income and are
considered to be "extremely low-income." Therefore, providing affordable housing
forvery low- and low-income elderly is one of the more significant housing needs of this
household category. 2000 Census data is not available to update these statistics but it is
likely that the number of elderly households overpaying for housing has increased given
the increase in both the number of elderly households and the increase in housing costs
since 1990.
In addition, the federally required "Consolidated Plan 1995 2000 July 1, 2000 to June 30,
2005.", which is prepared by and for the City of Palo Alto, has ~ estimated an
unmet need for additional supportive housing facilities for elderly and frail elderly
households in Palo Alto. The Plan has identified a need for an additional -h000 260
units of assisted living facilities and additional 235 units provided with skilled nursing
care or 24 hour care facilities ~’~ n~a ~1~1 .........
2. Single Parent Households
a) Description of Single Parent Households in Palo Alto
There were a total of ;2M-,-,-,-,-,-,-,-,~0 25 216 households in Palo Alto according to the -tggo 2000
Census gat~ and, of these ;24,700 households, approximately ~ 14,593 were "family"
households. Single parent households represented :g 8.2% of all family households in
2000 an increase over the 7% proportion in 1990. There were -1-3N-4 1,201 singleparent
households in 4-990 2000. 293 4-36-single parent households were headed by a male
parent and 908 8-7-8 had a female head of household. Single parent household as used in
this document is defined as a family household with one or more children under the age
of 18 years and headed by either a female or male head of household, with no spouse
present.
Lower household income is one of the more significant factors affecting single parent
households. For example, married couple families in Palo Alto reported a mean family
income of $101,537 for 1990 census purposes. Single parent family households,
however, were significantly lower for the same data collection period. Male single parent
households had annual family incomes of approximately $49,193. Annual mean
household income for female single parents in Palo Alto was $36,651 or slightly over
one-third that of a married couple family. Limited household income levels affect the
ability of these households to locate affordable housing and, consequently, this is one of
the more significant housing problems of this household category. Year 2000 Census
data is not yet available to confirm these same proportional income differences between
Draft Housing Element Technical Document 1999-2006 19
married couple and single parent households but it is probable that such differences
continue since a substantial proportion of married couple households have two wage
earners while single parent households, by definition, only have one.
b) Resources Available to Single Parent Households
In past years, the City provided financial assistance to a non-profit agency, "Innovative
Housing, Inc.," to administer a shared housing program. Typically the households
participating in the program were single parent households with 40% male parents and
60% female parents. In November 1996, Innovative Housing ceased operations due to a
lack of funding to cover their operations in the Bay Area. Other agencies are being
sought to provide this service.
c) Housing Needs of Single Parent Households
Affordable housing is one of the more significant needs of single parent households.
Many times, their limited household incomes constrain the ability of single parent
households to "afford" housing units. Consequently, these households may have to pay
more than they can afford for housing for themselves and their children. Or, they may
have to rent a housing unit that is too small for their needs because it is the only type of
housing they can afford. Other housing related needs that affect single parent households
include assistance with security deposits, locating housing that is close to jobs,
availability of child care services and proximity to transit services. Clearly the need for
more affordable housing for single parent households has grown since the number of
these households increased by about 73% over the last decade.
Without affordable housing and supportive services, many single parent households are at
a higher risk of becoming homeless. Single parent families are fastest growing segment
of the homeless p.opulation. According to the "1993 Santa Clara County Children’s
Report Card", 52% of homeless families in the County were headed by single parents.
3. Disabled Households
a) Description of Disabled Households in Palo Alto
Disabled households include households who have family members that have are-disabled
efphysical ~-~,~,~,vor’"~’~ .... disabilities or because e,f mental illness or disability. It is
possible, of course that some individuals have both a physical and mental disability but
census data does not provide that level of specificity. According to the 1990 U.S. Census
data, there were 1,940 persons ages 16-64 years in Palo Alto who had a disability that
affected mobility or self care. Of these, 1,700 persons had a disability that affected their
ability to work. Information is not available about the-type of household they live in,
their income level or how their disability affects their housing needs. Generally, it can be
assumed that persons with disabilities have lower incomes especially if their disability
20 Draft Housing Element Technical Document 1999-2006
affects their ability to work. Census 2000 data is not yet available to update the number
of disabled persons in Pale Alto but it is likely that the number of such persons has kept
pace with the City’s overall population growth of 5%.
b) Resources Available to Disabled Households
Pale Alto has a few subsidized housing units specifically designed for persons with
physical disabilities. Title 24 in the State of California relating to handicap accessibility
and the federal Americans with Disabilities Act (ADA) have resulted in an increase in
these opportunities. Subsidized projects that have units specifically designed and adapted
for persons with physical disabilities include California Park Apartments (1 unit), the
Barker Hotel (5 units), and 330 Emerson Street (1 unit). Other projects such as Lytton
Courtyard, include units that can readily be adapted for persons with physical disabilities.
The
Alma Place SRO has 101 handicap adaptable units and 6 fully accessible units. Page Mill
gtac-e Court housing for the developmentally disabled .......... has 16 of 24 units fully
accessible and 8 units adaptable. A few older projects have had units adapted within the
limitations of their existing construction including Webster Woods, Terman Park and
Sheridan Apartments.
:-~,;~0 Alliance for Co--unity Care, Inc.
provides treatment, suppo~ and rehabilitation counseling services for persons who have
been affected by serious psychiatric disabilities. Their La Selva Ncilitv se~es 12 adults
and their Middlefield Road House serves six. Although their programs and
administrative offices are based in S~ Jose, there is a se~ice ~d treatment office in
Pale Alto. They operate a licensed group home in Pale Alto, as well as an independent
sh~ed livin~ house. They ~e a~empting to rehabilitate ~d re-open a bo~d and care
home on Waverley Street in Pale Alto to sere as transitional housing for persons with
mental illness. Adolescent Counseling Se~ices, ~c. operates a residential program for
teenage youth with severe behavioral or emotional problems. Their Caravan House
serves up to six young people between the ages of 12 and 17. The Veterans Workshop
operates two group homes for veterans with disabilities se~ing a total of about 11 adults.
In recerx year~, The City of Pale Alto provided funds to help acquire and rehabilitate a
6-unit apartment structure in Sunnyvale (1215 Cortez Drive) which serves adults with
developmental disabilities and a 5-unit facility on Pettis Avenue in Mountain View that
provides housing for developmentally disabled females.
Draft Housing Element Technical Document 1999-2006 21
c) Housing Needs of Disabled Households
Individuals with physical disabilities are in need of housing units that have been modified
to improve accessibility. Examples of modifications that are helpful include widened
doorways and hallways, bathroom and kitchen modifications, (lowered counter heights,
accessible tubs/showers and toilets, etc.) entry and exit ramps, modified smoke detectors
and alarm systems for individuals with visual or hearing impairments, et~. and other
improvements.
A priority need for gisaNeg households with disabilities is housing near transit and jobs.
Persons with physical disabilities may need housing that is connected to the provision of
individualized services .including training, counseling, information and referral services,
and rent subsidy services that allow the physically disabled to live in the community. For
individuals with a disability that affects their ability to work or who live on a fixed
income, affordable housing is a high priority. Agencies that provide supportive services
to the disabled population, have been discouraged by the high cost of rental housing in
Palo Alto. In fact, the City has continued to provideg funding to several agencies to help
acquire housing units in nearby communities because of the lack of affordable housing
units in Palo Alto.
4. Overcrowded Households
a) Description of Overcrowded Households in Palo Alto
An overcrowded household is one in which there is more than one person per room in the
living structure (usually "room" is defined as any room in the structure except for kitchen
or bathrooms). On a statewide basis, it was estimated in 1989 that 7% of all California
households lived in overcrowded housing. (Source: California Statewide Housing Plan
Update, 1990, State of California Dept. of Housing and Community Development).
According to the 1990 U.S. Census, approximately 655 units or 2.7% of the City’s total
occupied housing units were overcrowded with more than one person per room. Of these
655 units, 287 were"severely overcrowded" with more than 1.51 persons per room. The
majority (252 units) of these severely overcrowded units were occupied by renter
households. In fact, renter households have a higher incidence of overcrowding than
owner households. Approximately 74% of the total 655 overcrowded units are occupied
by renter households. In regard to age of the residential structure, overcrowded
households are found in both older as well as newer housing units in the City. While
88% of the overcrowded households live in units that were built since 1940, this
proportion reflects the fact that 79% of the units in the City were built since 1940.
Therefore, the age of the housing units is not statistically significant in regard to
overcrowded households in Palo Alto. Although 2000 Census data is not available to
update these numbers but it is likely that the concept overcrowding is not related to age of
structure is still valid.
22 Draft Housing Element Technical Document 1999-2006
Overcrowding is not as serious a housing problem in Palo Alto as it is in Santa Clara
County as a whole or as it is in nearby cities such as Mountain View and Redwood City.
Overcrowding is primaril¥-a problem of very low- and low-income large family renters
(according to 1990 Census data) which have a 48.6% incidence of overcrowding
compared to a 4.3% incidence for all renters. For comparison, the rate of renter
overcrowding in the County is 17.1%, 11.6% for Mountain View (immediately adjacent
to Palo Alto), and 23.8% for San Jose, the highest in the County.
Households do not typically choose to be overcrowded but end up in that situation
because they cannot afford a housing unit that is appropriate in size to their needs.
Traditionally, large households (households of 5 or more persons) have difficulty in
securing and/or affording housing units of 3 or more bedrooms partially because of an
insufficient supply of 3+ bedroom units. Large renter families, in particular, have
difficulty in finding rental housing stock that is appropriate for their household size and
also affordable. The 1990 data indicate that there were 1,356 households in Palo Alto
that had 5 or more persons. Approximately 37% of these households or 500 households
total were renter households. Moreover, small households in Palo Alto have difficulty in
finding appropriate size rental housing due to the high cost of housing. Although recent
Census data is not available to update the overcrowding conditions in Palo Alto, it is
probable that the combination of an increase in household size, an increase in the number
of households with children, and the substantial increases in housing costs in the 1990s
are indicators that the problem of overcrowding may be greater in 2001 than it was in
1990.
b) Resources Available to Overcrowded Households
The 1990 U.S. Census data indicate that there were 1,920 rental units that had 3 or more
bedrooms in the City of Palo Alto. These 1,920 units represent 18.4% of all rental units
in the City at that time. The same data source reported that there were 1,356 large
households (households of 5 or more persons) and that 500 of these households were
renter households. Therefore the raw statistics would indicate that there appear to be
sufficient existing units that are appropriate in size for large households. Howeverthe
cost to rent these units may be prohibitive for some households. ~ In 1990,
78% of these 3+ bedroom rental units identified above had monthly gross rents in excess
of $4000 $1 800 per month. By March 2001, the average rent for a 3-bedroom apartment
increased to $2,992 per month (Source: REAL FACTS). This situation makes it
extremely difficult for lower income families to find adequate housing.
There are units in some of the assisted housing developments in the City that are both
large in size and affordable. As an example, the Arastradero Park development includes
fourteen 3-bedroom units and four 4-bedroom units. However, given the rapid rise in the
rents of large apartments, more family sized apartments are needed to help keep rental
costs down as well as reduce overcrowding.
Draft Housing Element Technical Document 1999-2006 23
c) Housing Needs of Overcrowded Households
The most obvious need, of course, for large and overcrowded households is the need for
housing units that are large and adequately sized for the family. Typically there is a need
for 3, 4 and 5 bedroom housing units for households that are overcrowded due to family
size. Because these type of units are usually expensive to rent or buy, overcrowded
. households are also in need of affordable and large housing units. And, as noted above,
small households in Palo Alto are also overcrowded because of the high cost of housing.
Therefore, affordable housing, primarily affordable rental housing, is a significant need
for overcrowded households and, in fact, this need is becoming more critical given the
near doubling of rents for all units between 1996 and 2001.
5. Homeless Households
a) Description of Homeless Households in Palo Alto
It is very difficult to develop a precise and realistic description of homeless households in
a community. This is due to several reasons but one of the more significant is the lack of
good data on the number and type of homeless households. The 1990 U.S. Census
attempted to identify homeless households during their "S-Night" count on March 20-21,
1990. During the evening hours of March 20 and the early morning hours of March 21,
census takers attempted to count the number of persons in emergency shelters and
persons visible in street locations. However, even the Census Bureau cautions users of
this data that the data is not considered to be complete and that there were probably many
more homeless persons than reported in this survey. Indeed, in Palo Alto, the 1990 U.S.
Census data reported that there were only 13 persons in shelters and 11 persons visible in
street locations. It is generally acknowledged by homeless service providers that these
numbers under-estimate the actual count of homeless persons in Palo Alto.
Families 20 10 10
Teta! Number ef Persens in Families 50 25 25
c;..~ An,,~70 ~5 35
24 Draft Housing Element Technical Document 1999-2006
In 1995, the cities of
San Jose, Santa Clara, Palo Alto, Mountain View, Sunnyvale, and Gilrog, and the County
of Santa Clara, jointly funded and participated in a survey of homeless individuals and
families in Santa Clara County. The survey consisted of a questionnaire that was
administered to a sample of the homeless population in the County. Unlike a census,
which counts the entire population in a group, a sample survey reaches only a subset of
the total population. The survey process consisted of on-site interviews with individuals
at various public .street locations throughout the County and on-site interviews with
individuals at all of the emergency shelters, youth outreach centers, and transitional
housing facilities. The survey interviewed a total of 1,149 homeless individuals and ~hat
strrvey-resulted in the following information:
Approximately 1,700 homeless persons were estimated to be without shelter at
the time the survey was taken.
¯The total "sheltered" at the time of the survey was estimated at 2,024 resulting in
a total homeless count of 3,724.
¯The number of children who are homeless comprised ;2-3 19% of the total sample
count and 74% of these children were under the age of twelve.
¯The number of working homeless ~ doubled from 12% identified in
a 1989 report to ~ 24% in the 1995 report.
¯Mental illness and substance abuse are problems that continue to be a significant
factor for the County’s homeless population.
¯The length of time in homelessness appears to be increasing. Over 41% of the
respondents reported being homeless for more than one year - an increase of
40% over the 1989 survey of the homeless.
¯The survey indicates the ethnic background of the participants as: 26% White,
57% African-American, 13% Hispanic, and 4% other.
The "1995 Overview of Homelessness in Santa Clara County" ~ estimated
that, based on turnover rates in shelters and adding in the approximately 8,800 AFDC
single head of household with children who requested homeless assistance for fiscal year
1994-95, there probably were a total of 16,300 persons in the County who experienced a
period of homelessness for that year, from less to a month to more than a gear.
The Palo Alto sample represented about 4.2 percent of the total survey population or
approximately 48 people. This would translate into about 72 people if this percentage
were applied to the 1,700 homeless people estimated to be in the County in 1995.
However, there is no accepted method for allocating the estimates of the number of
Draft Housing Element Technical Document 1999-2006 25
homeless to individual cities. Due to the transitory_ nature ofhomelessness, it cannot be
described with any meaning except on a countywide basis. From the perspective of a city
like Palo Alto, which is located on the border between two counties, homelessness should
be studied from a sub-regional perspective.
Another indicator regarding homelessness comes from the Housing Authoritv’s waiting
list information. When the waiting list was open in 1999, respondents were asked
whether or not they were homeless. The number of homeless householdsfrom Palo Alto
on this waiting list was 54. Assuming an average household size of 2.3 persons, these 54
households represent about 124 people who were homeless and who, at one time, lived in
Palo Alto. It is likel7 that the increase in housing costs during the 1990s is increasing the
risk of homelessness for lower income households in Palo Alto and, as indicated earlier,
many of the households at-risk of becoming homeless may be female headed, single
parent households or large family households that cannot find adequate, affordable
shelter.
b) Resources Available to Homeless Households
The City of Palo Alto participates in the Santa Clara County Collaborative on Housing
and Homeless Issues, which represents homeless shelters, service providers, advocates,
non-profit housing developers and local jurisdictions. The City and the Collaborative
follow a "Continuum of Care" approach in addressing the needs of homeless persons. The
continuum consists of the following steps in providing homeless resources:
i)Prevention Services
ii)Emergency Shelter
iii)Transitional and Permanent Affordable Housing
Listed below is a description of the resources available to Palo Alto households according
to the"Continuum of Care"approach.
i) Prevention Services:
The goal of this first level of resources is to prevent households from becoming homeless.
Households who are "at risk" for becoming homeless are those who are lower income and
who have a difficuit time paying for their existing housing. Traditionally, these include
households who"overpay"for housing (paying more than 30% of their income for
housing) as well as households who experience job termination or reduction or marital
separations. Part of the prevention resources are the provision of emergency food and
clothing funds as well as emergency rent funds and rental move-in assistance.
In Palo Alto, the Urban Ministry of Palo Alto is the primary resource available to
provider of services to homeless households persons. The Urban Ministry, at their
morning drop-in center, coordinates the provision of supportive services, counseling, job
26 Draft Housing Element Technical Document 1999-2006
labor referral, transportation vouchers, shower passes, mental health services and
maintains a message and mails system. On a daily basis, the drop-in center is visited by
about 440 120 persons. Since the drop-in center is located a short walk from the San
Mateo County line and adjacent to a major inter-County transit terminal, it is reasonable
to assume that some of their clients have connections to other communities and do not
solely represent Palo Alto households. The Urban Ministry also coordinates the
provision of groceries for needy b~e’asehe!ds individuals through the Food Closet located
at All Saints Episcopal Church in downtown Palo Alto. The Food Closet serves an
average of 90 persons daily. Urban ministries also coordinates a daily hot meal program
at various church locations.
The Shelter Plus Care Program, administered by the County Office of Homelessness,
provides Section 8 rental subsidies to eligible, case-managed homeless persons with a
disability. The program has been successfully implemented in both the Barker Hotel (a
rehabilitated 26 unit single room occupancy hotel) and Alma Place (a newly constructed
107 unit single room occupancy residency hotel). Thirteen previously homeless persons
are currently housed as a result of the program.
In addition to the case-management provided under the Shelter Plus Care Program, the
Palo Alto Housing Corporation provides additional, extensive counseling and Supportive
services to its residents at the Barker Hotel, the majority of whom were previously
homeless, or at-risk of becoming homeless. The program, funded with Palo Alto CDBG
funds, has significantly reduced the turnover rate at the Barker Hotel, keeping at-risk
persons in their homes.
The American Red Cross distributes emergency assistance funds to families and
individuals who are threatened with homelessness. The Red Cross is the local distributor
of County Emergency Assistance Network Funds.
ii) Emergency Shelters
The Urban Ministry of Palo Alto operates the"Hotel de Zink"shelter out of twelve
churches, using a different church each month of the year. A maximum of 15 adults each
night nigh44y can be provided with emergency shelter. Meals are also provided as part of
the service.
Within the County of Santa Clara, there are approximately 682 662 emergency year
round shelter beds and 590 seasonal (winter months) beds. r~,,,.; ..... ;~+ ..... ÷r,o +r,~
.~l~o~ o~n ~+~ ~nn ~. +u~+ ..,;H u~ ~;~;~.+~ ...~ +u~+ .......None of these
facilities are located in the City of Palo Alto. The City of Palo Alto, in conjunction with
other entitlement iurisdictions~ financed the development of Emergency Housin~
Conso~ium’s Homeless Reception Center in San Jose. The Reception Center operNes
150 ye~-round beds (250 beds during the wimer months) ~d provides int~e and
Draft Housing Element Technical Document 1999-2006 27
assessment services to its clients to ensure that they receive the appropriate level of care.
Additionally, Palo Alto assisted in the establishment of the 60-bed Clara-Mateo Shelter,
located at the Veterans Administration hospital in Menlo Park. The shelter contains six
family housing rooms and six transitional housing rooms. Although the shelter is open to
all eligible clients, about two-thirds of the population served is veterans.
The largest shelter for youth in San Jose is the Santa Clara County_ Children’s Shelter,
providing emergency shelter for wards of the court (usually victims of abuse or neglect)
from newborn to 18 years of age. The facility has a 90-bed capacity and is consistently
full. The New County_ Children’s Shelter (completed in 1995) has a capacity of 132 beds
and is also located in San Jose. Other shelters for youth include Casa SAY in Mountain
View, Emergency Housing Consortium’s Youth Outreach Program, and the Bill Wilson
Center in Santa Clara.
iii) Transitional and Pcrmaaent Affordable Housing
There are currently no transitional housing shelters in the City of Palo Alto but there are
transitional shelters in nearby communities. Listed on the following page are fi~r five
transitional shelters that could serve Palo Alto households as well as households in the
community in which they are located.
Illustration #10: Transitional Housing Shelters (in Nearby Areas),
Name Operator Capacity Clientele Other
(No. of Beds)Services
Haven Family Shelter 23 Families Yes, at site
House,Network
Menlo Park
Redwood Family Shelter
House,Network
Redwood City
40 Families Yes, at site
Reception Emergency
Center Housing
Consortium
250 Families Yes, at site
Illinois St. House Shelter 8 Single Yes
East Palo Alto Network Parents
Clara-Mateo Shelter,Clara Mateo 6 (rooms)Families,Yes
Menlo Park Alliance Individuals
Source: City of Palo Alto, "Consolidated Plan, 1995-2000", Pg. 23; "Consolidated Plan: July 1, 2000 to June 30, 2005, pg. 41
There is only one facility are twe facilities in the City of Palo Alto that provides a
managed supportive shared housingvvvw’~"~+:~...-~o~o opportunity. These facilities are
oriented to families with children and are typically occupied by single parent households.
28 Draft Housing Element Technical Document 1999-2006
Illustration #11: Supportive Shared Housing Facilities,
City of Palo Alto,--PP)6
Name Operator Capacity Clientele
Pine St.Palo Alto Housing 3 Households Small families or
House Corporation individuals
CitySource:of Palo Alto, "
c) Housing Needs of Homeless Households
One of the major causes ofhomelessness is the lack of affordable housing. Most
homeless households are on limited or fixed incomes and cannot afford a housing unit in
California’s housing market and, especially, in the Bay Area housing market. Permanent
affordable housing is the single most important housing need for homeless households.
In the meantime, new small emergency homeless shelters in Palo Alto would be useful in
addressing the immediate shelter needs of homeless persons who reside, or who once
resided, in Palo Alto, particularly homeless families.
6. Farmworker Households
a) Description of Farmworker Households in Palo Alto
State law requires every jurisdiction in California to assess the need for farmworker
housing. In Palo Alto’s case, there is no significant need for farmworker housing since
there is no significant farmworker or mining population in the City. ABAG’s Projections
2000 estimated that there would be about 430 jobs in the Agriculture and Mining sector
within Palo Alto’s Sphere of Influence in the year 2000. This job assignment is probably
the result of the distribution of jobs based on a regional model that does not necessarily
reflect the specific employment circumstances of individual communities. It is not likely
that any of these jobs are farmworker or mining jobs since there are no large agricultural
areas in Palo Alto that are devoted to field crops, orchards or other agricultural uses that
would require farmworker labor nor are there any active mining uses that would typically
require mining labor. The Agriculture and Mining sector jobs that may be in Palo Alto
are probably related to aspects of this sector not associated with field crops or orchard
work or extractive mining work. Palo Alto is nearly built out and highly urbanized.
Most large open space areas are located within the baylands or hillsides of Palo Alto and
its Sphere of Influence and are set aside for park use, conservation purposes, or open
Draft Housing Element Technical Document 1999-2006 29
space preserves. Finally, no housing advocate or low-income housing provider in Palo
Alto has indicated there is an unmet need in the City_ for farmworker or mineworker
housing.
b) Resources Available for Farmworker Households
Since there appears to be no significant number of farmworkers in Palo Alto, no special
housing resources have been identified or set aside for farmworkers. Housing for
farmworkers, to the extent that there are an’c, would be provided through the Cit~/’s
policies and programs that address the needs of lower income households in general.
c) Housing Needs of Farmworker Households
There is no evidence that there is significant need for farmworker housing in Palo Alto.
30 Draft Housing Element Technical Document 1999-2006
Chapter 3: Housing Stock
Inventory of Housing Units
^. ~r~ ....~.~ ~ ~ ~ na~ According to the 2000 Census, there were gg-,gg8 26048
residential units in Palo Alto. This was an increase of 400 860 units from 1990 when
there were a total of 25,188 units in the City.
Illustration #12: Total Number of Housing Units, City of Palo Alto
1970-962000
Total# of Units 28,000197021,338
1980 23,747 26,000
1990 25,188
2000 26,048 24,000
t ............~22,000
20,000
18,000
Total Number of Units
1970 1975 1980 1985 1990 1995 2000
Source: U.S. Census, 1970, 1980, 1990;__2000
In evaluating the rate of housing production from an historical perspective, there has been
a n~q~agte significant decrease in the rate of housing produced in the City of Palo Alto
~ over the last three decades. During the decade from 1970-80, the City’s
housing stock increased by 2,409 units or approximately 240 units per year. From
1980-90 this rate decreased to an average of 144 new units per year or a 10 year total of
1,441 new units added to the housing stock. The 1990-96 2000 data identified above
reflects an even lower rate of housing unit production dropping to an average of tessAhan
gO 86 units per year.
Illustration #13: Rate of Annual Housing Production, 1970-952000
Annual Rate
250
200
150
100
50
0
1970-80 1980190 1990-2000
Draft Housing Element Technical Document 1999-2006 31
There are several reasons for the decrease in housing unit production rates. First, the City
of Palo Alto is essentially "built out." Less than ;~ 0.5% of the City’s land area is vacant
and most of this land is not zoned for residential use. The opportunity to annex
additional land to the City is limited because the City is surrounded on the east and west
by the Cities of Mountain View, East Palo Alto, Menlo Park and Los Altos. The San
Francisco Bay frames the northeast boundary while Stanford University borders the
southwest boundary. Stanford University is located in the unincorporated area of the
County of Santa Clara but also owns parcels of land in the City. In fact, one of the more
significant housing approv~ projects under construction during the preparation of this
Housing Element is the "Stanford West" development on Stanford property adjacent to
Sand Hill Road. This development will c-ot~ generate ......z~n,~l,,"vv .............J .....0 628 rental
units and a senior housing complex with over 400 units. ~_This ~+
opportunities for large scale residential development in Palo Alto. The "Et-~nferd Wear"
Besides the dearth of residential land, another reason for the decrease in housin~
production was the recession during the early 1990s which affected the value of the
housing market and made it less attractive to build housing. That situation changed
durin~ the mid- and late-1990s when the Silicon Valley economy boomed with the
expansion of the Internet and the significant growth in high technology businesses. As
the number of workers and their incomes rose, housing demand increased and so did
housing production. However, production could not keep pace with demand thus driving
up the cost of housing even more rapidly than the growth of the economy. Land costs
increased very rapidly given the limited supply of available residential land which
increased financing costs. These factors combined with increased materials and
construction costs made it much more difficult to produce housing, especially affordable
housing. And, although the local economy has been slowin~ since the first half of the
year 2000, it is not anticipated that this economic slowdown will substantially decrease
the cost of producing new housing.
two factors discu~e~ above, availability of land and economic issues ~ will
continue to be important variables in determining the amount and the rate of new housing
produced in the City. Additional information on land availability and estimates of new
housing to be produced during the time frame of this Housing Element can be found in
32 Draft Housing Element Technical Document 1999-2006
Chapter 5 ("Future Housing Needs") and Chapter 6 ("Housing Constraints")
Housing Units by Type and Tenure
The majority of housing units in Palo Alto are single family units. Approximately 64%
of the total housing stock in 1990 was single family units with 94% of those single family
units being single family detached units and the remainder were single family attached
units (e.g. condominium and townhouse units). Multi’-family units in structures of 2-4
units represented 6.5% of the housing stock in 1990 and approximately 28% of the
housing stock consisted of multi-family units in structures of 5 and more units. Mobile
homes represented less than 1% of the total housing stock. The illustration below reflects
the 1990 mix of housing types in the City.
Illustration #14: Housing Stock by Type, City of Palo Alto, 1990
Single Family 16,166
2-4 Units 1,625
5+ Units 7,074
Other (includes 109 mobile homes,) 323
TOTAL 25,188
Source: U.S. Census, 1990 (STF3)
Year 2000 Census information on housing stock type is not vet available but it is
anticipated that the distribution of housing types will change only slightly with single
family units continuing to make up the maiority of Palo Alto’s housing stock but at
somewhat less than the current 64% level. This is due to the increasing construction of
multiple family housing in Palo Alto. For example, between 1996 and 2000 the City built
about 335 dwelling units and 212 of these units, or over 63%, were multiple family units.
In 2000, approximately 57.2% of the 25,216 occupied units in the City are
owner-occupied. Homeowners live in ~ 14,420 of the City’s occupied units and the
remaining 10¢1-7-1- 10796 are occupied by renter households. The percentage of
owner-occupied units has been slowly but steadily increasing. In 1970, 54% of the City’s
units were owner-occupied and by 1980 that percentage had increased to 55%. The 1990
owner-occupied percentage of was 57% centirmes this upward trend increasing only
slightly to 57.2% in 2000 indicating a leveling off of this trend.
It is interesting to note that the percentage of owner-occupied and renter-occupied units in
the City’s housing stock is fairly similar to the proportion of owner and renter units in
Santa Clara County as a whole. The County’s housing stock consisted of 4-1- 40.2%
renter-occupied and 59.8%_ owner-occupied units in 4-990 2000. l~.r ....... ~,,..~,-..~,:-" Pa!e A!to
Draft Housing Element Technical Document 1999-2006 33
o/~.,, c,f Owner
Me’antain View 52°o/O 3 800/o
Los Altos !2%88°,4
!990 (CF.~S Table 3)
In 1990, most of the owner occupied units in the City are were three bedrooms and larger
in size. Approximately 77.5% of all owner-occupied units are were three bedrooms or
larger. The average number of bedrooms in an owner-occupied unit is was 3.15
bedrooms while the average bedroom size of a renter-occupied unit is was 1.64 bedrooms
per unit. Year 2000 Census data is not yet available to update the number of bedrooms
for owner- and renter-occupied units, but it is likely that owner-occupied units may be
slightly larger in 2000 given the increasing size of single family detached dwellings over .
the last decade while renter-occupied units in 2000 are probably close to the same size as
they were in 1990.
Vacancy Rates
Vacancy rates have traditionally been used as a gauge to measure the health of a
community’s housing market. Low vacancy rates (typically defined as anything less than
3% for homeowner units and 5% or less for renter units) c-an indicate a tight housing
market with few vacant units +r,~+,_.., +~,~_,.,. ...... ~,~,,,,~+’~° .~ -.~.~’; ~" and increasing demand for those
vacant units which then drive up rental costs.
Data from the -1-990 2000 U.S. Census indicate that a total of 98-2 832 units were vacant
out of a total housing stock of g-57188-26,048 units. This reflects an overall vacancy rate
of~_9 3.2%. However, in looking at this data more closely only 7-0-7 614 of the 982 832
units were available for sale or rent. The remaining ggg 218 units were vacant but were
being used for seasonal, recreational or other uses. Therefore, the real vacancy rate when
evaluating units available for rent or sale is actually ~ 2.4%.
Of the g0-7 614 units available, it was calculated that 4-3-2 473 units were available for rent
and 2-74 141 units were for sale. If the 4-3-2 473. available rental units is added to the
occupied-rental housing stock in 4-990 2000 of g0r4-7-!- 10,796 ~ units, then
the total number of rental units (occupied and vacant) in 4-990 2000 was 4000-5 11,269
units. The 4-3-2 473 vacant units then represent 4.2% of the rental housing stock. By
using the same method, the homeowner vacancy rate in 4-990 2000 was about ;g 1% (2-7-5
141 vacant units + -P3-,-,-,-,-,-,-,-,~g 14,420 owner occupied units = -144N-0 14 561 units total). It is
34 Draft Housing Element Technical Document 1999-2006
probable, however, that vacancy rates for apartments during 2000 were much lower.
REAL FACTS estimated that occupancy rates for large apartment complexes (50 units or
more; 1,943 units total) varied from a low of 98.3% (1.7% vacancy rate) in the middle
quarters of 2000 to a high of 99.3% (0.7% vacancy rate) during the fourth quarter.
However, during the first quarter of 2001, average occupancy rates decreased to 95.9%
(4.1% vacancy rate) reflecting the slowdown in the economy.
Housing Age and Condition
Like many other California communities, Palo Alto experienced a huge spurt of growth
in the decade after World War II. Approximately one-third of the City’s current (1996)
housing stock was built in the decade between 1950-60. The 1990 U.S.Census data
confirmed this by indicating that the median year in which a typical Palo Alto housing
unit was constructed was 1955. In fact, the City’s housing stock appears to be divided
into three periods of construction or age. The 1990 U.S. Census data showed that
roughly one-third of the units (8,255 units) were constructed prior to 1949, another
one-third (8,385 units) were constructed between 1949-59 and the remaining one-third
(8,548 units) were built after 1959. Year 2000 Census information is not yet available to
update the age distribution ofPalo Alto’s housing stock but it is likely that the
distribution has changed only slightly with a higher percentage of units in the post-1960
period due to the additional units added between 1990 and 2000 and lower percentages
for the pre-1959 periods due to demolitions.
Draft Housing Element Technical Document 1999-2006 35
Illustration #16: Year Structure Built, City of Palo Alto, 1990
1960 - 1990 Pre - 1949
34%33%
1949-1959
33%
Source: 1990 U.S. Census
By looking at census data indicators only, Palo Alto’s housing stock is not substantially at
risk for having severely deteriorated units. The majority of the City’s units were built
after world War II and so there are limited numbers of very old housing units (50+ years)
in the City. Further~ the census data indicate that in 1990 only 51 of the City’s 25,188
total units lacked complete plumbing facilities. The number of units lacking plumbing
was probably about the same in 2000 or slightly smaller due to the demolition of some
older units.
While a formal "windshield"su rvey has not been conducted in Palo Alto in recent years,
there have been periodic and extensive drive-throughs of the neighborhoods in Palo Alto
by both staff and consultants. Because of the high market value and income levels in
many Palo Alto neighborhoods, the units generally appear to be in good condition and
there appear to be few, if any, pockets of deteriorating units. The Citb;’s 1988-91
"Housing Assistance Plan" estimated that only 3% of the City’s owner occupied housing
stock is substandard. The 3% figure was based on information from the City’s Housing
Improvement Program, which has now been discontinued, and is the most accurate
information available on substandard housing. City staff observations indicate minimal
change in the amount of substandard housing since 4-988 1991. City staff has also
observed that, in Palo Alto, there does not appear to be a correlation between the age of a
structure and deterioration. Further, the State Department of Housing and Community
Development (HCD) reports that Santa Clara County’s housing stock is in significantly
better condition than other areas of the State.
36 Draft Housing Element Technical Document 1999-2006
Assuming that the proportion (3%) of owner-occupied units estimated to be substandard
remains the same, only about 437 of the 14,561 owner-occupied units in Palo Alto could
be considered substandard. This actual number of substandard homes is probably less,
however, given the high real estate values of the City and the high level of investments
property owners are likely to spend to maintain these values.
A review of the 1990 U.S. Census data indicates that only .4.5% (598 households total) of
all owner occupants are very low-and low-income and live in housing units built prior to
1940. Another 10% of owner occupants (1,320 households tot~il) are very low- and
low-income and live in units built between 1940-59. This data provides an "upper range"
or maximum ceiling of rehabilitation need for owner occupied units using the assumption
that very lowand low-income households often cannot afford on-going maintenance and
repair as their units "age" and that these are the type of units most often in need of
rehabilitation. The 1,918 units (598 + 1,320 -- 1,918) represent 7.6% of all housing units
in the City in 1990. Assuming that the proportion of housing units needing rehabilitation
remained the same, then approximately 1,980 ofPalo Alto’s housing units may have
needed some rehabiltation in the year 2000.
Ol~e site which may contain a greater than average proportion of units needing
rehabilitation or replacement is the Buena Vista Mobile Home Park. This 4+ acre
development consists of both mobile home/trailers and studio rental units. The 1990 U.S.
Census reported that there were 109 mobile homes/trailers in the City and it is estimated
that 104 of these units are located at Buena Vista. The census data reported that, in 1990,
86 of these 109 units were occupied and of those occupied units 91% were owner
occupied. Many of the units at Buena Vista are older "trailer" units. Typically, these
older trailers lack adequate insulation, roofing and foundation and may also have outdated
plumbing and electrical systems. Additionally, accessibility (exterior doors and stairs,
hallways) is also a concern especially for older and/or disabled occupants. No 2000
Census data is available on mobile homes/trailers but during a recent (July 2001) drive-
through of the Buena Vista Mobile Park, it appeared that many of the exterior conditions
described in 1990 have remained the same.
The City’s rental housing stock is "younger" than the total housing stock. The median
year that a renter-occupied unit was built is 1960 while the median for all occupied units
is 1955. Although 2000 Census information is not yet available on the age of the Ci _ty’s
housing stock, it is likely that the median age of the owner-occupied has moved towards
the second half of the 1950s and the median age of the City’s rental units is in the early
1960’s. Seventy percent 70-% of the renter-occupied units in 1990 were in structures of 3
Draft Housing Element Technical Document 1999-2006 37
or more units. Assuming that very low- and low-income renters might be more likely to
live in substandard units because of their limited income for housing costs, a review of
income status and age of housing was conducted of the 1990 U.S. Census data. This
review indicates that the maj ority ~ of very low- and low-income tenants occupied
units built after 1960 ~no/_
~. Another 28% (987 households total) of very low- and low-income tenants
were living in units built between 1940-59 while the remaining 13% (462 households
total) of very low- and low-income renters lived in units built prior to 1940. Therefore,
the census data indicate that most very low- and low-income tenants in Palo Alto live in
"newer" units (units built.after 1960) and these units are typically assumed to be in no
serious threat of being substandard. There are 462 very low- and low-income tenants
living in units over 50 years of age and these units are the most likely to be substandard
and in need of rehabilitation. There are also 987 very low- and low-income tenants living
in units built between 1940-59 and some of these units could also be in need of repair or
rehabilitation. The 1,449 total units (462+987=1,449 units) represent 5.8% of all housing
units in the City in 1990. Assuming the same proportion (5.8%) of rental units that are
possible substandard, then approximately 1,463 housing units may have needed some
rehabilitation in 2000.
While it does not appear then that there is a serious problem with the condition of rental
units, it should be noted that the City has been active in trying to maintain the condition
of the existing rental housing stock. Using federal funds and bond authority, several
rental housing developments in Palo Alto have been rehabilitated in recent years. In
1998-99, the City assisted the Polo Alto Housing Corporation in preserving and
rehabilitating the 57 unit Sheridan Apartments and, in 1999-2000, assisted the Mid-
Peninsula Housing coalition in preserving and rehabilitating the 156 unit Polo Alto
Gardens. In 1995, The City assisted with the acquisition and rehabilitation of the 66 unit
Arastradero Park Apartments in 1995. With City assistance, the Palo Alto Housing
Corporation rehabilitated the 10 unit Plum Tree Apartments in 1991 and the 26 unit
Barker Hotel project in 1994. The City intends to continue to monitor the maintenance
and repair needs of the rental housing stock.
Cost and Affordability of Housing
Housing costs continue to be a concern for California communities, especially in the San
Francisco Bay Area. Palo Alto is a very desirable community and, consequently, the cost
of housing is especially high and has been rising rapidly. Between 1996 and 2000 the
price of both single family detached dwellings and condominiums/townhouses more than
doubled. Single-family detached home prices increased 105% from $490,000 to
$1,006,600. Condominium and townhouse prices increased 107% from $264,000 to
$546,600 (Source: Silicon Valley Board of Realtors, penwest.com). T,_,~***,,o~,~ ...... v**~**’~:~’1~1""
subsidized 1D SO~lO ........ , .................. k’ *~* P£o a-’ai!ab!e ~’-~-’ ÷~- ~" ..... r,~‘4o
38 Draft Housing Element Technical Document 1999-2006
~ ....;~ ~ .......~,; ....~ u~+ ~T~,, A ....;~*;~" ~~*~ Usin the 2000
median prices o~ a single family detached home ($1,006,600) and a condominium or
tow~ouse ($546,600) as examples~ the household incomes necess~ to purchase a
medi~ priced home in Palo Alto can be calculated. Assuming a standard 20% down
pa~ent and an 8% mo~gage with a 30 year te~, a household would need to have ~
a~ual income of approximately ~ $275,000 to afford the median sales price of
~ $1 ~006,600 for a single family detached home. The momhly payment for
principal, interest, taxes ~d insurance is estimated to be over ~ $6 800 per month
and it is assumed that the household would pay no more than 30% of their income for
housing costs. Using the same assumptions, the household income required to purchase
the medium price condominium or to~ome in Palo Alto would be approximately
$75,$0~ $163,000 per year. This assumes a monthly pa~ent of ..... ~2,000 over
$4 000 per month for principal, interest, taxes, instance ~d homeowner association
dues. Usin~ a ~amily of four as the basis for comp~ison, a household would have to earn
over t~ee times the Count’s median income to purchase the medi~ priced single-
family home in Palo Alto. To purchase a median priced condominium or tow~ouse in
Palo Alto, a four person household would need to have ~ income of nearly twice the
median level.
The information in the above paragraph indicates that households either need a ver2 high
household income to afford the median priced housing units in Palo Alto in 4996 2000 or
else would need to have a substantial amount of funds for a large down payment so that
the monthly mortgage costs would be reduced. Low- and moderate-income households
do not have the household incomes needed to afford these units and, typically, do not
have access to large amounts of funds to use for down payments. Therefore, it is very
difficult for low- and moderate-income households to afford home ownership in Palo
Alto. In fact, unless publicly subsidized in some manner, home ownership in Palo Alto is
available only to households with above moderate-incomes.
~ In March 2001, based on a monthly survey of-l-6 13 apartment complexes
Draft Housing Element Technical Document 1999-2006 39
representing a total of gO7-8 1,943 units in Palo Alto, REAL FACTS reported that the
average apartment unit was 902 856 square feet and rented for ~ $2.93 per square
foot or $t-,g6g $2 512 per month. The average rent for a 1 bedroom/1 bath was $tvt-40
$2,300; a 2 bedroorrd2 bath average rent was $t-3-2-6 $3,218/month; and, the 3 bedroom/
2 bath was ~ $2 992 per month. These rental rates are double or nearly double their
1990 levels.
Using 4-996 2000 median income figures for Santa Clara County, a household of 4
persons could have an income of no more than $33,790 $43,500 per year to qualify as a
very low-income household. By applying the formula that a household should spend no
more than 30% of their income for housing,, then the very low-income, 4-person
household should spend no more than $84g $1 087 per month for housing costs,
including utilities.
Illustration #17:2000 Income Limits/Housing Affordability
County of Santa Clara, 4-Person Household
Maximum Income
Limit
Maximum Housing
Cost (30% of Income)
Very Low
0-50% of Median $43500 $1,087/month
Low*
51-66% of Median $53,853 $1,346/month
Moderate.
80% of Median $69~600 $1,740/month
100% of Median $87,000 $2,175/month
120% of Median $104 400 $2,610/month
* In areas with very high median incomes, HUD caps the low-income limit based on the national median
income rather than the traditional 80% of County median income.
Source: U.S. Department of Housing and Urban Development
The chart on the previous page indicates household income levels and maximum
"affordable" housing costs for a four person household. In comparing maximum
affordable housing costs to the average -t996 2000 apartment rent of $t-36g $2 512 per
month, it appears both that the .very low- and low-income households are completely
priced out of the market. Neith~ None of those households can theoretically afford the
average apartment rent. These households either have to find a much smaller unit (i.e.
studio unit or 1 bedroom unit possibly) or pay more than 30% of their income for housing
costs (which is the most likely scenario). In regard to home ownership, both-of these
income groups are also unable to compete for home ownership units since their
household incomes are significantly below the median priced townhome/condominium or
the median priced single family, detached home. ~ Only those 4 person
moderate-income households earning at least $100,480 (115% of the Count5, median
income) appears to be able to afford typical rental rates in Palo Alto; however, home
40 Draft Housing Element Technical Document 1999-2006
ownership is out of reach ~ since that requires an income of at least
$163,000 for a median priced condominium or townhouse.
..~ ~o/~ ~ ....a ........old would need ~,
In summary, home ownership in Palo Alto is expensive and available principally to
households "’;÷~" ~’~......... ~ ...............~,,~ near the upper end of above moderate incomes.
Without a public subsidy in some manner, the average median priced home ownership
units in the City require minimum household incomes,,~..~.,,.,,," ~’/~ ~tm ~,~,~ ~ aA.,~nna $163,00-
$275,000 depending on unit type. OnN the upper end of the households in the above
~oderate-income ~ ran~ can "afford" t~ical rental unit housing costs, but
low- and very low-income households have a much more difficult time. Ve~
low-income households, in pa~icul~, are much more challenged in finding a rental unit
that is affordable and appropriately sized for their household. These trends have
:"" significant : ........ The recent slowing of the economy and increased vacancy
raes may bring about a modest decline in rents and home prices, but not to the extent of
substantially improving the affordability of housing in Palo Alto.
Draft Housing Element Technical Document 1999-2006 41
Chapter 4: Existing Affordable Housing o
The City of Palo Alto has been very active in promoting and supporting the provision of
affordable housing. This chapter of the Housing Element Technical Document describes
the various housing programs and policies operative in the City at the time this Element
was prepared (-1-996-9-7 2001). Also included in this chapter is an inventory of the
existing affordable housing units in the City and a description of the various social
service agencies thatreceive City funding and provide housing support services.
City Housing Programs and Policies
1. Below Market Rate (BMR) Program
One of the most significant housing programs adopted by the city is the "Below Market
Rate" (BMR) Program. The BMR program was initiated in 1974 as a mechanism to
increase the supply of housing affordable to individuals and families with low-to
moderate-incomes. When first adopted, the BMR program applied to projects of 20 or
more units. In 1976, this was lowered to projects of 10 or more units. In 1990, the
threshold was further reduced to apply to projects of 3 or more units. With the adoption
of the 4x)9-7 1998-2010 Comprehensive Plan and this it__~s Housing Element, the threshold
is was placed at three units for for-sale housing and five units for rental housing. The
raising of the threshold for rental projects ~ was done in order to facilitate
construction of small rental projects, where the BMR program has limited impact.
The BMR program requires that, in for-sale projects of three or more units and rental
projects of five or more units, at least 10% of the units be provided at housing costs that
are affordable to low- and moderate-income households. Development on sites greater
than 5 acres in size are required to include a 15% BMR component. The priority for the
program is to include units spread throughout the community and in all projects. An
alternative allows for the developer paying an "in-lieu" fee to the City rather than actually
providing the units. These "in-lieu" fees are then deposited in the City’s "Housing
Development Fund." (See the following page for a further description of this fund.)
Program H-31 of the 1998-2010 Comprehensive Plan recommends the adoption of a
revised density bonus program that allows for the construction of up to three additional
market rate units for each BMR unit above that normally required, up to a maximum
zoning increase of 25 % in density and allows an equivalent increase in square footage
for projects that meet this requirement. The program is consistent with State law. This
density bonus program has not get been implemented by the City but will be undertaken
as part of the Zoning Ordinance update. Because of the need for affordable housing, the
BMR Program represents the only assessment of impact fees made by the city on new
housing construction.
The BMR Program was initiated in 1974. From ! 97A, 97 By January 2000, there were a
total of 4-44 151 ownership units and g-3 38 rental units generated by the program. Sales
and resales of BMR units are administered under contract to the City by the Palo Alto
42 Draft Housing Element Technical Document 1999-2006
Housing Corporation (PAHC), a private, non-profit organization. The BMR Program has
generated approximately 7.5 BMR units per year, on average, since the initiation of the
Program. This rate of production has not been sufficient to meet the City’s need for
affordable housing. To improve the rate of production of BMR units and increase the
City’s supply of affordable housing, Program H-29 of the Comprehensive Plan propos.es
to increase the minimum percentage of affordable units required for most projects from
10% to 15% and increase the minimum percentage of BMR units to 20% for proiects five
acres or greater in size. PA HC ~;~*~; ....... ;,~,.~ 1;~, ~-;~÷ .... ,~,~ r, ..... ~,..~,~ ........
The original goal of the BMR program is was to have the initial sales price of BMR
ownership units affordable to households whose incomes do not exceed 100% of the
median income, adjusted for family size, as established periodically by HUD for Santa
Clara County. However, with the proposed increase in the percentage of required BMR
units, Program H-30 proposes to allow the BMR units to be affordable to those
households earning up to 120% of the County median income to ease the finanicial
burden on developers that provide BMR units. For all proiects with BMR ownership
units, certain restrictions are recorded with the grant deed to ensure that there will be
continued occupancy and ownership of the BMR units by low- and moderate-income
persons. When a BMR owner wishes to sell the unit, he or she must give the City the
right of first refusal to purchase it. The City exercises its option and assigns the right to
purchase the unit to a buyer selected by the PAHC (according to guidelines approved by
the City). The price at which a unit is resold is calculated based on the increase in the
"Consumer Price Index" tbr the San Francisco Bay Area during the period of ownership.
Currently, one-third of the percentage increase in the Index is applied to the purchase
price to determine the resale price. For example, if a unit was purchased initially for
$100,000 and if the Index rose 15% during the period of ownership then the resale
calculation would be $100,000 + (1/3 x 1.5% x 100,000) = $105,000. Certain substantial
improvements and depreciation factors are also taken into consideration in calculating the
resale price.
Sales and resales of BMR units are administered under c.ontract to the City by the Palo
Alto Housing Corporation (PAHC), a private, non-profit organization. PAHC also
maintains a waiting list of people interested in purchasing a BMR unit. According to
City policy, priority for ownership of BMR units is given to applicants who live or work
in Palo Alto. Further, there are certain household~s income can.net exceed 1
megia~oM~e,~m~ and ~ asset limitations.
The BMR program also applies to rental projects. Currently, at least 10% of the units in
a rental project must be provided as BMR units to households earning between 50% and
80% of the County median income, adjusted for family size. Programs H-20 and H-20a
would increase the minimum BMR set aside to 15% of all rental units. The rents are
initially established based on HUD Section 8 Fair Market Rents and may be adjusted
annually based on one-third of the Consumer Price Index, or other similar formula as
adopted by the City Council. Alternatives include payment by the developer of an annual
Draft Housing Element Technical Document 1999-2006 43
in-lieu fee to the City’s Housing Development Fund based on the difference between the
initial Section 8 fair market rents and the market rate rents of the units, or a one-time fee
based on 5% of the appraised value of the rental portion Of the project.
2. City Housing Funds
The City maintains a "Housing Development Fund"which is capitalized from several
different resources and contains several "sub-sets" of funds. Basically, the Housing
Development Fund consists of the following:
a) Residential Housing In-Lieu funds,
b) Commercial and Industrial Housing In-Lieu funds, and
c) Federal or State housing funds (i. e. CDBG and HOME) as well as program income
from past loans or projects.
The Residential Housing In-Lieu Fund consists of fees paid by developers of residential
projects under P alo Alto’s BMR Program and any miscellaneous revenues designated for
housing. When a sufficient level of funds accrue in this account, the City milizes the
funds for affordable housing development. Typically, the fund can be used for
acquisition, rehabilitation, new construction, and predevelopment of low-income
housing. As of March 31,2001, the Residential Housing In-Lieu Fund had an
unrestricted balance of $1,246,491.
The Commercial Housing In-Lieu fund is capitalized with fees paid by
developers/owners of new or expanded commercial or industrial developments, as
required by Chapter 16.47 of the Palo Alto Municipal Code. The fees ate intended to
oft-set the below-moderate incomeresidential demands resulting from the increased work
force that will be generated by the development. Currently (4-99g 2001.), the fee charged
is ~ $4.2__~1_1 per square foot. The fee is charged only on new construction that exceeds
20,000 square feet or expansions to existing buildings of 2,500 square feet or more.
Similar to the Residential Housing Reserve fund, the City allocates these funds to
affordable housing developments within the community. As of March 31,2001, the
Commercial Housing In-Lieu Fund had a balance of approximately $770,090.
Program H-43 of the Comprehensive Plan proposes that the formula for calculating the
commercial and industrial housing in-lieu fee for projects with impacts on housing be
evaluated and revised to better reflect the impact of new jobs on housing demand and
costs. It also proposes the use of different indices for calculating annual increases in this
fee to more accurately track actual increases in housing costs which have outstripped the
Consumer Price Index. The City has recentl7 (July 2001) hired a consultant to study this
fee and report back to the City Council on how it should be adjusted.
The third component of the "Housing Development Fund" is State or Federal housing
funds and the program income from any past housing loans or projects. For example, the
44 Draft Housing Element Technical Document 1999-2006
City receives program income from loans made with CDBG funds in previous years.
From 1990-96 2000, the City has received an-ran_p_g~ average of $~100,000 per year
in program income from previous CDBG loan awards, primarily to applicants in the
City’s housing rehabilitation program.
Federal~ and State~ and Other Housing Resources
1. Federal Resources
The City of Palo Alto is an "entitlement" community under the federal Community
Development Block Grant (CDBG) Program. As such, the City receives an annual
allocation of CDBG funds to assist with affordable housing opportunities as well as
economic development and public services in the community. On an average annual
basis, the City has been receiving approximately $700,000 each year in CDBG funds (in
fiscal year 2001/02, Palo Alto’s CDBG allocation was $771,000). Traditionally, the City
has used about 15% of its annual CDBG allocation, per federal regulations to help fund
various social service agencies who provide support services to lowand moderate-income
households. Examples of some recently funded activities with social service agencies
include fair housing counseling, homeless assistance and housing information and
referral. In addition, over 50% (62% in fiscal year 2000/01) of CDBG funds are used by
the City to provide assistance in the development or rehabilitation of housing that is
affordable to lower income households. The City directs the CDBG funds to the City’s
"Housing Development Fund," which is then used for pre-development expenses,
acquisition of land or existing buildings and rehabilitation costs of affordable housing
projects.
2. State Resources
The City is also eligible to apply for State of California housing funds. One of the more
popular State funds in recent years is the "HOME" program. HOME funds are federal
funds that are directly allocated to large urban areas as well as to State governments to
then distribute to local communities. These HOMlg funds can be used for a variety of
activities, including the development or rehabilitation of renter or owner occupied
housing that is affordable to very low- and low-income households. The HOME program
is a very competitive program with many communities applying to the State for a limited
amount of funds during an annual competition, q’~’~ c,;~ ............... ~,,1 ; ....... ;~, ~1
Earker He, te!. Due to excessive demand for the State’s HOME allocation, and rating
criteria that do not favor areas like Palo Alto, it is difficult to secure an award. Staff will,
however, continue to track the Notices of Funding Availability and evaluate all
potentially suitable proiects to determine whether or not to apply for a HOME grant.
Draft Housing Element Technical Document 1999-2006 45
The City has also worked closely with local non-profits to secure other state and federal
funding. One of the most desirable programs is the federal Low Income Housing Tax
Credit Program. The Palo Alto Housing Corporation used Low Income Housing Tax
Credits to build the California Park Apartments project and has received an awm:d for
construction of the Alma Place SRO. In addition, Community Housing, Inc. received
federal Section 202 funds for the construction of the Lytton Courtyard project, and
Mid-Peninsula Housing Coalition received federal Section 811 funds to construct 24
units of housing for the developmentally disabled. The City intends to continue to pursue
all sources of funding and to assist local agencies and non-profits in applying for and
securing additional financing opportunities.
3. Housing Trust Fund of Santa Clara County (HTSCC)
The HTSCC is a public/private initiative dedicated to creating more affordable housing in
Santa Clara County using a revolvin~ loan fund and grant-making program to
complement and leverage other housing resources. The City of Palo Alto has contributed
$500,000 toward the initial $20,000,000 investment capitalization. This resource is
currently available to help leverage new affordable housing proiects in Palo Alto.
Affordable Housing Unit Inventory
There are several different "types"of affordable housing units in the City of Palo Alto.
Some affordable rental units are owned by non-profit or for-profit developers and,
because of the affordability restrictions imposed by funding sources, are affordable to a
certain household income level for a fixed period of time. In addition, there are 444 151
BMR ownership units that are privately owned but are restricted with regard to resale and
price to only other low- and moderate-income households and another ~ 38 units in the
BMR rental housing program. A listing of the locations of these units can be found in
Appendix # B of this document. Finally, the Section 8 rental subsidy program is operated
by the Santa Clara County Housing Authority and provides a rental subsidy to landlords
of units who rent to eligible low-income households. Any rental unit in the City can be
eligible for occupancy in this program as long as the unit meets certain health, safety and
occupancy requirements. According to staff-at the Housing Authority, there were a total
ofgg 253 households in Palo Alto receiving Section 8 rental subsidy assistance as-of
OetoberMx)~ during fiscal year 1999/2000. Of these g-5 253 households, gt- 180 were
elderly and/or disabled and the remaining g4 73 households were family households.
Four households were categorized as low-income and 247 as-very low-inome.
In Apr4t4998 September 2000, there were a total of 25 housing developments in the City
that included 4-r2-34-1,233 units of Subsidized rental housing. These developments are
owned primarily by non-profits, such as the Palo Alto Housing Corporation, but some are
owned by for-profit owners. Appendix # A B includes a table with the addresses and
number of units in each of these 25 housing developments.
46 Draft Housing Element Technical Document 1999-2006
Housing Support Services
There are many non-profit groups and organizations that provide housing related support
services in Palo Alto. For example, the Palo Alto Housing Corporation (PAHC) was
established in 1969 and was formed to encourage and develop low- and moderate-income
housing in the City. PAHC has been very active in assisting the City with the BMR
Program, acting as a developer/owner of other affordable housing projects, and providing
extensive information and referral services on housing in the region. Other organizations
that have received City funding assistance to provide housing related support services
include the Urban Ministry of Palo Alto, Catholic Charities of Santa Clara County (Long
Term Ombudsman Program), Emergency Housing Consortium, Innovative Housing,
Outreach and Escort, Mid-Peninsula Citizens for Fair Housing, Senior Coordinating
Council (Senior Repair Program), Community Association for Rehabilitation, American
Red Cross (Rental Assistance, Single Parent Services), Miramonte Mental Health
Services, Peninsula Area Information and Referral (tenant-landlofd counseling)~ aM
Support Network for Battered Women, Mid-Peninsula Housing Coalition (Palo Alto
Gardens Apartments, Alliance for Community Care (support services for those with
mental disabilities), Clara-Mateo Alliance (homeless), and Shelter Network (transitional
housing and services).
The City has provided funding to the agencies mentioned above through CDBG funds as
well as City General funds. Palo Alto has a tradition of assisting non-profit groups with
funding so that these groups and organizations can also provide support services and
direct assistance to low- and moderate-income households in the City.
Draft Housing Element Technical Document 1999-2006 47
Chapter 5: Future Housing Needs
According to State Housing Element Guidelines, Housing Elements should include an
analysis of the number of housing units to be built, rehabilitated and/or conserved in
order to meet the community’s current and future housing needs. Following is an analysis
of Palo Alto’s new construction, rehabilitation and conservation needs.
New Construction Needs
The Association of Bay Area Governments (ABAG) has developed estimates of housing
needs for communities in the San Francisco Bay Area for 1999-2006, the time frame of
the Housing Element. Under State law, ABAG is responsible for allocating the regional-
housing need, established by the State Department of Housing and Community
Development (HCD) for each region of the state, to each jurisdiction in the San Francisco
Bay Area. The allocation process used information from ABAG’s Proiections 2000 to
determine each iurisdictions fair share of the region’s housing need. Proiections 2000
examines population, household, and job growth; examines various demographic factors
(e.g., age and sex of the population); and, reviews transportation patterns and other data.
In addition to this data, ABAG considered the land use policies and the land use data of
local governments, including the sites available for residential development and the
availability of urban services. The housing need determination is primarily based on the
number of households each iurisdiction is expected to create between 1999 and 2006. In
addition, a weighting factor was given to projected job growth to partially represent the
demand for housing generated by this growth. This weighting factor increased the
housing need allocation for jurisdictions that were expected to add a significant number
of jobs between 1999-2006. The local iurisdictions in Santa Clara County also agreed
that, since urbanization should take place only within the urban service areas of the cities,
about 75% of the Unincorporated County’s Sphere of Influence housing need should be
allocated to the Cities where these units could be better served and urban encroachments
into the County would be better contained...................... , ........~, Needs
48 Draft Housing Element Technical Document 1999-2006
Using available data and projections based on future employment and population trends,
the -1-989 ABAG goc-um~ estimates that the total projected housing need for Santa Clara
County is 7gO-3g 57 991 new units for 1988 95 1999-2006. Palo Alto’s orig4nat share of
that total need was l~,uvjonn is 1,397 units or g-_-_g 2.4% of the County’s total need.
In addition to the total housing need estimate, ABAG is charged with determining the
number of housing units that are needed for each of four household income levels based
on County median household income. These income levels are defined as follows: Very
Draft Housing Element Technical Document 1999-2006 49
Low-Income - 0-50% of County median income; Low-Income - 50-80% of County
median income; Moderate-Income - 80-120% of County median income; and, Above
Moderate-Income - greater than 120% of County median income. The inten~ purpose of
this division of housing need by income level ac-t4on is to more equitably distribute the
type of households by income category throughout a region so that no one community is
"impacted" with a particular household income group and to ensure that each jurisdiction
addresses the housing needs of each economic segment in their communities. The-t990
~o~ ~÷ ....: ........:o~ ¯~ n~n Palo Alto’s fair share of the region’s housing need
by income level for 1999-2006 is described in the illustration below.
Illustration #19: ABAG New Construction Need by Household
Income Level, Januar~ 1, 1999 to June 30, 2006
Very Low-income Households
Low-Income Households
Moderate-Income Households
Above Moderate-Income Households
gg8 265
-2-3~ 116
;M-7 343
680 673
The household income distributions noted above represent objectives that
Palo Alto should strive to achieve in meeting ^ t~ ^ ,-,_ .... ;o~÷~a ......... ÷ .... ÷; ..... ~ its
fair share of the region’s housing need. Since -1-990 January 1, 1999, Palo Alto has
successfully produced, or has approved, additiena! housing units affordable to various
income groups ............
December 31,199 ou .......~ ...............These
units are occupied~ read7 for occupanc7, or will be ready for occupanc7 prior to June 30~
2006. Palo Alto’s progress in meeting its fair share of the re~ion’s housing need are
su~arized in the illustration below.
Illustration #19a: Progress in Meeting Palo Alto’s Fair Share of the Region’s 1999-
2006 Housing Need by Income Level~ 1999-2000
Income Level
Very Low
Low
Moderate
Above Moderate
TOTAL
1999-2006 Need
265
116
343
673
1~397
1999-2000 Built or
Approved Units
24
66
18
735
843
Unmet Need
241
5O
325
None
One hundred and forty-three (143) of the 843 units built or approved have been
constructed and are already occupied or are ready for occupancy. The remaining 700
50 Draft Housing Element Technical Document 1999-2006
units have received building permits and are in the process of being built. Most of these
units should be ready for occupancy b7 the end of 2001.
In reviewing the totals shown in the table above, it appears that Palo Alto has already
constructed, or approved for construction, about 60% of its fair share of the region’s
housing need. Howe~,er, it should be noted that the totals include 62 more above
moderate income units than required by ABAG’s assessment of Palo Alto’s fair share of
the region’s housing need for 1999-2006. Only 108 of 724 affordable units needed, or
about 15% of Palo Alto’s total need for affordable housing, have currently been built or
approved for construction. Palo Alto’s current unmet housing need for 1999-2006
consists of 616 housing units that need to be affordable to very_ low-, low- or moderate-
income households.
338
(~1)
(~)
347 1999 95 Total Need
(8)~;~,~°~’~ ^’ ....Do, ....,,,~o.,.o. ~,o.o,,o ......
Draft Housing Element Technical Document 1999-2006 51
Rehabilitation Need
It is estimated that the rehabilitation need in Palo Alto is low compared to many other
California communities. As indicated on page gg 3~7 of this document, the-t988-~
m.~,, it was estimated that 3% of the City’s owner-occupied housing
stock or approximately 42-8 437 units vcere might have been considered substandard at
~’~ ";~° t~.e .... "~ ............ A in the year 2000.
A review of 1990 U.S. Census data indicated that 598 units in the City were occupied by
very low- and low-income homeowners and that these units were more than 50 years old
(units built prior to 1940). Another 1,320 very low- and low-income homeowners
occupied housing units that were constructed between 1940-59. This data provides an
"upper range" or maximum ceiling of rehabilitation need for owner occupied units using
the assumption that very low- and low-income households often cannot afford on-going
maintenance and repair as their units "age" and that these are the type of units most often
in need of rehabilitation. The 1,918 units (598 + 1,320 -- 1,918) represented 7.76% of all
housing units in the City in 1990. Applying this same percentage to the total number of
housing units in 2000, it is estimated that approximately 1,980 of the City’s occupied
housing units might need rehabilitation.
Overall, the rental housing stock in the City was built more recently than the owner
occupied units. Information on pages g-5-26 37-38 of this document summarizes 1990
U.S. Census data and indicates that the "upper range" of rental units that are older and
occupied by very low- and low-income households is 1,449 units total or 5.8% of the
City’s housing stock. Applying this same percentage to the available 2000 Census data, it
is estimated that approximately 1,463 of the City’s occupied housing units might need
rehabilitation.
52 Draft Housing Element Technical Document 1999-2006
The information given in the two paragraphs above indicate that the number of housing
units needing rehabilitation in Palo Alto may range from 1,462 to 1,980 units. However,
there do not appear to be any areas in the City that have concentrations of units that need
rehabilitation. In fact, Palo Alto consistently has neighborhoods where the housing units
are well maintained and, in many cases, reflect a high degree of pride in ownership.
While the census data provides an indication of the range of units that could need
rehabilitation using household income data and age of units, "drive-by" inspections of
units in Palo Alto indicate that the majorityof the housing stock is in very good condition.
The only area of the City that appears to have higher than average incidence of units that
may need repairor replacement is the Buena Vista Mobile Home Park, which contains
primarily older trailer or mobile home units.
Conservation Need
1. Energy Conservation
By owning and operating its own utilities system, the City is committed to offering its
residents a high quality of utility services at the lowest possible cost. The Utilities
System attempts to invest in a mix of new energy and water supply projects, operating
efficiencies, and consumer-oriented conservation and solar services, which together will
enable local residents to meet their resource needs at a lower cost than in neighboring
communities. Energy Services staff of the City have an active role in design review for
all new construction, excluding individual single family homes. Through this review,
energy efficiency is assessed and modifications made. Landscape standards are in place
that require efficient outdoor water use. Energy services staff are available to assist
property owners, architects, and builders, including single family, in evaluating building
plans and making recommendations for improving energy and water use efficiency.
In addition to its commitment to keep utility costs low and conserve energy, the City
established a Utilities Residential Rate Assistance Program (RAP) in 1993, which
reduces utility rates by 20% for qualifying households. Originally, qualifications were
based on household income (approximately 37% of County median income) or physical
disabilities. In 2001, the City extended this program to include households earning 50%
or less of the County median income. This program has helped very low-income
households pay for a key component of monthly housing costs making it somewhat easier
for them to stay in their existing housing.
2. Conservation of Existing Affordable Housing
Conservation of the existing affordable housing stock is critical in today’s economic
climate. Because of the high cost of housing and lack of vacant land to construct new
affordable housing, it is extremely important to preserve and protect those affordable
housing units that already exist ~................ :. State Housing Element Law requires
communities to conduct an inventory of affordable units that might be "at risk" of
Draft Housing Element Technical Document 1999-2006 53
converting to market rate units within a 10 year time frame of the Housing Element. The
inventory is to include all multi-family rental units that have been funded with federal,
state or local assistance. A review of multi-family units in Palo Alto indicates that the
only units that are at risk are those that have been assisted with federal funds. The only
State funded project is the Barker Hotel which was assisted with State of California
HOME funds and those units have affordability controls until 2033. Regarding local
assistance the City does not have a Redevelopment Agency and has not issued any
mortgage revenue bonds. The City does have a "Below Market Rate" (BMR) program
that requires 10% of units to be affordable in projects of 3+ units or the payment of an
in-lieu fee. The units in the BMR program have resale and affordability controls for 59
years and renew each time the property title is transferred and, therefore, are not at risk of
converting to market rate.
Palo Alto has 728 units in 13 developments of very low- and low-income housing that are
to varying degrees subject to increases in rent or conversion to market rate housing.
These projects are listed in Illustration # 22 on the following page. These projects are
assisted in part by HUD with Section 8 project-based rental assistance in which a direct
subsidy is provided to the owner. The future of the Section 8 program is continues to be
renewal. Currently, Section 8 contracts are being extended on a year-to-year basis and
may be subject to rent increases in the future if the Section 8 Program is eliminated or cut
back. Most of the subsidized rental projects fall under this category. There is one tt~a~oe
projects with a for-profit owners are considered most at-risk. (Two other at-risk projects
owned by for-profit owners, Sheridan Apartments and Palo .Alto Gardens, have been
purchased by non-profits with City assistance between 1998-1999 and are no longer
considered to be at high risk of conversion to market rate housing.) The remaining units
are owned by non-profits and, for various reasons such as relatively low mortgage debt
and the non-profits commitment to maintain affordable housing, are considered less at
risk of being lost as affordable housing; however, the loss of Section 8 subsidies could
result in increased rents, making the units less affordable to very low- and low-income
households.
54 Draft Housing Element Technical Document 1999-2006
Illustration #22: Summary of Government Assisted Units "At Risk" for Conversions
Terman Apartments Goldrich & Kest 221(d)(4)Section 8 92 72 Family
655 Arastradero Rd.5150 Overland Ave.Section 8 Opt:2004 &
Palo Alto, CA Culver City, CA .Elderly
Palo Alto Gardens Mid-Peninsula Housing 221(d)(3) Title 1994: Title VI 156 156 Family
648 San Antonio Rd.Corporation VI Section 8 1998 Section 8 &
Palo Alto, CA 658 Bair Island Rd., Ste. 300 (_Section 8 Elderly
Redwood City, CA 94063 vouchers)
Sheridan Apts.Palo Alto Housing Corp.221(d)(4)Section 8 Opt:
360 Sheridan Ave.725 Alma St.Section 8 1999
Palo Alto, CA Palo Alto, CA 94301 (now year-to-
year Section 8)
57 57 Elderly
Lytton Gardens I Community Housing, Inc.2360)(1)Section 8 Opt:140
656 Lytton Ave.656 Lytton Avenue Section 8 1996-97, 1998 220 Elderly
Palo Alto, CA Palo Alto, CA (now year-to-44
year Section 8)
i- C61orad’Park~!~i~:4:~. ~lorad~’P~arl~C~rp,~’~~ ~i > 7~2~6~)i[).. ~Z\~:~-~tio~{ 8 0~[: 7~ ~ ~ ~ ~5 ~
Adlai Stevenson House Palo Alto Senior Housing Section 202 Section 8 Ipt:120 24 Elderly
455 E. Charleston Ave.455 E. Charleston Ave.Section 8 1999
Palo Alto, CA Palo Alto, CA (now year-to-
year Section 8) . ¯
Feme Apartments Palo Alto Housing Corp.Section 8 Section 8 Opt:
101-131 Feme Ave.725 Alma Street Mod-Rehab 1997
palo Alto, CA Palo Alto, CA 94301 (now year-to-
year Section 8)
16 5 Family
Lytton Gardens II Community Housing Inc Section 202 Section 8 Opt:100 100 Elderly
656 Lytton Ave.656 Lytton Ave.Section 8 1999
Palo Alto, CA Palo Alto, CA (now year-to-
year Section 8),,
Emd}son South : :~ ,i’PaJh, Aldn0u~in~ ,c0~p::, ~; ~: Section 8,, : ~ S~aibfi:80~t: :~ 6 ~, ? ,,~ 5,~ :: Small :’
Draft Housing Element Technical Document 1999-2006 55
Arastradero Park Apts Palo Alto Housing Corp.Section 8 Section 8 Opt:66 48 Family
574 Arastradero Road 725 Alma Street Sec. 236(j)(1)2000 & Senior
Palo Alto, CA Palo Alto, CA 94301 (now year-to-
year Section 8)
Oak Manor PAHC Apartments, Inc.Section 8 Section 8 Opt:
Townhomes C/o Palo Alto Housing Mod-Rehab 2008
630 Los Robles Ave.Corp.
Palo Alto, CA 725 Alma Street
Palo Alto, CA 94301
33 23 Family
TOTAL 946 728
56 Draft Housing Element Technical Document 1999-2006
3. Description of "At Risk Units"
In the past, the subsidized rental proiects in Palo Alto could have been w~,~
pages e,n~ be divided into two categories: those that areTitle VI
(National Housing Act of 1990) eligible and those that have Section 8 Project Based
Subsidies. With the acquistion of Palo Alto Gardens by the Mid-Peninsula Housing
Coalition, there are no Title VI eligible projects remaining in Palo Alto. All other "at-
risk" proiects The ...... v ........ that have Section 8 Project Based subsidies are
organized below according to their existing or previous funding source ;,
The ........#Palo A 1+,,
a
equity at ab + ca ~ --;.;~.
o~vn~r~
low ineame kansing.
The owners ofPa!o A 4+0 Gardens
J ly, .... ,
""
Draft Housing Elemem Technical Documem 1999-2006 57
Expiration of Section 8 Project Based Subsidies:
Section 8 rental subsidies are subsidies provided directly to the project owner and the
amount of the subsidy is typically determined based on the tenant’s income and the rent
charged. The subsidy helps tenants "afford" their monthly rent by paying a portion of the
rent for them to the property owner. HUD and the property owner enter into a contract
for a specified period of time during which Section 8 rental subsidy assistance will be
provided. The owner may was formerly able to renew the Section 8 assistance in periods
of 5-15 years, depending on the contract, u ......... "~-o ~lh .... ~ 3A~+;-11;~- *~
.....,;,.. .AA ÷r,o +;~ ~+-,r, ........÷:~. ~÷~,;o wt/.,,o;.. ~] ....÷ Currently, HUD
+~o H22~ ~a~ ~n onl~ r~new~ S~ction 8 assistanc~ on a
y~ar-to-year basis, subject to Congessional ~nding. it is not ~ow how long this ~ear-
to-~ar renewal will continue.
During the 1995 2905 time frame next decade, a number efthree projects in Palo Alto
Will have their current Section 8 Project Based Subsidy contracts either expiring or up for
renewal. The effect of a loss of Section 8 subsidies differs depending on many factors
including the underlying mortgage assistance, the percentage of households receiving
rental assistance and their income levels, and each project’s annual operating costs.
Following is a description of the principal types of mortgage assistance which financed
the affected projects.
Sec.,221(d)(4) Projects
v,,o,~,~o;*’+° have Terman Apartments complex is the only remaining project
with a Section 221 (d) (4) market rate mortgages with Section 8 project based subsidvies.
~’~’~-÷o 221(d)(4) oj............ v .........................~ A pr ects ~ uses market
rate mo~gages with FHA insurance. This type of mo~gage has no underlying mo~gage
prepa~ent restriction which requires continued affordability. Therefore, the units in
~ this projects could be rented at market rate and there would be no requirement that
the tenants be low-income.
58 Draft Housing Element Technical Document 1999-2006
The only other Section 221 (d) (4) project in Polo Alto, the Sheridan Apartments, was
recently acquired by the Polo Alto Housing Corporation with assistance from the City of
Polo Alto using available CDBG funds. This proiect is no longer considered "at-risk" of
converting to market rate units. The Terman Apartments are the only remaining
subsidized rental units seriously "at-risk" of conversion.
Section 8 Moderate Rehabilitation Program Projects
Under this HUD program, HUD offered 5 to 10 year contracts for Section 8 assistance to
owners of existing rental housing occupied by eligible very low- and low-income
Draft Housing Element Technical Document 1999-2006 59
households, if the owner performed at least a minimum amount of property rehabilitation.
In many cases, the rehabilitation work was funded by loans from local housing programs
using CDBG funds or other HUD funds. The effect of a loss of Section 8 assistance
depends on the specific financial circumstances of each project, especially the degree to
which the owner’s ability to cover debt service and operating costs depends on the
revenue from the Section 8 rental contract.
There are only two remaining A!! of the Section 8 Moderate Rehabilitation Projects in
Palo Alto that have not vet had their original Section 8 contracts expire, the Curtner
Apartments and the Oak Manor Apartments, and both are owned, or controlled by, the
Palo Alto Housing Corporation (PAHC). The remaining Section 8 Moderate
Rehabilitation Proiects have their Section 8 contracts renewed on a year-to-year basis and
all of them are also owned or controlled by PAHC. Feur ~;~÷° ~..,~1;.. o7 ...;~ ....
assistance. The Section 8 contract assistance enables P~C to provide affordable
housing to very low-income households. Without the Section 8 assistance, PAHC would
need to increase the rents paid by the tenants, which would mean that occup~cy would
shiR to somewhat higher income households over time. However, since these prope~ies
ca~ relatively low amounts of ~o~ized mo~gage debt, PAHC should be able to
maintain them as affordable rental units for low-income households even without the
Section 8 assistance. The ~o, ..... ¯ :~~.~. t~.u ....... ~ ~.~ ~.~ ,~ ~ .... +..
Heuaing~a~..~-~"*u ~:,., .o:° +u~_~, At present, HUD ~ continues to offer owners of 5 or
more units a one year extension of their Section 8 contract.
PAHC controls two larger projects which would be much more seriously affected by non-
renewal of their Section 8 contracts. These projects are Arastradero Park Apartments and
Oak ManorTownhomes. Both projects were acquired and rehabilitated by PAHC under
complicated financing structures in which loans, funded from tax-exempt bonds, covered
a major portion of the costs. Rental income, on par with the current Section 8 contract
level, is needed for PAHC to continue to meet operating costs and repay the loans. In the
case of Arastradero Park the current Section 8 contract rents exceed the rental value of
the units on the open market. Since the FHA insured the Arastradero Park mortgage,
HUD would probably be forced to offer PAHC some type of mortgage reduction in return
for loss of the rental subsidies to avoid a default and a claim on the FHA insurance fund.
However, Arastradero Park has been operating under a year-to-year renewal of its Section
8 contract.
4. Cost Analysis
The cost to conserve the units in the ~ developments that have Project Based Section 8
Subsidies as very low-and low-income housing, is as varied as the projects themselves.
Some of the developments have zoning controls or deed restrictions, some have longer
term contracts and some have low mortgage debt; however, as noted previou’sly,
replacement is extremely difficult given the scarcity of available land. Most of these
proiects have been able to extend their Section 8 contracts on a year-to-year basis. The
60 Draft Housing Element Technical Document 1999-2006
units most at risk are those in the "~ .... 1 ..... ÷o Terman Apartments owned by a
for-profit corporations. In 4-99-S 1998-99, the City of Palo Alto assisted in the purchase -
and conservation of Arastradere Park Palo Alto Gardens and the Sheridan Apartments as
The Palo Alto Gardens contains 156 units originally financed in 1973 under the Section
221 (d) (3) program. Its Section 8 contract expired in 1998. In June 1998, HUD
converted the vouchers of eli¢ible tenants to one-year "enhanced" Section 8 vouchers.
This action provided the owners with market rents but with no increase in the tenant-paid
portion of the rent. After a one-year term of the "enhanced" Section 8 vouchers, the
owners would have been under no obligation to continue to accept the Section 8
households as tenants. If the owners had continued to accept Section 8 tenants, then the
tenants would have had to pay the difference between the fair market rent and the real
market rent set by the owners.. For many of the .elderly households, whose incomes are
typically below$10,000 a year, this would have been a considerable hardship.
In the summer of 1998, Mid-Peninsula Housing Coalition (MPHC) began discussions
with the project’s owners about a possible sale. By November, MPHC had finalized the
purchase contract and submitted a formal request to the City for $1,000,000 in financial
assistance for the acquistion. MPHC secured the principal financing for the project in
February 1999 with an award of a tax-exempt bond allocation of $11.4 million and an
award for federal housing tax credits. In October 1998, the City submitted an application
to the State for federal HOME funds in the amount of $825,000 to assist with the costs of
fundin~ the Sheridan and Palo Alto Gardens projects. However, that application was not
funded. Under the terms of the purchase agreement and the requirements of the tax-
exempt bond financing, MPHC needed to close escrow on the purchase before the end of
May 1999. City funds in the amount of $1,000,000 were needed to complete the
purchase, but the City did not have sufficient funds available. Therefore, on February 17,
1999, the City submitted a request to HUD for approval of pre-award costs. HUD
approved the City’s request on March 5, 1999. This allowed the City to use local funds
for a portion of its $1,000,000 loan and expend the monies to close escrow and meet the
requirements of the purchase contract and other funding. On April 12, 1999, Council
approved the formal loan documents for the transaction, and on April 29, 1999 escrow
was closed by MPHC on the acquistion.
The Sheridan Apartment complex contains 57 single bedroom units for the elderly
originally financed in 1978 under the Section 221 (d) (4) FHA program with a 20-year
federal Section 8 rental contract for all 57 units. Its Section 8 contract expired in 1999.
In the spring of 1997, the owners decided to sell the project for conversion to market rate
rental housing. PAHC entered into negotiations to buy the Sheridan with the intention of
preservin¢ its existing use as Section 8 assisted housing. PAHC’s initial attempts to
negotiate a purchase agreement were unsuccessful because the owner demanded a price
Draft Housing Element Technical Document 1999-2006 61
based on market rents. The City then initiated legal action to enforce its deed restrictions.
Finally, on January 13, 1998, PAHC executed a purchase agreement with the owners for
a $5.1 million purchase price. On February 2, 1998, the City Council approved 145,500
in CDBG funds for PAHC for predevelopment activities. An FHA loan commitment was
received by PAHC in May 1998 after which the City Council authorized a maximum City
loan commitment of $2.5 million in CDBG and City Residential Housing In-Lieu funds.
In late August 1998, PAHC was awarded both state and federal tax credits and escrow
closed on December 9, 1998. Rehabilitation work commenced immediately and has
since been completed.
The acquistion of the two proiects described above illustrates that ~¢ith considerable
work by both the Palo Alto Housing Corporation, the Mid-Peninsul Housing Coalition,
City staff and others was necessary to preserve these projects for affordable housing, It
also shows the various sources of financing that were @otained required (bond financing,
HUD and City funds, etc.) to allowing for the purchase ,,~" ^ ~o÷~n,~,~ Dn~lr ^ ~,~,-~÷~
~y PAHC these pro]ects ~d the eno~ous costs involved. If we combine the costs of the
Palo Alto Gardens ~d Sheridan Apa~ments and the cost of other recent rental
acquistions ~d rehabilitations (e.g., the ~astradero P~k Apa~ments), we can detemine
that the average cost to acquire, rehabilitate ~d conse~e the units for yew low-income
use ~ ran~ed from approximately $114,200 - $140,000 per unit. This included an
average of $82,200 - $106,500-per unit for acquisition, $10,500 - $12,000 per unit for
rehabilitation cost and about $21,500 per unit for other costs such as sponsor fees,
transaction costs, financing including the bond issuance and establishing reserve ~nds.
~igh "a l+h ....h s cost ran~ ..........¢ ........v ...............................,
~ providef! a basis for estimating the possible cost to conse~e or replace the ~ one
remainin~ Section 8 projects owned by ~ for-profit co~orations. Using the cost range
above, the cost of acquiring, conse~ing, and rehabilitating (or replacing) the 72 units of
the Texan Apa~ments would be about $8,222,400 - $10,080,000.
Project Name # ef Tetal Cogt t8 Conserve
Because the remaining units are owned by non-profits, it is highly unlikely that they
would have to be replaced or purchased at market rates. They are in danger of losing
their Project Based Section 8 rental assistance, which would likely result in a modified
mortgage arrangement with HUD and/or some increase in rents, but remaining well
below market rates. In addition, because of the quality and desirable location of the
62 Draft Housing Element Technical Document 1999-2006
projects, tenants receivingTenant Based Section 8 Subsidies are likely to continue living
in the properties for some time.
Potential funding sources to pay for the cost of conserving these units are limited.
Similar to the Arastra~ere Park Palo Alto Gardens and Sheridan project_s, City staff
would assist in pursuing such funding sources as bond financing, State of California
housing program funds, HOME funds, CDBG funds and City funds. Other potential
funding sources might include Low Income Housing Tax Credits and Affordable Housing
Program Funds from the Federal Home Loan Bank. All of these funding sources are,
however, limited.
Draft Housing Element Technical Document 1999-2006 63
Chapter 6: Housing Constraints
Housing development can be affected by economic forces in the private market as well as
regulations and policies imposed by public agencies. These constraints primarily impact
the production of new housing but can also affect the maintenance and/or improvement
of existing housing. The discussion below, and on the following pages, analyzes both the
governmental and non-governmental ("market") constraints that can affect the housing
market in Palo Alto.
Governmental Constraints
1. Land Use Controls
a) Comprehensive Plan
The 1998-2010 Comprehensive Plan is Palo Alto’s chief, policy document governing
and guiding the long-term development of the City. Besides the Housing Element, the
most important portion of the Plan influencing the production of housing is the Land Use
and Community Design Element. This element describes the land use categories that
allow residential use and the general density and intensity limits for each of these
categories. Four residential land use designations are contained in the Land Use and
Community Design Element and are described below.
Single Family Residential
Allows one dwelling unit on each lot as well as churches or schools (conditional uses).
The typically allowed density range is one to seven units per acre but the upper end of this
range can be increased to 14 dwelling units per acre to accommodate second units or
duplexes.o
Multiple Family Residential
Allows net densities ranging from eight to 40 dwelling units per acre with more specific
density limits governed by a site’s zoning district and its location. Generally higher
densities are permitted near major streets and public transit and lower densities next to
single family residential areas. The updated Housing Element proposes that the density
ranges for each of the City’s three multiple family zoning districts be described to clarify
the density limits of these zoning districts, including the establishment of a minimum
acceptable density or a density "floor". This will help to ensure that the limited
residential lands available will be developed close to their full potential. In addition, the
revised text for this land use designation reinforces the City’s commitment to the
Comprehensive Plan’s goals of supporting transit use and creating a viable and attractive
pedestrian-oriented environment.
64 Draft Housing Element Technical Document 1999-2006
Village Residential
This land use designation was added to the Comprehensive Plan in 1998 and has yet to be
applied to any lands in Palo Alto. The intent of this designation is to promote housing
that contributes to the harmony and pedestrian orientation of streets and neighborhoods.
This designation allows a maximum density of 20 units per acre but does not establish a
density floor. The updated Housing Element recommends the establishment of a density
floor for this designation and suggests text revisions to this designation to clarify its
potential role in supporting transit use by encouraging development at the higher end of
the density range on sites near transit facilities. The City should intensify its efforts to
find sites suitable for this land use designation to increase its housing supply.
Transit-oriented Residential
This land use designation was also added to the Comprehensive Plan in 1998 and has yet
to be applied to any lands in Palo Alto. The intent of this designation is to allow higher
density residential uses in the University Avenue/Downtown and California Avenue
commercial centers within 2000 feet of a multi-modal transit station and thus support
transit use. A maximum density of 50 dwelling units per acre is established but no
density floor is described. The updated Housing Element calls for development standards
that would encourage higher density development nearest to the transit stations while still
preserving the character of adjacent neighborhoods. It also calls for the development of a
zoning district that will achieve these ends. The City should intensify its efforts to find
sites suitable for this land use designation to increase its housing supply and achieve its
goal of supporting transit and reduce automobile use.
In addition to the residential land use designations listed above, the Comprehensive Plan
allows residential development under non-residential (commercial and industrial) land
use d~signations. These lands represent a significant potential housing supply but new
standards must be developed for this potential to be realized. These land use designations
and their general development limits are described below.
Neighborhood Commercial
This designation typically allows smaller shopping centers with retail uses that serve
nearby neighborhoods. It also allows residential and mixed use projects with floor area
ratios (FAR) no larger than 0.4 but does not describe an allowed density range. The
updated Housing Element proposes that a density range be established and that new
development standards be created for residential or mixed use proiects. This will clarify
the City’s intent for how these sites should be used if residential or mixed use
development is proposed and to maximize the residential potential of these sites. The
updated Housing Element also calls for revising the zoning ordinance to support these
uses.
Draft Housing Element Technical Document 1999-2006 65
Regional]Community Commercial
This designation allows larger shopping centers intended to serve marketslarger than
nearby local neighborhoods but it does not allow residential or mixed use. Sites with this
designation are much larger than neighborhood shopping centers and contain large
parking areas. These sites represent an untapped opportunity for the creation of
residential and mixed use development on underutilized parking lots or other areas. This
land usedesignation allows residential and mixed use developments with high density
residential. The updated Housing Element calls for the reation of development standards
and zoning revisions that would allow such development to occur.
Service Commercial
This land use designation supports citywide or regional commercial facilities for people
arriving by automobile. It also allows residential and mixed use proiects in some
locations but does not establish density limits. The updated Housing Element proposes
that, through the Zoning Ordinance Update, a density range be established and that
development standards and zoning ordinance provisions be revised to support such
development.
Mixed Use
This designation allows for combinations of Live/Work, Retail/Office, Residential/Retail
and Residential/Office uses but it has yet to be applied to any site in Palo Alto. Further, it
does not establish a residential density range to guide development. The updated
Housing Element proposes that a density range be established through the Zoning
Ordinance Update to realize the residential development potential of these sites.
Research/Office Park
This land use designation allows for office, research, and manufacturing establishments
and a variety of other uses including residential and mixed use. This designation does not
establish a density range for residential uses. The updated Housing Element calls for the
establishment of a density range through the Zoning Ordinance Update. It also calls for
revisions to development standards and Zoning Ordinance provisions to allow reasonable
mixed use development to occur on sites with this de.signation.
Light Industrial
Wholesale and storage warehouses and the manufacturing, processing, repairing and
packing of goods are all allowed under this designation. Residential and mixed use
proiects are also allowed but no residential density limits are described. The updated
Housing Element proposes a density limit be established through the Zoning Ordinance
66 Draft Housing Element Technical Document 1999-2006
.Update and suggests revisions to the FAR limits and the zoning ordinance to allow
reasonable mixed use development to occur on sites with this designation.
Institutional
Besides the commercial and industrial land use designations described above, the
institutional lands in Palo Alto represent a potential source of housing. The updated
Housing Element proposes that the Public Facilities zone and Institutional land use
designations allow residential development consistent with surrounding densities and
intensities of development.
Comprehensive Plan Policy Changes
Besides the modifications to the land use changes described above, the updated Housing
Element suggests a series of land use and other policy changes designed to increase the
supply of affordable housing in Palo Alto. These include the following:
Promote density changes that encourage the efficient development of scarce
residential lands and that support transit use and the creation of a pedestrian friendly
environment.
¯Encourage the use of the Village Residential and Transit-oriented Residential land use
designations.
¯Encourage the redevelopment of parking areas with high density residential or mixed
use in combination with parking structures.
¯Revise the commercial and industrial housing in-lieu fee formula for proiects
impacting housing to better reflect the impact on new iobs on housing demand and
costs.
b) Zoning Ordinance
The City’s Zoning Ordinance is the primary tool used to manage the development of
residential units in Palo Alto. The Residential Districts that are a!lewe~ in described in
Palo Alto’s Zoning Ordinance include the RE: Residential Estate District, R-l: Single
Family Residence District, R-2:Two Family Residence District, RMD:Two Unit Multiple
Family Residence District, RM- 15: Low Density Multiple-Family Residence District,
RM-30: Medium Density Multiple-Family Residence District, RM-40: High Density
Multiple-Family Residence District and the Planned Community District. Moreover,
residential development is permitted in all other zones except the PF: Public Facilities
Zone. Permitted densities, setback requirements, minimum lot sizes and other factors
vary among the residential districts. Listed below are some of the more significant
factors of each of the districts.
Draft Housing Element Technical Document 1999-2006 67
RE Residential Estate District
The RE District is intended to create and maintain single family living areas compatible
the with natural terrain and the native vegetative environment. The minimum site area is
one acre. Only one residential unit, plus an accessory dwelling or guest cottage, is
permitted on any site. The maximum size ~ the main dwelling on a conforming lot is
6,000 square feet.
R-1 Single Family Residence District
The R-1 district is intended for single family residential use. Typically, only one unit is
allowed per R-1 lot although, under certain conditions, accessory or ~ second
dwelling units may be allowed in addition to the primary unit.
;+o ;- Pa!e, a ~ ~ Generally the minimm
lot size for the R-1 district is 6,000 square feet. However, there are ce~ain areas of the
City where the minimum lot sizes historically have been larger than 6,000 squ~e feet and
these l~ger lot sizes are being maintained t~ough the Zoning Ordin~ce by specific R-1
zone combining districts.
Illustration #24:R-1 Districts and Minimum Site Areas
Type of R-1 District Minimum Site Area
R-1 General
R-1 (650)
R-1 (743)
R-1 (929)
R-1 (1858)
6,000 Square Feet
7,000 Square Feet
8,000 Square Feet
10,000 Square Feet
20,000 Square Feet
(557 square meters)
(650 square meters)
(743 square meters)
(929 square meters)
(1,858 square meters)
The R-1 District zoning regulations also specify lot coverage maximums (typically a
maximum of 35% lot coverage is allowed) and Floor Area Ratios (the ratio of the house
size to the lot size). Generally, the maximum floor area on a single family lot is not
allowed to exceed a floor area ratio of .45 for the first 5,000 square feet of lot area and
.30 for any portion of lot area in excess of 5,000 square feet. These lot coverage and
FAR limits may significantly limit the development of second dwelling units on certain
lots. In addition, there are certain height restrictions that may also limit development
potential. "Daylight Plane" restrictions apply that are height limitations controlling
development on residential properties. In certain areas of the City where there are
predominantly single-story "Eichler" homes, there may also be limitations on adding
second stories to single-story units.
R-2 and RMD Residential Districts
There are two residential districts that allow two units on a site. The R-2 Two Family
Residence District allows a second dwelling unit under the same ownership as the initial
dwelling unit in areas designated for single family use with regulations that preserve the
68 Draft Housing Element Technical Document 1999-2006
essential character of single family use. A minimum site area of 7,500 square feet is
necessary for two dwelling units in this district. The RMD Two Unit Multiple-Family
Residence district also allows a second dwelling unit under the same ownership as the
initial dwelling unit in areas designated for multiple-family uses. The minimum site area
for two units is 5,000 square feet and the maximum density in this district is 17 units per
acre.
Multiple-Family Density Districts
The Zoning Ordinance provides three categories of multiple family residential use: low
density (RM-15), medium density (RM-30) and high density (RM-40). In the RM-15
district, the permitted density range is from 6 - 15 units per acre. The updated Housing
Element (Program H-5) proposes that the density floor be reevaluated through the Zoning
Ordinance Update process to determine if a higher density floor is appropriate. The
minimum site area is 8,500 square feet and there are setback, floor area ratio, lot coverage
and height limitations also. The RM-30 district allows a range of 16 - 30 units per acre
while the RM-40 allows a range of 31 - 40 units per acre. In both all of these districts,
there-are have minimum site areas, height limitations, lot coverage and floor area ratios.
In addition, all of the multiple-family zones have open and BMR ("Below Market Rate")
requirements. Further discussion of BMR requirements is included later in this chapter.
PC Planned Community District
In addition to the specific residential districts noted above, there is also the "Planned
Community District" that is intended to accommodate developments for residential,
commercial, professional or other activities, including a combination of uses. It allows
for flexibility under controlled conditions not attainable under other zone districts. The
Planned Community District is particularly intended for unified, comprehensively
planned developments that are of substantial public benefit. A constraint to the PC zone
related to housing is a requirement for a finding of public benefit. In a high cost area
such as Palo Alto, additional public benefits discourages residential PC zone proposals.
The ~ 1998-2003 Housing Element in Program H-7, calls for the development of a
Planned Development Zone similar to the PC zone, but without the public benefit finding.
This program has not yet been implemented but it will be addressed in the CiW’s current
Zoning Ordinance Update.
New Residential and Mixed Use Zoning Districts
Three land use designations in the Comprehensive Plan, Transit-oriented Residential,
Village Residential, and Mixed Use do not get have corresponding Zoning Districts that
would fully implement them. Program H-5 of the updated Housing Element calls for the
creation of zoning districts that would allow lands with these designations to be
developed at the maximum densities described in the Comprehensive Plan as well as
require a minimum level of residential development. Sites with these designations will
be increasingly important for the CiW’s housing suppls’ and the goals of the
Draft Housing Element Technical Document 1999-2006 69
Comprehensive Plan that support transit use and that seek to create a more pedestrian
friendly and less auto-oriented environment.
Residential Uses in Commercial Districts
All of the City’s Zon~_ge Districts allow for residential development except the Public
Facilities zone. In the 1970s and 1980s, several mixed use projects were developed in the
commercial zones that included significant numbers of residential units. However,
during the late 1980s and 1990s, financing of mixed use proj ects became more difficult
and the City has seen a decline in mixed use proposals. In addition, the zoning ordinance
requirement for site and designreview of mixed use p_rojects and a requirement that the
more restrictive zoning requirement of either the commercial or residential zone apply,
have resulted in a constraint on the production of housing units in commercial zones, tn
this-The 1998-2003 Housing Element, ~’~ ~÷~" r,~ nn~÷o~ under Program H-15, ~
calleds-for the elimination of the requirement for site and design review of mixed use
projects. Policy H-4 and Programs H-I~ through H-15 (now H-21 through H-26) also
adopted with the 1998-2003 Housin~ Element~u ~,~ ~ ~ ang ~ 10 ~-e were intended to
encourage mixed use projects and to implement a review of the mixed use requirements
with the intent of simplifying the zoning requirements and adding incentives that will
encourage further residential and mixed use development in the commercial zones. None
of these programs have ~et been implemented and~ therefore, carried over to the updated
Housin~ Element, which proposes further chan~es in the Comprehensive Plan and Zonin~
Ordinance to facilitate the development of residential and mixed uses in non-residentiall
zoned areas.
Site Development Regulations
In certain instances, the City’s site development regulations can be viewed as constraints
to the development of housing. The City recognizes that its residential neighborhoods are
distinctive and wants to preserve and enhance their special features. Since Palo ,Alto is
basically a "built-out" community, most new single family residential development is
going to occur in existing neighborhoods.through either infill lots or
demolition/remodeling of existing ~tructures. Therefore, the regulations guiding
development are intended to ensure that much of what Palo-Alto cherishes in its
residential areas, such as open space areas, attractive streetscapes with mature
landscaping and variety in architectural styles, is preserved and protected.
Several site development regulations, however, are recognized in the Goals, Policies and
Programs of this Housing Element as needing assessment and possible revision to reduce
the constraints on developing housing. Currently, the City does not have a zoning district
that permits the development of single family detached units on lots of less than 6,000
square feet. Program H-6 (now Program H-11) of the previous Housing Element calleds
for amending the zoning regulations to permit residential lots of less than 6,000 square
feet where appropriate. The proposed planned Development zone would allow for small
lot developments. Program H-7 (now Program H-12) calleds for modifying parking
70 Draft Housing Element Technical Document 1999-2006
requirements to allow higher densities of housing in areas where jobs, services, shared
parking and transit will reduce the need for parking. These programs have not -get been
implemented but they have been carried over into this Housing Element and will be
addressed as part of the Zoning Ordinance Update. Program H-5 of the updated Housing
Element. calls for allowing increased density ar-~,ng within commercial and industrial
areas~ ang near transit centers, and in other appropriate areas. Program H-2 of the 1998-
2003 and this Housing Element, as well as other programs, calls for considering
minimum density requirements which could result in more housing, as well as more
affordable housing.
Summary
Currently, the City’s Zoning Ordinance allows a range of residential densities from very
low density single family to 40 units per acre multiple-family. In conformance with
Comprehensive Plan policy, it will eventually allow maximum densities of 50 units per
acre for Transit-oriented Residential and similar mixed use de~,elopments. Residential
uses are also allowed in commercial and industrial districts as well as planned
developments within the"Planned Community District. While certain requirements
within the Zoning Ordinance (floor area ratios, height limitations, etc.) may be viewed as
constraints to development, the City has adopted these requirements as a means of
ensuring that 1) the distinctive residential qualities of the existing neighborhoods are
preserved and, 2) new development reflect a certain level of quality that is individual and
yet blends in with Palo Alto’s community character. Moreover, through the adoption of
the policies and programs in this Housing Element, the City is seeking to reduce these
constraints. Further, the updated Housin~ Element calls for density increases and
modified development standards that would more easily allow development to occur at
the higher end of the densit7 range while still preserving community character. All of
these efforts will be folded into the Zoning Ordinance Update.
2. Local Processing and Permit Procedures
There are various levels of review and processing of residential development
applications, depending on the size and complexity 0fthe development. For example,
single family use applications that require a variance or home improvement exception can
be handled by the Zoning Administrator. More complicated applications, such as
subdivision applications or rezoning, require review and approval by the Planning
Commission and City Council and, in some instances, the City’s Architectural Review
Board.
Residential Development applications that fall under the responsibility of the Zoning
Administrator are usually processed and a hearing held within 6-8 weeks of the
application submittal date. This includes review by the Architectural Review Board,
which is required for all residential projects except singly developed single family houses
and duplexes. Rezonings and minor subdivision applications typically have a longer time
frame since they must be heard before both the Planning Commission and the City
Draft Housing Element Technical Document 1999-2006 71
Council. Generally, an application will be heard by the Planning Commission 7-10 weeks
after application submittal. Local ordinance requires the City Council to consider the
Planning Commission recommendations within 30 days; therefore, there would be a
maximum of 30 more days after the Planning Commission hearing for the City Council’s
action on the application. If the application is for a major site and design or Planned
Community rezoning, then the Architectural Review Board will conduct a hearing after
the Planning Commission Hearing and this could affect the time frame. Further, all of the
time frames referenced above assume that all environmental assessment and/or studies
have been completed for the development. Additional time will be required if there are
any environmental issues that need to be studied or resolved as a result of the
environmental assessment. These permit processing timelines are comparable to other
jurisdictions in the Bay Area.
Architectural Review Board (ARB) approval is required for all residential projects except
singly-developed single family homes and duplexes. The ARB sets certain standards of
design in order to keep the high quality of housing in Palo Alto. This includes a
preference for naturally weathering materials, and "genuine" materials such as true clay
tiles. The ARB process may add time and may result in requiring a higher level of
design, materials and construction, which can be a constraint to the development of
housing; however, the level of review and the upgrade in materials has the long term
benefit of lower maintenance and higher retention of property values. Moreover, the
construction of thoughtful and well-designed multi-family housing has sustained
community support for higher density projects and has resulted in community support for
residential projects at all income levels. The preferences on materials are sometimes
waived for affordable housing projects.
In regard to codes and enforcement, the City has adopted the Uniform Building Code
(UBC), published by the International Conference of Building Officials, which
establishes minimum construction standards. Although a locality may impose more
stringent standards, it cannot adopt any that are less restrictive than those of the UBC.
Thus, the City cannot modify the basic UBC requirements. The City also administers
certain State and Federal mandated standards in regards to energy conservation and
accessibility for disabled households. In reviewing these standards, certain requirements
especially in regard to handicapped accessibility may be viewed as a constraint to housing
production. The City has no direct control over these types of requirements other than
working with local legislators on a federal and state level to modify and make the
requirement more realistic.
The City’s development fee structure does not appear to be a significant impediment to
residential development. Residential developments are charged fees according to the
value of the project for building, planning and fire review fees. For example, a residential
unit with a value of $200,000 would be charged about $-~o84 $3,800 for building,
planning and fire fees. For infill and individual single family development, the public
works fees are minimal and estimated to be less than $500 per unit. For a residential
subdivision, the most significant public works fee would be the fee for a Street Work
72 Draft Housing Element Technical Document 1999-2006
Permit, which is 5% of the value of the street improvements. The City’s Utility
Department does charge for sewer and water hook-ups ........
Pale Alto’s building and planning permit processing fees are comparable to similar fees
charged by other jurisdictions in the Bay Area. It should be noted, however, that these
fees do not cover the full cost the City incurs to process these development applications
and provide the support services needed by City staff. In essence, the City subsidizes the
development review process. The City currently allows the waiver of existing fees for
very low- and low-income housing proiects when appropriate. The updated Housing
Element also proposes under Program H-18 that affordable housing proiects be exempt
from any infrastructure impact fees the City is curentl¥ considering.
Other public service districts of course may charge fees that are outside of the control of
the City. The most significant of these fees in Pale Alto are school impact fees. The Pale
Alto Unified School District adopted a fee schedule in July, -1-996 December 2000 that
specifies a fee of $-1=84 $2.05 per square foot for residential units. Le~ Alte~ Sche, e!
$1.23 $ per ~quare feet.
3. Below Market Rate (BMR) Program
The City’s BMR Program has been in existence since 1974 and has produced 4-44 151 for-
sale residential units and gg 38 rental units as of January 2000. The program was
initiated to fill a gap in affordable housing between households making above moderate-
income, who it was felt could afford their own housing, and low-income households, who
could be assisted by other state and federal programs. The program has built-in
provisions that result in the units in the program being more affordable over time when
compared to market rate units and median income, owner households.
The BMR Program could be considered a constraint. However, in high cost cities such as
Pale Alto, this type of program is ~ necessary to augment the production of
moderate cost housing. The BMR program has several options for the developer and
allows for the developer to recoup the direct construction and financing costs of the unit
excluding land, marketing, offsite improvements and profit. In addition, the City does not
apply any other impact fees, such as park or transportation fees, to residential projects.
Finally the City requires that BMR units be included in for-sale residential projects of
three or more units and for-rent residential projects of five or more units, and the units be
mixed throughout a project. The result is a diversity of income within housing
developments throughout the City.
Draft Housing Element Technical Document 1999-2006 73
Although Palo Alto’s current BMR Program has endeavored to increase the supply of
affordable housing, it has managed to create only about 7.5 units a gear of affordable
housing, which is clearly not sufficient to meet the City’s need for affordable housing.
To increase the supply of affordable housing, the updated Housing Element proposes that
the BMR requirement for affordable housing be increased from 10% to 15% for
ownership proiects of 3 or more units and rental projects of 5 or more units. The BMR
requirement for proiects on five or more acres is proposed to be increased from 15% to
20%. The cost of these increases will be offset by allowing the BMR ownership
requirement to be satisfied by providing housing affordable to those households earning
up to 120% of the County median income rather than the current limitation of providing
ownership housing affordable to those households earning 100% or less of County
median income.
4. Land Availability
The greatest housing constraint facing Palo Alto is the very limited supply of land
available for residential use. Palo Alto is basically a "built-out" community. Only -1=4
0.5% of the City’s land area is vacant. In fact, A~
~xr~o÷,, ~ ~a~ o~a ~ ~ ,~ ~,, ~z~o less than 5 acres of vacant, residentially zoned
land ....~ ~"- ~ ~ .....;~ ~;~~ i City~ .........................remain n the . The lack of vac~t land,
however, has resulted in ~ effo~ to "recycle" land parcels with commercial or industrial
zoning that are vacant or have other land uses that are economically m~ginal. The City’s
long-te~ policy to discourage the rezoning of residential land to co~ercial use, while
encouraging the rezoning of co~ercial lands for residential use, has resulted in 46 sites
being rezoned from co~ercial to residential since 1978. During the same time period,
only 10 sites have been ch~ged from residential to co~ercial. This policy continues in
~ the updated Housing Element.
74 Draft Housing Element Technical Document 1999-2006
Given the dearth of vacant, residentially zoned land available, Palo Alto must identify and
rezone underutilized residential and non-residential lands sufficient to meet its unmet
housing needs. These lands could be rezoned to allow solely residential use or to allow
mixed uses that require a minimum level of residential development rather than solely
commercial or industrial use. During the preparation of this Housing Element, City staff
began the Housing Opportunities Study, which included a series of field investigations
and collected other information to identify_ those sites most suitable for residential use or
conversion to residential use. Staff focused primarily on existing commercial or
industrial lands that appeared to be underutilized, or that were nearing the end of their
economic life, where market forces are likely to promote a change in use in the near
future. Some of these sites were more promising than others and should be given priority
in the City’s efforts to convert non-residential sites to residential use. To this end, the
City has established a list, or inventory, of sites suitable for the production of housing
during the 1999-2006 time frame of this Housing Element. The range of units expected
from the Inventory is illustrated below. (The Housing Sites Inventory is described in
detail in Appendix E.)
!.8 Acres R 1 7 8
2.5 Acres RM 15 15 ~0
,L’%-v,ne-’. e,,,,,ann:n_.., , ,, anna ,-, ......:,., ~,.,: ......, ^ .......
Illustration #25: Land Inventory. ~ Potential Residential Development by Tier
1999-2006
Total Acreage Estimated Number of Units
62+ 1,070+
Source: City of Palo Alto Dept of Planning and Community Environment, January, 2002
The Inventory consists primarily of sites already zoned for residential use (either standard
residential or Planned Community zones) or sites that have combined residential and non-
residential zonings that can be relatively easy to convert to residential use in terms of
policy or practical reasons. For example, most of the sites contained in the Inventory
would not require changes in the Comprehensive Plan to allow residential use. However,
many of the sites may require rezoning or partial rezoning to achieve the desired dwelling
Draft Housing Element Technical Document 1999-2006 75
unit yields. Some of the sites are vacant but most are occupied by uses or buildings that
are older or underutilized and are likely to be reused with higher value residential or
mixed use within the next five gears. It is expected that most of these sites would be
rezoned and converted to solely residential use but mixed use proiects would not be
prohibited as long as a minimum amount of residential development was part of the mix.
These sites could generate at least 1,070 units using just the lower end of the density
ranges allowed on these sites.
In addition to the Housing Sites Inventory, a list of sites considerable suitable for future
residential use. This second list consists of sites that are tgpicalls, zoned for commercial
or industrial use and are currently occupied by non-residential uses. It also includes
publicly owned properties, such as parking lots, which could accommodate residential use
if the PF Zoning District were modified to allow residential use. As in the Inventory,
these sites could be considered underutilized or nearing the end of their expected
economic life. These sites are likely to contain more or higher valued improvents than
the Inventow which will make them more costly to purchase and redevelop but this may
be offset by limiting new development to the parking lot or storage areas of these sites.
These sites may also face environmental or other obstacles to their conversion to
residential use but these obstacles are not insurmountable. Preparing these sites for
residential or commercial use may also take more time, but most of these sites are located
in areas with good access to transit or transportation facilities, are adequately provided
with urban services, and are near retail and service uses that could support their
redevelopment to residential or mixed use. More of these sites might be rezoned or used
for mixed use development than the sites in the Inventory. These sites may require
amendments to the Comprehensive Plan for housin~ or mixed use development.
Modifications to the Zoning Ordinance may also be required, such as new, more flexible
development standards for commercial zoning districts that would allow more substantial
combined residential and retail commercial development or require other policy changes,
such as encouraging the use of air rights.
The second list may act as a reserve of potential land suitable for residential development
which may not be needed during the 1999-2006 time frame of this Housin¢ Element but
could be made available if the sites in the Inventory prove to be unavailable for housing.
The Housing Opportunities Study is an ongoin~ effort and may add more sites to this list
over the life of this Housing Element.
The Inventory provides more than sufficient housin~ opportunities for Palo Alto to meet
the unmet portion (616 units) of its fair share of the region’s housing needs as described
in Chapter 5. The City is committed under Housing Program H-14 to rezone enough of
the lands in the Inventory_ to meet this need by 2004. This should allow sufficient time
for developers to acquire land, receive permit approvals and build the housing needed in
Palo Alto prior to June 2006. If lands in the Inventory become unavailable for housing
resulting in there being insufficient land to meet the City’s remainin~ housing needs, it is
the Ci _ty’s intention that lands in the second list be evalutated and rezoned to make up the
shortfall by 2004.
76 Draft Housing Element Technical Document 1999-2006
The City’s Housing Sites Inventory_ has identified sufficient land suitable for residential
development to meet its 1999-2006 housing needs but its efforts to find sites suitable for.
housing will not end there. Palo Alto intends to continue its Housing Opportunities Study
(HOS) (see Program H-13) to both add to and refine the Housing Sites Inventory. The
HOS will continue to identify sites that may be available for redevelopment for housing
or mixed uses and that should be added to the Housing Sites Inventory. Conversely,
further investigation of sites on the second list may fijad that there are problems that make
them unsuitable for residential development or that may only allow development at a
lesser density. Sites on the second list will also need to be evaluated on a regular basis to
determine if these sites may be moved from this list to the Inventory. The HOS should be
considered an ongoing process for Palo Alto since new housing opportunities may arise
and the City will need to be flexible to take advantage of these opportunities. The City
must also continue to look for suitable, new housing sites beyond the 2006 limit of this
Housing Element.
Information in Chapter 5 of this document summarizes the number of new residential
units needed to meet Palo Alto’s estimated "P ~ .... 1 ~ .... ~..,. N~eds,,
a!!ecatien fair share of the region’s housin~ needs. The info~ation on pages ~ 5~
indicates that Palo Alto’s new cen~tructien estimate share of the region’s housin¢ need is
~ ~ units for the ~ ao~ ~ 1999-2006 time frame.
The -1-,g44 1,397 unit estimate is ~ sub-categorized into units needed by household
income level. ^ .... az~’- ÷~ "~’~ z~ .... *~ As indicated in Chapter 5, on pages ~-5-50-51
of this document, Palo Alto has already made substantial progress in meeting its housing
needs. The following areAhe ~ ~f- describes the remaining housing need
estimates for Palo Alto by household income level after accounting for the number of
housing units built or approved for construction between 1999 and 2000 (see Appendix
D_).
Illustration#25a: Unmet Housing Need by Household Income, 1999-2006
241 Units Very Low-Income Need (0-50% of Median)
50 Units Low-Income Need (51-80% of Median)
325 Units Moderate-Income Need (81-120% of Median)
0 Units Above Moderate-Income Need (120%+ of Median)
Draft Housing Element Technical Document 1999-2006 77
Although Palo Alto has already provided more that enough housing to meet the needs of
the above moderate-income households it is expected to generate, it has considerably
more to do to meet the needs of the very low-, low-, and moderate-income households
seeking to live in the City. As indicated in the table above, the City must have sufficient
land to accommodate 616 Units of affordable housing. The extremely high housing costs
of Palo Alto will make it difficult for the City to achieve this goal. In Chapter 3 of this
document, we found that the CiW’s most affordable housing is multiple-family rental
housing. Palo Alto needs to substantially increase the opportunities for this type of
housing if it is to meet this need.
To create more affordable housin~ opportunities, ABAG’s Blueprint 2001: Housing
Element Ideas and Solutions (pages 3-10) suggests that Medium Density Residential
zoning designations should allow at least 18 dwelling units per acre and High Density
Residential zoning designations should allow at least 30 units to the a~re. These density
targets are roughly equivalent to the RM-30 Medium Density Multiple-Family Residence
District (16-30 dwelling’units per acre) and the RM-40 High Density Multiple-Family
Residence District (up to 40 dwelling units per acre). The Housing Sites Inventory
discussed above focuses primarily on those sites that can accommodate RM-30, RM-40
or hi~her density residential or mixed use development to meet the CiW’s affordable
housing needs. This inventory, with its suggested zoning changes° indicate that Polo Alto
will have more than enough land to provide the opportunities necessar~ to build housing
for 616 very low- to moderate-income households. In fact, the development potential of
the Housing Sites Inventory at the lower end of the potential dwelling unit yield is about
1,070 units or about 65% more than would be necessary to accommodate the unmet need
of 616 units. This exceeds HCD’s suggested strategy of"overzoning" lands for
residential use by at least 20% above the minimum amount needed to meet a
jurisdiction’s share of the region’s housing needs. It should be noted that most of the
sites on the Inventory are z6ned, or will be zoned, to support density ranges to provide the
maximum potential for the construction of affordable housing in Polo Alto.
;+" ~";~+ The City takes its commitment to encourage the
construction of affordable housing ve~ seriously. In recent gears, Palo Alto has had
some success in assisting in the building, and not just pla~ing for, affordable housing.
D~ing the late 1990s, the 107 unit Alma Place SRO (yew low income housing), the 24
78 Draft Housing Element Technical Document 1999-2006
unit Page Mill Court (developmentally disabled, very_ low-income housing), and 159 low
income rental units of the Stanford West Project (currently under construction) were all
built, or being built, in Palo Alto. The City has established and is proposing as part of
this Housing Element, numerous policies and programs to encourage the additional
development of housing, particularly housing affordable to very low-, low- and moderate-
income households. These include allowing for increased densities near transit;
consideration of requiring minimum densities; zoning incentives for smaller, more
affordable housing; evaluation of second dwelling unit regulations to encourage the
creation of more units; revised regulations to allow residential lots of less than 6,000
square feet and modifications to reduce parking requirements when houses are located
near jobs, services and transit.
The City will do what it can to encourage the construction of higher density, affordable
residential projects. However, since the City of Palo Alto does not itself build housing,
the City cannot guarantee that providing the necessary housing opportunities means that
the required housing will be built, t4oweu~, Even with the strong commitment of the¯~t ....it will be difficult for Palo Alto c-anCity to provide affordable housing, ~t ;° unlikely ~" n+
to provide that many more units for very low- and low-income households. The primary
reasons are a lack of available low cost land and the limited availability of subsidy funds.
The City will continue to use public and private resources to make a good-faith effort to
provide as many units as it can in meeting ÷~,~..,~ ~,~,~,~ ...... ~’~’~..’.~’;~a its fair share of the region’s
housing need, as well as, the City’s own commitment to provide housing for all income
groups and a diversity of housing throughout the City.
5. Infrastructure
The City of Palo Alto is an older and well-established community in terms of
infrastructure. The City owns and manages its utilities, including water and electrical.
According to staff from the City Public Works Department, there are no significant
infrastructure constraints that would affect anticipated residential development. The
City’s wastewater and water systems both have sufficient capacity to serve expected
residential growth, although some local service lines need expansion or extension. On-
going maintenance and repair of existing storm drainage, water, and wastewater
improvements are identified as part of the City’s Capital Improvement Plan (CIP).
Needed repairs are prioritized in the CIP and projected over a multi-year period.
While there appear to be no significant infrastructure constraints on a citywide basis,
there may be constraints on a site-by-site basis depending on the site’s proximity to
existing utility and service lines and whether there would be a need to provide additional
connections or upgrades to those lines. These types of improvements would typically be
the responsibility of the property owner/developer.
Draft Housing Element Technical Document 1999-2006 79
6. Environmental
There are some areas in the City that have specific environmental areas of concern. There
are approximately 12 sites in the foothill area of the City that are within a specific
earthquake fault zone area. These sites require in-depth soils rePorts and peer review as
part of their development ~rse approval process. Moreover, the entire City is subject to
moderate to severe earth movement during a seismic event.
According to the City Public Works Department staff, approximately 25-30% of the City
is within the flood hazard zone. Structures within this zone must meet certain building
requirements when expanding or improving the property if the improvement is greater
than 50% of the value of the property. Some areas of the City have isolated cases of
pollution of the soil and groundwater that may require clean-up, and the close proxi~nity
of groundwater to the surface may limit excavation and require additional foundation
stabilization.
Finally, many available sites are limited by noise constraints from vehicular traffic and
railroad trains. Sound walls or additional noise barriers may be required to reduce noise
to acceptable levels for residential use. These requirements could be viewed as
constraints in that they increase the cost and may prohibit owners from undertaking
improvements. The City, however, has limited control over these requirements since they
are primarily regulated by state and federal agencies.
Market Constraints
There are a number of costs involved in the development of housing. These include land
and construction costs, sales and marketing, financing and profit. Because these costs are
so "market sensitive, "it is difficult for a local government to reduce them in any way.
Listed below are some of the more significant market related issues.
1. Financing Costs
Financing costs are primarily dependent on national economic trends and policy
decisions. At the time this Housing Element was prepared (4-99-7- mid-2001), fixed
mortgage rates for single family residential housing varied from 8-,-,-,g 6.38 to 7.25% for a
30 year fixed conforming loan as compared to 8.2% in 1997. This means that financing a
home has become somewhat easier in the last few years. *~ ,, ....... a J,, : .........
usta e rate oans were
slightly lower than fixed conforming loans, ~ ranging from starting rates of~-5
5.75% up to g 7% and with maximum lifetime caps in the 44 10.95 - 12% range.
Financing from both mortgage brokers and retail lenders (banks, savings and loans) is
available in the Palo Alto area. The availability of financing, then, is not a constraint to
80 Draft Housing Element Technical Document 1999-2006
the purchase of housing in Palo Alto, although financing for development of
condominiums, rental housing and mixed use projects, can still be difficult to obtain.
Financing costs for subsidized housing are more difficult, as the competition for the
limited available funds is very competitive severe.
2. Land and Construction Costs
The actual costs of developing and building housing in Palo Alto could be viewed as a
constraint to housing, especially affordable housing. Vacant land is scarce in Palo Alto -
less than g 0.5% of the City’s land is vacant and less than 15 acres of vacant land is zoned
for residential use. The on " ~,,e .............. , ............. : .................... : ,o.~.~ ,,e÷n.r....a Weat" ~;* ....~.:~, ; .......;~ .. ~ .....Because of the lack of vacant
parcels, it is anticipated that under-utilized sites or sites zoned for co~ercial/industrial
uses will become more feasible for re-use t0 residential designations. The City continues
to review non-residentially designated areas ~d underutilized sites for potential
residential uses and is encouraging the integration of residential use into
commercial/industrial areas.
The scarcity of vacant land has resulted in increased costs of purchasing any available
land. Residentially zoned (multiple-family zoning districts) property has more than
doubled in value since 1996 and can sell for $150-$167 gO per square foot or more
depending on its location and development potential. Individual single family lots, if
available, are typically over $900,000 ann nnn_, v,,,v.~ ~ or more in price for a 5,000 to 16,000
square foot lot. Commercially zoned land (outside of the downtown core) may have also
doubled in value to is valued at over $150 4-5 per square foot. Thus, a one acre site would
be worth in excess of $6.5 ;g million.
Construction costs in Palo Alto are also expensive but are similar to those of surrounding
communities. Discussions with private and non-profit develop.ers and City staff indicate
that multiple-family residential construction costs can range from approximately $200 7-5
per square foot to $250 or higher-199 299+ per square foot depending on amenities and
the quality of construction materials. It becomes difficult to build housing, particularly
affordable housing, with this range of construction cost. For example, using $250 4-00
per square foot as an estimate, a gel00 1,000 square foot home would cost $250,000
299,009 just for construction costs and excluding land costs, off-site improvements,
processing fees and financing costs. Even with the "economies of scale" ofmultifamily
construction, costs are still high for those units also. Unfortunately, construction costs are
dependent on many factors including labor costs, material costs and competition in the
market place and are beyond the control of the City. In order to develop housing that is
affordable, especially to very low- and low-income households, c-osl4y substantial public’
subsidies are routinely required because of the high cost of land and construction.
Draft Housing Element Technical Document 1999-2006 81
Chapter 7: Review of 1998-2003 Housing Element
Background Information
State Housing Element Guidelines require that communities evaluate their previous
Housing Elements according to the following three criteria:
¯Effectiveness of the Element,
¯Progress in Implementation, and
¯Appropriateness of Goals, Objectives and Policies.
The City’s most recent Housing Element was amended and adopted in 1990 91 1998 and
covered the five-year period of 1998-2003. ~-,~l. ~+~’~’~._,,,~,~w~ ~.~,~ ~ ~ na~ In November 1998, the
State of California, Dep~ment of Housing and Co--unity Development, found the
Housing Element to be in compliance with State Housing Element law. Therefore, the
~ 1998-2003 Housing ~lement was the most c~ent Housing Element of the City at
the time that this ~ 2001 Housing Element Tec~ical Document was prepared. ~
1998-2003 version of the Housing Element recogNzed that it would be an interim
document, that it was essentiallg an extension of the 1990 Housing Element, and that it
would be revised once ABAG prepped a new housing needs dete~ination for all
jursidictions in the San Francisco Bag Area. Since the 1998-2003 Housing Element is
being updated in the middle of its designated time frame, man7 of the policies and
programs have not been implemented or only pa~ially implemented; therefore, the
effectiveness of these policies and programs cabot be completely evaluNed. This should
be kept in mind when considering the progress of the 1998-2003 Housing Element
presented below.
Program Policies, Programs and Goals
There were -1-6 23 policy statements in the -1-990 1998-2003 Housing Element that
reflected the City’s overall goals for addressing housing needs. Within each policy
statement, the 4-990 Element identifies specific housing programs to implement each of
~+~-~ -~.~~ .....~mn~ ,~ ~ ....~oo~.;~’~n Following the outline of the ~ 1998-2003 Housing
statements and th~ pmgm~s ~d o~jccfiws quantified fo~ e~ch of the poficy statements.
This an~]ys~s is followed h~ ~ t~Ne s~dzi~g th~ ~’s p~og~ess ~ pm~d~g ~ts f~i~
82 Draft Housing Element Technical Document 1999-2006
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DraR Housing Elemem Tec~ical Documem 1999-2006 83
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84 Draft Housing Element Technical Document 1999-2006
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Draft Housing Element Technical Document 1999-2006 85
86 Draft Housing Element Technical Document 1999-2006
vacancy rat: -’-’~ ,,.lcul ....th: rate, o o~m: annual basis. In
Dra~ Housing Element Tec~ical Document 1999-2006 87
88 Draft Housing Element Technical Document 1999-2006
Draft Housing Elemem Technical Document 1999-2006 89
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90 Draft Housing Element Technical Document 1999-2006
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Dra~ Housing Element Tec~ical Document 1999-2006
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92 Dra~ Housing Element Tec~ical Document 1999-2006
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Draft Housing Element Technical Document 1999-2006 93
94 Draft Housing Element Technical Document 1999-2006
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Dra~ Housing Element Tec~ical Document 1999-2006 95
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96 Draft Housing Element Technical Document 1999-2006
City
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Dra~ Housing Element Tec~ical Document 1999-2006 97
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98 Draft Housing Element Technical Document 1999-2006
Draft Housing Elemem Technical Documem 1999-2006 99
Policy H-l: Meet community and neighborhood needs as the supply of
housing is increased.
Palo Alto was able to meet more than half the needs of its very low- (57%) and
above moderate-income households (53%) but was only able to produce 10% of the
housing needed for low-income households and 15% for moderate income
households. As already shown, the most affordable housing in Palo Alto is
multiple-family residential development at densities allowed under the RM-30 and
RM-40 zoning districts or at even higher densities. The City must increase its
efforts to produce affordable housing for very_ low-, low- and moderate-income
households, which means that more of this type of multiple-family residential land
must be made available during the time frame of this Housing Element and that the
lands currently planned for multiple-family residential, or that allow mixed use,
must be developed at or near the high end of their allowed density ranges.
Policy H-2: Consider a variety of strategies to increase housing density
and diversity in appropriate locations.
Program H-l: Allow for increased housing density immediately surrounding
commercial areas and particularly near transit centers.
Program H-2: Consider enacting minimum density requirements in multiple
family zones.
Program H-3: Evaluate zoning incentives that encourage the development of
diverse housing types, including smaller, more affordable units and two- and
three-bedroom units suitable for families with children.
Program H-4: Evaluate the provisions for second dwelling units in single
family areas to determine how additional units might be provided
Program H-5: Create a Planned Development zone that allows the
construction of smaller lot single family units and other innovative housing
types without the requirement for a public benefit finding.
Program H-6 Amend zoning regulations to permit residential lots of less than
6,000 square feet where smaller lots would be compatible with the
surrounding neighborhood
Program H-7: Modify parking requirements to allow higher densities and
reduced housing costs in areas appropriate for reduced parking requirements.
The Comprehensive Plan has created the Transit-oriented Residential land use
designation that would allow increased densities near transit stations but this designation
has not yet been applied to any specific sites. Other land use designations, such as Mixed
Use and Village Residential could also be used to increase densities in appropriate areas.
100 Draft Housing Element Technical Document 1999-2006
The City needs to identify sites where these designations can be applied and include them
in the Housing Sites Inventory_. Zoning districts for these land use designations also need
to be created so they can be implemented. The Zoning Ordinance currently contains
minimum density requirements in multiple-family zones but these requirements need to
be clarified. This is being pursued in the current Zoning Ordinance Update.
Proposed changes to the Zoning Ordinance to increase housing densities in conformance
with Comprehensive Plan land use designations have not been implemented but are
currently being studied by the City in the Zoning Ordinance Update, which is currently in
progress.
Policy H-3: Support the designation of vacant or underutilized land for
housing.
The City continues to support the redesignation of vacant or underutilized land for
housing but there has been little vacant land available for redesignation over the last
three years. As a result, no new vacant lands have been rezoned for housing. There
is more of a supply of underutilized land available and the City has used some of
this land for residential or mixed use residential/commercial development but only
in relatively small amounts. The City must increase its efforts to find and convert
non-residential land to residential use as called for in the updated Housing Element.
Policy H-4: Encourage mixed use projects as a means of increasing the
housing supply while promoting diversity and neighborhood vitality.
Program H-8: Evaluate the effectiveness of existing incentives that encourage
mixed use and residential development on commercially zoned land and
determine additional incentives to be provided
Program H-9: Use coordinated area plans and other tools to develop
regulations that support the development of housing above and among
commercial uses.
Program H-IO: Encourage the development of housing on parking lots by
adopting incentives that will lead to housing production while maintaining the
required parking.
Program H-11: Eliminate the requirement for Site and Design review for
mixed use projects.
The City allows residential use in all commercial zones and utilizes the site-specific
Planned Community (PC) zone to encourage mixed use housing proiects. During the
preparation of the 1998-2003 Housing Element, a review of the mixed use regulations
indicated that these regulations did not facilitate mixed use development. The City
concluded that a specific mixed use zoning district, or at a minimum, revisions to existing
Draft Housing Element Technical Document1999-2006 101
zoning standards in the commercial and industrial districts that allow mixed uses or
housing, are needed to allow greater development flexibility and to decrease the need for
variances and modifications to site development regulations. These revisions would help
increase the potential for mixed use developments.
The City intends to continue to pursue modifications to the zoning regulations to
encourage mixed use housin~ projects and better utilization of available land. Items to be
considered include reuse of parking lots, incentives, reduced parking requirements,
horizontal mixed use, and greater efforts to work with employers to obtain additional
housing development. All of these items are currently being consider under the Zoning
Ordinance Update and a draft revision of the Zoning Ordinance is expected in 2002.
The only coordinated area plan the City is currently engaged in is in the South of Forest
Area (SOFA) (southern Downtown). The advisory group working on this plan is in the
process of reviewing possible land use mixes including high density housing over
commercial or office use. The work of this group will be completed in 2001.
Three residential development projects were built over or replaced existing parking lots in
the early 1990s but none has occurred in the last half of that decade. The City wants to
continue to encourage this type of development and is looking for ways to make this type
of development easier to accomplish. Also, a few, small mixed use projects have
occurred in the 1990s but this type of development needs to be increased given that most
of the City’s underutilized lands are in commercial or industrial areas. A means of
encouraging that type of development would be to reduce the processing obstacles that
developers face. The issues of parking lot development incentives and modifications to
the Site and Design Review process for mixed use projects are currently being considered
in the Zoning Ordinance Update. A draft version of the revised Zoning Ordinance is
expected in 2002.
P,olicy H-5: Discourage the conversion of lands designated as residential
to nonresidential uses, unless there is no net loss of housing potential on a
community-wide basis.
No residential lands were converted to non-residential use in Palo Alto between
1998 and 2000. However, institutional uses, such as churches and schools, are
competing for the same land as residential uses. The City needs to reinforce its
policies discouraging the conversion of residential land, especially multiple-family
residential land, to protect this very limited resource.
Policy H-6: Support the reduction of governmental and regulatory
constraints to the production of affordable housing.
Program H-12: Where appropriate and feasible, allow waivers of
development fees as a means of promoting the development of housing
affordable to very low- and low-income households.
102 Draft Housing Element Technical Document 1999-2006
The City continues to regularly evaluate its zoning requirements, building c.odes, fees,
and development procedures to eliminate barriers to affordable housing. The fee waiver
process is ctLrrently being developed. Draft revised Zoning Ordinance standards will be
proposed in 2002.
Policy H-7: Promote the rehabilitation of deteriorating or substandard
residential properties.
Program H-13: Continue the citywide property maintenance, inspection, and
enforcement program.
Program H-14: Enact development regulations that encourage rehabilitation
of historic residential buildings, remodeling of older multifamily rental
buildings and retention of smaller single family residences.
The City has continued to utilize various public funding sources to assist with the
rehabilitation and/or acquistion of existing affordable rental housing, including the
Community Development Block Grant (CDBG) Program, City funds and bond funds.
Between 1998 and 2000 the City_, in cooperation with several non-profit organizations,
accomplished the following:
¯Construction of the 24 unit Page Mill Court which provides permanent, affordable
rental housing for persons with developmental disabilities and whose incomes are less
than 30% of County median income.
¯Preservation and rehabilitation of the 57 unit Sheridan Apartments which was at-risk
of converting to market rate housing. Sheridan Apartments provides subsidized
housing for seniors and persons with disabilities. The units were acquired by the Palo
Alto Housing Corporation with assistance from the City.
¯Preservation and rehabilitation of the 156 unit Palo Alto Gardens Apartments which
was at-risk of converting to market rate housing. The Palo Alto Gardens provides
subsidized housing for seniors and families. The units were acquired by the Mid-
Peninsula’Housing Coalition with assistance from the City.
¯Rehabilitation of the water system for the 66 unit Arastradero Park Apartments. New
water lines were provided for each unit under this proiect.
¯Rehabilitation of the Waverley Street House to provide affordable housing for 26
lower income persons with mental illness.
¯Re-roofing Building "A" which contains 59 units of the 120 unit Stevenson House
which provides housing for low income seniors.
The City is continuing its citywide property maintenance, inspection, and enforcement
program and provides rehabilitation assistance on an "as needed" basis for units occupied
by ver~ low- and low-income homeowners. Revised development regulations that
encourage rehabilitation of historic residential buildings, remodeling of older multifamily
rental buildings, and the retention of smaller single family dwellings have not yet been
Draft Housing Element Technical Document 1999-2006 103
established but are being considered under the Zoning Ordinance Update. Draft revised
Zoning Ordinance standards will be proposed in 2002.
Policy H-8: Maintain the number of multifamily rental housing units in
Palo Alto at no less than its current level while supporting efforts to
increase the rental supply.
Program H-15: Continue implementation of the Condominium Conversion
Ordinance.
Program H-16: Where a proposed subdivision or condominium would cause a
loss of rental housing, grant approval only if at least two of the following
three circumstances exist:
¯Theproject willproduce at least a lOOpercent increase in the number of
units currently on the site and will comply with the City’s Below Market
Rate (BMR) program (described in Program H-20); and/or
¯The number of rental units to be provided on the site is at least equal to the
number of existing rental units; and/or
¯No less than 20percent of the units will comply with the City’s BMR
program.
As indicated by the preservation of the Palo Alto Gardens and the Sheridan Apartments,
Palo Alto continues to act to preserve its existing supply of multiple-family housing. In
1974, the City adopted a Condominium Conversion Ordinance (Chapter 21.40 of the Palo
Alto Municipal Code), which regulates the conversion of rental apartments
condominiums for projects containing three or more units. An application for conversion
can be considered only if there is a Citvwide rental vacancy rate that exceeds three
percent, or regardless of vacancy rate, if:
¯One below market rate unit is provided for every two market rate units to be
converted.
¯The tenants of at least two-thirds of the rental units consent to this conversion.
Between 1998-2000, no rental units were converted to ownership units under the
provisions of this ordinance. The City intends to continue to regulate the potential
conversion of rental units by continuing to implement the Condominium Conversion
Ordinance.
Policy H-9: Encourage community involvement in the maintenance and
enhancement of public and private properties and adjacent rights-of-way
in residential neighborhoods.
Program H-17: Create community volunteer days and park cleanups,
plantings, or similar events that promote neighborhood enhancement.
104 Draft Housing Element Technical Document 1999-2006
Program H-18: Conduct City-sponsored cleanup campaigns for public and
private properties.
The City continues to encourage community involvement in the maintenance of public
and private properties and adjacent rights-of-way as is evidenced by the exemplar_
condition of buildings and improvements in the vast maiority of the City.
Policy H-IO: Encourage and foster diverse housing opportunities for very
low-, low-, and moderate-income households.
Palo Alto continues to encourage diverse housing opportunities for very low-, low-
and moderate-income households by preserving existing affordable housing, as in
the case of the Palo Alto Gardens and Sheridan Apartments, and by identifs, ing new
sites for multiple-family housing. However, the City has been restricted in the
provision of housing opportunities due to the limited amount of land available for
multiple-family housing. That is why the updated Housing Element calls for
aggressive implementation of the Housing Opportunities Study to provide more
sites suitable for this type of housing in locations that support the goals and policies
of the Comprehensive Plan, including housing sites that support transit use and the
creation of pedestrian oriented environments.
Policy H-11: Provide for increased use and support of tenant/landlord
educational and mediation opportunities.
Program H-19: Implement the "Action Plan" of the City of Palo Alto’s
Consolidated Plan or its successor documents.
Program H-20: Continue implementation of the City’s "Below Market Rate"
(BMR) lnclusionary Housing Program that requires at least ten percent of all
housing units built in for-sale projects of three units or more and rental
projects of five units or more to be provided at below market rates to very
low-, low-, and moderate-income households.
Program H-21: Adopt a revised density bonus program that allows the
construction of up to three additional market rate units for each BMR unit
above that normally required, up to a maximum zoning increase of 25 percent
in density. Allow an equivalent increase in square footage (Floor Area Ratio)
for projects that meet this requirement.
Program H-22: Recognize the Buena Vista Mobile Home Park as providing
low-, and moderate-income housing opportunities.
During the last two years of the City’s Consolidated Plan, the City helped to create 131
new units of affordable rental housing in the Alma Place and Page Mill Court proiects
and preserved 213 units of affordable rental housing in the Palo Alto Gardens and
Draft Housing Element Technical Document 1999-2006 105
Sheridan Apartments. The City also contributed funds to help accomplish the following
over the life of the 1995-2000 Consolidated Plan:
¯Construction of the New County Children’s Shelter, a 76,000 sq. ft. facility in San
Jose designed to serve 3,900 abused and/or neglected children from Santa Clara
County.
¯Renovation of the Casa Say Youth Shelter in Mountain View - short-term shelter for
runaways or at-risk adolescents.
¯Installation of safety improvements for the Stevenson House and Lytton Gardens both
of which are senior residential facilities.
¯Construction of the 250-bed regional homeless reception center in San Jose operated
by the Emergency Housing Consortium.
¯Acquisition of a shared transitional home (Margarita Street House) for low-income
veterans in conjunction with the Veterans Workshop.
Between 1998 and 2000 the City added 5 new BMR rental units and 7 new BMR
ownership units under its Below Market Rate program but this level of production is very
low compared to the City’s need for housing affordable to lower and moderate income
households. That is why the update Housing Element calls for increasing the minimum
number of BMR units from 10% to 15% of the total number of units in new residential
projects.
The revised density bonus program called for in Program H-21 has not yet been
implemented but is being considered under the Zoning Ordinance Update. The City has,
however, adopted a Mobile Home Conversion Ordinance to help preserve the Buena
Vista Mobile Home Park.
Policy H-12: Support agencies and organizations that provide shelter,
housing, and related services to very low-, low-, and moderate-income
households.
Program H-23: Promote legislative changes and funding for programs that
facilitate and subsidize the acquisition, rehabilitation, and operation of
existing rental housing by housing assistance organizations, nonprofit
developers, and for-profit developers.
Program H-24: Use existing agency programs such as Senior Home Repair to
provide rehabilitation assistance to very low- and low-income households.
Program H-25: Support the preservation of existing group homes and
supported living facilities for persons with special housing needs. Assist local
agencies and nonprofit organizations in the construction or rehabilitation of
new facilities for this population.
106 Draft Housing Element Technical Document 1999-2006
Palo Alto continued its efforts to support agencies and organizations that provide
shelter and other services during the 1998-2000 time period. In addition to the
contributions mentioned under Policy-H-11 above, the City also assisted in the
acquisition and rehabilitation of the Palo Alto Gardens and Sheridan Apartments
and the rehabilitation of the Waverly Street House as a transitional housing for 13
homeless people with mental illness. No new home repairs were conducted under
the Senior Home Repair Program between 1998-2000.
Policy H-13: Pursue funding for the construction or rehabilitation of
housing that is affordable to very low-, low-, and moderate-income
households. Support financing techniques such as land banking, federal
and state tax credits, mortgage revenue bonds, and mortgage credit
certificates to subsidize the cost of housing.
Program H-26: Maintain a high priority for the acquisition of new housing
sites, acquisition and rehabilitation of existing housing, and housing-related
services in the allocation of Community Development Block Grant (CDBG)
funds or similar programs.
Program H-27: Support and expand the City’s Housing Development Fund or
successor program.
Program H-28: On an on-going basis, seek funding from state and federal
programs, such as the HOME program and HUD Section 202 and 811 (or
successor programs), to support the development or rehabilitation of housing
for very low-, low-, or moderate-income households.
Program H-29: Continue to require developers of employment-generating
commercial and industrial developments to contribute to the supply of low-
and moderate-income housing.
As described in earlier discussions, the City has used every_ means at its disposal to
pursue funding for the construction or rehabilitation of affordable housing, such as the
use of CDBG funds to help acquire and rehabilitate proiects, such as the Palo Alto
Gardens and Sheridan Apartments. The City will continue to pursue funding of all types
that will help the City maintain or construct affordable housing although the competition
is very_ severe and many of the evaluation criteria used for programs, such as HOME, do
not favor communities like Palo Alto. The City is also aware that it must try_ to generate
its own funding resources to produce housing. In particular, the City has acknowledged
that the funding generated by the commercial and industrial housing in-lieu fee for
projects with impacts on housing has not kept pace with the rapid increase in the demand
for and cost of new housing generated by new employment. The updated Housing
Element calls for an evaluation of and adiustments to the commercial and industrial
housing in-lieu fee to reflect the impact of commercial and industrial development on
housing needs.
Draft Housing Element Technical Document 1999-2006 107
Policy H-14: Encourage the preservation, rehabilitation, and construction
of Single Room Occupancy (SRO) hotels and SRO housing.
The 107 unit Alma Place SRO was constructed in Palo Alto in 1998 and is evidence
of the City’s continued commitment to create and preserve SRO housing
opportunities. The facility is designed to serve very low- income persons.
Policy H-15: Support opportunities for Shared Housing and other
innovative housing forms to promote diversity and meet the needs of
different household types and income levels.
To date, the City has not developed any new policies or programs to support Shared
Housing. This issue will, however, be considered during the Zoning Ordinance Update
currently underway.
Policy H-16: Support housing that incorporates facilities and services to
meet the health care, transit, or social service needs of households with
special needs, including seniors and persons with disabilities.
Policy H-17: Support family housing that addresses resident needs for child
care, youth services, recreation opportunities and access to transit.
During 1998-2000, the City assisted in the acquisition, preservation and rehabilitation of
the Palo Alto Gardens Apartments and the Sheridan Apartments both of which provide
housing for seniors. Palo Alto Gardens also contains units for families. The City also
contributed to the rehabilitation of the water system of the Arastradero Park Apartments,
which serves 66 families. Since there are not many housing projects that incorporate
facilities and services that might be needed by their residents, the City has used its funds
to improve community facilities that are likely to be used by those occupying affordable
housing projects throughout the City. City funds have been used to improve Rinconada
Park to make it more accessible to people with disabilities and to provide playground
equipment and play area renovations for the Peninsula Children’s Center, which serves
children with emotional and behavioral disabilities. Repairs have been made to the
Ventura Community Center, which serves a low-income area. Improvements have also
been made to the Community Association for Rehabilitation/Swim Center, which
provides warm water therapeutic swim opportunities for seniors and persons with
disabilities. Although the City will continue to support housing that incorporate facilities
and services needed by special populations, it will also continue to provide support for
such facilities outside of housing projects.
Policy H-18: Support legislation, regulatory changes, federal funding,
and local efforts for the permanent preservation of HUD-assisted very
108 Draft Housing Element Technical Document 1999-2006
low- and low-income units at risk of conversion to market rate housing or
loss of federal rental assistance.
The City_ continues to support HUD programs, such as the Section 8 rental assistance
program, and will continue to monitor federal legislation and regulatory_ changes to
determine if and when to take aggressive action to ensure retention of these affordable
housing units.
Policy H-19: Support the provision of emergency shelter, transitional
housing and ancillary services to address homelessness.
As indicated above, the City has participated in supporting homeless shelters and service
facilities in the County as well as allowing smaller temporary_ shelters (Hotel de Zink) in
the City itself. This may not be enough to meet the needs of the homeless in Palo Alto,
which may number as high as 124 people. That is why the updated Housing Element
calls for the City to allow homeless shelters with a conditional use permit in the CS and
CD commercial zoning districts and in the industrial zoning districts.
Policy H-20: Provide leadership in addressing homelessness as a regional
issue.
Policy H-21: Work closely with appropriate agencies in the region to
develop and implement policies and programs relating to homelessness.
Program H-30: Continue to participate in the Santa Clara County Homeless
Collaborative as well as work with adjacent jurisdictions to develop
additional shelter opportunities.
Program H-31: Continue to participate with and support agencies addressing
homelessness.
Palo Alto has continued to actively participate with other jurisdictions in seeking
solutions to the problems of the homeless in Santa Clara County. The City continues to
believe that homelessness is a regional issue and that it must be addressed on that basis.
That is why the City has contributed funds to so many homeless shelters and service
facilities outside of its jurisdiction as well as inside. The City will continue to take a
leadership role and actively participate with other communities to address homelessness.
Policy H-22: Support programs and agencies that seek to eliminate
housing discrimination.
Program H-32: Work with appropriate state and federal agencies to ensure
that fair housing laws are enforced.
Program H-33." Continue to support groups that provide fair housing services,
Draft Housing Element Technical Document 1999-2006 109
such as Mid-Peninsula Citizens for Fair Housing.
Program H-34: Co~ntinue the efforts of the Human Relations Commission to
combat discrimination in rental housing, including mediation of problems
between landlords and tenants.
Program H-35: Continue implementation of the City’s Ordinances prohibiting
discrimination in renting or leasing housing based on age, parenthood,
pregnancy or the potential or actual presence of a minor child
During 4990-9g 2000, the City continued to work towards elimination of discriminatory
activities in all aspects of housing. The City has annually allocated CDBG funds to Mid-
Peninsula Citizens for Fair Housing to provide services to promote fair housing,
including complaint investigation, counseling and advocacy.~...~...~,r~"’:~- ,r.~..... 1. 99~ J°’~, fi~cal
~ ,: ......~ ^^~+: .....+ ........+ +~.~ ~ ....;~. ~,~:n+:~ ~vo~w. F~.c~ Th City 1....e a so
contracts with Proiect Sentinel to provide tenant/landlord information, referral and
mediation services. CDBG funds have been used to support ombudsman activities to
assist with complaints related to elderly residents living in nursing homes in the City.
The City has also sponsored community meetings and forums to discuss the need for
housing for people with special needs and provided publications that helped seniors and
others to access housing. The City intends to continue these types of activities in the
~ ~_.,.1 cmo ~,,,,.,o’~a 1999-2006 time period.
Policy H-23: Reduce the cost of housing by promoting energy efficiency,
resource management, and conservation for new and existing housing.
Program H-36: Continue providing staff support and technical assistance in
energy conservation and demand management to architects, developers, and
utility customers.
The City of Palo Alto is fortunate to own and manage its water, gas, wastewater and
electric utility systems. Conservation of these resources is a high priority for the City.
The City has a full time staff person who provides assistance with water and energy
conservation. The "Residential Energy Auditor" works primarily with existing residential
occupants and helps to evaluate their energy/water use and make recommendations for
more efficient operations. Further, this staff person is available to work with developers
or architects of new construction projects to design energy conservation features during
the planning stages of the project. The City also offers on a promotional basis, programs
that offer rebates for more efficient refrigerators or the use of energy efficient fluorescent
lighting supplies.
In 1993, the City created the Utilities Residential Rate Assistance Program (RAP) to
provide rate relief to residents who lack adequate financial resources to pay utility bills.
110 Draft Housing Element Technical Document 1999-2006
Level of income and disabili _ty are used to determine if a household qualifies for the
program. Qualifying residents currently receive a 20% discount on their utility bills. In
May 2001, the City Council expanded the reach of the RAP to allow three times more
residents to qualify for the program than were allowed previously.
Goals
Draft Housing Element Technical Document 1999-2006 111
Progress in Meeting Previous Housing Needs
ABAG originally proiected that the City of Palo Alto needed to provide sufficient land to
accommodate 1,809 new housing units between 1988 and 1995. This total was revised
downward to 1,597 units for 1990-1995 to account for the City’s housing production for
the years 1988-1990. This revised housin~ need by household income level is described
in the table below and became the housing production goals of the 1998-2003 Housing
Element.
Illustration #26: Palo Alto’s Fair Share of the Re~ion’s Housin~
Need by Income Level, 1990-1998
Household Income Level (% of County Median Income)
Very Low (0-50%)
Low (51-80%)
Moderate (81-120%)
Above Moderate (121% and above)
Total
Number of
Units Needed
338
232
347
680
The table below updates the progress the City made in meeting its fair share of the
region’s housing needs from 1990-1998.
112 Draft Housing Element Technical Document 1999-2006
Illustration #26a: Progress in Meeting Palo Alto’s Fair Share of the Re~ion’s
Housing Need by Income Level~ 1990-1998
Income Level 1990-2003 Need 1990-1998 Unmet Need
Production
Very Low 338 16.__~9 169
Low 232 24 208
Moderate 347 53 294
Above Moderate 68__9_0 384.296
Total 1,597 63._.0.0 967
As can be seen from the table above, between January_ 1, 1990 to December 31, 1998, 630
units were built in the City of Palo Alto, about 39% of the City’s fair share of the region’s
housing need for that period. Of these units, 270 were affordable to very low-, low-, and
moderate income households. This constituted about 27% of the City’s 917 unit
affordable housing need for 1990-2003. The City was more successful in producing units
affordable to households with above moderate incomes and provided 56% of the units
needed for this income level. However, overall production of housing was very low, only
70 units per year, for the 1990-1998 timeframe.
Although significant progress was made in the production of very low-income units with
over half the goal (57%) met (this includes the constructon of the 107 unit Alma Place
SRO and the 24 unit Page Mill Court proiect for the disabled), considerably less progress
was made in the low- and moderate-income categories where, respectively, only 10% and
15% of the need was met. It is clear that City was not very effective at producing
affordable housing during most of the 1990s. This was recognized during the 1998-2010
Comprehensive Plan update and the creation of the 1998-2003 Housing Element in which
a series of policy and program changes were adopted to increase the supply of affordable
housing. Most of these proposed changes, however, have not yet been fully implemented
so the effectiveness of these new policies and programs cannot be completely evaluated.
It should also be noted that other factors beyond the control of the City, such as increases
in land and construction costs, may have also contributed to depressing the production of
affordable housing
The City had more success in preserving only units that were "at risk" of converting to
k ho si g du i g *~ ~ aaa o< ~;~ ~ .........~’~ A ~emar etrate u n r n ...............................raatra ro°--l-
~1998-2000 with the preservation of the 156 unit Palo Alto Gardens
Ap~ments and the 57 units Sheridan Apa~ments. The City assisted in the acquisition of
these units with financial and tec~ical assist~ce and the units continue to be used as
housing affordable to lower income households.
Draft Housing Element Technical Document 1999-2006 113
Effectiveness of 1998-2003 Housing Element and
Implications for t-998 1999-2006 Housing Element
As the information on the previous pages demonstrates, the City of Palo Alto has been
active in encouraging and supporting the development and preservation of housing,
especially affordable housing. From 1990-9-7 2000, there were 4-9 26 "Below Market
Rate" units added to the inventory, 2-0 86 units rehabilitated through the Rental
Rehabilitation Program and 5 units rehabilitated with CDBG assistance. In addition, the
City has assisted with the rehabilitation of the Waverly Street House board and care home
(transitional housing) which is designed to serve 13 homeless people with mental
disabilities. The City assisted non-profit owners in the acquisition and rehabilitation of
xr~.~r. Pal Alt Garde do o ns an
the Sheridan Apartments. Lytton Courtyard and Alma Place SRO were constructed
during this time period. In addition, the City provided considerable technical and
financial support to non-profit agencies providing housing related support services such
as homeless assistance, shared housing, fair housing information and mediation services
and senior home repair programs.
For the 4998-2490g 1999-2006 time frame, the City will continue the basi~ general ,
direction of the -1-990 1998-2003 Housing Element but will place greater emphasis on
increasing the potential supply of affordable housing by increasing densities on some sites
and more aggressively searching for non-residential sites to convert to residential use, or
mixed use with a minimum residential component, through the Housing Opportunities
Study. New construction projects of 3 or more units will continue to be required to
include affordable units/in-lieu fees but at higher rates than previously and the
preservation of existing units will continue to be encouraged and monitored. The City
will continue to support the work of non-profit groups and agencies in providing
affordable housing opportunities. With limited land and development opportunities in the
future, however, the City will review its existing housing programs and ordinances to
ensure that the maximum number of affordable housing opportunities are provided ~
.... ¯ -’-÷~^~ ;’--1:-~’~-"- and new development standards are created that allow the
maximum potential development to occur and, that clarify residential density ranges to
ensure that a minimum level of residential development is achieved and the limited
supply of residential land is used efficiently. The City will place an increased emphasis
on expanding the opportunities for residential development in commercial, industrial or
other areas not traditionally considered, for residential use. The City will continue to
emphasize the importance of maintaining the existing diversity of the housing stock in
terms of rental and multi-family units and in supporting the opportunities for households
of all income levels to have access to affordable housing. A regular monitoring system
will be established to ensure that the Cits, is moving towards meeting its goals.
Commercial and industrial development will be asked to contribute a fair share of its
resources to the production of affordable housing to at least partially offset the impact on
housing demand and costs ~enerated by new jobs.
114 Draft Housing Element Technical Document 1999-2006
The appendix that follows, Appendix A, is a duplication of Chapter 4 of the City’s
Comprehensive Plan for the 1998-2010 time frame. It contains the goals, policies and
programs that specify in more detail the actions that the City will take to achieve the
objectives noted in the paragraph above.
Draft Housing Element Technical Document 1999-2006 115
Appendix Materials
Ao
B.
C.
D.
Eo
Go
Reprint of the Housing Element of the Comprehensive Plan (Chapter 4))
Table of Subsidized Rental Housing Developments
Table of Summary of Below Market Rate (BMR) Units
Table of Housing Units Built and Housing Units with Approved Building Permits, January
1, 1999 - December 31, 2000
Table of Housing Sites Inventory, Potential Residential Development: 1999-2006
Acknowledgements of Resource Persons Contacted During
Preparation of the 1999-2006 Housing Element
Bibliography
Palo Alto/HE Tech Doc Rev/revHETechDoc2
Rev. 1/12/02
116 Draft Housing Element Technical Document 1999-2006
Draft Housing Element Technical Document 1999-2006 117
APPENDIX B ~
Subsidized Rental Housing Developments (Septcmb¢r 2000)
Stevenson House, 455 East Charleston 1968 120 120 Seniors
Pale Alto Gardens, 648 San Antonio Rd.1973/pres.156 156 Families & Seniors (128
1999 units)
Lytton Gardens I, 656 Lytton Ave.1975 218 218 Seniors
Lytton Gardens II, 656 Lytton Ave.1979 100 100 Seniors (50 Independent
Living; ~0 Reseidential Care)
/Sheridan Kpts~360=Shei’idafi-Avo~i ~ : :~ %: ~_~ ~ ~/- _~!979/pi~:f~ J ~57-~~ ~ ~-if ~7~ "-: Seniors:H~eap~ed~
P~e St. Sh~ed Lvg House, 1259 P~e S~eet 1981 1 1 Families
Terman Apts, 655 Arastradero Rd.1985 92 72 Families & Seniors (72
Section 8 units)
Ferne Apts~10!-!3] Ferric Ave.:-:¯¯ ~ ’1~84~-:~ ~-:: 16 :~: :~0~Famfli~s~(6 Secflon:gunits)
Emerson South, 3067 Emerson St.1985 6 6 Small Families/Single Adults
Families (9 Section 8units)
Families (3 Section 8 units)
California Park Apt.,:2301 ParkBlvd. :;:: ?:~=: ::~-1989 ~45/i~,45
Oak Manor Apartments, 630 Los Roblesd 1991 33 23
Families, Hand, capped (i
unit)-
Families (23 Section 8 units)
Plum Tree Apts., 3020 Emdrson St. :~/~~ i991 i’ : ~10 ~ i : f~::10~
Lytton IV (Courtyard), 330 Everett Ave.1994 51 51
Families
Seniors
Barker Hotel, 439 Emerson St. ~ :
Emerson North, 3051-~061 Emerson St.
Emerson Home, 330 Emerson St, ¯
Ventura Apts., 290~310 Ventura Ave.
i994
1994
26 26::~ ~
6 6
12 7
i996
1997
Adults ~/Handicapped (5 units)
Small Families & Seniors (1
Section 8 unit)
Small Families, Handicapped
& Seniors
Families
Alma Place SRO, 753 Alma St.
Page Mill Court, 2700 Ash
1998 107 107 ~
1998 24 24
Single Adults/Handicapped
Adults with Developmental
Disabilities
TOTALS 1,304 1,233
APPENDIX C
Summary of Below Market Rate Program Units (June 2000)
Foothill Green 1975 4
Greenhouse I 1975, 1983, 1987 14
~ =,6reenhoUse)_i
Ch~ing Place 1976 2
Villas de la Pla~s 1978 4
San ~tonio Village 1979 2
Palo Alto Greens 1981 4
Palo Alto Redwoods 2983 12
Birch Coul- BlR 1984 5
Loma Verde Village 1985 4
Cha~ing CouI 1985 1
Abitare 1985 9
Talisman Duplex 1987 2
The Hamlet 1988 6
The Iosewalk 1988 4
Charleston Village 1990 2
73 TLoma~erde (C~istenseh Com~
Camino Place 1992 4
Jacobs Cou~1993 3
Promenade
Evere~ Tow~ome 1997 1
Silve~ood 1999 3
Classics 2000 4
TOTAL OWNERSHIP UNITS 151
Southwood Apartment Homes 1985
l l00 Welch Road Apartments ~ ,:::~]L:1987 = "
Mayfield Apartment - 345 Sheridan 1987
Mayfield Apartment- 345 Sheridan = -. 1987
Montage Apartments 1998
10
9
5
38
TOTAL RENTAL UNITS
APPENDIX D
Housing Units Built and Housing Units with Approved Building Permits,
January 1, 1999 - December 31, 2000
Income Level Project Name/Address Number of
units
Units Built." Jan. 1, 1999- Dec. 31, 2000
Very Low Income Page Mill Court Apartments 24
Subtotal 24
Low Income Stanford West
435 Sheridan
Subtotal
6
3
9
Moderate Income
Subtotal
Silverwood
Classics
Cottages
3
4
4
11
Above Moderate Income
Subtotal
Stanford West
435 Sheridan
Various
54
32
13
103
Total Built Units 143
Units with Approved Building Permits Jan. 1,
1999 -Dec. 31, 2000
Very Low Income
Subtotal
Low Income
Subtotal
Moderate Income
Subtotal
Above Moderate Income
Subtotal
Total Units with Approved Building Permits
Grand Total
Stanford West
Cottages
Stanford West
Various
0
0
57
57
7
7
511
125
643
700
843
Appendix E
Housing Sites Inventory
Sites Zoned, or that are Proposed to be Rezoned,
for Residential Use Prior to 2004
Site No.Site Address Description Existing
Zoning
Proposed
Zoning
Site Size
in Acres
3-01
5-01
5 -02
5-06
5-21
5-28
8-06
8-09(a)
8-09(b)
8-11
8-14
10-02
12-01
12-06
12-07
1101, 1161 Embarcadero;
2080 W. Bayshore
Bryant, Channing &
Ramona
400/430 Forest Ave. at
Waverly St.
800 High St.
657-663 Alma St. (north
comer of Alma st. and
Forest Ave.)
33 & 39 Encina Ave. near
El Camino Real
2650 Birch St. at Sheridan
Ave.
2701 El Camino Real
2755 El Camino Real
E. side Sheridan Ave.
btwn. SPRR and Park
Blvd.
1515 El Camino Real at
Churchill
901 San Antonio Rd.
4102 El Camino Real at
Vista
4219 El Camino Real
4249 E1 Camino Real
Edgewood
Plaza
Oak Court site
CSAA
Office/Surgi
Center
Creamery site
Former Craft
and Floral bldg.
Opportunity
Center
2 vacant lots
and 4 houses
Greenworld
Nursery
VTA Park &
Ride Lot
Underutilized
industrial
bldgs.; portion
of Page Mill
Rd. r.o.w.
Medical Office
Sun
Microsystems
Former
Blockbusters
Hyatt Rickey’s
Hotel
Elk’s Lodge
PC1643
AMF
(Development
Application
Pending)
RM-40
CD-S(P)
CD-C(P)
CD-S(P)
CS
RM-40
RM-40, CN
PF
GM(B)
RM-15
GM
RM-30
CS(H)
TBD
AMF
RM-40
PC
(Application
pending)
Mixed Use
PC
(Application
pending)
RM-40
RM-40 or
Mixed Use
RM-40
RM-40
RM-15
RM-40
RM-30
CS(H)
(Development
application
pending)
RM-30,
RM-15, R-1
4.49
(portion)
1.23
0.98
0.96
0.48
0.25
0.57
0.98
0.48
3.92
0.48
12.92
(portion)
0.65
15.98
(portion)
8.08
Potential
Dwelling
Unit Yield
20-25
53
30-40
60-65
10-12
55
15-20
30-35
15-18
120-150
5-7
25O-30O
10-15
200-300
100-175
Site No.
12-08
12-09
12-11
12-12
-12-15
13-02
Total
Site Address
4315-4329 El Camino
Real
4146 El Camino Real
3445 Alma St.
NE comer Maybell &
Clemo
4131 El Camino Real
525 San Antonio Rd.
Description
Palo Alto
Bowling Alley
Vacant
Alma Plaza
Vacant orchard
and 4 homes
Mostly vacant
site.
Religious day
care center
Existing
Zoning
RM-30, RM-
15, CS
RM-15
PC
R-2, RM-15
CN
R-1(743)
Proposed
Zoning
RM-30- 1.57
ac.; RM-15 -
0.62 ac.
RM-30
PC
(Application
pending)
RM-30 (1.9
ac.); RM-15
(0.6 ac.)
CN (8 Units
in approved
Mixed Use
project)
RM-40
Site Size
in Acres
2.19
0.77
4.21
(portion)
2.51
0.48
2.74
62+
Potential
Dwelling
Unit Yield
30-55
10-20
10-15
35-65
45-85
1.110+
* PTN = Portion of Larger Parcel
d~IAI xopuI
~O~UOAUI
so~!S ~3u!snoH
0
Additional Potential Longterm Housing Sites
Sites Considered Suitable for Future Residential Use
Site No.
4-02
5-03
5-04
5-05
5 -22
5-29
8-01
8-03
8-04
8-05
8-07
8-08
8-10
8-12
8-13
9-01
9-04
9-05
10-01
11-03
12-02
12-04
12-05
12-10
12-13
12-14
12-16
Site Address
285 Quarry Rd.
1093-1095 Channing Ave.
855 El Camino Real
University Ave. Circle area
153 Hamilton Ave.
49 Wells Ave. at Urban Ln.
1795 & 1805 El Camino Real at Park Avenue
N. side El Camino Real btwn. Cambridge &
Sherman Aves.
231 Grant Ave. between Park & Birch
2310-2500 E1 Camino Real (Cambridge/California
area)
S. side Staunton St. btwn. Oxford & College Aves.
2209-2237 E1 Camino Real(east comer of El
Camino Real and College Ave.)
2305-2333 E1 Camino Real (east comer of El
Camino Real and Cambridge Ave.)
2805-2905 El Camino Real (at Page Mill Rd. and
Pepper Ave.)
3001-3017, 3111-3127 El Camino Real (at Olive
and Acacia Aves.)
720-738 Colorado St.; 733-737 San Carlos Ct.
2605 Middlefield Rd. at Moreno
744-752 Colorado St.
3864 Middlefield Rd.
& 525 E. Charleston
611 Hansen Way at El Camino Real
E. comer E1 Camino Real and Curtner
Description
Hoover Pavilion
St. Alberts Church
Town & Country Shop. Center
Intermodal transit Center/Red Cross
Former Fasani Carpets/Turner Martin
Underutilized commercial site
Vacant lot and fast food restaurant
City parking lots
3941/3945 El Camino Real
3981 E1 Camino Real
4035r4043 El Camino Way
4101~4121 El Camino Way (east of East Meadow
Dr.)
4125-4139 El Camino Way (north of James Rd.)
3700, El Camino Real (btwn. Barron Ave. and La
Selva)
4200-4232 El Camino Real
4085 El Camino Way at West Meadow
3505-3783 El Camino Real
4111 & 4161 Alma St.
725 San Antonio Rd. & 4151 Middlefield Rd.
(Woolworth’s Nursery)
687 Arastradero Rd.
County Mental Health Building
2-story commercial structures
Various commercial and office buildings
Various older, underutilized commercial uses
Various older, underutilized commercial uses
Mix ofunderutilized commercial uses
Mix ofunderutilized comm. uses; vehicle
storage
Single-family houses
Former Coop Market
Single-family houses
CAR facility
Varian
Manpower Office; Jiffy Lube; Compadres
Restaurant
Existing motel
Mayflower Motel
Existing home/commercial uses
Small shopping center
Small, older commercial uses
Mix of vacant and marginal commercial uses
12-18 Various commercial/office uses
12-19 Goodwill Store
12-20 Various underutilized commercial uses
13-01 Church and YWCA
13-03 Office uses
15-01 Greenhouse, vacant
Palo Alto/HE Tech Doc Rev/InventoryCCrev
Rev. 1/12/02
APPENDIX F
City Staff.
Resource Persons Contacted
During Preparation of 1999-2006 Housing Element
Julie Caporgno, Department of Planning and Community Environment
Joan Taylor, Department of Planning and Community Environment
Catherine Siegel, Department of Planning and Community Environment
Suzanne Bayley, Department of Planning and Community Environment
Roland Rivera, Department of Planning and Community Environment
Anna Amarato, Department of Planning and-Community Environment
Curtis Williams, Contract Planner
Ad Hoc Technical Advisory Committee
Marlene Prendergast, Executive Director, Palo Alto Housing Corporation
Litsie Indergand, Peninsula Interfaith Action
Edie Keating, Peninsula Interfaith Action
Bonnie Packer, Planning Commission
Sally Probst, League of Women Voters
Jo Ann Acero, Mid-Peninsula Housing
Bob Golton, Palo Alto Unified School District
Tina Allen, Palo Alto Unified School District
Focus Group
Martin Bernstein, Architect
Dave Ahn, Habitat for Humanity
Tony Carrasco, Architect
Steve Blanton, Real Estate Broker
Sunny Dykwel, Real Estate Agent
Dan Dykwel, Real Estate Agent
Laura Ferrell, Contractor
Judith Wasserman, Architect/ARB Member
Drew Maran, Contractor/ARB Member
Vera Goupille, Lytton Gardens Senior Complex
Bill Phillips, Stanford Land Management
David Baker, Architect
Scott Ward, Contractor
APPENDIX G
Bibliography/DataSources
Association of Bay Area Governments (ABAG), Housing Needs Determination, May
2000
Association of Bay Area Governments (ABAG), Projections 2000
Bay Area Economics, MarketAnalysisfor 753 Alma Street, April 21,1995
Bay Area Housing, Blueprint 2001: Housing Element Ideas and Solutions
city of Palo Alto, Consolidated Plan, July 1, 2000 to June 30, 2005
City of Palo Alto, Housing Element of the Comprehensive Plan, 1998-2003
City of Palo Alto, Municipal Code, Chapter 18,1998 Edition
County of Santa Clara, Office of the Homeless Coordinator, 1995 Overview of
Homelessness in Santa Clara County, March 10, 1995
HomeBase, Homelessness in the Bay Area, 1990
Lapkoff & Gobalet Demographic Research, Inc., Demographic Analysis and
Enrollment Forecasts for the Palo Alto Unified School District, December 1992
State of California, Department of Finance, Household and Population Reports, 1980-96
United States, Bureau of the Census, 1970, 1980, 1990 and 2000 U.S. Census
United Way of Santa Clara County, United Way Needs Assessment for Santa Clara
County, 1993-94
Palo Alto/HE Tech Doc Rev/AppendicesRev
Rev. 9/26/01 9:21 AM