HomeMy WebLinkAbout2001-04-02 City Council (11)City of Palo Alto
City Manager’s Report
TO:
FROM:
HONORABLE CITY COUNCIL
CITY MANAGER
8
DEPARTMENT: PLANNING AND
COMMUNITY ENVIRONMENT
DATE:
SUBJECT:
APRIL 2, 2001 CMR: 190:01
REQUEST FOR HOUSING DIRECTION TO SEEK LAND FOR
AFFORDABLE HOUSING
RECOMMENDATION
It is recommended that the City Council authorize the City Manager and staff to identify
potential affordable housing sites for acquisition by the City.
BACKGROUND
In recent months, the lack of housing in the Bay Area and its resultant high cost has been
a dominant issue in the media and a major concern for both employees as well as
businesses. Housing affordability in the Bay Area is at an all time low with recent
estimates indicating only 16 percent of Bay Area households able to afford a median
price home. Palo Alto, unfortunately, has been representative of the Bay Area trend. In
the last four years, the average Palo Alto home has risen in cost from $485~000 to ~lightly
over a million dollars. Particularly vulnerable are those who are unable to afford market-
rate housing, including emergency service providers, teachers, and other service workers
who support our quality of life in Palo Alto.
DISCUSSION
Two goals of the City’s Comprehensive Plan are to provide an adequate supply of
housing and to provide sufficient housing opportunities for a diverse population. Policies
H-10 and H-13 encourage the development of affordable housing in the City, including
pursuing local funding options. Although Palo Alto has strongly supported the provision
of affordable housing through its Comprehensive Plan policies, only limited affordable
housing has actually been developed primarily due to the exorbitant land costs and
limited availability of developable land. The biggest obstacle for most non-profit
developers is. assembling a develo 9able site, given the current market values.
CMR:190:01 Page 1 of 3
Although the City has been very active in promoting and supporting affordable housing,
specifically through the Below MarketRat(’(BMR) and Community Development Block
Grant (CDBG) programs, .the development of affordable housing by non profits has been
limited. The Community Working Group’s assemblage of land for the Opportunity
Center is the only non-profit affordable housing project currently in the planning stages.
This year the City specifically requested family housing project proposals for the City’s
CDBG funding. Other than the proposal from the City requesting funding for
landbanking for future affordable housing sites, .the Community Working Group’s
proposal was the only proposal submitted.
Currently the City. is beginning the process of updating its Housing Element. This update
must be completed and forwarded to the California Department of Housing and
Community Development by December 31, 2001. The Housing Element must identify
how the City will meet its Regional Housing Needs Assessment goal assigned by ABAG
consisting of 1,397 units needed of very low, low, moderate and above moderate housing.
An adequate Housing Element not only fulfills a state mandate, but it offers an
opportunity for the City to initiate new programs, improve plans and build support for
much needed housing. One of the major objectives of the Housing Element update is to
adequately provide for the housing needs of all economic segments of the community.
As part of the update process, the City needs to demonstrate its commitment to providing
housing for all income levels. Of particular importance is the financing, production and
preservation of affordable housing unitsl
The update of the Housing Element represents an opportunity to address the housing
crisis-in a coordinated and meaningful way and to establish community planning
strategies that emphasize "smart growth" principles. Smart growth development patterns
encourage compact, transit-oriented, well-designed housing to accommodate all segments
of the population. Adequate provision of housing is key to sustainable development and
smart growth in the Bay Area. As part of the Comprehensive Plan, the Housing Element
should articulate a local framework for smart growth and the provision of affordable
housing, focusing cornnaunity attention and energy on these critical areas of need. In
addition, at the City Council’s recent retreat on February 21, 2001, the Council included
an emphasis on affordable housing as a critical issue to be addressed in the next few
years.
Since 1999, the economic strength of the technology industry in Palo Alto has
significantly exacerbated a local as well as regional jobs/housing imbalance, thereby
. creating additional pressure for ttie provision of housing in Palo Alto. Currently Palo
Alto has a jobs/housing imbalance that exceeds 2.4:1. It is estimated that in the last three
years Palo Alto has added ten jobs for every new housing unit constructed. In order to
accommodate Palo Alto’s existing work force, the City would have to more that double
its existing housing stock.
CMR:190:01 Page 2 of 3
In trying to identify potential sites for affordable housing, staff would focus our attention
on possible locations along ourtransportation corridors.-Possible funding sources for
acquiring housing sites include our existing as well as future housing development funds
and CDBG monies. Another source is the Housing Trust Fund of Santa Clara County.
(The city is one of the major public sector contributors to the Trust Fund.) The focus of
the Housing Trust is to help finance the acquisition of sites for affordable housing. Once
a site is acquired, the City would likely work with a non-profit housing developer to
.design and construct any housing.
CITY MANAGER APPROVAL:
City Manager
CMR: 190:01 Page 3 of 3