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Home My WebLink AboutStaff Report 2606-6468CITY OF PALO ALTO Policy & Services Committee Special Meeting Tuesday, August 11, 2026 6:00 PM Agenda Item 3.Discuss and Provide Feedback on Housing Element Program 6.5: Alternative Housing Program, Objective B. CEQA Status: Exempt Under CEQA Guidelines Section 15262. Staff Presentation 1 0 1 7 0 POLICY & SERVICES COMMITTEE Staff Report From: City Manager Report Type: ACTION ITEMS Lead Department: Planning and Development Services Meeting Date: August 11, 2026 Report #: 2606-6468 TITLE Discuss and Provide Feedback on Housing Element Program 6.5: Alternative Housing Program, Objective B. CEQA Status: Exempt Under CEQA Guidelines Section 15262. RECOMMENDATION Staff recommends that the Policy and Services Committee: 1. Receive information regarding Housing Element Program 6.5(B), Alternative Housing Program. 2. Review and discuss the Planning and Transportation Commission (PTC)'s feedback from its April 8, 2026, Study Session regarding: a. Micro housing and senior housing as the preferred housing typologies for further study and implementation; and b. Prioritization of locations near existing high-quality transit for these housing types. 3. Provide comments and/or feedback regarding: a. The preferred approach for implementing senior housing; b. The PTC’s direction on implementing micro housing; and c. Policy level feedback on the preferred implementation strategy and the identified incentives. EXECUTIVE SUMMARY Housing Element1 Program 6.5(B) directs the City to evaluate innovative housing models, including micro housing, shared housing, and intergenerational housing, to help meet the housing needs of aging adults, students, and lower-income individuals citywide. The City 1 Housing Element 2023-2031: https://www.paloalto.gov/files/assets/public/v/1/planning-amp-development- services/housing-element/housing-element_2023_2031/palo-alto-housing-element.pdf 1 0 1 7 0 initiated the Alternative Housing Program to evaluate these housing types and identify potential zoning and policy approaches to facilitate their development. 3 the PTC reviewed the findings from the Alternative Housing Program Initial Findings Memo (Attachment A) and discussed potential implementation approaches. The PTC identified micro housing and senior housing as the preferred housing typologies and indicated a preference for locating these housing types in areas with access to existing high-quality transit, services, and community amenities. BACKGROUND Allow innovative housing structures such as micro housing and new shared and intergenerational housing models. Identify appropriate locations in the City to build alternative housing models. Develop recommendations and zoning amendments to support alternative housing for City Council consideration. 3 April 8, 2026, PTC Study Session Staff Report: https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=87210&dbid=0&repo=PaloAlto 1 0 1 7 0 while supporting the City’s adopted Housing Element goals related to housing choice, aging in place, affordability, and efficient land use. State Laws Influencing Alternative Housing Planning and Transportation Commission Study Session Micro housing and senior housing as the preferred housing typologies for further study and implementation. Areas near existing high-quality transit as the preferred locations for these housing types. 1 0 1 7 0 Housing Typologies Studied In order to implement Housing Element Program 6.5 B, staff evaluated four alternative housing types: micro-housing, shared housing, and intergenerational housing. These housing types differ in physical form, operational characteristics, and target populations, but share common policy goals related to affordability, efficient land use, and housing diversity. A detailed analysis of the housing types researched, examples of researched housing developed in the region, and the different geographic areas in the City that are best suited for alternative housing types is discussed in detail in the Attachment. Micro Housing Micro housing consists of self-contained dwelling units that are intentionally designed to be smaller than conventional studio apartments, typically ranging from approximately 250 to 350 square feet. Each unit contains a private bathroom and kitchenette, allowing residents to live independently while occupying substantially less floor area than a traditional apartment. Unlike shared housing or Single Room Occupancy (SRO) developments, which generally rely on shared kitchens, bathrooms, or other common facilities, micro housing functions as an independent dwelling unit while providing a more compact housing option. Although micro housing is generally developed as market-rate housing, the reduced unit size typically results in lower monthly housing costs than larger studio or one-bedroom apartments because residents lease fewer square feet. Micro housing therefore provides an opportunity to expand the City's housing choices by creating housing that may be more attainable for smaller households without requiring public subsidy. Alternatively, micro housing may also be developed as deed-restricted affordable housing. Existing Municipal Code regulations were primarily developed around conventional apartment development and do not specifically accommodate micro housing. Current standards related to density, floor area ratio (FAR), height, daylight planes, parking requirements, usable open space, and site coverage may limit the feasibility of developing smaller housing products. The Alternative Housing Program evaluates whether targeted modifications to these standards could facilitate construction of micro housing while maintaining appropriate design quality and neighborhood compatibility. Single Room Occupancy Housing Units SRO housing represents another form of alternative housing that has historically provided smaller and more affordable housing options for one-person households. Unlike micro housing, SRO developments generally consist of private sleeping rooms with shared kitchens, bathrooms, or other common facilities, whereas micro housing consists of self-contained dwelling units with private kitchens and bathrooms. While the Palo Alto Municipal Code does 1 0 1 7 0 not define SROs as a distinct residential use, the City currently permits SRO-type housing through its existing residential regulations, including provisions governing efficiency dwelling units, lodging units, and other residential uses, depending on the design and operational characteristics of the project. Shared Housing Intergenerational Housing Senior Housing 1 0 1 7 0 State law. Independent senior housing may be developed as either market-rate or deed- restricted affordable housing depending on the project sponsor and available funding sources. Alternative Housing and Regional Housing Needs Allocation (RHNA) 1 0 1 7 0 on whether residents occupy separate living quarters intended for independent residential occupancy. The age composition of residents does not affect whether units count toward RHNA; rather, eligibility is based on the physical characteristics and occupancy of the dwelling units. Existing Definitions and Regulations 1 0 1 7 0 requirements of Government Code Section 65915. Eligibility for a density bonus is governed by State law and does not imply that all senior housing developments are deed-restricted affordable housing. ANALYSIS Potential Implementation Approaches Approach 1: Adopt Comprehensive Zoning Amendments 1 0 1 7 0 Approach 2: Amend Key Development Standards in Strategic Locations Integrated and intentional amendment of development standards such as FAR, parking requirements, minimum usable open space requirements, and maximum site coverage in targeted locations. Targeted implementation would prioritize areas with existing high- quality transit, neighborhood-serving commercial uses, employment opportunities, and community amenities. This approach is consistent with the PTC recommendation that micro housing be concentrated in transit-accessible locations where reduced parking demand, walkability, and access to services support smaller housing formats. Approach 3: Focus on Key Development Standards in Coordination with State Legislation State laws such as AB 2097 and SB 79 mandate a series of local zoning changes that will ease the development of alternative housing. The Alternative Housing Program Initial Analysis identified other development standard that would increase feasibility of micro housing products (reduced open space requirements and maximum site coverage standards). The City may consider implementing specific zoning amendments to parcels in the TOD areas and Housing Opportunity Sites outside the TOD areas identified in the 2023-2031 Housing Element. While the implementation approaches focus primarily on micro housing, many of the development standards being evaluated, including parking, floor area ratio (FAR), open space, and site coverage may also improve the feasibility of other innovative housing products identified in Housing Element Program 6.5(B). Staff, based on the feedback from the Policy and Services Committee, may evaluate whether future zoning amendments should also incorporate regulatory changes that support shared housing and intergenerational housing as market conditions and community priorities change. Senior Housing Market-rate senior housing expands the City's overall housing supply for older adults by increasing opportunities for residents to downsize while remaining in the community. Increasing the supply of independent senior housing may also improve housing mobility by allowing existing residents to transition from larger homes into housing better suited to their needs. Affordable senior housing serves lower-income older adults who may otherwise face housing insecurity or displacement due to increasing housing costs. These projects typically require public subsidy, tax credit financing, or other affordable housing funding sources in addition to land use incentives. 1 0 1 7 0 The overlay options described below are intended to establish where independent senior housing should be encouraged within the City. Regardless of whether the City pursues a fixed or floating overlay, the Policy and Services Committee may also wish to provide feedback regarding whether the overlay should apply equally to market-rate and deed-restricted affordable senior housing or whether certain incentives should be reserved for affordable developments that provide an additional public benefit. Option 1: Fixed Senior Housing Overlay o Clear geographic boundaries. o Streamlined project review. o Tailored development standards and incentives within designated areas. Option 2: Floating Senior Housing Overlay o Site-specific review of individual proposals. o Flexibility to evaluate unique site and project opportunities. o Potential application in a broader range of locations. o Greater discretionary review. Potential Standards, Process Improvements, and Incentives 1 0 1 7 0 every project type, and additional evaluation would occur before any amendments are presented for adoption. Development Standards Modified parking standards in areas supported by transit accessibility. Adjustments to floor area ratio and maximum site coverage. Flexible usable open space standards that maintain high-quality outdoor amenities. In the case of Senior Housing, staff may evaluate greater flexibility in how common open space is designed and programmed to better accommodate the recreational, accessibility, and social needs of older adults while maintaining overall project livability, rather than reducing the overall quality of open space in senior housing developments. Minimum and maximum unit size standards specific to micro housing. Implementation Tools Streamlined permit review, where consistent with existing statutory review timelines and available staffing resources. Transportation Demand Management (TDM) measures, including transit pass programs and mobility incentives for senior housing residents. Financial Incentives Evaluation of fee reductions or waivers for deed-restricted affordable housing projects where supported by City policy and available funding. Feedback Requested Alternative Housing Types: Confirmation that micro housing and senior housing should remain the preferred alternative housing typologies for implementation under Housing Element Program 6.5(B). 1 0 1 7 0 2.Prioritized Locations: Confirmation that implementation efforts should prioritize locations with existing high-quality transit, neighborhood-serving commercial uses, and community amenities. 3.Overlay Type: Consideration between a fixed senior housing overlay or a floating senior housing overlay as the preferred implementation strategy. 4.Zoning Amendments: Direction on next steps to prepare zoning amendments establishing development standards specific to micro housing, including regulations related to parking, floor area ratio, site coverage, usable open space, and objective design standards. 5.Standards/Tools/Incentives: Input on which implementation tools, development standards, or incentives should be evaluated further before preparation of draft zoning amendments. Next Steps Following Policy and Services Committee discussion, staff will: 1. Develop preferred implementation approach for senior housing based on Committee feedback. 2. Develop draft zoning code amendments consistent with Housing Element Program 6.5(B). 3. Present proposed zoning amendments to the Architectural Review Board and the Planning and Transportation Commission in Q3 or Q4 for recommendation to Council. FISCAL/RESOURCE IMPACT The recommendation in this report has no fiscal impact. Incorporating feedback from the Policies and Services Committee is expected to be accommodated within the existing scope and budget of the Alternative Housing Program, including the current professional services agreement with Placeworks, Inc. Should the scope expand beyond current assumptions and additional resources be needed, staff will bring appropriation actions forward for City Council approval. The long-term land use decisions will have a marked impact on the financials of the City and its tax revenues and population service needs. Balancing revenue generating land uses with critical housing development is important to consider. STAKEHOLDER ENGAGEMENT As part of the analysis for the Alternative Housing Program, the project team conducted interviews with architects, developers, housing advocates, and other practitioners. The 1 0 1 7 0 feedback received was published in March 2026,5 in advance of PTC Study Session. A dedicated project webpage6 has been launched and is accessible through the City’s website; the webpage will serve as the primary platform for ongoing project updates. ENVIRONMENTAL REVIEW ATTACHMENTS APPROVED BY: 5 Initial Analysis published in March 2026 for PTC Study Session: https://www.paloalto.gov/files/assets/public/v/2/planning-amp-development-services/long-range- planning/alternative-housing/program-6.5b_alternative-housing-program_initial-analysis.pdf 6 Project Webpage: https://www.paloalto.gov/Departments/Planning-Development-Services/Housing-Policies- Projects/Alternative-Housing-Program 1 Palo Alto Alternative Housing Program: Initial Analysis Study Session - Policy and Services Committee This report was prepared by PlaceWorks, Inc. (consultants for the Alternative Housing Program) for the City of Palo Alto. It includes background information, analyses, and potential approaches to the City of Palo Alto Alternative Housing Project (Project). The Project will partially implement Palo Alto Housing Element (HE) Program 6.5. This report is composed of the following sections: Overview and Summary Deﬁning Alternative Housing Existing City of Palo Alto Regulations Other Jurisdictions Approaches and Projects Challenges to Alternative Housing Preliminary Zoning Approaches and Incentives 2 Overview and Summary The Alternative Housing Program was initiated in response to Housing Element Program 6.5(B), which recognizes that Palo Alto’s existing housing stock does not adequately address the needs of all household types. While the City’s housing inventory is primarily composed of single-family homes and conventional multifamily apartments, demographic changes, increasing housing costs, and changing household composition have created demand for a broader range of housing options that may better serve seniors, single-person households, young professionals, graduate students, and other residents seeking smaller and more attainable housing choices. The purpose of this eﬀort is to evaluate zoning and policy tools that expand housing diversity while supporting the City’s adopted Housing Element goals related to housing choice, aging in place, aﬀordability, and eﬃcient land use. This report prepared as an initial analysis includes research done, outcomes, and the preliminary approaches related speciﬁcally to Implementing Objective B of Program 6.5. The program intends to:  Allow innovative housing structures, such as micro unit housing and new shared and intergenerational housing models, to help meet the housing needs of aging adults, students, and lower-income individuals citywide.  Identify appropriate locations in the City to build alternative housing models,  Make recommendations to City Council and follow up with an ordinance to change local zoning regulations as directed. Research completed as part of the 2023-2031 Housing Element indicates the need for alternative housing due to multiple interrelated demographic conditions, including:  Inaccessible housing. Housing is increasingly unaﬀordable in Palo Alto. In 2018, 17 percent of all households were cost burdened, or spent more than 30 percent of monthly income on housing 1. Over 14 percent of households were severely cost burdened or spent more than 50 percent of their income on housing 2.  Overcrowding. Average household size has increased steadily in Palo Alto, from 2.3 persons per household (pph) in 2000, to 2.5 pph in 2013, and to 2.6 pph in 20203. Overcrowding disproportionately impacts low-income households. It is exacerbated by the current lack of larger (three or more bedrooms) aﬀordable rental units. Approximately 3.5 percent of renters experience moderate overcrowding, compared to 0.9 percent of owners4. 1United States Department of Housing and Urban Development, Comprehensive Housing Affordability Strate gy (CHAS), based on the 2014-2018 American Community Survey (ACS). 2 Ibid. 3 US Census 2000 and 2010, Department of Finance 2013, and 2016-2020 ACS ﬁve- year estimates (Table S1101). 4U.S. Department of Housing and Urban Development (HUD), Comprehensive Housing Affordability Strategy ( CHAS) ACS tabulation, 2013-2017 release. 3  Elderly population. The percentage of elderly persons in Palo Alto has increased signiﬁcantly. Residents 65 years and older made up about 13 percent of the population in 1980. In 2020, the elderly made up about 19 percent of the population 5.  Large households. In 2020, Palo Alto was estimated to have about 1,848 households with ﬁve or more members 6, representing approximately seven percent of total households (owner and renter occupied combined). There is a severe mismatch between the number of these families and the number of dwelling units sized to accommodate them. In 2021, traditional single-family homes accounted for over 60 percent of all existing housing units built in Palo Alto, highlighting the importance of a diversifying the City’s housing stock. PlaceWorks assessed the three alternative housing models identiﬁed in Program 6.5(B), including micro housing, shared housing, and intergenerational housing, as well as senior housing based on staﬀ recommendation. PlaceWorks reviewed existing laws, building codes, and industry standards used to deﬁne each model and guide local polices. PlaceWorks also reviewed the City’s current regulations as well as relevant zoning approaches in other jurisdictions. Finally, PlaceWorks identiﬁed nonregulatory and regulatory challenges to constructing alternative housing. This analysis is supported by interviews with nine stakeholders experienced and/or invested in alternative housing, both locally and in general. The results of this outreach process are summarized in Appendix A of this document. SUMMARY PRELIMINARY APPROACHES This Report identiﬁes potential, preliminary approaches to amending the Palo Alto Municipal Code (PAMC) to facilitate alternative housing. The housing models identiﬁed in Program 6.5(B) are diverse and distinctly diﬀerent from senior housing. Hence, senior housing is discussed as a distinct typology requiring a unique implementation approach in this report. Research and stakeholder interviews completed as part of this project suggest all are supported by the following policy frameworks and geographies:  Flexible development standards. The small unit sizes, design challenges and required densities of micro housing and urban co-living projects generally require generous ﬂoor- area-ratio (FAR) standards, high lot coverage allowances and reduced open space requirements.  Low parking minimums. Most existing and approved alternative housing projects in the Bay Area provide no oﬀ-street vehicle parking. Many are located in districts without parking minimums or with parking maximums. Architects and developers consulted stated that oﬀ-street parking requirements are signiﬁcant barriers to most alternative housing. 5 US Census 1980, 1990, 2000, 2010, 2010-2012 ACS three-year estimates, and 2016-2020 ACS ﬁve- year estimates (Table DP05). 6 2016 -2020 ACS ﬁve-year estimates (Table B25009). 4  Transit adjacency. The small units, shared spaces, and typical tenants that deﬁne alternative housing are generally associated with car-free living. Relevant projects thrive on transit corridors and near transit stations or hubs.  Highly resourced locations. Alternative housing typically includes limited common, private or recreational open space, and either small or shared living spaces. As noted, projects are often occupied by zero-vehicle households. As such, these projects are best suited to sites within walking distance of public parks, grocery and retail, diverse services, medical facilities and other community resources. The following preliminary zoning approaches, developed for initial review, consider both the diversity of diﬀerent alternative housing models as well as the trends identiﬁed above. A. Adopt comprehensive zoning amendments. This approach involves amending the PAMC to include cohesive, comprehensive zoning standards for each alternative housing model prioritized by City leaders. This includes: • Adopting new deﬁnitions and purpose statements for each housing type. • Adding new types as allowable uses in selected zoning districts. • Adopting new density, ﬂoor area ratio (FAR) and development regulations for each housing type. • Amending Contextual Design Criteria and Objective Design Standards (ODS) to further streamline alternative housing. B. Amend key development standards in supportive locations. This approach involves increasing FAR, reducing open space minimums, increasing lot coverage, and reducing oﬀ-street parking requirements in areas that are currently, or are planned to be, suited to alternative housing. These could include one or more of the following: • California Avenue Pedestrian and Transit-Oriented Development (PTOD) Combing District. Multiple stakeholders identiﬁed the PTOD as appropriate for alternative housing and the target of PAMC amendments. • South of Forest Area Coordinated Area Plan (SOFA 1 CAP). The 2000 SOFA 1 CAP included City approval of 160 new dwelling units and 30,000 square feet of retail and oﬃce space in a 9-block area. This land use vision, which includes a public park and childcare facility, is consistent with alternative housing. • San Antonio Road Area. The ongoing San Antonio Road Area Plan is an opportunity to zone for alternative housing as part of a larger community vision consistent with such housing. There is a strong demand for mid-rise multifamily projects in the area, and city’s proposed vision for the area includes adding new public and private resources to support new housing. • ROLM Housing Element Focus Area. This HE focus area includes multiple housing opportunity sites. Although not currently fully resourced, this focus area will beneﬁt from the community vision, policies and future implementation of the adjacent San Antonio Road Area Plan. 5 C. Coordinate Amendments with State legislation. This approach includes amending open space and lot coverage standards within 0.5-mile of the city’s Caltrain stations. This approach would build on Assembly Bill (AB) 2097, which prohibits public agencies from imposing minimum parking requirements on any project located within 0.5-mile of a major transit stop, and Senate Bill (SB) 79, which will require distance-dependent upzoning surrounding transit stops in urban transit counties such as Santa Clara County. Elements of one or more of the above approaches could be combined in a ﬁnal zoning approach. 6 Deﬁning Alternative Housing There is agreement among stakeholders consulted on this project, as well as relevant research and policy, that there are no standard deﬁnitions of the alternative housing products identiﬁed in HE Program 6.5(B). The following initial descriptions are based on various building codes, State laws, federal policies, and stakeholder input. These deﬁnitions are used to inform the preliminary, potential approaches outlined in Section 6 of this report. MICRO UNIT HOUSING “Micro unit housing” or “micro housing” refers to housing products with multiple dwelling units that typically do not exceed 350 square feet. Related terms include “eﬃciency housing,” “eﬃciency apartments,” “micro apartments,” and “tiny homes.” Existing laws and regulations primarily regulate individual “micro units” rather than development models that contain them. There is no standard size threshold beyond which a traditional “dwelling unit” or studio becomes a “micro unit.” However, the following codes regulate minimum dwelling unit size in California: • International Building Code (IBC) Section 1208.4, Eﬃciency Dwelling Units. This section establishes that “Eﬃciency Dwelling Units” shall have a living room of not less than 190 square feet (sf), and that such units shall: o Be provided with a separate closet. o Be provided with a kitchen sink, cooking appliance and refrigerator, each having a clear working space of not less than 30 inches (762 mm) in front. o Be provided with a separate bathroom containing a water closet, lavatory, and bathtub or shower. • California Health and Safety Code (HSC) Section 17958.1. This section establishes that local governments may “permit eﬃciency units for occupancy by no more than two persons which have a minimum ﬂoor area of 150 square feet, and which may also have partial kitchen or bathroom facilities, as speciﬁed by the ordinance.” Per this code, a jurisdiction shall not: o Limit the number of eﬃciency units in an area zoned for residential use and located within one-half mile of public transit or where there is a car-share vehicle within one block of the eﬃciency unit. o Limit the number of eﬃciency units in an area zoned for residential use and within one mile of a University of California or California State University campus. o For purposes of this subdivision, any requirements related to density, setbacks, lot coverage, or height restrictions established by local ordinance are not considered a limit on the number of eﬃciency units. 7 • California Residential Code (CRC) Section R304.5, Eﬃciency Dwelling Units. This section states that Eﬃciency Dwelling Units shall have a living room of not less than 220 square feet of ﬂoor area. An additional 100 square feet of ﬂoor area shall be provided for each occupant of such in excess of two. Two architects consulted as part of this analysis stressed that achieving livable micro units that attract a wide market is diﬃcult within the minimal space parameters of the IBC. This is consistent with an Urban Land Institute (ULI) survey of developers of micro housing, which found “…that a micro unit with less than 200 square feet was too small, that a unit with 375 square feet was too large, and that something in the 275- to 300-square foot range was optimal 7…” This is about the size of a typical hotel room. Based on stakeholder input and national research, this analysis assumes that a recommended local deﬁnition for “micro unit” is a dwelling unit of 250 -350 square feet, inclusive of a required, separate bathroom and functioning kitchenette, with interior space dimensions that comply with IBC standards. Accessory Dwelling Units (ADU) are sometimes categorized as micro housing. However, because ADUs are regulated in Chapter 18.09 of the Palo Alto Municipal Code (PAMC) and are not included in Housing Element Program 6.5(B), they are not included in this analysis and are not recommended to be included in the deﬁnition of “micro unit” housing. Multifamily Multifamily micro housing, or micro apartments, refers to residential or mixed-use projects with ﬁve or more individual micro units. Not all units in these projects must be micro units. Input from design stakeholders and review of recent projects indicate that multifamily micro housing projects are typically two to six-story structures designed to maximize density on small sites in walkable, transit-oriented neighborhoods. Stakeholders and research suggest that the location of micro housing is a key component of this housing model. As unit space decreases, so does the need to build such units in highly resourced locations. In a summary of walkability and location, one legal researcher of micro housing wrote: “The shrinking of space within private homes may be oﬀset by external amenities 8.” Potential sites for micro housing in Palo Alto are discussed further in Section 6 of this report. Multifamily micro housing is attractive to college students, early-career professionals, teachers, healthcare and service workers, and single-person households earning low to moderate income levels who seek aﬀordable, well-located housing with access to jobs, transit, and amenities. As described by one architect, these may be “young professionals who put a premium on vibrant and convenient locations.” Active retirees are also attracted to the convenience and walkability. 7 Urban Land Institute, 2015, The Macro View and Micro Units, Page 25. 8Infranca, John, Stanford Law & Policy Review, Vol.25, Housing Changing Households: Regulatory Challenges For Microunits And Accessory Dwelling Units, page 86. 8 Car-free residents and those who rely on public transit or active transportation ﬁnd these units particularly appealing, as they are typically located in downtown or transit-oriented communities. Rise Berkeley. This project is located at 2025 Kala Bagai Way in downtown Berkeley. It includes 48 single- or double-occupancy micro studios ranging from 350 to 427 square feet. The project is situated on a 3,700 square-foot lot, resulting in a density of 570 units per acre. Common open space is provided in the form of a landscaped rooftop garden. The project does not include vehicle parking. October 2025 listings include a 427 square-foot studio for $1,236/month and a 359 square-foot studio for $999/month. Detached micro housing refers to a range of housing products commonly referred to as “tiny homes.” The 2021 International Residential Code, Appendix AQ, deﬁnes “tiny house” or “tiny home” as “a dwelling that is 400 square feet (34 m2) or less in ﬂoor area excluding lofts.” According to the California Department of Housing and Community Development, tiny homes may be permanent or mobile 9. Multifamily micro housing is typically considered a higher and better use of urban land than free- standing detached micro housing. Moreover, City staﬀ and local housing advocates stressed there is less prioritization and potential for detached micro housing in Palo Alto than for micro apartments. Thus, this analysis focuses on multifamily micro housing. Single Room Occupancy Housing Units Single Room Occupancy (SRO) housing represents another form of alternative housing that has historically provided smaller and more aﬀordable housing options for one-person households. Unlike micro housing, SRO developments generally consist of private sleeping rooms with shared kitchens, bathrooms, or other common facilities, whereas micro housing consists of self- contained dwelling units with private kitchens and bathrooms. While the Palo Alto Municipal Code does not deﬁne SROs as a distinct residential use, the City currently permits SRO-type housing through its existing residential regulations, including provisions governing eﬃciency dwelling units, lodging units, and other residential uses, depending on the design and operational characteristics of the project. The City previously amended its Zoning Ordinance to allow SRO housing consistent with Housing Element requirements; however, SRO housing is not regulated through a standalone zoning classiﬁcation. Depending on the project design, permanent SRO developments may satisfy the HCD‘s deﬁnition of a housing unit and therefore count toward the City's RHNA. Although SRO housing was discussed as an alternative housing model at the PTC Study Session, the Commission recommended that implementation eﬀorts under Housing Element Program 6.5(B) focus on micro housing and senior housing. 9California Department of Housing and Community Development, May 9, 2016, INFORMATION BULLETIN 201 6-01 (MH, FBH, SHL, MP/SOP, RT, OL)- Revised 9 SHARED HOUSING “Shared housing” is an umbrella term for residential projects in which multiple private dwelling units share one or more communal spaces. A recent trio of assembly bills (AB 682, AB 1551, and AB 2334) added shared housing projects to the types of projects eligible for density bonuses if they provide aﬀordable units or senior housing. Per AB 682, the following deﬁnitions are included in Government Code Section 65915 (7) (A) (i): • “Shared housing building.” “A residential or mixed-use structure, with ﬁve or more shared housing units and one or more common kitchens and dining areas designed for permanent residence of more than 30 days by its tenants. The kitchens and dining areas within the shared housing building shall be able to adequately accommodate all residents.” • “Shared housing unit:” “…one or more habitable rooms, not within another dwelling unit, that includes a bathroom, sink, refrigerator, and microwave, is used for permanent residence, that meets the “minimum room area” speciﬁed in Section R304 of the California Residential Code and complies with the deﬁnition of “guestroom” in Section R202 of the California Residential Code.” • “Student housing development:” “… a development that contains bedrooms containing two or more bedspaces that have a shared or private bathroom, access to a shared or private living room and laundry facilities, and access to a shared or private kitchen.” Palo Alto has adopted these deﬁnitions and incorporated these products into PAMC Section 18.15.030, Density Bonuses. California code allows cities to expand or restrict local deﬁnitions beyond “the attributes of a shared housing building beyond the state deﬁnition.” Expanding the deﬁnition of shared housing allows cities to capture other federally identiﬁed housing models that are consistent with the goals of Program 6.5(B). The U.S. Department of Housing and Urban Development (HUD) deﬁnes shared housing broadly, as “a living arrangement in which two or more unrelated people share a house or apartment 10,” HUD stresses that “[shared housing] is an aﬀordable living arrangement…in urban areas with high housing costs 11.” The City of Palo Alto is consistent with this characterization. HUD identiﬁes “co-housing” and “co-living” as formal variants of shared housing. 10U.S. Department of Housing and Urban Development, Office of Policy Development and Research, June 202 1, Insights Into Housing and Community Development Policy, Assessments of Shared Housing in the United S tates. 11 Ibid. 10 Co-housing Co-housing refers to a development with private, self-contained units clustered around shared space to form intentional communities. According to the Cohousing Association of the United States, co-housing is not a ﬁnancial or legal model. It is a descriptive term for “an intentional, collaborative neighborhood that combines private homes with shared indoor and outdoor spaces designed to support…community life 12.” Co-housing projects may include for-sale or for-rent units and may be organized formally as a co-op or a homeowner’s association. Units are typically fully amenitized, with shared spaces dedicated to recreation and communal activity. According to a prominent developer and designer of cohousing projects consulted as part of this project, these developments are valuable “go-betweens” that attract potential residents interested in living in small communities rather than single-family homes or large multifamily projects. Co-housing attracts families, older adults, retirees, and intergenerational households who seek long-term stability, collaboration, and a strong sense of community. These residents value shared responsibility, social interaction, and the ability to participate in decision-making within an intentional neighborhood. At 2200 Lisa Lane in Pleasant Hill, CA. This is a suburban co-housing community on a 2.2-acre site. Developed in 2001, the community includes 32 townhouse-style homes that are individually owned condominiums managed under a homeowner's association. The community emphasizes environmental sustainability and social connection, featuring energy- eﬃcient green building design and shared facilities such as a common house with a full kitchen, dining and gathering spaces, a workshop, organic garden, kiln, pool, and hot tub. Residents regularly share community meals two to ﬁve times per week, supporting a cooperative lifestyle among households of all ages. Living Co-living is an urban housing model in which individuals rent private, often furnished rooms in multifamily buildings that contain shared common spaces. HUD stresses that co-living “Frequently target[s] adult professionals in high-demand housing markets 13.” Common shared facilities include kitchens, dining areas, living areas, and/or recreational areas. Similar to micro housing, co-living appeals to college students, early-career professionals, teachers, essential workers, and single-person households who prioritize aﬀordability, ﬂexibility, and convenience. Co-living residents often prefer furnished, well-located housing in transit- accessible areas that enable independent yet socially connected living. Together, these housing models oﬀer diverse, community-oriented, and attainable housing options that meet the needs of residents seeking connection, aﬀordability, and eﬃciency in high-cost urban areas. 12 The Cohousing Association of the United States, Cohousing.org, accessed April 23, 2025. 13U.S. Department of Housing and Urban Development, Office of Policy Development and Research, June 202 1, Insights Into Housing and Community Development Policy, Assessments of Shared Housing in the United S tates. 11 Broadway This 595,440 square-foot apartment building is located above the 19th Street BART station in downtown Oakland. It contains 451 market rate units. A portion of the units are co-living suites, each with four private bedrooms, two shared bathrooms, and fully equipped common living and kitchen spaces. Leases are per bedroom. Some bedrooms are furnished with expandable furniture. As of October 2025, bedroom leases in shared suites started at approximately $1,700/month. Living This project is on San Pablo Avenue in Berkeley’s transit rich West Berkeley Commercial (C-W) District. The four-story, mixed-use building contains 42 private rooms, each with a private bathroom. A community kitchen and balcony are provided on each ﬂoor. The rooms operate under Berkeley’s Group Living Accommodations (GLA), deﬁned as “A building or portion of a building designed for or accommodating Residential Use by persons not living together as a Household. According to the architect, the project was “designed as a prototype for a new housing type for UC Berkeley grad students and as a model for the greater Bay Area in addressing the housing crisis.” The project includes no vehicle parking. INTERGENERATIONAL HOUSING The United States Census deﬁnes “multigenerational household” as a household that consists of at least two adult generations. “Multigenerational” and “intergenerational” are considered interchangeable terms. There are two common approaches to intergenerational housing: (1) programmed intergenerational housing and (2) multigenerational households. Intergenerational Programmed intergenerational housing refers to projects designed to support speciﬁc populations of older and younger adults from diﬀerent families. These developments typically include eligibility requirements intended to facilitate successful cohabitation and: • Provide for safety, health, and the necessities of life. • Promote programs that increase cooperation and interaction between people of diﬀerent generations. • Enable all ages to support each other in relationships that beneﬁt both individuals 14. As is the case with shared housing, California code establishes speciﬁc parameters for this housing model that can be expanded in a local deﬁnition. • California Civil Code Section 51.3.5 deﬁnes “intergenerational housing” as developments that consist of units for senior citizens (55 or older), caregivers, or transition-age youths (Individuals aged 18 to 24 who are either current or former foster or homeless youth). 14Harvard University, Joint Center for Housing Studies, 2024, Healthier Lives Across Generations, A Blueprint f or Intergenerational Living 12 Residents of these projects typically share features such as common rooms, dining areas, recreational spaces, and gardens. These projects are typically publicly subsidized and built by nonproﬁts or aﬀordable housing developers. Intergenerational housing appeals to residents across generations who seek connection, mutual support, and stability within an inclusive community environment. Seniors beneﬁt from companionship, safety, and reduced isolation, while younger residents gain ﬁnancial relief through aﬀordable living opportunities, and young families beneﬁt from everyday assistance such as childcare or household support through intergenerational interaction. Caregivers may also live on-site to provide additional assistance and strengthen community relationships. These communities integrate shared amenities and social programming to foster mutual support and enhance the well-being of residents of all ages. Approved Avenue The City of Emeryville recently approved the ﬁrst intergenerational aﬀordable housing development in California at 4300 San Pablo Avenue, located on a City-owned site and treated as an emergency shelter under the City’s zoning regulations. The property is owned by the City and formerly served as the City’s Recreation Center, consisting of portable oﬃce structures. Since 2019, the site has been temporarily used for emergency shelter and related operations. The development will deliver 68 units of 100 percent aﬀordable intergenerational apartment homes serving seniors, caregivers, and transition-age youth. Because the project is classiﬁed as an “emergency shelter” use, the project is not subject to residential density limits or open space requirements, nor does it trigger any development bonuses or require oﬀ-street parking. Multigenerational Multigenerational households refer to dwelling units sized and designed to accommodate all members of households with two or more adult generations. Based on HE data and programming, this refers to aﬀordable rental units with three or more bedrooms in Palo Alto. The need is supported by HCD: “Due to the limited supply of adequately sized units to accommodate larger households, large families often face signiﬁcant diﬃculty in locating adequately sized, aﬀordable housing 15.” Palo Alto HE Program 6.2, Family Housing and Large Units, calls for the City to “Research and implement incentives to encourage larger units, such as FAR exemptions for three or more- bedroom units, and creation of family-friendly design standards.” Therefore, this project does not assess approaches to multigenerational households. SENIOR HOUSING 15California Department of Housing and Community Development, Building Blocks webpage, https://www.hc d.ca.gov/planning-and-community-development/housing-elements/building-blocks/large-families- and- female-headed-households, accessed April 29, 2025. 13 Senior housing is intended to serve adults aged 55 years and older and includes independent living communities designed to enable older adults to age in place within the community. The City of Palo Alto prioritizes senior housing in citywide and neighborhood-level policy documents but has not adopted supportive zoning regulations. The primary zoning tool to promote senior housing is the overlay zone. An overlay zone is a supplemental zoning layer placed over a parcel's existing base zoning. Rather than replacing the underlying district, the overlay adds to or modiﬁes its requirements to advance a speciﬁc objective. The parcel retains its base zoning. Overlays are a common and ﬂexible land use tool for encouraging types of development in select locations. Housing overlay zones place a layer of special standards, and often incentives for meeting those standards, over base zoning to encourage uses such as senior housing. They generally work through the following elements:16,17,18 • Base districts. Most overlays attach to residential or non-residential base zones while the parcel keeps its underlying zoning. Potential is often greatest in commercial or underused zones, where a city can promote inﬁll or ﬁnd additional housing sites. Overlays can also be developed to target only some properties within a zone. • Eligibility requirements. Overlays facilitate a target development type by establishing qualifying criteria for that development. For example, aﬀordability-based overlays include a minimum share or level of aﬀordable units, sometimes tiered. For senior housing overlays, the primary criteria is occupancy restricted to senior citizens, and potentially other physical or programmatic requirements. • Special standards or incentives. Overlays typically promote desired development with special development standards for projects that meet requirements. Typical standards include increased height, reduced parking requirements, reduced setback or open space, unit-size ﬂexibility, and in some cases fee waivers. • Streamlining. Overlays can reduce or exempt qualifying projects from discretionary review, and where land is not already zoned residential, can avoid a general plan amendment, cutting time and cost. Senior housing overlays allow jurisdictions to identify priority locations for senior housing and encourage project development. Overlays can tailor development standards to the needs of senior residents and/or physical development requirements; or match the standards of the existing base district where that is more appropriate. 16 Terner Center for Housing Innovation, April 2019, Affordable Housing Overlay Zones: Oakley. 17 Association of Bay Area Governments, September 25, 2025, Affordable Housing Overlay Zones. 18 San Joaquin Valley Council of Governments, Housing Overlay Zones (HOZs), https://sjvcogs.org/regulatory- mechanisms/housing-overlay-zones-hozs/. 14 Versailles: This 55+ for-sale condominium community is located at 10 Crystal Springs Rd, at the corner of El Camino Real and Crystal Springs Road in San Mateo, within the E2 (Executive oﬃces)/R5 (Multiple Family Dwellings, High Density) zoning districts eligible for the SC Overlay. The project, built in 2008, includes 61 condominium units across a range of one- and two- bedroom ﬂoor plans. Sequoia Haven This aﬀordable rental community in Menlo Park's Belle Haven neighborhood was developed by MidPen Housing Corp. and completed in 2017. The development provides 90 apartments, 86 one-bedroom and 4 two-bedroom units, all restricted to seniors 62 and older earning up to 50 percent of area median income. Built on the site of the 1960s-era Gateway Apartments, the project replaced 48 aging units and achieved a net increase of 42 aﬀordable units, made possible by a 2013 City rezone to allow higher density. Square This aﬀordable senior rental housing was developed by MidPen Housing Corp. comprises 66 aﬀordable rental apartments restricted to residents 62 and older earning up to 50 percent of area median income. The project achieved a density of approximately 127 units per acre, up from a baseline of 35 units per acre, made possible by the Senior Housing Overlay's reduced unit size standards and shared parking and infrastructure with the broader Foster Square development. Based on negotiations between the City and MidPen Housing Corp., the project utilized a parking ratio of 0.59 spaces per unit through shared parking, resulting in cost savings of approximately $1.6 million, including $1.27 million in shared infrastructure and $202,000 in parking reductions. DEFINITION AND RHNA Whether alternative housing units count toward a jurisdiction’s regional housing needs allocation (RHNA) is an ongoing topic of concern. The California Department of Housing and Community Development (HCD) uses the U.S. Census Bureau’s deﬁnition of “housing unit” in its regional housing needs determination (RHND) and RHNA processes. Per this deﬁnition, a unit is “A house, an apartment, a mobile home, a group of rooms, or a single room that is occupied (or if vacant, is intended for occupancy) as separate living quarters.” Alternative housing products such as individual microunits or separate condos in shared living projects are consistent with this deﬁnition and would count toward Palo Alto’s RHNA requirement. Other shared housing, such as co-living group units or programmed intergenerational housing, may be more consistent with the Census Bureau’s deﬁnition of “group quarters,” which are “places where people live or stay in a group living arrangement that is owned or managed by an organization providing housing and/or services for the residents.” This concern was raised at a 2022 hearing of the Assembly Committee on Local Government, regarding Assembly 682. Committee members stressed that the cohousing units envisioned in the bill may not be eligible to count toward a local government’s RHNA target. Intergenerational housing may also count toward the City's Regional Housing Needs Allocation (RHNA) provided the development contains individual dwelling units that satisfy HCD's deﬁnition 15 of a housing unit. Similar to shared housing developments, RHNA eligibility depends on whether residents occupy separate living quarters intended for independent residential occupancy. The age composition of residents does not aﬀect whether units count toward RHNA; rather, eligibility is based on the physical characteristics and occupancy of the dwelling units. HCD is currently reconsidering the role of group quarters in the RHNA process. In California’s Housing Future 2040, The Next Regional Housing Needs Allocation (RHNA) (April 2024) HCD evaluates the role of group quarters in the RHNA process, and the potential for crediting a wider range of housing types. According to the report, “some group quarters represent an essential form of housing that the state has an interest in incentivizing. Creating a more nuanced process for determining which group quarters are counted in the RHND can help ensure that the state is fully accounting for the housing need and leveraging the RHNA process to incentivize key housing types.” Although no action has been taken, the report outlines a series of recommended statutory changes to adjust how group quarters are treated in the RHNA process. STATE LAWS INFLUENCING ALTERNATIVE HOUSING Since adoption of the 2023–2031 Housing Element, the State has enacted several housing laws that support many of the objectives identiﬁed in Housing Element Program 6.5(B). • AB 130 expanded statutory streamlining and environmental review exemptions for qualifying inﬁll housing developments. • State Density Bonus Law continues to incentivize aﬀordable and qualifying senior housing through additional development capacity and regulatory concessions. • AB 2097 eliminated minimum parking requirements for qualifying projects located near major transit stops, improving the feasibility of compact housing products. • SB 79 further requires local jurisdictions to permit increased residential development intensity within designated transit-oriented development areas. Although these laws do not speciﬁcally establish standards for alternative housing, they collectively reduce regulatory barriers and create a policy framework that supports smaller housing types, transit-oriented development, and housing diversity. The implementation approaches evaluated in this report build upon these recent State law changes by identifying local zoning amendments that could further facilitate alternative housing while remaining consistent with the City's adopted Housing Element and Comprehensive Plan. 16 Existing City of Palo Alto Regulations There is precedent for supporting alternative housing in existing City of Palo Alto land use and housing policies and regulations. LAND AND COMMUNITY DESIGN ELEMENT The Land Use and Community Design Element of the 2030 Comprehensive Plan prioritizes a mix of housing types. Although no policies refer directly to “alternative housing,” many are consistent with HE Program 6.5(B). These include: • Policy L 2.3: As a key component of a diverse, inclusive community, allow and encourage a mix of housing types and sizes, integrated into neighborhoods and designed for greater aﬀordability, particularly smaller housing types, such as studios, co-housing, cottages, clustered housing, accessory dwelling units, and senior housing. • Program L2.4.5: Update the municipal code to include zoning changes that allow a mix of retail and residential uses, but no oﬃce uses. The intent of these changes would be to encourage a mix of land uses that contributes to the vitality and walkability of commercial centers and transit corridors. • Program L2.4.7: Explore mechanisms for increasing multifamily housing density near multimodal transit centers. • Program L2.4.8: Identify development opportunities for below-market rate and more aﬀordable market-rate housing on publicly owned properties in a way that is integrated with and enhances existing neighborhoods. • Policy L-2.5: Support the creation of aﬀordable housing units for middle- to lower-income level earners, such as City and school district employees, as feasible. HOUSING ELEMENT Chapter 5, Goals & Policies of the 2023-2031 Housing Element includes policies that support the development of alternative housing and the approaches to facilitating alternative housing identiﬁed in this report. These include: • Policy 2.1: Increase opportunities for aﬀordable housing development through use of ﬂexible development standards. • Policy 2.2: Enhance incentives that expand development standard concessions and other inducements oﬀered as tools to facilitate the development of more aﬀordable housing, with a mix of aﬀordability levels within mixed-income housing. • Policy 2.3: Achieve a diversity of rental and homeownership opportunities, including apartments, townhomes, condominiums, single-family houses, and accessory dwelling units, micro-units and alternative housing options to accommodate the housing needs of all socioeconomic segments of the community. • Policy 3.3: Prioritize funding for the acquisition of housing sites near public transit and services, the acquisition and rehabilitation or replacement in existing housing, and the provision for housing-related services for aﬀordable housing. 17 NORTH VENTURA COORDINATED AREA PLAN The development of micro, shared, and/or intergenerational housing in the 2024 North Ventura Coordinated Area Plan (NVCAP) would partially support the NVCAP’s overarching Housing and Land Use goal: “Add to the City’s supply of multi-family housing, including market rate, aﬀordable, “missing middle” and senior housing in a walkable, mixed use, transit-accessible neighborhood, with retail and commercial services, open space, and possibly arts and entertainment uses.” In addition, the relatively high-density land use districts in the NVCAP, shown in Table 1, would work to accommodate alternative housing. NVCAP DEVELOPMENT STANDARDS Density (du/acre)(ft)FAR Density NV Density NV Density NV Density Residential NV R4 Density Residential NV R3 AFFORDABLE HOUSING FUND Palo Alto’s Aﬀordable Housing Fund (AHF) was established “to provide ﬁnancial assistance for the development, acquisition and rehabilitation of housing aﬀordable to extremely low, very low-, low-, and moderate-income households that live or work in the City.” The AHF Guidelines, amended via resolution by the City Council in 2025, are not land use regulations. However, the document includes language that highlights Palo Alto’s commitment to accessible alternative housing. Section C, Eligible Housing Types, Projects, and Activities, identiﬁes “Shared housing, co-housing, mobile home parks and other special or innovative housing products” as one of the groups of housing approaches that “Aﬀordable Housing Fund revenues will primarily be used to assist 19.” All three alternative housing products deﬁned in this report are consistent with this group of approaches. Amending local land use regulations to further support these approaches would remove signiﬁcant barriers to the fulﬁllment of AHF objectives. MUNICIPAL This section identiﬁes only direct references to alternative housing products in the PAMC. There are many existing PAMC regulations that are relevant to alternative housing, both as opportunities for implementation and challenges to production. These will be explored in Section 6 of this document. 19 City of Palo Alto, March 24, 2025, City of Palo Alto Affordable Housing Fund Guidelines. 18 Micro housing is not deﬁned in PAMC Section 18.04, Deﬁnitions. There are two references to “eﬃciency unit” in PAMC Section 18.04. One is under deﬁnition (4)(A), as a type of unit allowed by the State of California as an ADU. The second is under deﬁnition (135) “Studio dwelling unit, eﬃciency dwelling unit” means a dwelling unit consisting of a single habitable room for living and sleeping purposes, plus ancillary kitchen and bath facilities. There is one direct reference to micro housing in the PAMC. Table 1 of PAMC Section 18.52.040, Oﬀ-Street Parking, Loading and Bicycle Facility Requirements, states that one parking space per micro unit is required, the same requirement for studio units and 1-bedroom units. A table notation states: “A ‘micro unit’ as used herein means a residential unit of 450 square feet or less.” Parking standards for “micro units” are documented in the City’s past planning record. A 2018 Staff Report to the Planning & Transportation Commission recommends conducting a public hearing for a series of draft zoning amendments. One of the amendments is the addition of oﬀ- street parking standards for micro units, set at one space per unit. Unlike the current PAMC, the 2018 draft table notation does not quantify the size of micro units. It states that the parking standard would be reduced to 0.5 spaces per micro unit on parcels “within one-half mile radius of a major ﬁxed rail transit station.” This reduction is not included in the current PAMC. “Shared housing” is not deﬁned in PAMC Section 18.04. However, Section 18.04 includes the following uses characterized by group living and/or shared facilities: • (35) “Convalescent facility” means a use other than a residential care home providing inpatient services for persons requiring regular medical attention but not providing surgical or emergency medical services. • (124) “Residential care home” means use of a dwelling unit or portion thereof licensed by the state of California or county of Santa Clara, for care of up to six persons, including overnight occupancy or care for extended time periods, and including all uses deﬁned in Sections 5115 and 5116 of the California Welfare and Institutions Code, or successor legislation. • (135.5) “Supportive housing” means housing with no limit on length of stay, that is occupied by target populations, as deﬁned by Section 53260(d) of the California Health and Safety Code, and that is linked to on- or oﬀ-site services that assist the supportive housing residents in retaining the housing, improving his or her health status, and maximizing his or her ability to live and, when possible, work in the community. Supportive housing shall be considered a residential use of property and shall be subject only to those restrictions that apply to other dwellings of the same type in the same zone. Supportive housing programs may use residential care homes wholly or as a part of their overall facilities. 19 As previously noted, the PAMC also includes deﬁnitions consistent with recent State density bonus laws (see Section 2 of this report). These include the following (full deﬁnitions not repeated here): • "Shared housing building" • "Shared housing unit” • “Student housing development" Per the PAMC, “For purposes of calculating a density bonus granted pursuant to this section for a shared housing building, "unit" means one shared housing unit and its pro-rated share of associated common area facilities.” Intergenerational Intergenerational housing is not deﬁned or regulated in PAMC Title 18. However, PAMC Section 9.74.010, Discrimination Against Families with Minor Children In Housing, states “The overall eﬀect of such discrimination is to encourage the ﬂight of families from the city, resulting in the decline of stable, intergenerational neighborhoods, the closure of schools, and the reduction of social and recreational services for children and their families.” This language indicates that accommodating intergenerational families is an ongoing priority in Palo Alto, and that implementation of HE Program 6.5(B) is consistent with at least one of the City’s social and quality of life objectives. PROJECT APPLICATIONS The City has received a limited number of applications for micro housing and other alternative project types over the past decade. Although none have been built as originally submitted, the entitlement processes indicate both developers’ interest and City’s receptiveness to such projects. Two examples include: • 2755 El Camino Real 20. In September 2016, staﬀ recommended that the City Council conduct a preliminary review of a project to develop a 2.6-acre property with high- density, multifamily housing. The project included 60 small units and 45 parking spaces, 26 of which would be provided via a “puzzle parking” lift system. The project did not conform to any nearby zoning and was labeled a potential “pilot for micro housing.” One councilmember suggested that the City needed a zoning classiﬁcation that allows for micro units and highlighted the idea of a “residential, low car impact project.” Staﬀ presented three options that “could achieve the applicant’s basic objectives,” including creating a “Pilot Project” in the Public Facilities (PF) Zone District, creating a “micro housing combining district overlay,” and modifying Pedestrian and Transit Oriented Development Combining District regulations for the project. 20 City of Palo Alto, City Council Staff Report, ID# 7152, September 12, 2016. 20 • Community feedback ranged from support for micro housing to concern over market viability and traﬃc impacts. The project was approved with an additional 20 parking spaces (65 total) parking in 2018, and via the addition of a Workforce Housing (WH) Combining District to the existing PF Zoning District. The ﬁnal building, with 57 dwelling units, completed construction and received occupancy in May 2024. • 955 Alma Street21. In May 2021, an applicant made a request for a Council Prescreening to consider a proposal to rezone a site in the SOFA 2 area from RT-35 to Planned Community/PHZ and redevelop the site with a four-story, mixed-use development with 36 “innovation micro studio residences” averaging 342 square feet (sf). The applicant requested a 30 percent parking reduction and lift parking. Some residents praised the project and its location near the Caltrain Station, stating the units were suitable for young people and those without cars. Others questioned whether it would truly provide more aﬀordable options, while some highlighted that it was out of context with the neighborhood and did not ﬁt on the small site. The project was never submitted for formal review. Senior housing is not separately deﬁned or comprehensively regulated in Palo Alto. However, the City has mentions senior projects as “an independent living facility, not a convalescent or a residential care facility.” Additionally, PAMC 18.52 provides parking standards for senior housing projects (0.75 spaces/ unit) and 18.15 details eligibility of senior housing projects for density bonus and waivers (20 percent bonus for 100 percent senior citizen housing development). The City, however, does not have an established Senior Housing overlay and currently uses one or more other overlay zones to regulate target uses and locations. These include: • PAMC 18.12 Single Story Overlay (S) Combining District • PAMC 18.34 Pedestrian and Transit Oriented Development (PTOD) Combining District • PAMC 18.60 Alternative Standards Overlay Districts Cities such as Menlo Park, San Mateo, Lafayette, and Foster City have established a dedicated senior housing overlay, that is discussed in this report. 21 City of Palo Alto, City Council Staff Report, ID# 12020, May 18, 2021. 21 Other Jurisdictions Approaches and Projects The following section is a brief overview of other zoning-based approaches to alternative housing and examples of local projects. Due to the small number of alternative housing projects recently approved or built and the variety of regulatory approaches, it is diﬃcult to draw a direct association between regulation and construction. Most alternative housing projects are located in urban markets such as Berkeley and San Francisco. Smaller cities have adopted regulation to promote alternative housing more recently. While there are fewer approved or built projects in those communities, this may reﬂect timing or market challenges rather than the eﬀectiveness of that regulation. CITY BERKELEY The City of Berkeley has the Bay Area’s largest per-capita stock of micro units, and the recent approval of a unique shared housing project (summarized below) is further indication of the City’s prioritization of alternative housing. While Berkeley is more urban than Palo Alto and with a higher student demand for alternative housing, four characteristics of the city’s zoning code help facilitate these projects: • Purpose-driven development standards. • “Per resident” open space standards. • Lack of Parking Minimums. • Minimum unit size. Driven Development Title 23, Zoning, of the Berkeley Municipal Code includes qualitative and quantitative regulations to support alternative housing. The zoning districts are guided by purpose statements consistent with alternative housing, such as reduced open spaces, transit orientation, convenience and aﬀordability. Development standards such no maximum FAR and 100% allowable lot coverage were adopted to support these outcomes. Resident” Berkeley has separate Minimum Useable Open Space requirements per Dwelling Unit and per “Group Living Resident.” This was amended from the original 200 square feet of usable open space per dwelling unit and 90 square feet per group living accommodation resident to 40 square feet per dwelling unit and 40 square feet per group living resident with the adoption of the 2023 Southside zoning amendment. According to Title 23, Group Living Residents are residents of “Group Living Accommodations,” which is deﬁned as “A building…designed for or accommodating a residential use by persons not living together as a household. Group living accommodations typically provide shared living quarters without separate kitchen or bathroom facilities for each room or unit.” The reduced resident-based open space requirement facilitates the design and approval various shared and co-living housing projects. Lack Parking 22 Residential oﬀ-street parking minimums are limited to the City’s Hillside Overlay area. In all other locations, oﬀ-street parking is not required for any residential use, including ADUs, dwelling units, Group Living Accommodations, and various congregate housing types. The minimum housing unit size allowed in Berkeley is 190 square feet plus a kitchen, as regulated in the Berkeley Housing Code (Section 19.10). This is smaller than the “ideal” micro unit identiﬁed by stakeholders and existing literature and is consistent with existing building codes. Other dimensions include: • Section 19.01, Unit Floor Area. “… Dwelling units…shall have at least one room which shall have not less than 120 square feet of ﬂoor area. Other habitable rooms, except kitchens, shall have an area of not less than 70 square feet.” Berkeley’s code also states that “Nothing in this section shall prohibit the use of an eﬃciency living unit within an apartment house meeting the following requirements: a. The unit shall have a living room of not less than 220 square feet of superﬁcial ﬂoor area. An additional 100 square feet of superﬁcial ﬂoor area shall be provided for each occupant of such unit in excess of two. b. The unit shall be provided with a separate closet. c. The unit shall be provided with a kitchen sink, cooking appliance and refrigeration facilities, each having a clear working space of not less than 30 inches in front. Light and ventilation conforming to this code shall be provided. d. The unit shall be provided with a separate bathroom containing a water closet, lavatory, and bathtub or shower. Berkeley • Studio 2000. This project consists of 82 studio micro units in City’s Downtown Mixed-Use District. Twenty percent of the units are below market rate, resulting in a State Density Bonus allowance. The building is designed with a “sawtooth” facade that allows for increased light and views. The property is within ﬁve minutes walking distance of the Downtown Berkeley BART Station. The project does not include vehicle parking. • Cityspace 2539. This is a six-story co-living and micro unit project at 2539 Telegraph Avenue in the City’s C-T Telegraph District. It includes 354-square foot studios as well as two-, three- and four-bedroom shared suites. Each suite is centered around a shared kitchen and living area and is fully furnished. The exterior design is characterized by oversized windows to capture light and views. The project is adjacent multiple Alameda County (AC) Transit bus routes and stops. It does not include vehicle parking. • Berkeley Moshav. This co-housing project broke ground in March 2025. It is in the City’s C- W (West Berkeley Commercial) District, on a block characterized by two-story multifamily buildings, automotive and retail uses. The project includes 36 privately-owned, market- rate condominiums ranging in size from one bedroom to three-plus bedrooms. It emphasizes multi-generational living and includes two communal kitchens. 23 CITY SAN The City of San Jose adopted co-living standards into Title 20, Zoning, of the City’s Municipal Code in 2023. Per Section 20.200.197, a “Co-Living Community” (CLC) is a “residential facility where individual secure bedrooms rented to one or two persons, are provided for an established period of time with a lease agreement, in exchange for an agreed payment of a ﬁxed amount of money. To be considered a Co-Living Community, shared full kitchen facilities must serve six (6) or more bedrooms, and must include interior common space excluding janitorial storage, laundry facilities and common hallways.” Co-living Communities are allowed as special (S) uses in the City’s Downtown Zoning Districts, and as conditional (C) or special uses in the City’s various Urban Village and Mixed-Use Zoning Districts. They require permits subject to various criteria approval, such as: • Bedroom size: CLC bedrooms must be at least 100 square feet in ﬂoor area if occupied by one person, and 150 square feet in ﬂoor area if occupied by two persons, excluding closet and bathroom. • Common space: CLCs must provide a minimum of 20 square feet of interior common space per bedroom. • Management Plan. CLCs must be accompanied by an approved operation and management plan. • Design Standards. CLCs must conform to design standards for relevant zoning district. • TDM Plan. CLC applicants must submit a Transportation Demand Management (TDM) plan. Oﬀ-street parking requirements for CLCs is on a per-bedroom basis. They are determined by the results of the required TDM. • Mesa Terrace (Formerly Gallup and Mesa). This programmed intergenerational housing development is at 1171 Mesa Drive, in the City’s UR (Urban Residential) District. It comprises 46 aﬀordable and supportive units built by Eden Housing, Inc. on a 0.38-acre site. The 5-story wood-frame building over a concrete podium includes 16 studios, 19 one-bedroom units, 5 two-bedroom units, 5 three-bedroom units, and 1 manager’s unit. Of the total units, 23 are reserved for transition-age youth, young adults who have aged out of the foster care system and need stable housing, while the remaining units are rented to families, creating an intentionally mixed and supportive community. There is a 1,000 SF community room on the ground ﬂoor. CITY MOUNTAIN VIEW 24 The City of Mountain View has adopted regulations to support micro housing in speciﬁc planning areas. These include establishing desired ratios of micro units in speciﬁc districts and eliminating parking minimums in target geographies. For example: • North Bayshore Precise Plan. The City’s North Bayshore Precise Plan (amended 2021) is shaped by a series of urban-oriented land use goals, including housing aﬀordability, concentrated growth, walkable blocks, and the promotion of active transportation. The Plan establishes a housing unit mix goal of 40 percent micro units in the Plan’s North Bayshore District. Micro-units are deﬁned as dwelling units “up to 450 square feet and without a separate bedroom.” The Plan also establishes an oﬀ-street parking maximum for micro units of 0.25 spaces/unit. • Plan-wide elimination of parking minimums. The City eliminated parking minimums for residential uses in the plan areas of the Downtown Precise Plan, El Camino Real Precise Plan, San Antonio Precise Plan, and East Whisman Precise Plan. These are considered “transit-oriented Precise Plan areas with the greatest development opportunities.”20 The City of Mountain View has not established speciﬁc regulations for shared or intergenerational housing in its municipal code. However, the city approved the Mountain View Cohousing Community, a downtown development consisting of individually owned condominium homes. • Mountain View Cohousing Community. Like Berkeley Moshav, this is an example of market-rate co-housing community, located at 1445 Calderon Ave. The community includes 19 individually owned, single-level condominium-style homes ranging in size from 1,400 to 2,000 square feet, situated on land held collectively by the community membership. The 1.1-acre site is within the downtown area of Mountain View The development includes three buildings: a main three-story structure with 15 condominiums, a 6,000-square-foot common house, and a roof deck; a second three- story building with additional units, a townhouse, and a workshop; and a restored historic farmhouse that serves as a meeting place and guest house. Two parking spaces per owner are provided underground. The community operates through consensus-based governance, with all households participating in major decisions and contributing weekly to the upkeep of shared spaces. CITY SAN FRANCISCO San Francisco is highly urban with a diverse population. The City regulates both shared and intergenerational housing in its municipal code by allowing key uses within deﬁned geographies. Group Housing is deﬁned as “a Residential Use that provides lodging or both meals and lodging, without an individual or limited cooking facilities or kitchens, by prearrangement for 30 days or more at a time and intended as Long-Term Housing.” Examples of Group Housing include a Residential Hotel, boardinghouse, guesthouse, rooming house, lodging house, residence club, commune, fraternity or sorority house, monastery, nunnery, convent, or ashram. 25 The City requires that the residential square footage of Group Housing include both common and private space. Speciﬁcally: • For every gross square foot of private space, 0.5 gross square feet of common space shall be provided. • At least 15 percent of the common space must be devoted to communal kitchens. • A minimum of one kitchen is required for every 15 Group Housing units. Micro housing and shared housing is further accommodated by Special Use Districts (SUDs) that oﬀer increased density allowances and ﬂexible development standards. The modiﬁcations of standard zoning regulations apply to all geographic areas identiﬁed by the SUDs. One SUD facilitates increased density allowances and ﬂexible development standards for family and senior housing. The City deﬁnes Senior Housing as “a Residential Use deﬁned as dwellings that are speciﬁcally designed for and occupied by senior citizens.” The modiﬁcations of standard zoning regulations apply to all geographic areas identiﬁed by the SUD. The following alternative housing projects reﬂect San Francisco’s prioritization of alternative housing: • SmartSpace Micro Apartments. Located in the SOMA district. The SmartSpace project provides 23 micro-apartment units, each approximately 295 square feet in size, within a total building area of 11,740 square feet. The units feature a full kitchen, queen-sized bed, dining table, full bathroom, and ample built-in storage. • The Village. Located in downtown San Francisco between the Union Square and Civic Center areas. A multigenerational co-living community of 18 residents, adults, children, parents, and non-parents, living together. The home includes 18 bedrooms, 3 kitchens, and 9 bathrooms across three connected ﬂats, with shared spaces such as a playroom, tearoom, and multi-purpose area. CITY SEGUNDO Although outside the Bay Area, the City of El Segundo is an example of a small California jurisdiction (population 17, 272) that regulates micro-units and micro-housing comprehensively in a dedicated chapter of the zoning code. The purpose of Chapter 15-13C, Micro-Units, is “to encourage the production of a more diverse housing stock and more aﬀordable housing options. In enacting this chapter, it is also the intent of the City to implement the goals, objectives, and policies of the Housing Element of the City's General Plan.” The City deﬁnes “Micro-Unit Developments” as “housing developments containing 5 or more units 250 to 450 square feet.” The code also states that: 26 • 50 percent of the micro-units in a project must be at least 350 square feet in ﬂoor area. • A maximum of 25 percent of residential units in a development may be micro-units, unless otherwise agreed to via development agreement. • Micro-unit developments shall comply with a series of operational standards, such as minimum length of resident stay, per-unit occupancy limits, and submission of a development management plan. Per Section 15-13C-2, micro-unit developments are permitted in the following zones and districts: • Multifamily Residential (R-3) Zone. • Housing Overlay (HO) District. • Mixed-Use Overlay (MU-O) District. • Downtown Speciﬁc Plan (DSP). Parking standards require one space for studios and one-bedroom units, and 1.5 spaces for two- bedroom units. As is the case with other local approaches to alternative housing, deviations from parking standards require the submission of a TDM program and provision of mobility amenities, such as shuttles to transit stations, on-site childcare, and on-site bike-share stations. Section 15-13C-10, Design Standards, established a basic set of standards speciﬁc to micro-unit developments. They include required nine-foot ceiling heights, direct access to natural light, and total window space that is at least 15 percent of the unit’s total gross ﬂoor area. 27 Challenges to Alternative Housing The following discussion is based primarily on input from stakeholders consulted on this project and analysis of other jurisdictions’ approaches. There is general agreement that developing alternative housing faces multiple nonregulatory and local regulatory barriers. There are also potential approaches to overcoming each of these challenges, as outlined in the following section of this report. NONREGULATORY CHALLENGES The following potential challenges were identiﬁed by one or more stakeholders. They are also consistent with existing research and initial analysis for this project. Each will inﬂuence the potential for alternative housing in Palo Alto.  Financial Feasibility. Developers of co-housing, designers of micro housing and the housing ﬁnance expert consulted for this project highlighted current ﬁnancial challenges that may inﬂuence the construction of alternative housing as much as local regulation. These include lack of market demand, high interest rates, liability and insurance costs and construction costs. Stakeholders stressed the diﬃculty of acquiring lending for all but the largest multifamily projects, as well as liability concerns may result in extremely high insurance costs. The co-housing developer stated that developing co-ops and co-living projects as BMR developments is typically ﬁnancially infeasible. According to one designer, “In today’s ﬁnancial environment, only large projects can access the resources that allow you to dip into the lower income spectrum.”  Aﬀordability. There are concerns that housing costs do not decrease in proportion to unit size. Rents for smaller units are not suﬃciently less than rents for slightly larger units, particularly when rents are based on BMR income limits instead of market/size of unit. However, most studies in markets such as San Francisco and Seattle indicate that micro housing is signiﬁcantly more accessible than traditional housing. According to a May, 2025 study, the average rent of a micro unit in San Francisco was $1,888.00 and the average rent of a conventional unit was $3,516.00. In Seattle, the average rent of a micro unit was $1,289.00 versus a conventional rent of $2,388.00.  Community Concerns. As noted in Section 3, past applications for micro housing have been met with mixed opinions from community members. Due to their innovative nature, alternative housing products are less familiar to members of all communities than traditional housing types. Stakeholder input and public feedback to past applications indicates this may be a challenge in Palo Alto. As stated in the HE, most housing in Palo Alto consists of single-family homes. Multiple stakeholders stressed that residents have a history of strong, consistent opinions regarding housing development. This has resulted in predictability in many cases, but according to one stakeholder, may result in the community viewing micro housing or shared housing products as “a ‘step down,’ rather than a needed lateral approach.” REGULATORY CHALLENGES 28 Palo Alto land use and housing policies reviewed in Section 3 of this report indicate broad support for local alternative housing. The following section outlines City of Palo Alto zoning, development and design standards that may impede the construction of alternative housing. Lack of Formal Deﬁnitions As previously stated in this Report, PAMC Section 18.04 does not include formal deﬁnitions of the three alternative housing approaches included in HE Program 6.5(B). As a result, associated standards and regulations cannot be accurately assessed and adopted, and it is diﬃcult to identify districts in which the uses may be allowed. Moreover, without deﬁnitions, what constitutes each product is open to discretion by applicants, City staﬀ and community members alike. This prevents streamlining and accuracy in the entitlement process. Lack Integration Zoning Associated with lack of deﬁnitions, neither micro housing, shared housing or intergenerational housing is identiﬁed in land use tables of any zoning districts. Therefore, each application for these uses requires an interpretation of appropriateness by the Director, per PAMC Section 18.08.080. Moreover, the absence of alternative housing in land use tables means that none of the models are referenced in the “Purposes” statements of any zoning district. The result is an overall lack of City prioritization of alternative housing. As identiﬁed in Section 3, numerous Palo Alto policies encourage supporting the construction of alternative housing in various multifamily and commercial/mixed use districts. This language could be used to develop relevant, consistent PAMC purpose statements. Potentially Restrictive FAR Stakeholder input collected for this analysis, review of other jurisdictions’ regulations and past project applications suggest that FAR is a greater barrier to alternative housing, speciﬁcally micro housing, than units/acre standards. PlaceWorks understands that the City of Palo Alto has recently adopted, or is currently studying, FAR increases through the Housing Incentive and Aﬀordable Housing Incentive programs, and in various study and focus areas. Most of these areas are consistent with the type of walkable, transit-oriented urban nodes that are amenable to alternative housing. In addition, the PAMC includes multiple paths toward FAR increases. These include locating sites on El Camino Real in CN and CS zones, FAR increases for housing developments of 3-10 units (PAMC 18.18.065), project locations in speciﬁc assessment districts, and projects that include seismic or historic upgrades. PROPOSED HOUSING OPPORTUNITY DEVELOPMENT STANDARDS Existing Residential FAR Residential FAR Density Multiple-Family Residence (RM-40) 1.5 4.0 -C Downtown Commercial Community Subdistrict 2.0 4.0 29 CD-N Downtown Commercial Neighborhood Subdistrict 1.5 3.0 NV-R4 High Density Multiple Family Residential 3.0 5.0 NV-MXH High Density Mixed-Use 3.0 5.0 Potentially Restrictive Parking Requirements Nearly all stakeholders interviewed as part of this project stressed that alternative housing, with typically smaller units or shared spaces, justiﬁes and requires reduced parking requirements. Designers and local housing advocates identiﬁed Palo Alto’s current oﬀ-street parking requirements as a potential barrier to these products. To facilitate this, there is also general agreement that these products should be built in walkable, transit rich areas. PAMC Section 18.52.040 Minimum Oﬀ-Street Parking Requirements for Multifamily Uses shows that shared units and intergeneration housing are not regulated. The requirements for micro units are greater than ADUs and the same as studio and 1-bedroom apartments. Additionally, the current maximum size of a micro unit in Palo Alto (450 sq. ft.) is equivalent to many studios, making it diﬃcult to justify a reduced parking requirement. As previously noted, this is the only reference to “micro units” in the PAMC. CURRENT STREET PARKING MINIMUMS Parking Requirement No. spaces) Bike Parking Requirement No. spaces) Accessory Dwelling Unit None None Accessory Dwelling Units None None -Family Residential (R-2 & RMD Districts) 1.5 1 per unit Multiple-Family Residential Unit (450 sq. ft. or less) 1 1 per unit Unit 1 1 per unit -Bedroom Unit 1 1 per unit -Bedroom or Larger Unit 2 1 per unit Source: PAMC 18.52.040, Table 1 As will be assessed in Section 6, recent State legislation was passed to reduce parking requirement and manage parking policy around major transit stops in California. Lack Objective 30 Like most Bay Area jurisdictions with objective design standards (ODS), Palo Alto’s ODS apply to development types included in state streamlining laws and those indicative of regional housing trends. These include: • Traditional multifamily and mixed-use development forms, including townhouses (PAMC Chapter 18.24). • Townhome style multifamily projects, or “Village Residential” (PAMC Section 18.13.060). As has been stressed, the alternative housing products assessed in this report are diverse in form and utility. Palo Alto’s current ODS do not account for these diﬀerences, which include, but are not limited to: • The impacts of micro unit size on external façade patterns and massing breaks. • The diversity of scale and massing that may be associated with shared and micro housing. • Varied design and placement of private open spaces. • Changes to entryway standards resulting from primary common areas rather than individual units. • Design of common open spaces and shared facilities. • New standards for lighting and ventilation. Potentially Restrictive Requirements Multiple architects and planners interviewed for this project identiﬁed the City’s open space requirements as a barrier to past multifamily housing applications, and a potential barrier to alternative housing projects. They cited two potentially challenging components of the standards: • The minimum usable open space minimum, set at 150 sq./ft. per unit in most high- density and commercial mixed-use districts. • The existence of multiple, interrelated open space standards, including: • Minimum usable open space. • Minimum common open space. • Minimum private open space. • Minimum landscape/open space coverage. As suggested, this group of standards can be restrictive and is often perceived as overly complex. This may be particularly true for innovative housing types deﬁned by shared common and open areas, small units that maximize living areas, and designs that assume residents will utilize surrounding open spaces and resources. 31 Preliminary Zoning Approaches and Incentives The following sections include a series of preliminary approaches to facilitating alternative housing via PAMC amendments. APPROACH COMPREHENSIVE ZONING AMENDMENTS As is the case in most Bay Area cities, Palo Alto’s regulations for alternative housing types are currently limited and not fully cohesive. Amending the PAMC to include an integrated and intentional approach to regulation could support these housing models. As part of this approach, the City would: a. Deﬁne New Housing Uses b. Integrate Uses into Appropriate Districts c. Amend Development Standards d. Tailor Design Criteria and Objective Design Standards Deﬁne New This strategy includes formally deﬁning each model, identifying one or more as an allowed land use in selected districts, adding purpose statements to those districts that document the City’s support for such approaches and adopting development standards speciﬁc to the new uses. The following may be used to shape future deﬁnitions: • Micro housing. Micro units should be deﬁned as dwelling units of not more than 350 square feet, including a living room of not less than 220 square feet of ﬂoor area. Required amenities such as a kitchen sink, cooking appliances and refrigerator, as well a functional separate bathroom with lavatory, bathtub or shower should be identiﬁed. • Shared housing. The deﬁnition of shared housing should be consistent with, but expand on, recent State Density Bonus law updates. It should include the required ratio of bedrooms to shared kitchens, as well as tenant and operational requirements. • Intergenerational housing. Palo Alto should deﬁne intergenerational housing as developments with 10 or more units that are programmed with various multigenerational eligibility requirements and an approved operations plan. The following are examples of districts considered appropriate for alternative housing, based on location and existing purpose statements: • RM-40 High Density Multiple-Family Residence: This district is “…intended to create, preserve and enhance locations for apartment living at the highest density deemed appropriate for Palo Alto. The most suitable locations for this district are in the downtown area, in select sites in the California Avenue area and along major transportation corridors which are close to mass transportation…” 32 • CD-C Downtown Commercial: The purpose of the district includes “…accommodating a wide range of commercial uses serving city-wide and regional business and service needs, as well as providing for residential uses and neighborhood service needs…” • CS Commercial Service: As noted by City staﬀ, many major housing projects in Palo Alto are occurring on CS Commercial Service zoned parcels. The purpose of the district includes “...create and maintain areas accommodating citywide and regional services that may be inappropriate in neighborhood or pedestrian-oriented shopping areas, and which generally require automotive access for customer convenience, servicing of vehicles or equipment, loading or unloading, or parking of commercial service vehicles.” • NVCAP Districts: The NVCAP establishes an innovative vision for transit, mobility, and shared space that is consistent with alternative housing. In addition to transit accessibility, the Plan outlines a vision for public pedestrian access, stating: “Central to the vision for a re-imagined North Ventura neighborhood is a shared street, or “woonerf,” along Portage Avenue…that can provide a placemaking space for community gatherings, events, retail, and other ﬂexible uses.” The following NVCAP districts would support alternative housing: o NV-R4 High Density Multiple-Family Residential District: This district is intended to “create, preserve and enhance locations for apartment living at the greater density deemed appropriate for NVCAP. The most suitable locations for this district are along major transportation corridors which are close to mass transportation facilities and major employment and service centers.” o NV-MXH High Density Mixed-Use District: This is intended to “…ensure neighborhood- oriented retail and services are provided within walking distance of high density residential…” Development Another component of a comprehensive zoning approach involves amending and/or creating new development standards to accommodate alternative housing. This could include base FAR, parking requirements, minimum useable open space and maximum site coverage for the select districts. Objective The ﬁnal potential component of a comprehensive zoning approach includes tailoring Palo Alto’s design direction to the unique physical and design characteristics of alternative housing. Currently, PAMC Chapter 18.24 includes Contextual Design Criteria and ODS. This combination oﬀers applicants the ﬂexibility to undergo traditional discretionary review or streamlined ministerial review. Moreover, many projects to which ODS apply, including those consistent with State Density Bonus, can use waivers to adapt ODS to their desired project. Regardless, the availability of subjective and objective design standards is an important facet of regulating multifamily and residential mixed-use projects. Tailoring this regulation to alterative housing would result in a similar comprehensive approach. As highlighted by stakeholders and indicated by approaches in other jurisdictions, the following design characteristics of alternative housing project may diﬀer from traditional multifamily projects: 33 • Site layout. Shared housing often contains a central open space resulting in a campus- style, internally facing layout composed of multiple small buildings. Many ODS do not account for this campus-style development, with standards for building orientation, façade breaks, street facing elevations and other standards that respond to traditional, single building projects. • Façade articulation. Micro-units may signiﬁcantly impact the design of external building elevations. Their size results in more compressed unit breaks, while the reduction in private open spaces alters façade patterns. Current Palo Alto ODS for façade articulation, vertical and horizontal recesses and projections, and datum requirements may not translate to alternative housing forms. • Open space planning. Current ODS contain standards for private and common open space. The standards do not account for shared facilities, and existing minimum size requirements may be too large for micro-unit spaces. • Lighting and ventilation. Designers stressed that a key challenge for micro housing is ensuring that all units receive adequate light and ventilation. Standards for these developments should include updated minimum window area and shade structure design requirements. These represent a sample of design components that, if regulated via ODS tailored to one or more alternative housing approaches in lieu of the existing parallel standard, would support these housing types. As part of this approach, the City could: • Amend various Contextual Design Criteria sections to include design statements in support of alternative housing. • Adopt a new set of design standards applicable only to alternative housing. These standards would regulate relevant issues such as access to light and adequate ventilation, private and common open space design, window location and total area, and internal hallway and stair design. • Amend existing standards to include optional standards for alternative housing types. These could include standards for building entries into primary common areas for shared housing, reduced ceiling height requirements, reduced minimum façade breaks for micro apartments, and revised façade design standards that allow for the compressed external patterns created by micro units and their private open spaces. APPROACH AMEND KEY STANDARDS IN STRATEGIC LOCATIONS Rather than adopt comprehensive, district-wide Title 18 amendments to support alternative housing, the city could limit amendments to key development standards in speciﬁc locations consistent with the urban contexts shown to support alternative housing. Stakeholders, research, and past project applications in Palo Alto suggest that alternative housing is sensitive to restrictive FAR, open space and oﬀ-street parking standards, and that it thrives in 34 transit-oriented, highly resourced areas. One approach for Palo Alto could be to amend these standards in one or more of the following supportive geographies (see Figure 1): • California Avenue Pedestrian and Transit-Oriented Development (PTOD) Combining District. Multiple local housing advocates interviewed as part of this project identiﬁed the PTOD as appropriate for alternative housing and the target of associated PAMC amendments. Per PAMC 18.34.010, the PTOD is intended “to allow higher density residential dwellings on commercial, industrial and multi-family parcels within a walkable distance of the California Avenue Caltrain station…” and foster densities that “support the use of public transportation…Encourage a variety of housing types… Implement the city's Housing Element and Comprehensive Plan.” It should be noted that most of the PTOD Combining District boundary is within 0.5-miles of the California Avenue Caltrain Station. As such, the area is subject to the upzoning requirements of SB 79 and parking requirements of AB 2097 and could be included in Approach 3, below. • South of Forest Area Coordinated Area Plan (SOFA 1 CAP). The 2000 1 CAP included City approval of 160 new dwelling units and 30,000 square feet of retail and oﬃce space in a 9-block area. This land use vision, which “provides increased housing opportunities convenient to shops services, and transit,” and resulted in a public park, is consistent with alternative housing. Additionally, SOFA 1 policies such as Policy L-12 support non- automobile-oriented development, stating “…new commercial, residential. and mixed-use development shall, to the greatest extent possible, incorporate measures into their design and operation to mitigate potential nuisance conﬂicts with existing automobile and other service uses in the MU and AMF land use designation.” It should be noted that most of the SOFA 1 boundary is within 0.5 miles of the Palo Alto Caltrain Station. As such, the area is subject to the upzoning requirements of SB 79 and parking requirements of AB 2097 and could be included in Approach 3, below. • San Antonio Road Area. The 2023-2031 Housing Element establishes a pair of housing Focus Areas associated with GM (General Manufacturing) and ROLM (Research, Oﬃce and Limited Manufacturing) districts. Development standards for these housing focus areas, including FARs of up to 2.5, are established in PAMC Section 18.14.20. The Housing Element also calls for extending the local Housing Incentive Program (HIP) to these focus areas, which would further facilitate alternative housing. Program 6.6 of the Housing Element calls for developing the GM (General Manufacturing) Focus Area into a local area plan. Currently, this area of Palo Alto does not contain the diversity of transit and community resources that typically support alternative housing. However, as stated in Housing Element Program 6.6.C, the area plan would include integrating housing with multi-modal transportation and facilitating accessible retail/service amenities, parks and open spaces, and various placemaking improvements. 35 The now ongoing San Antonio Road Area Plan is an opportunity to zone for alternative housing as part of a larger community vision. As stated in current Plan documents, there is strong demand for mid-rise multifamily projects in the area, and it is understood that the area requires a vision for new public and private resources to support new housing. • ROLM Housing Element Focus Area. The ROLM Focus Area, which is located adjacent to the current San Antonio Road Area Plan is a separate target for alternative housing upzoning. It includes a series of housing opportunity sites and would beneﬁt from the community vision, policies and future implementation of the San Antonio Road Area Plan. FAR increases and potential other amendments could be tailored to these areas and adopted separately. This approach could also be implemented in the form of an overlay zone, as has been suggested by previous City Council members in response to relevant projects (see Chapter 3 of this Report). APPROACH COORDINATE WITH LEGISLATION Two recent state laws mandate a series of local zoning changes that will ease the development of alternative housing in areas shown to support such housing. In this zoning approach, Palo Alto would limit zoning amendments to station areas to build on these state mandates. Assembly Bill 2097 (2022) prohibits a public agency from imposing or enforcing any minimum automobile parking requirement on a residential, commercial or other development project located within one-half mile of a major transit stop. Per Section 65863.2 of the CA Government Code “the Legislature ﬁnds and declares that the imposition of mandatory parking minimums can increase the cost of housing, limit the number of available units, lead to an oversupply of parking spaces, and increased greenhouse gas emissions.” When eﬀective July 1, 2026, Senate Bill 79 (2025) will override local zoning limitations to allow greater heights and densities for residential development near transit stops in urban transit counties, including Santa Clara County. The Bill includes a tiered approach to height, density and FAR upzoning requirements based on the type of transit stop and distance from the stop. All three Caltrain stations in Palo Alto are considered Tier 1 stations. As shown in Table, required maximum heights range from 65 – 95 feet, densities from 30 – 160 du/acre, and FAR from 3.0 to 4.5. Development (Tier 1) Development feet) Residential Density Residential Ratio (FAR) 36 As indicated by research and stakeholders interviewed, micro and shared housing products will likely beneﬁt from parking and intensity changes resulting from these bills. This approach includes amending the City’s open space and site coverage standards for sites within 0.5-mile of the City’s Caltrain Stations to maximize alternative housing-friendly regulation near transit. Existing PAMC open space standards: Minimum Landscape/Open Space Coverage and Minimum Usable Open Space can be amended to a “Per shared housing resident” standard applicable to alternative housing projects. Maximum Site Coverage Amendments The densities and designs of alternative housing projects are challenged by site coverage restrictions. Maximum Site Coverage areas within 0.5-mile of Palo Alto’s three Caltrain stations can be increased to 100%. This is consistent with North Ventura Medium and High-Density Mixed-Use Districts (PAMC Chapter 18.29). POTENTIAL INCENTIVES FOR MICRO , SHARED, AND INTERGENERATION HOUSING As noted in previous sections of the report, alternative housing projects face signiﬁcant feasibility challenges. Palo Alto could reduce these challenges by adopting a series of amendments across various policies and regulations. These include, but are not limited to: Inclusionary Housing Requirements The developer of shared housing projects interviewed as part of this project stated that the aﬀordability requirements of all inclusionary housing ordinances are extremely diﬃcult to fulﬁll via the addition of aﬀordable units. In-lieu fees are typically the selected path to compliance. Palo Alto’s inclusionary requirements range from 15 to 25 percent, as established in PAMC Chapter 16.65, Citywide aﬀordable housing requirements. The City could consider performing a focused feasibility analysis to assess the potential for reduced aﬀordability requirements speciﬁcally for shared, intergenerational, and micro housing; and/or adopting new incentives to ease compliance with aﬀordability housing requirements. Transportation Demand Management Measures Past research, current analyses, and outreach conducted for this project suggest that alternative housing has a diﬀerent relationship with the surrounding mobility landscape than traditional single and multifamily housing. As a result, these products could be supported by a combination of reduced parking requirements and new “pre-approved” transportation demand management measures that supplant all PAMC Section 18.29.110 Transportation Demand Management Plan (TDM) submission and review requirements. Demand measures could include: • Subsidized transit pass programs • Transit access support programs for seniors • Shared bike facilities • Delivery service facilities • “School pool” programs 37 • Car share stations The City could adopt these measures as a full list to be included in projects, or as a list from which diﬀerent alternative projects must select a minimum number. APPROACHES FOR SENIOR HOUSING A senior housing overlay could be established as either a ﬁxed or a ﬂoating overlay, each discussed below. Fixed Overlay Zones A ﬁxed overlay is mapped to speciﬁc “base” zoning districts and therefore has typical district boundaries. In the case of senior housing, this approach would oﬀer predictability and clarity, pairing senior housing with the geographies and purposes of existing zone(s). The desired locations of senior housing are explicit in the overlay boundaries. Land within a ﬁxed overlay retains its existing underlying zoning and may be developed either under the base district regulations or subject to modiﬁed or additional senior housing standards. Because the eligible districts and applicable standards are established ahead of time, projects are subject to a typical and predictable review process. Multiple local cities including San Mateo have adopted ﬁxed senior housing overlay zones to encourage senior housing development. Palo Alto’s comprehensive planning and housing documents indicate a desire for senior housing in diverse neighborhoods. Candidate base districts and associate geographies should reﬂect this diversity, and could include: • Multifamily residential districts (RM-20, RM-30, and RM-40). • Commercial districts (CN and CC), are located near services and transit, including Caltrain stations, VTA and SamTrans bus routes, Dumbarton Express service, and transit-served corridors such as Alma Street, El Camino Real, and California Avenue. • SOFA and NVCAP districts. • Districts in or associated with the ROLM Focus Area. • Districts in or associated with the San Antonio Road Area Plan. Eligibility Requirements The overlay would establish the criteria to deﬁne a “senior housing project” eligible for special standards. At a minimum, these would include: • Occupancy is limited to senior citizens and qualiﬁed permanent residents, in accordance with state legal deﬁnitions. • Eligibility or restriction of congregate housing development. Requirements could be expanded to include: 38 • Speciﬁc design and physical criteria, and/or required facilities, needed to accommodate the elderly and comply with state and federal regulation. • Location criteria to ensure projects are proximate to public transportations and/or other daily use resources. • Requirements restricting use of the property to senior housing development in the future, via recordation of covenant. Special Development Standards: The overlay would establish special development standards, beyond base standards, modiﬁed to make senior housing feasible. Incentives: Palo Alto could consider developer incentives to promote senior housing projects consistent with overlaying requirements and standards. Potential examples include: • Fast track processing of plan review and approval. • Waiver of City fees. • Relaxation of City standards, including density and/or FAR increases. • Combinations of the above. Floating Overlay Zones Other jurisdictions have adopted “ﬂoating” overlay zones to facilitate speciﬁc development types. A ﬂoating overlay has no predetermined location. Rather than being mapped to base districts in advance, it is assigned to an individual lot or group of lots following project approval, including ﬁndings of site appropriateness and General Plan consistency. Applied this way, the overlay can supersede existing zoning regulation with development standards tailored to the unique characteristics of a particular site. Because a ﬂoating overlay is applied on a project-by-project basis, the on-site and oﬀ-site conditions of every project are reviewed. This facilitates additional control and discussion. This approach, without boundaries, also expands the geographic potential of a given project type. A ﬂoating senior housing overlay typically assumes that senior housing may work in all areas of a city, depending on the speciﬁcs of a site and its surroundings. Menlo Park and Foster City have established ﬂoating overlay districts to facilitate senior housing development. If Palo Alto were to develop a ﬂoating senior housing overlay, the ordinance would also need to address: Development Standards Without reference to base layers, neither base development standards nor special development standards are directly applicable. The City would need to adopt a development standards structure, potentially through: • Association with the Planned Community (PC) district. • Adoption of overlay-speciﬁc development standards. 39 Location criteria: Without base layer boundaries, a ﬂoating overlay would not regulate allowed location. It would be applied to a site in any base district the City determines is suitable for senior housing, with each parcel retaining its underlying zoning. As such, the City would likely establish locational criteria against which proposed projects are reviewed. Potential criteria include: • Compatibility of surrounding land uses. • Noise, air quality, and/or other environmental impacts. • Adequacy of infrastructure. • Proximity to medical services, open space, and other daily resources. • Proximity to public transit. Project review and approval: Due to the project-based review structure, a successful ﬂoating ordinance would regulate the project review and approval process, including: • Sequence of review and approval by the PTC, ARB, and/or PSC and City Council. • The type of site approval, conditional or otherwise. • Potential developer agreement requirements, to ensure implementation of all project commitments that qualiﬁed the project for approval and/or incentives. August 11, 2026 www.paloalto.gov Alternative Housing Program Policy and Services Committee:Action Item Vishnu Krishnan. Senior Planner 2 Purpose ❑Staff presentation on the following alternative housing models: •Micro housing •Shared housing •Intergenerational housing •Senior housing ❑Review PTC recommendations of the preferred alternative housing types. ❑Provide policy-level feedback on: •Implementation tools •Incentives ❑Next steps 3 Program 6.5, Objective B: •Allow innovative housing such as micro unit housing,new shared, and intergenerational housing models to help meet the housing needs of aging adults, students and lower -income individuals. •To the extent that density presents a constraint…identify sites where elimination of maximum dwelling units per acre is appropriate. •Meet with stakeholders and conduct public hearings. •Change local zoning regulations. Why Alternative Housing? Existing housing stock primarily consists of single -family homes and conventional apartments. Growing demand for housing is driven by: •Housing affordability •Demographic change •Aging population •Changing household sizes Alternative Housing Program Overview 4 Alternative Housing Typologies Studied Micro-Units •Self-contained dwelling units intentionally designed to be smaller than conventional studios. •Approximately 250 to 350 square feet in size. •Contains a private bathroom and kitchenette. Shared Housing Intergenerational Senior Housing •Dwelling units with common communal areas such as kitchen, dining, or living spaces. •May be built as a co-living developments, cohousing communities, and/ or graduate student residences. •Dwelling units designed to house residents from at least two different age groups. •Units typically include shared amenities and social programming intended to foster interaction and mutual support. •Dwelling units intended to serve adults aged 55 years or older. Must include at least 35 dwelling units. •May include supportive services and amenities such as community gather spaces, wellness programming, transportation assistance, meal services, and recreational activities. 5 ▪HCD uses Census Definition of “Housing Unit” •“A house, an apartment, a mobile home, a group of rooms, or a single room occupied as separate living quarters.” •Micro-unit or condo in shared development, and Senior housing would count. •Intergenerational housing may count if it meets HCD's definition of a housing unit. •Shared/co-living spaces with single entrance likely not counted for RHNA. •Memory care and nursing care facilities do not count. AB 1131 seeks to change this. ▪2024 HCD Report: Potential Change – Group Quarters / AB 682 •Recognize a wider range of housing. •Group Quarters including shared/ co-living spaces with single entrances should be considered. •“Some group quarters represent an essential form of housing ”. •State “should leverage RHNA to incentivize housing types”. State of California: Alternative Housing & RHNA 6 ▪AB 130: Streamlining and environmental review exemptions for qualifying projects located near major transit, improving the feasibility of compact housing projects. ▪AB 2097: Eliminates minimum parking requirements for projects located near major transit stops. ▪SB 79: Requires jurisdictions to permit increased residential development intensity within designated transit-oriented development areas. ▪State Density Bonus Law: Incentivizes affordable and qualifying housing through additional development capacity and regulatory concessions. ▪MTC TOC Policy: Fosters station area density, parking, access and housing requirements. Regulatory Consideration: Regional and State TOD Initiatives 7 ❑Approach 1:Comprehensive citywide zoning amendments. •Define the use. •Integrate the use into appropriate districts. •Amend development standards. •Tailor design criteria and objective design standards. ❑Approach 2:Targeted amendments near areas with existing amenities and services. •Amend development standards such as FAR, parking requirements, minimum usable open space, and maximum site coverage in targeted locations. ❑Approach 3:Focus on key development standards in coordination with State Legislation. •Amending development standards to parcels in the TOD area and Housing Opportunity Sites in close proximity to the TOD areas. Potential Implementation Approaches – Micro Housing 8 ❑Option 1:Fixed Senior Housing Overlay. •Mapped onto select locations for greater predictability. •Establishes: •Clear geographic boundaries. •Streamlined project review. •Tailored development standards and incentives for designated areas. ❑Option 2:Floating Senior Housing Overlay. •Projects could apply for the overlay to an individual site providing flexibility, giving the City the opportunity to evaluate proposals as they arise. •Establishes: •Site-specific review of individual proposals. •Flexibility to evaluate unique site and project opportunities. •Potential application in a broader range of locations. •Greater discretionary review. Potential Implementation Approaches – Senior Housing 9 ❑Development Standards •Modified parking standards. •Adjustments to FAR and maximum site coverage. •Flexible open space requirements. •Minimum and maximum unit size standards. ❑Process Improvements •Streamlined permit review. •Transportation Demand Management measures. ❑Financial Incentives •Evaluation of fee reductions. •Focus on deed-restricted affordable housing. Potential Implementation Tools 10 Areas/ Districts to Consider (in addition to TOD-eligible areas) ❑South of Forest Avenue ❑San Antonio Road ❑California Avenue Pedestrian and Transit Oriented Development (PTOD) Combining District ❑Includes North Ventura Coordinated Plan (NVCAP) Area (NV-R4 and NV-MXH zones) ❑ROLM Focus Area 11 ❑Focus on: •Micro housing •Senior housing ❑Prioritize locations: •Near high-quality transit: University Avenue, California Avenue, San Antonio Road Caltrain Stations. •Close to services and areas with existing amenities: Parks, Grocery stores, Libraries, Community Centers, and Healthcare facilities. Direction from the Planning and Transportation Commission 12 ❑Alternative Housing Types: •Confirmation that micro housing and senior housing should remain the preferred alternative models. ❑Prioritized Locations: •Confirmation that implementation efforts should prioritize locations with existing high-quality transit, neighborhood-serving commercial uses; and areas with existing community amenities. ❑Overlay type: •Preferred overlay type and the applicability of incentives for senior housing. ❑Standards/ Tools/ Incentives: •Input on which tools, standards, or incentives need further evaluation in advance of preparing draft zoning amendments. •Feedback on the next steps to prepare development standards specific to micro housing (parking, FAR, site coverage, usable open space, and objective design standards). Feedback Requested 13 Following Committee's feedback, Staff will: ❑Develop preferred senior housing strategy ❑Draft zoning amendments ❑Present to: •Architectural Review Board •Planning & Transportation Commission ❑Return to City Council Next Steps Vishnu Krishnan Senior Planner Vishnu.Krishnan@PaloAlto.gov (650)329-2425