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Home My WebLink AboutStaff Report 2603-6132CITY OF PALO ALTO CITY COUNCIL Special Meeting Monday, May 04, 2026 Council Chambers & Hybrid 5:30 PM Agenda Item 14.Receive Update and Provide Direction to Staff on the Implementation of Senate Bill 79 (SB 79) and Work Related to the Downtown Housing Plan. CEQA Status: Exempt Under CEQA Guidelines Section 15262. Public Comments, Staff Presentation 9 2 8 4 City Council Staff Report From: City Manager Report Type: ACTION ITEMS Lead Department: Planning and Development Services Meeting Date: May 4, 2026 Report #:2603-6132 TITLE Receive Update and Provide Direction to Staff on the Implementation of Senate Bill 79 (SB 79) and Work Related to the Downtown Housing Plan. CEQA Status: Exempt Under CEQA Guidelines Section 15262. RECOMMENDATION Staff and the SB 79 / Downtown Housing Plan Ad Hoc recommend that the City Council: 1. Direct staff to prepare an emergency ordinance, for adoption prior to July 1, 2026, excluding from SB 79 development standards all sites containing historic resources designated on the City's local register as of January 1, 2025, effective through one year following adoption of the City's 7th cycle housing element (estimated January 31, 2032). 2. Direct staff to prepare an ordinance or emergency ordinance increasing allowable development capacity on eligible sites within one-half mile of a qualifying transit stop to at least fifty percent (50%) of SB 79's applicable density and FAR standards, and simultaneously exempting those sites from SB 79 development standards, effective through one year following adoption of the City's 7th cycle housing element (estimated January 31, 2032); and, 3.Direct staff to continue work to advance and complete the Downtown Housing Plan and amend the scope of work as appropriate to take into consideration implementation of SB 79. EXECUTIVE SUMMARY This item was originally scheduled as an Action Item for the March 9, 2026, City Council meeting and was rescheduled to the May 4, 2026, City Council meeting. 9 2 8 4 SB 79 will take effect on July 1, 2026. The legislation is intended to facilitate the upzoning of land located in proximity to qualifying transit stations, thereby promoting transit-oriented development through the establishment of new minimum standards for building height, residential density, and floor area. BACKGROUND 1 staff provided the City Council an update on the Downtown Housing Plan and an overview of SB 79 and requested direction on the implementation of the State law. The classification of qualifying transit stops, and key statutory provisions discussed in that report are highlighted below: Distance from Pedestrian Access Point to a TOD Stop Tier 1 TOD Stop (Caltrain)Development Standard Up to ¼-mile Up to ½-mile “Adjacent” (within 200’) Bonus Height, Density, and Residential FAR Height2 Density Residential Floor Area Ratio (FAR) 1 October 22, 2025 City Council Staff Report https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=18007 2 Note that a qualifying project may use the standards in SB 79 as its base density under state density bonus law; however, if the project exceeds the City’s height limit due to the provisions of SB 79, the City is not required to grant an additional height waiver. 9 2 8 4 The City Council appointed a SB 79 / Downtown Housing Plan Ad Hoc (Councilmembers Burt and Lauing) to further evaluate the implications of SB 79. Staff met with the Ad Hoc Committee three times (January 27th, March 25th, and on April 21st) since it was formed and presented information of areas affected by SB 79, projected residential development, and policy options for Council consideration. ANALYSIS SB 79 implementation is limited to sites that meet specific statutory eligibility criteria, including applicable zoning designations and proximity to qualifying transit stops (Attachment A). Metropolitan Transportation Commission (MTC), the region’s designated Metropolitan Planning Organization, is required to prepare and publish official maps identifying applicable TOD zone boundaries. Staff has seen preliminary drafts5 that are generally aligned with staff expectations. On March 20, 2026, HCD issued an advisory memorandum providing clarifications on key SB 79 definitions to assist the state's Metropolitan Planning Organizations in completing their required transit stop mapping prior to the law's July 1, 2026, effective date. The advisory establishes HCD's interpretive positions on critical terms including transit stop tiers, qualifying service types, and distance measurement methodology, and confirms that SB 79 will take effect in seven California counties, including Alameda, Los Angeles, Sacramento, San Francisco, San Mateo, Santa Clara, and San Diego. Attachment A of this report is staff’s analysis of SB 79 TOD zones and eligible parcels within the City. These maps closely align with the draft maps available on MTC’s webpage and is subject to revision upon release of the official maps by MTC. The analysis discussed was presented to the City Council’s Ad Hoc Committee. A summary of the key takeaways from the analysis is provided below. Key Takeaways SB 79 significantly reshapes development near transit: SB 79 establishes state-mandated minimums for height, density, and FAR on qualifying parcels near Caltrain stations, substantially limiting the City’s discretion under existing zoning and adopted planning frameworks. Cities can adopt an Ordinance temporarily exempting sites that are: within a Very High Fire Hazard Severity Zone, subject to Flooding, are Historic Resources listed in the local register, or that are zoned for high density residential use providing at least 50% of the capacity required by SB 79. 5 https://experience.arcgis.com/experience/934f95609d6b45c5be0f8f0030c01436?draft=true 9 2 8 4 Downtown Housing Plan Scope Is Smaller Than SB 79 Impact Area: While the University Avenue/Downtown Priority Development Area encompasses approximately 206 acres, the Downtown Housing Plan covers only 76 acres. In contrast, SB 79 affects a much larger area; approximately 325.23 acres, around the Downtown/University Avenue Caltrain Station. This includes the Downtown Housing Plan area, South of Forest Avenue (SOFA) areas, the transit center, and Stanford Shopping Center. Historic resources require consideration: Downtown Palo Alto and the San Antonio Road area contain a high concentration of historic properties or properties within historic districts. SB 79 includes limited provisions for the protection of historic resources. The City is allowed to adopt an ordinance to temporarily ensure these resources are protected. Ongoing protection is achievable only by adopting, prior to January 31, 2032, a TOD Alternative Plan; even then, protected historic resources cannot exceed 10% of the area of a TOD zone. SB 79 currently does not provide express guidance on the treatment of historic districts, but it appears that a local ordinance may protect historic districts in addition to individual historic structures. This is subject to change with additional guidance from HCD. Small parcel sizes limit realistic redevelopment potential: Feasibility analysis indicates that parcels smaller than approximately 5,200 square feet are less likely to redevelop, unless multiple parcels are combined. This reduces development potential particularly in the Downtown/University Avenue area, limiting the number of sites that can realistically take advantage of SB 79 standards. Historically, there has been little interest for lot consolidation in Palo Alto, even with development incentives. Redevelopment is likely to occur on a limited subset of eligible land: 9 2 8 4 Downtown/University Avenue Transit Station Area: Approximately 163 acres California Avenue Transit Station Area: Approximately 222 acres San Antonio Transit Station Area: Approximately 32 acres Further discounting is necessary, however, because redevelopment is costly and carries risk for developers. Many property owners will be satisfied leaving their properties as-is despite the potential for increased housing development. Staff anticipates that the vast majority of single-family homeowners are unlikely to pursue apartment buildings on their property, though some may choose to do so. A review of development activity over the past 25 years shows that only ten percent of all parcels were redeveloped, with exceedingly few single- family zoned properties converting to multifamily housing. Applying a ten percent redevelopment factor consistent with this historical activity, and a one percent factor for single-family zoned property, staff can estimate a theoretical range of future housing production from SB 79 for each transit station area over the next 25 years. These figures are not a projection or formal estimate; they are simply a calculation based on screening criteria and existing baseline data and are subject to numerous variables that cannot be fully accounted for through this type of screening-level analysis. Downtown/University Avenue Transit Station Area: Approximately 1600 units California Avenue Transit Station Area: Approximately 900 units San Antonio Transit Station Area: Approximately 200 units The above analysis does not account for recent changes to state law that promote greater development potential including exemptions to the California Environmental Quality Act, allowances for taller buildings, greater floor area, reduced parking requirements, and state density bonus concessions and waivers and application streamlining. These measures add greater predictability to the development process and may encourage additional property owners to consider redevelopment. During discussions with the Council Ad Hoc Committee, it was recognized that the city can reasonably anticipate greater housing production over the next 25 years than it has experienced historically, due in large part to state mandates promoting increased housing production. In reviewing projected housing demand, the Ad Hoc considered a realistic capacity up to 20% increase – a potential doubling of the initial staff estimate. California Avenue faces the greatest zoning shift: The California Avenue SB 79 area contains a substantial proportion of single-family zoned property, including larger 10,000 square foot lots in the Old Palo Alto neighborhood that would not require land consolidation to support apartment development. New construction 9 2 8 4 built to SB 79 standards may appear contextually inconsistent with the historic development pattern northeast of the Caltrain station. The commercial areas along and near California Avenue have seen little significant redevelopment in recent years, due in part to small lot sizes and the former requirement for on-site parking, both of which made redevelopment economically impractical. The interaction of SB 79 with other state laws could catalyze future housing or mixed-use development, with uncertain implications for the area's retail environment. New development may also lack coordinated design or placemaking, with larger parcels likely proving more attractive for redevelopment than smaller ones. San Antonio Road area raises unique historic district uncertainties: San Antonio Road area includes large concentrations of Eichler homes and a designated historic district. SB 79’s treatment of historic districts, where individual properties are not separately listed, may be the subject of additional guidance from HCD. Because exclusion of historic sites is limited to 10% of TOD land area after January 31, 2032, not all historic sites can be protected in the long term. The Economic Feasibility Analysis prepared for the Downtown Housing Plan remains relevant: While SB 79 provides development opportunities to owners of qualifying properties, the feasibility of such projects depends on market conditions, broader market trends, site constraints, competing uses, impact fees, and inclusionary housing requirements. This is outlined in the Economic Feasibility Analysis prepared for the Downtown Housing Plan, which was included as Attachment A to the October 22, 2025, City Council Staff Report.7 State Density Bonus Law: SB 79 projects are eligible to use State Density Bonus Law to seek a density bonus, incentives or concessions, waivers or reductions for development standards and parking ratios.8 The density allowed under SB 79 serves as the base density for calculating the density bonus. However, a project proposing a height allowed by SB 79 that is more than the local height limit is ineligible for a waiver for additional height beyond that specified in SB 79. This does not apply for 100% affordable projects located within one-half mile of a major transit stop. 7 October 22, 2025 City Council Staff Report: https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=18007 8 https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=65915&lawCode=GOV 9 2 8 4 Assembly Bill (AB) 130 (2025): AB 130 (2025)11 significantly streamlines housing development approvals in urban communities by creating a new statutory exemption from CEQA for qualifying infill residential projects. This means that qualifying residential or mixed-use infill projects (generally up to 20 acres) that are consistent with either applicable Comprehensive Plan or zoning regulations (as modified by SB 79 and/or state density bonus law) could bypass CEQA review entirely, with an accelerated permitting timeline. The exemption applies to projects meeting minimum density thresholds, and site qualifications (i.e., not located in floodplains, fault zones, wetlands, or very high fire severity zones, not a hazardous waste site, and not demolishing a historic structure). AB 130 amends the Permit Streamlining Act by imposing strict timelines for City review and approval. If the City does not act within 30 days following its objective standards review and the required tribal consultation, a project may be deemed automatically approved. This substantially reduces staff’s ability to present projects for review by the ARB, PTC, or City Council. Developers must comply with the new labor standards for 100% affordable housing projects and buildings over 85 feet in height, meet air quality requirements, and perform contamination cleanup as appropriate. The law does not alter State Density Bonus Law provisions, including waivers and parking reductions. This means that in addition to the increased FAR permitted under SB 79, developers could seek to waive maximum lot size limitations in residential zones, setbacks, open space requirements, site coverage, daylight plane requirements, or even retail preservation requirements through the State Density Bonus Law. Assembly Bill (AB) 2576 (2026): AB 2576 (Harabedian), currently under consideration in the California Legislature, proposes amendments to the provisions of SB 79. As currently drafted, AB 2576 would expand the definition of eligible historic resources to expressly include resources in the local and State registers. Additionally, it would remove the existing limitation that restricts the exclusion of historic resource sites to no more than 10 percent of the total TOD zone area. At the time of this report, AB 2576 remains pending in the State Legislature and has not been enacted. Other bills under consideration during this legislative session that would amend SB 79 do not have any impact to Palo Alto at this time but could be further amended before this session ends. 11 https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202520260AB130 9 2 8 4 Assembly Bill (AB) 2097 (2022): AB 2097 (2022)13 eliminates minimum parking requirements for new development (residential, commercial, and most other uses) located within one-half mile of high-quality transit service (i.e., major transit stops such as the Caltrain Station). This essentially prohibits local governments from enforcing minimum parking requirements for qualifying projects. In Palo Alto, the State law is applicable to all properties that lie within one-half mile radius of the University Avenue, California Avenue, and San Antonio Road Caltrain Stations. SB 79 Implementation Options: On January 27, 2026, staff presented four potential approaches to implementing SB 79 to the Ad Hoc, each reflecting varying levels of effort and scope. These approaches considered: Existing and ongoing planning initiatives; Anticipated additional workload and its potential impact on City Council priorities for the current year; Expected near term planning initiatives; Staff capacity and available resources; Fiscal implications; Opportunities for community engagement; and Review and approval timeline established by HCD pursuant to the state law. While all four approaches advance the State’s pro-housing objectives, they differ in the degree to which the City exercises local control. The City may choose to allow SB 79 to preempt local codes, adopt an ordinance clarifying how SB 79 applies locally, including exclusion of historic properties, adopt an ordinance upzoning and temporarily exempting non-historic parcels in the TOD zones, and/or prepare a Transit-Oriented Development (TOD) Alternative Plan, based on the considerations outlined above. Both an upzoning ordinance and a TOD Alternative Plan may require environmental assessment and are subject to HCD review. In addition, the Ad Hoc reviewed options related to the Downtown Housing Plan and consideration of whether this effort should continue in light of SB 79 broader reach over the Downtown area. Discontinuing work on the Downtown Housing Plan would not require the City to return MTC grant funds that have already been paid to the City. Four SB 79 implementation approaches are listed below. The Ad Hoc recommends a combination of Approach 2 and 3 below. 13 https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220AB2097 9 2 8 4 Approach 1: No action on SB 79 Under this approach, the default development standards established by SB 79 would take effect on July 1, 2026, for all qualifying TOD zones. This approach requires no action by the City and no review by HCD, resulting in automatic compliance with State law. However, it provides the least amount of local control and community input and does not protect historic resources. Approach 2: Adopt a Local Implementing Ordinance / Protect Historic Resources Under this approach, the default SB 79 standards would still take effect on July 1, 2026, but the City would adopt an ordinance clarifying the application of SB 79 locally and identify sites that are exempt. This approach provides additional local control and community input and allows for the temporary exemption of historic resources. Adoption of the ordinance would be subject to HCD review. If this option were selected, staff would return before July 1, 2026, with an emergency ordinance on the consent calendar and follow up with formal adoption through the Planning and Transportation Commission (PTC) and City Council later in the year. Approach 3: Rezone all TOD eligible sites to allow 50 percent of the SB 79 development potential Pursuant to Government Code Section 65912.161(b), sites can be exempted from SB 79 default standards through January 31, 2032, if they allow at least 50 percent of SB 79 base density standards. Under this approach, the City would amend the zoning to allow TOD-eligible sites to meet this 50% threshold standard and subsequently exempt those sites from SB 79 until January 31, 2032. This option provides the city approximately six years to consider advancing a TOD Alternative Plan to address future housing production and plan for infrastructure upgrades in anticipation of future growth. The cities of Los Angeles and San Francisco are both reportedly exploring this option.15 Staff is evaluating the environmental review needs for this approach, which may delay ordinance adoption. Any ordinance exempting sites would also be subject to post- adoption HCD review and approval. Given the uncertainty about the timeline, there may be an interim period during which SB 79 default standards would apply until the rezoning becomes effective. Approach 4: Prepare a TOD Alternative Plan Under this approach, the default SB 79 standards would take effect on July 1, 2026, while the City concurrently prepares a TOD Alternative Plan applicable to all TOD zones. The TOD Alternative Plan could include targeted development standards, infrastructure 15 Cal Matters article, dated April 15, 2026: https://calmatters.org/housing/2026/04/sb-79-implementation/ 9 2 8 4 planning, and a structured community outreach process. Adoption of a TOD Alternative Plan would render planning efforts such as the Downtown Housing Plan redundant and may overlap to some degree with other work related to Housing Element Program 3.7: Objective Design Standards for the SOFA area. The approach, however, provides greater local control and public input, but would require several hundred thousand dollars for consultant work and significant staff resources, both of which are currently unaccounted for and resourced. The TOD Alternative Plan would be subject to HCD review and approval. Options for the Downtown Housing Plan: As noted above, continuing with the Downtown Housing Plan with SB 79 Implementation Approach 4 is not recommended, but remains an option for the other approaches. The Council Ad Hoc recommends Option B to continue work on the Downtown Housing Plan. Option A: Refocus the Downtown Housing Plan on Development Standards: Redirect the Downtown Housing Plan effort toward developing objective standards for the downtown area and exploring lot consolidation opportunities. This option would produce updated development standards but not a completed area plan policy document. It utilizes existing grant funding productively; supports future objective standards for SOFA II; allows for nuanced solutions addressing small lot sizes and other downtown constraints. Option B: Resume and Complete the Downtown Housing Plan: Resume the full Downtown Housing Plan effort, modeling the plan on SB 79 standards while addressing other local considerations. This option results in a completed area plan policy document. Option C: Discontinue the Downtown Housing Plan: Discontinue work on the Downtown Housing Plan, recognizing that SB 79 largely establishes development potential for the area. This approach recaptures approximately $378K to the General Fund. Not recommended in part due to concerns expressed about San Antonio Area Plan and increased housing production in that area but also has reputational considerations that may impact future funding opportunities. NEXT STEPS The Ad Hoc Committee recommends that the City Council take a phased implementation strategy that balances compliance with the State law and preservation of local planning objectives, while allowing the city additional time to evaluate whether preparation of a TOD Alternative Plan is warranted. Under this framework, the city would: 9 2 8 4 Prepare an emergency ordinance, for adoption prior to July 1, 2026, excluding from SB 79 development standards all sites containing historic resources designated on the City's local register as of January 1, 2025, effective through one year following adoption of the City's 7th cycle housing element (estimated January 31, 2032). Prepare an ordinance increasing allowable development capacity on eligible sites within one-half mile of a qualifying transit stop to at least fifty percent (50%) of SB 79's applicable density and FAR standards, and simultaneously exempting those sites from SB 79 development standards, effective through one year following adoption of the City's 7th cycle housing element (estimated January 31, 2032); and, Continue work to advance and complete the Downtown Housing Plan and amend the scope of work as appropriate to take into consideration implementation of SB 79. Based on Council recommendation, staff will proceed with implementation efforts for SB 79 and the required environmental analysis. For Approach 4, staff would need to return to Council with a scope of work and cost estimate before seeking consultant solicitation for the planning and environmental work. For Approaches 1-3 staff will engage the Council Ad Hoc as necessary. Based on guidance for the Downtown Housing Plan – if the initiative continues, staff will engage the Council Ad Hoc throughout the remainder of the year to strategize on continued analysis and community engagement and strive to complete the project, likely in 2027. FISCAL/RESOURCE IMPACT Fiscal and resource impacts will vary based on Council direction and the associated level of effort. Approaches 1 and 2 would not result in additional fiscal nor resource impacts. Approach 3 may require preparation of an environmental analysis, necessitating consultant support and associated costs. However, these costs are not expected to exceed existing funding available within the department’s budget. If Council directs staff to pursue Approach 4, staff will return with a detailed scope of work and cost estimate. Preliminary estimates indicate that the effort would cost approximately $500,000 in additional funds beyond those already allocated for the Downtown Housing Plan, including the grant funding from MTC. STAKEHOLDER ENGAGEMENT Staff and the members of the Ad Hoc Committee met with Senator Josh Becker and Assemblymember Marc Berman, to discuss the implications of SB 79 as it relates to the City of Palo Alto. 9 2 8 4 Notably, SB 79 is intended as a streamlining mechanism to accelerate housing production near transit, its implementation includes requirements for broader community engagement and public input, including public hearings, if a local agency chooses to prepare a TOD Alternative Plan. While no public engagement is required if the city takes no action on SB 79 (Approach 1), Approaches 2, 3, and 4 would each involve varying levels of public engagement. ENVIRONMENTAL REVIEW ATTACHMENTS APPROVED BY: From:Michael Regula Cc:Planning Commission Subject:Agenda Item 14: Support Housing Near the CalTrain CAUTION: This email originated from outside of the organization. Be cautious This message needs your attention This is a personal email address. i Mark Safe Report Powered by Mimecast Hello Palo Alto City Council, My name is Mike Regula and I live in University South neighborhood. SB 79 will have a significant impact on the neighborhood that I live in for the better. My wife It excites me that more people will be able to contribute to our community in the same way. Please implement SB 79 in good faith to promote the most homes possible around our Caltrain SB 79 presents a unique opportunity to meet our housing goals, promote affordability, and Cheers, Mike Regula From:Rob Nielsen Cc:Planning Commission Subject:Agenda Item 14: [INSERT SUBJECT HERE ABOUT SUPPORT FOR SB 79] CAUTION: This email originated from outside of the organization. Be cautious This message needs your attention This is a personal email address. i Mark Safe Report Powered by Mimecast Dear Mayor Venker and other Palo Alto City Council members, I am Rob Nielsen and I live in Midtown. I am writing to urge you to implement SB 79 Focusing housing near transit is particularly beneficial as it makes the best of transit Rob Nielsen From:William M. Conlon Cc:Planning Commission Subject:Agenda Item 14: Support for Emergency Ordinances CAUTION: This email originated from outside of the organization. Be cautious of opening attachments and clicking Hello Palo Alto city council, my name is Bill Conlon, and I have lived in Old Palo Alto for 42 years. SB79 provides for housing density of 100 dwelling units per acre within 1/2 mile of the California Avenue train YIMBY advocates argue that existing residents will benefit from higher land values while arguing the contradiction Moreover, it is ironic that SB79 prioritizes housing in the immediate vicinity of the Caltrain stations, apparently to In considering options, I urge the council and staff to consider the long-term implications of SB79 on our Bill Conlon From:Deborah Goldeen epna-discuss@googlegroups.com I expect most people who know me have noticed, by now, the for sale/open house sign in front of my house (2130 Palo Alto does not need more low income/charity housing. Even more so, it does not need more luxury housing. SB79 should have allowed us to do this. But no. The state gatve cities an opportunity to get ahead of the game and Our new house isn’t very far away. Ironically, it’s still, technically, in Palo Alto. The house is new to us, but it is not What to do about SB79 is item 14 on city council agenda tomorrow (Monday, May 4th). If you are contemplating Palo Alto likes to pride itself on its humanitarian/environmentally conscious values. When I was growing up here in God only knows what is going to be built on 2130 Birch St. now. What happens to that property now is out of our Even though this long email, which most won’t read to the end, I have included a link to a an excellent OWN Real Wishing you all the best and see you at the farmers market - Deborah Goldeen From:Barb V Cc:Planning Commission Subject:Agenda Item 14: support for housing near transit and SB79 CAUTION: This email originated from outside of the organization. Be cautious This message needs your attention This is a personal email address. i Mark Safe Report Powered by Mimecast Hello Palo Alto city council, my name is Barb Voss and I live in Palo Alto Redwoods (4250 Please implement SB 79 in good faith to promote the most homes possible around our Caltrain Please also prioritize affordable and accessible housing near transit hubs. I am a locally- Although I am currently able to drive, many people with disabilities are not. It's critically SB 79 presents a unique opportunity to meet our housing goals, promote affordability, and Barb Voss, 4250 El Camino Real C221, Palo Alto CA 94306 From:Steve Pierce To:Council, City Cc:Lait, Jonathan Subject:SB 79 Revised Exhibit CAUTION: This email originated from outside of the organization. Be cautious This message could be suspicious The sender's email address couldn't be verified. ! Mark Safe Report Powered by Mimecast Dear Council Members, The attached color version of Exhibit A [to the letter sent on Friday May 1, also attached] This common lotting pattern supports my request that SB 79 units be permitted on parcels with It is critical that we maximize the opportunities for new housing. Thank you for your consideration. Date: May 1, 2026 To: Members of the City Council RE: SB 79, Item #14, Meting May 4, 2026 Should the Council decide to exclude sites containing historic resource from SB 79 In areas such as Downtown North where there are extensive areas zoned R-2 and RM By way of example, the property at 177 Bryant is a Category 4 historic home located Our historic homes are a community resource and if they are preserved, From:slevy@ccsce.com Cc:Lait, Jonathan; Knight, Julia; Armer, Jennifer CAUTION: This email originated from outside of the organization. Be cautious This message could be suspicious The sender's email address couldn't be verified. ! Mark Safe Report Powered by Mimecast Dear Mayor Veenker and council members, 1) Select option 4 and ask staff to develop an Alternative TOD plan to meet SB 79 and city 2) Direct staff to continue developing and expand the Downtown Housing Plan to include Explanation Option 4 the development of an alternative TOD plan to meet the SB 79 goals meets the the most local control consistent with continuing to promote our Housing Element goals and By allowing the SB 79 density to be moved around, it maximizes the location of new In particular, option 4 could support new housing in the broader downtown area, which is In addition, option 4 is also the only option that truly minimizes the impacts on R1 And option 4 can include option 2 by exempting historic sites to the extent allowed by SB 79 In contrast option 3 will, as I understand it, allow townhomes and small apartments in R1 of the SB 79 density. I hope staff will show members and the public pictures of the housing that will be allowed I hope the council has time and energy to help staff move forward on the Downtown As it exists, it includes only the least likely parcels to site housing and faces challenges I suggest a broader definition including the SOFA and parts of University South and North. 660 University, 332 Forest and the townhome proposal on Webster are all outside the I favor an area from Everett to Homer or the north side of Channing and extending to I support the ULI study findings about the potential on lands near the transit center and Whatever else council chooses, please include these sites in the housing inventory update As a downtown resident, I believe our area is well suited for more housing and it is time to Stephen Levy From:Adam Schwartz Cc:Planning Commission Subject:Agenda Item 14: please fully implement SB 79 to build new homes CAUTION: This email originated from outside of the organization. Be cautious Hi Palo Alto city council: Greetings, my name is Adam Schwartz, and I have lived in Palo Alto for a I particularly hope the council will either (1) allow SB 79 to go into effect The local and state issue I care about the most is building new homes in our beautiful city and Our city's implementation of SB 79 is a great opportunity to do this. Let's take this chance to Sincerely, Adam Schwartz From:Ken Novak Cc:Planning Commission CAUTION: This email originated from outside of the organization. Be cautious This message needs your attention Some Recipients have never replied to this person. This is a personal email address.i Mark Safe Report Powered by Mimecast Hello , I’m writing to urge you to implement SB 79 in good faith to maximize housing near our I encourage the council to either allow SB 79 to take effect as written or adopt a local SB 79 offers a rare chance to align housing growth with transit access. I urge you to take full Ken Novak 1644 Channing Ave, Palo Alto, Ca 94303 From:Gia Pham Subject:Item 14 on 5/04/26: SB 79 Public Comment CAUTION: This email originated from outside of the organization. Be cautious This message needs your attention This is their first email to your company. i Mark Safe Report Powered by Mimecast Dear Palo Alto City Council, I am a resident of Palo Alto living at the Stanford Apartments in Alma Village on Alma SB 79 will have a significant impact on cities across California, and that impact will largely It is important that Palo Alto’s approach reflects long-term priorities that support a thriving Maximize Housing Near Stuff Those with Disabilities In my work with individuals with developmental disabilities, I see daily how essential Myself I have also experienced the value of living near transit and services personally Someone I know I also live with someone who relies entirely on biking and does not own a car, which Because of this, I strongly believe housing should be prioritized/maximized in locations Preserve Historic Sites Beyond transportation, I value Palo Alto’s cultural and community assets that Therefore, Palo Alto should move forward with a Transit-Oriented Development Thank you for your time and consideration. I urge the City Council to prioritize policies that Warm Regards, From:Steven Atneosen Cc:Planning Commission Subject:Agenda Item 14: We support SB 79 CAUTION: This email originated from outside of the organization. Be cautious We live in the College Terrace neighborhood and most recently, Crescent Park. Please implement SB 79 in good faith to promote the most homes possible around our We care deeply about housing near transit because it is one of the most practical, equitable, More importantly, this is an opportunity to bring Palo Alto fully into the 21st century. All By embracing SB 79 and focusing growth around transit, the City can help create vibrant, SB 79 presents a unique opportunity to meet our housing goals, promote affordability, and Steven Atneosen and Caroline Dahllof Steven Atneosen From:Reid Kleckner Cc:Planning Commission Subject:Agenda Item 14: Housing is the cornerstone of prosperity CAUTION: This email originated from outside of the organization. Be cautious This message needs your attention This is a personal email address. i Mark Safe Report Powered by Mimecast Hello Palo Alto city council, my name is Reid Kleckner and I live in Midtown. Please implement SB 79 in good faith to promote the most homes possible around our Caltrain In particular, the California Avenue district could use more homes. It is ideally located next to A bakery, GK Pastry, recently opened on Park Ave, but declined to renew its lease after a few SB 79 presents a unique opportunity to meet our housing goals, promote affordability, and From:Steve Pierce To:Council, City Cc:Lait, Jonathan Subject:Item #14 SB 79 CAUTION: This email originated from outside of the organization. Be cautious This message could be suspicious The sender's email address couldn't be verified. ! Mark Safe Report Powered by Mimecast Date: May 1, 2026 RE: SB 79, Item #14, Meting May 4, 2026 Should the Council decide to exclude sites containing historic resource from SB 79 In areas such as Downtown North where there are extensive areas zoned R-2 and RM By way of example, the property at 177 Bryant is a Category 4 historic home located on the Our historic homes are a community resource and if they are preserved, development of From:Russell Siegelman Cc:Planning Commission Subject:Agenda Item 14: I strongly support SB 79 - please implement it in Palo Alto! CAUTION: This email originated from outside of the organization. Be cautious This message needs your attention This is a personal email address. This is their first email to your company.i Mark Safe Report Powered by Mimecast Hello Palo Alto city council, my name is Russell Siegelman and I live at 244 Santa Rita Av. Please implement SB 79 in good faith to promote the most homes possible around our Caltrain I want more housing, more rental housing and more affordable housing in Palo Alto. We need There is a significant multi-family project proposed on the site of Molly Stone’s grocery store SB 79 presents a unique opportunity to meet our housing goals, promote affordability, and increase transit access--if we take advantage of it. Please make sure we do! Russell Siegelman From:dgoldeen@icloud.com Cc:City Mgr; Council, City CAUTION: This email originated from outside of the organization. Be cautious of opening attachments and clicking Mr. Jonathan Lait - Nice work! I’ve read a lot of staff reports. This one was really well done, and on such an important topic. From:David Ball Cc:Planning Commission CAUTION: This email originated from outside of the organization. Be cautious This message needs your attention This is a personal email address. This is their first mail to some recipients.i Mark Safe Report Powered by Mimecast Hello Palo Alto city council, my name is David Ball and I live in Evergreen Park. SB 79 is really important to provide affordable housing and to cut down on greenhouse gases SB 79 presents a unique opportunity to meet our housing goals, promote affordability, and From:Jaime Bayan Cc:Planning Commission Subject:Agenda Item 14: SUPPORT FOR SB 79] CAUTION: This email originated from outside of the organization. Be cautious This message needs your attention No employee in your company has ever replied to this person. i Mark Safe Report Powered by Mimecast Hello Palo Alto city council, my name is Jaime Bayan and I live on Greer Road . SB 79 presents a unique opportunity to meet our housing goals, promote affordability, and Sincerely , From:Susan Setterholm Cc:Planning Commission Subject:Agenda Item 14: [INSERT SUBJECT HERE ABOUT SUPPORT FOR SB 79] CAUTION: This email originated from outside of the organization. Be cautious of opening attachments and clicking Hello Palo Alto city council, my name is Susan and I lived in Downtown Palo Alto (Forest). Please implement SB 79 in good faith to promote the most homes possible around our Caltrain stations. I Palo Alto and California need housing near transit. As we look at the medium-term probability of huge fuel price SB 79 presents a unique opportunity to meet our housing goals, promote affordability, and increase transit access--if Susan Setterholm From:Christopher A Kantarjiev Cc:Planning Commission Subject:Agenda Item 14: I support SB79"s initiative to improve housing equity in Palo Alto Hello Palo Alto city council, my name is Christopher Kantarjiev and I Please implement SB 79 in good faith to promote the most homes possible I understand that there are concerns about the Mollie Stone's project - SB 79 presents a unique opportunity to meet our housing goals, promote Thank you, From:Jeremy Levine, Palo Alto Forward To:Council, City Cc:Lait, Jonathan; Frick, Coleman; Armer, Jennifer; Scottoneil Attachments:2026.3.9 Public Comment on SB-79 Implementation.pdf CAUTION: This email originated from outside of the organization. Be cautious Good afternoon city council, Please see the attached comment with Palo Alto Forward's perspective regarding the Thank you for your consideration and looking forward to seeing you at May Fete this -- Jeremy Levine (he • him) April 30, 2026 Palo Alto City Council RE: Agenda Item 14, Implementation of SB 79 To the Palo Alto City Council, Palo Alto Forward works to expand housing and transportation choices in our community. In To that end, we support the city implementing SB 79 as written, as we believe every However, we understand the city has additional goals. To best achieve those goals, we would By implementing a local alternative plan, Palo Alto can maximize housing allowed in the places We have identified several factors that we believe some council members care about—though Table 1 - Comparison of Approaches Approach Default SB-79 TOD Alternative Plan 1: No Action 2: Emergency 3: 50% Now,4: TOD Alternative Minimizes Reduces R-1 Promotes Maximizes Maximizes Preserves Preserves Delays or Table 1. Comparison of approaches presented by staff. A check mark means the approach Analysis of Factors The following sections explain in detail our assessments in Table 1. Minimizes Expense to the City Approach 1 (No Action) is absolutely free, which is categorically different from all the other Approaches 2 (Ordinance) and 4 (TOD Alternative Plan) both require new workstreams. Approach 3 (50% now) sets itself in a different category from 2 and 4, because it requires all of Returning to Approaches 2 and 4, we do expect 4 would be qualitatively more expensive. Reduces R-1 Impact Approaches 1 (No Action) + 2 (Ordinance) do not allow the city to move density around within Approaches 3 + 4 do allow the city to exempt R-1 areas from 50% (but not all) of the effects of Promotes Cohesive Massing Approaches 1 (No Action), 2 (Ordinance), and 4 (TOD Alternative Plan) all move the city as Approach 3 (50% now), in contrast, will introduce an interim period where only townhomes and Once development like that happens, it will take decades for the use to convert again during Maximizes Housing on Best Sites SB-79 aligns transit infrastructure with train stops, but not with other resources such as bus Approaches 1 (No Action) and 2 (Ordinance) do a decent job of this by allowing midrise Approach 3 (50% Now, Rest Later) has the disadvantage that it will zone our best sites to just Approach 4 (TOD Alternative Plan) improves upon the approaches above by allowing the city to Maximizes Chances of Building RHNA According to the city’s latest Annual Progress Report to Housing and Community Development, Going forward, the city needs to produce an average of 1,092 units per year to meet aggregate Approaches 1 (No Action) and 4 (TOD Alternative Plan) urgently move the city toward legalizing Approach 2 (Ordinance) somewhat reduces scope of the reform, and might exclude some units. Approach 3 (50% Now, Rest Later) unnecessarily delays (yet does not prevent) the legalization Preserves SDBL Height Exemption As drafted, SB-79 exempts sites in the TOD area from using State Density Bonus Law (SDBL) 1 Approaches 1 (No Action) and 2 (Ordinance) preserve this SDBL exemption, which is a local Approaches 3 (50% Now, Rest Later) and 4 (TOD Alternative Plan) both involve forming TOD Preserves Historic Sites Approach 1 (No Action) is the only approach which would not likely result in historic sites being Delays or Avoids Full TOD Alternative Plan We believe Approach 3 (50% Now, Rest Later) is presented as an approach because it defers Accordingly, we have scored Approaches 1, 2, and 3 green and Approach 4 as red for this Conclusion A TOD Alternative Plan can best harmonize the city’s goals with the opportunity to promote ●Increases expense Fails to maximize our chances of meeting our housing goals 1 See the interaction between 65912.161(d): “Section 65912.157 shall not apply within a jurisdiction that ”; and 65912.157(d), which implements the SDBL height exemption in SB-79. We urge the city to either allow SB 79 to take effect as written or adopt a TOD Alternative Plan, Thank you for your consideration, Jeremy Levine Executive Director, Palo Alto Forward From:LWV of Palo Alto To:Council, City Subject:May 4, 2026 Council meeting, agenda item 14 (SB79) CAUTION: This email originated from outside of the organization. Be cautious The League of Women Voters of Palo Alto submits the attached comment on Agenda Item 14 -- League of Women Voters of Palo Alto 3921 E. Bayshore Road Palo Alto, CA 94303 Phone: (650) 903-0600 3921 E. Bayshore Road Palo Alto California 94303 (650) 903-0600 lwvpaoﬀice@gmail.com Dear Mayor Veenker and City Council members: The League of Women Voters of Palo Alto supports (1) increasing the supply of low and ﬀordable housing and the methods by which this can be attained. The League urges the City to follow the Urban Land Institute’s (ULI) recommendations for ﬀordable to all incomes, families, and ﬀirmatively further fair housing. The Gateway also presents faster and less costly ﬁnancing ﬀordable housing than any other area of the city. ULI’s recommendations stress that the Gateway presents a unique opportunity to comply ﬀordable housing near existing transit stations. The League Discussion Under its 2023-2031 Regional Housing Needs Assessment, Palo Alto must plan for ﬀordable homes to 3,465 very low, low, and moderate-income households, in ﬀordable to above moderate-income households. Plus, by July 1, Where should the City zone for these homes? The area (the “Gateway”) near the downtown transit station has an existing multi-transit major hub for 1 multiple bus providers situated next to Caltrain), and well-established bike routes. ULI’s ULI Study in October 2025. At the request of Stanford, VTA, and Palo Alto, ULI in October 2025 studied the impact of SB 79 on development around the Gateway. The ULI study found:1 1. The land is uniquely positioned to comply with SB 79 because it has large parcels of ﬁnancing of ﬀordable housing feasible. The ULI designers imagined space for about 1500 units of mixed income housing (including families), retail facilities, and walkable and bikeable community gathering space. Because the area consists of large parcels with only a handful of landowners, these conditions create an opportunity for faster and less costly development compared to other areas of Palo Alto. This in turn allows land value recapture to pay for infrastructure and housing, or operations of the transit station, or other public priorities. Considering the Gateway for development and land value recapture, one ULI researcher “Time kills all [development] deals…the land is uniquely valuable here. Most of Palo ﬁt of having this A similar point is made by land use experts at CalMatters ﬁnancing/#:~:text=This%20housing%20can%20help,suﬀicient%20incentives%20to%20us 2 2. The Gateway should also enable Palo Alto to take advantage of the State’s desire to ULI suggested immediately exploring joint development agreements with the transit 3. State and Regional ﬁnancing programs are available for aﬀordable, high density, and ﬀordable Housing Fund (TOAH), the California TOD Program, the Bay Area Preservation ﬁnancing under California Housing Aﬀordable Housing and Sustainable Communities 4. The San Antonio Road Area Plan (SARAP)is the other contender for locating aﬀordable ﬀordable housing in that area: the City could either ﬀerent developers, either a small ﬀordable housing fund (which would be made available for 100% aﬀordable ﬁts.) Since the aﬀordable housing sites in the San Antonio Road for Emissions Reduction.2 Both the Gateway and SARAP are considered high resource areas for Low Income Housing Conclusion We urge the City to designate new RHNA Housing Inventory Sites in the Gateway area or ﬁnancing ﬀordable housing. 3 Transferring some housing sites to the Gateway and away from SARAP would also address ﬀordable housing in an under resourced ﬀirmatively further fair housing which could Sincerely. 1 . Video of ULI October 2025 presentation https://www.youtube.com/watch?v=U8rVK3- vWZc, particularly 1:48:21 Andrew Malik on unique opportunity downtown 2 SARAP Existing Conditions Report chrome- extension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.paloalto.gov/files/assets/publ 4 From:pennyellson12@gmail.com Subject:Historic Place Designation CAUTION: This email originated from outside of the organization. Be cautious Honorable City Council & Director Lait, Question related to SB79 and Historic Place designation: Greenmeadow neighborhood is on the National Register of Historic Places. (GMCA has Can State law or local ordinance legally override or undermine this Federal designation I am asking this question because of comments in the May 4 Council packet, Item #14 Thank you, in advance, for providing your perspective on this matter. Sincerely, Penny Ellson Virus-free.www.avg.com May 04, 2026 www.paloalto.gov Senate Bill (SB) 79 and Downtown Housing Plan Considerations Vishnu Krishnan, Senior Planner Background •Initial findings presented to the Council on October 22, 2025. •The Downtown Housing Plan/SB 79 Implementation Ad Hoc was formed in January 2026 and met with staff on January 27, March 25, and April 21, 2026. o Ad Hoc Members: ▪Councilmember Ed Lauing ▪Councilmember Patrick Burt •The Ad Hoc considered the preliminary analysis, made recommendations, and directed staff to present the findings, ad hoc recommendation, and seek Council input on the implementation of the State law. 2 Purpose •Consider the implications of Senate Bill (SB) 79 in the identified transit-oriented development (TOD) areas and the potential approaches towards its implementation; and •Provide direction on the preferred approach for the citywide implementation of SB 79 and the Downtown Housing Plan initiative. 3 SB 79 (2025) Objective •Increase the supply of affordable housing, reduce greenhouse gas emissions through reduced vehicle miles traveled, and enhance the efficiency of public transit systems. •Mandates upzoning of land located within proximity to rail stations and rapid bus corridors to encourage transit-oriented development. o Degree of upzoning depends on the classification of the transit and the distance from the station, as measured from the pedestrian access points. 44 SB 79: Transit-tiering and applicable standards Distance from TOD Stop Minimum Height Requirement Residential Density (du/ac)Residential FAR Directly Adjacent Sites (≤ 200 ft) 95 ft (75 + 20 ft bonus) 160 du/ac (120 + 40 bonus) 4.5 (3.5 + 1 bonus) Within ¼ Mile 75 ft 120 du/ac 3.5 ¼ – ½ Mile 65 ft 100 du/ac 3.0 •Allowable density cannot be reduced to less than 50 percent of the default standards for any individual site. •TOD projects are eligible for a density bonus and waivers of development standards except height above the SB 79 standard. •Inclusionary Housing requirements (one of the following): •7% of units affordable to extremely low-income households; •10% of units affordable to very low-income households; or •13% of units affordable to lower-income households. •Local inclusionary requirements that exceed these minimums can be enforced. •Application processing generally unchanged: •SB 79 does not modify CEQA requirements, though AB 130 may exempt many projects. •SB 79 does not establish a new ministerial approval process, though other laws like SB 35 can still be used. 5 SB 79: Exclusions Until January 31, 2032, Palo Alto may exclude by ordinance: •Sites zoned with capacity ≥50% of SB 79 default standards •Sites in very high fire severity zones •Sites subject to sea level rise risk •Sites with a locally registered historic resource (as of January 1, 2025) After January 31, 2032, excluded sites must meet SB 79 default density or be incorporated into an Alternative Plan. 6 SB 79: Alternative Plans Alternative Plans Jurisdictions may redistribute density across TOD zones, subject to: •Overall capacity across all TOD zones must be maintained •Individual sites may not fall below 50% of SB 79 default (except fire, sea level rise, or historic sites) •Historic sites may not exceed 10% of the area within any single TOD zone •Individual sites may not be credited above 200% of SB 79 default capacity •Individual TOD zones may not fall below 50% of SB 79 default capacity 7 What might redevelop? In addition to sites excluded by ordinance (i.e. due to hazards, historic protections), there are additional sites across all three areas that have a very low likelihood to redevelop. Sites excluded for the purpose of calculating staff's housing projections: •Parcels developed within the last 25 years. •Condominiums and Planned Communities (PC). •Sites with existing Office-use and an FAR >= 1.50. •Parcels less than 0.12 acre have low development feasibility. 0.12 -acre (~5200 sq. ft.) yields 6 to 8 smaller units (average unit size of 780 sq.ft.). SB 79 requires a minimum of 5 dwelling units for a project to qualify. Historical trends show roughly 10% of parcels citywide have redeveloped over the last 25 years; less projected for R1-zoned properties – 1% (excluding single family home rebuilding and new accessory units). 8 9 University Ave Caltrain Station What can be excluded per SB 79? •Very High Fire Severity Zone – not applicable •Flooding – not applicable •Historic Properties – 22.25% SB 79 Area Distance Acres 200 feet 52.86 200 feet – 0.25 mile 120.53 0.25 mile – 0.5 mile 151.85 Total 325.23 SB 79 Area – excluding PF, PC, and parcels <= 0.12 acre Distance Acres 200 feet 0 200 feet – 0.25 mile 64.56 0.25 mile – 0.5 mile 66.64 Total 163.26 10 California Ave Caltrain Station What can be excluded per SB 79? •Very High Fire Severity Zone – not applicable •Flooding – not applicable •Historic Properties – 1% SB 79 Area Distance Acres 200 feet 48.38 200 feet – 0.25 mile 111.11 0.25 mile – 0.5 mile 324.18 Total 483.67 SB 79 Area – excluding PF, PC, and parcels <= 0.12 acre Distance Acres 200 feet 0 200 feet – 0.25 mile 47.73 0.25 mile – 0.5 mile 141.35 Total 222.72 11 San Antonio Caltrain Station What can be excluded per SB 79? •Very High Fire Severity Zone – not applicable •Flooding – not applicable •Historic Properties – 17% SB 79 Area Distance Acres 200 feet 0 200 feet – 0.25 mile 27.39 0.25 mile – 0.5 mile 147.28 Total 174.28 SB 79 Area – excluding PF, PC, and parcels <= 0.12 acre Distance Acres 200 feet 0 200 feet – 0.25 mile 0.65 0.25 mile – 0.5 mile 16.58 Total 32.79 Approaches – SB 79 The City can choose to allow State Law to go into effect as written, adopt an ordinance clarifying how State Law applies locally, and/or propose a “transit -oriented development alternative plan” (ordinances and plans are subject to State approval). Default SB 79 densities go into effect on July 1, 2026. Note: An ordinance is required to exempt historic resources and requires HCD review. •Approach 1: No action on SB 79. •Approach 2: Adopt a local implementing ordinance to protect historic resources. •Provides additional local control. •Approach 3:Rezone all TOD eligible sites to allow 50 percent of the SB 79 development potential. •Provides the City approximately six years to consider advancing a TOD Alternative Plan. •Approach 4: Prepare a TOD Alternative Plan. •Provides the City with maximum control through development standards, infrastructure plan, and structured community outreach process. 12 Approaches – Downtown Housing Plan •Option A: Refocus the Downtown Housing Plan on Development Standards. o The Plan will produce updated development standards but may not result in a complete Area Plan policy document. •Option B: Resume and complete the Downtown Housing Plan. o Model the Plan on SB 79 standards while addressing other local considerations. •Option C:Discontinue the Downtown Housing Plan. Except for SB 79 Approach 4, the Downtown Housing Plan can reasonably continue under other options provided – or may be discontinued altogether if SB 79 is thought to address Downtown Housing Plan's housing interests. 13 Staff / Ad Hoc Recommendation 1.Prepare an ordinance for adoption prior to July 1, 2026, excluding all sites with historic resources; 2.Prepare an ordinance increasing allowable development capacity on eligible sites to at least 50% of SB 79 capacity (increase density, height and modify setbacks, daylight plane, and lot coverage); place on May 18 City Council consent calendar; and 3.Continue work to advance and complete the Downtown Housing Plan. 14 15 Approach 3: R1 Zone 50 Percent Feasibility Achievable FAR 1.75 Lot Size 6,000 square feet (50' x 120') Setback Front 10 feet Rear 10 feet Side 4 feet Daylight Plane Initial Height: 16'-0", measured from property line. Slope: 45 degrees (modeled from HIP provision) Site Coverage 4,200 square feet Total Floor Area Floor 1 4,200 square feet Floor 2 4,200 square feet Floor 3 2,100 square feet Council Direction / Next Steps 16 1.Provide direction to staff on the preferred approach to implement SB 79; 2.Provide direction to staff on whether to proceed with the Downtown Housing Plan; and 3.As appropriate, the Council Ad Hoc will continue to engage with staff regarding the Downtown Housing Plan through 2026. Vishnu Krishnan Senior Planner vishnu.krishnan@paloalto.gov 650.329.2425 17