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Home My WebLink About2026-09-09 Planning & Transportation Commission Agenda PacketPLANNING AND TRANSPORTATION COMMISSION Regular Meeting Wednesday, September 09, 2026 Community Meeting Room & Hybrid 6:00 PM Amended Agenda Amended Agenda Items Appear Below in RED Planning and Transportation Commission meetings will be held as “hybrid” meetings with the option to attend by teleconference/video conference or in person. To maximize public safety while still maintaining transparency and public access, members of the public can choose to participate from home or attend in person. Information on how the public may observe and participate in the meeting is located at the end of the agenda. Masks are strongly encouraged if attending in person. The meeting will be broadcast on Cable TV Channel 76, live on YouTube https://www.youtube.com/c/cityofpaloalto, and streamed to Midpen Media Center https://midpenmedia.org. Commissioner names, biographies, and archived agendas and minutes are available at http://bit.ly/PaloAltoPTC. VIRTUAL PARTICIPATION CLICK HERE TO JOIN (https://cityofpaloalto.zoom.us/j/91641559499) Meeting ID: 916 4155 9499 Phone: 1(669)900-6833 PUBLIC COMMENTS General Public Comment for items not on the agenda will be accepted for up to three minutes or an amount of time determined by the Chair. In-person comments will be heard at the beginning of the agenda and remote comments will be heard at the end of the agenda. All requests to speak will be taken until 5 minutes after the staff’s presentation. Written public comments can be submitted in advance to Planning.Commission@PaloAlto.gov and will be provided to the Commission and available for inspection on the City’s website three days before the meeting. Please clearly indicate which agenda item you are referencing in your subject line. Spokespersons that are representing a group of five or more people who are identified as present at the meeting at the time of the spokesperson's presentation will be allowed up to ten (10) minutes at the discretion of the Chair, provided that the non-speaking members agree not to speak individually. The Chair may limit Public Comments to thirty (30) minutes for all combined speakers. The Chair may reduce the allowed time to speak for Study Sessions and Action Items to two (2) minutes or less to accommodate a larger number of speakers. PowerPoints, videos, or other media to be presented during public comment are accepted only by email to Planning.Commission@PaloAlto.gov at least 24 hours prior to the meeting. Once received, the Clerk will have them shared at public comment for the specified item. To uphold strong cybersecurity management practices, USB’s or other physical electronic storage devices are not accepted. Signs and symbolic materials less than 2 feet by 3 feet are permitted provided that: (1) sticks, posts, poles or similar/other type of handle objects are strictly prohibited; (2) the items do not create a facility, fire, or safety hazard; and (3) persons with such items remain seated when displaying them and must not raise the items above shoulder level, obstruct the view or passage of other attendees, or otherwise disturb the business of the meeting. 1 Regular Meeting September 09, 2026 Materials related to an item on this agenda submitted to the Board after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas TIME ESTIMATES Listed times are estimates only and are subject to change at any time, including while the meeting is in progress. The Commission reserves the right to use more or less time on any item, to change the order of items and/or to continue items to another meeting. Particular items may be heard before or after the time estimated on the agenda. This may occur in order to best manage the time at a meeting or to adapt to the participation of the public. 2 Regular Meeting September 09, 2026 Materials related to an item on this agenda submitted to the Board after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas CALL TO ORDER/ ROLL CALL AGENDA CHANGES, ADDITIONS AND DELETIONS The Chair or Commission majority may modify the agenda order to improve meeting management. IN-PERSON PUBLIC COMMENT Members of the public may speak to any item NOT on the agenda. 1-3 minutes depending on number of speakers. In-person comments will be heard at the beginning of the agenda and remote comments will be heard at the end of the agenda. CITY OFFICIAL REPORTS 1.Director's Report, Meeting Schedule, and Assignments ACTION ITEMS Public Comment is Permitted. Applicants/Appellant Teams: Fifteen (15) minutes, plus three (3) minutes rebuttal. All others: Three (3) minutes per speaker. 2.Recommendation on an Ordinance Amending Palo Alto Municipal Code Titles 18 and 21 to Address Direction from City Council Regarding Separate Sale of Accessory Dwelling Units. CEQA Status: Exempt Pursuant to CEQA Guidelines Section 15061(b)(3). Supplemental Report Added 6:15 PM – 7:00 PM APPROVAL OF MINUTES Public Comment is Permitted. Three (3) minutes per speaker. 3.Approval of Planning & Transportation Commission Draft Summary Minutes of August 12, 2026 COMMISSIONER QUESTIONS, COMMENTS, ANNOUNCEMENTS OR FUTURE MEETINGS AND AGENDAS Members of the public may not speak to the item(s). VIRTUAL PUBLIC COMMENT Members of the public may speak to any item NOT on the agenda. 1-3 minutes depending on number of speakers. In-person comments will be heard at the beginning of the agenda and remote comments will be heard at the end of the agenda. 3 Regular Meeting September 09, 2026 Materials related to an item on this agenda submitted to the Board after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas ADJOURNMENT OTHER INFORMATION The materials below are provided for informational purposes, not for action or discussion during this meeting’s agenda. Written public comments may be submitted in advance and will be provided to the Commission and availible for public inspection on the City’s website three days before the meeting. A.Public Comment 4 Regular Meeting September 09, 2026 Materials related to an item on this agenda submitted to the Board after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas PUBLIC COMMENT INSTRUCTIONS Members of the Public may provide public comments to teleconference meetings via email, teleconference, or by phone. 1.Written public comments may be submitted by email to Planning.Commission@PaloAlto.gov. 2.Spoken public comments using a computer will be accepted through the teleconference meeting. To address the Commission, click on the link below to access a Zoom-based meeting. Please read the following instructions carefully. ◦You may download the Zoom client or connect to the meeting in- browser. If using your browser, make sure you are using a current, up-to-date browser: Chrome 30, Firefox 27, Microsoft Edge 12, Safari 7. Certain functionality may be disabled in older browsers including Internet Explorer. ◦You may be asked to enter an email address and name. We request that you identify yourself by name as this will be visible online and will be used to notify you that it is your turn to speak. ◦When you wish to speak on an Agenda Item, click on “raise hand.” The Clerk will activate and unmute speakers in turn. Speakers will be notified shortly before they are called to speak. ◦When called, please limit your remarks to the time limit allotted. A timer will be shown on the computer to help keep track of your comments. 3.Spoken public comments using a smart phone will be accepted through the teleconference meeting. To address the Commission, download the Zoom application onto your phone from the Apple App Store or Google Play Store and enter the Meeting ID below. Please follow the instructions above. 4.Spoken public comments using a phone use the telephone number listed below. When you wish to speak on an agenda item hit *9 on your phone so we know that you wish to speak. You will be asked to provide your first and last name before addressing the Commission. You will be advised how long you have to speak. When called please limit your remarks to the agenda item and time limit allotted. CLICK HERE TO JOIN Meeting ID: 916 4155 9499 Phone:1-669-900-6833 Americans with Disability Act (ADA) It is the policy of the City of Palo Alto to offer its public programs, services and meetings in a manner that is readily accessible to all. Persons with disabilities who require materials in an appropriate alternative format or who require auxiliary aids to access City meetings, programs, or services may contact the City’s ADA Coordinator at (650) 329-2550 (voice) or by emailing ada@PaloAlto.gov. Requests for assistance or accommodations must be submitted at least 24 hours in advance of the meeting, program, or service. 5 Regular Meeting September 09, 2026 Materials related to an item on this agenda submitted to the Board after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas Item No. 1. Page 1 of 2 Planning & Transportation Commission Staff Report From: Planning and Development Services Director Lead Department: Planning and Development Services Meeting Date: September 9, 2026 Report #: 2608-6678 TITLE Director's Report, Meeting Schedule, and Assignments RECOMMENDATION Staff recommends that the Planning and Transportation Commission (PTC) review and comment as appropriate. BACKGROUND This document includes the following items: Upcoming PTC Agenda Items PTC Meeting Schedule PTC Representative to City Council (Rotational Assignments) Commissioners are encouraged to contact Samuel Tavera (Samuel.Tavera@PaloAlto.gov) to notify staff of any planned absences one month in advance, if possible, to ensure the availability of a PTC quorum. PTC Representative to City Council is a rotational assignment where the designated commissioner represents the PTC’s affirmative and dissenting perspectives to Council for quasijudicial and legislative matters. Representatives are encouraged to review the City Council agendas (https://www.cityofpaloalto.org/City-Hall/City-Council/Council-Agendas-Minutes) for the months of their respective assignments to verify if attendance is needed or contact staff. Prior PTC meetings are available online at https://midpenmedia.org/category/government/city-of-palo-alto/boards-and- commissions/planning-and-transportation-commission. UPCOMING PTC ITEMS Item 1 Item 1 Staff Report Packet Pg. 6 Item No. 1. Page 2 of 2 September 30, 2026 Senate Bill (SB) 9 Permanent Ordinance South Palo Alto Bike/Ped Connectivity project Bryant Street Bike Boulevard and Lincoln Avenue Traffic Calming Project ATTACHMENT AUTHOR/TITLE: Item 1 Item 1 Staff Report Packet Pg. 7 Planning & Transportation Commission 2026 Meeting Schedule 1 2 3 1 1 2026 Schedule Meeting Dates Time Location Status Planned Absences 1/14/2026 6:00 PM Hybrid Regular 1/28/2026 6:00 PM Hybrid Cancelled 2/11/2026 6:00 PM Hybrid Regular James 2/25/2026 6:00 PM Hybrid Regular Chang 3/11/2026 6:00 PM Hybrid Special James, Ji 3/25/2026 6:00 PM Hybrid Regular 4/8/2026 6:00 PM Hybrid Regular James, Templeton 4/29/2026 6:00 PM Hybrid Regular 5/13/2026 6:00 PM Hybrid Regular Hechtman 5/27/2026 6:00 PM Hybrid Regular 6/10/2026 6:00 PM Hybrid Regular Hechtman 6/24/2026 6:00 PM Hybrid Cancelled Chang 7/8/2026 6:00 PM Hybrid Regular James 7/29/2026 6:00 PM Hybrid Cancelled 8/12/2026 6:00 PM Hybrid Regular 8/26/2026 6:00 PM Hybrid Regular Templeton 9/9/2026 6:00 PM Hybrid Regular 9/30/2026 6:00 PM Hybrid Regular 10/14/2026 6:00 PM Hybrid Regular 10/28/2026 6:00 PM Hybrid Regular 11/11/2026 6:00 PM Hybrid Cancelled 11/18/2026 6:00 PM Hybrid Special Templeton 11/25/2026 6:00 PM Hybrid Cancelled 12/9/2026 6:00 PM Hybrid Regular 12/30/2026 6:00 PM Hybrid Cancelled 2026 Assignments - Council Representation (primary/backup) January February March April May June Bryna Chang Allen Akin Bart Hechtman Kevin Ji Todd James Forest Peterson Todd James Forest Peterson Cari Templeton Bryna Chang Allen Akin Bart Hechtman July August September October November December Council Cari Templeton Bryna Chang Allen Akin Bart Hechtman Kevin Ji Summer Break Kevin Ji Todd James TBD Cari Templeton Bryna Chang Item 1 Attachment A - 2026 PTC Schedule & Assignments Packet Pg. 8 Item No. 2. Page 1 of 5 Planning & Transportation Commission Staff Report From: Planning and Development Services Director Lead Department: Planning and Development Services Meeting Date: September 9, 2026 Report #: 2608-6688 TITLE Recommendation on an Ordinance Amending Palo Alto Municipal Code Titles 18 and 21 to Address Direction from City Council Regarding Separate Sale of Accessory Dwelling Units. CEQA Status: Exempt Pursuant to CEQA Guidelines Section 15061(b)(3). RECOMMENDATION Staff recommends the Planning and Transportation Commission (PTC) take the following actions: 1. Receive public testimony and review the draft ordinance (Attachment A); and 2. Provide a recommendation to the City Council on the draft ordinance (Attachment A). EXECUTIVE SUMMARY The Planning and Transportation Commission (PTC) reviewed a draft Accessory Dwelling Unit (ADU) ordinance on May 13, 2026.1 On the question of separate sale of ADUs the PTC recommended staff return for further discussion once more data was available on the implementation by other cities. At the August 17, 2026,2 City Council hearing, the Council approved the ADU ordinance and remanded the issue of separate sale of ADUs back to the PTC and asked that the PTC provide a recommendation to Council on how to implement that component before the end of the year. Attachment A is a draft ordinance that would authorize separate sale of ADUs. BACKGROUND Past Council Direction At the time Council adopted Ordinance 5656 in 2025, the City’s most recent second unit Ordinance, they also directed staff to investigate the feasibility of allowing ADUs to be sold separately from the primary dwelling unit which became an opt-in option for all jurisdictions in California in 2024 under Senate Bill (SB) 477; qualified nonprofit corporations were permitted to do this under AB 1033 without a jurisdiction opting-in. 1 May 13, 2026 PTC Meeting (Action Item #2): https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=19323 2 August 17, 2026 Council Meeting (Action Item #6): https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=18779 Item 2 Item 2 Staff Report Packet Pg. 9 Item No. 2. Page 2 of 5 During the May 2026 PTC hearing, the PTC felt there was not enough regional data available to determine how successful separate sale of ADUs would be and, accordingly, did not incorporate it into the recommended ordinance to Council. The PTC recommended staff return to discuss separate sale of ADUs once more data was available. During the August 2026 Council meeting, a majority of the members on Council suggested the City should be proactive in allowing for separate sale of ADUs. Council remanded the issue to the PTC with some specific direction, discussed in more details below. ANALYSIS In 2024, the State legislature adopted Assembly Bill (AB) 10335 which required jurisdictions to allow certain ADUs developed by qualified nonprofit corporations to be sold separately from the primary unit, and allowed jurisdictions to extend this option to all other ADUs. Since then, roughly 10 jurisdictions in California have passed ordinances allowing for separate sale of ADUs, and more appear to be poised to adopt ordinances in the coming year. While San Jose was the earliest jurisdiction to extend separate sale to all ADUs in 2024, their staff noted only two applications had been approved and two more were currently under review since 2024 (the first project to go through this process in San Jose was recently sold). Other jurisdictions (such as Santa Cruz, and more recently the Cities of Berkeley and San Diego) have either recently adopted ordinances or have experienced a similar low volume of projects despite early adoption of an ordinance. While members of the public have reached out to City staff since 2024 on this topic, it is unclear whether the City would see a significant volume of applications for separate ownership, if allowed. In comparison, since the adoption of SB 9 (2021) procedures in 2021, the City has received 38 applications. It is worth noting that a property owner can already achieve separate sale of an ADU through SB 9 by building an ADU on an existing lot and then subdividing the lot using the SB 9 Urban Lot Split provisions. The proposed ordinance would differ from SB 9 by creating an air parcel on the property instead of dividing it physically. August Council Hearing Discussion Staff has prepared draft language in Attachment A, that could be placed within Palo Alto Municipal Code (PAMC) Chapter 21.09. The draft language mirrors the streamlined process established for SB 9 development but is tailored to provide for existing or proposed ADUs. It also incorporates the requirements under Government Code (GC) Section 66342. The SB 9 process is a streamlined subdivision process that consolidates the requirements of the Preliminary Parcel Map and Parcel Map6 applications and provides the Director of Planning and Development Services with the authority to approve or deny the application. Unlike SB 9, this proposal for separate sale of ADUs is not a State-mandated, non-discretionary process, so the two-step process of a preliminary parcel map and parcel map could be retained if the PTC 5 AB 1033 language was incorporated into Government Code (GC) Section 66340-66342: https://leginfo.legislature.ca.gov/faces/codes_displayText.xhtml?lawCode=GOV&division=1.&title=7.&part=&chap ter=13.&article=4. 6 Preliminary and Parcel Map Checklists (see pg. 29-43): https://www.paloalto.gov/files/assets/public/v/1/planning-amp-development-services/file-migration/current- planning/forms-and-guidelines/overview-and-guidelines-for-the-review-of-subdivision-projects.pdf. Item 2 Item 2 Staff Report Packet Pg. 10 Item No. 2. Page 3 of 5 believes it is valuable. During the Council hearing, council members requested staff study the following: Restricting Certain Land Uses for Separate Sale ADUs 9 Requiring Minimum Lot Sizes for Separate Sale ADUs Identifying a Specific Project Fee 10 This is consistent with staff’s approach to processing these applications in a similar manner to SB 9 applications. However, should the City adopt a new fee in the upcoming year specifically for this new project type, the proposed text will give staff the flexibility to charge that new fee until this ordinance is updated. Staff believe 9 “Dwelling unit” means a room or group of rooms including living, sleeping, eating, cooking, and sanitation/bathing facilities, constituting a separate and independent housekeeping unit, occupied or intended for occupancy on a non-transient basis and having not more than one kitchen. 10 FY 2027 Muni Fee Schedule (see pg. 82/123): https://www.paloalto.gov/files/assets/public/v/1/administrative- services/city-budgets/municipal-fee-schedules/fy-2027-adopted-municipal-fee-schedule.pdf. Item 2 Item 2 Staff Report Packet Pg. 11 Item No. 2. Page 4 of 5 this will accurately capture the time needed to ensure the costs of these projects remain cost recovery for staff time and resources and is not excessive. Below-Market-Rate (BMR) ADUs and Larger Housing Development Projects 13 FISCAL/RESOURCE IMPACT STAKEHOLDER ENGAGEMENT 13 Although the City’s inclusionary ordinance requires that BMR units be comparable in size and amenities to market rate units, it is becoming increasingly common for developers to avoid this requirement through the use of an incentive or concession under State Density Bonus Law. Item 2 Item 2 Staff Report Packet Pg. 12 Item No. 2. Page 5 of 5 The PAMC requires notice of this public hearing be published in a local paper at least 10 days in advance. Notice of a public hearing for this project was published in the Daily Post on August 28, 2026, which is 12 days in advance of the meeting. ENVIRONMENTAL REVIEW ALTERNATIVE ACTIONS ATTACHMENTS AUTHOR/TITLE: Item 2 Item 2 Staff Report Packet Pg. 13 *NOT YET APPROVED* 1 0160208_20260902_ay16 Ordinance No. _____ Ordinance of the Council of the City of Palo Alto Amending Title 18 (Zoning) and Title 21 (Subdivisions) of the Palo Alto Municipal Code to Allow Sale of Accessory Dwelling Units Separately from a Primary Dwelling Unit The Council of the City of Palo Alto does ORDAIN as follows: SECTION 1. Findings and Declarations. A. On ______, 2026, the City of Palo Alto adopted Ordinance ____, amending the City’s requirements for ADUs and JADUs to reflect changes in State law. B. On August 17, 2026, the City Council directed staff to evaluate modifying the City’s ordinance to allow ADU condominiums as allowed under AB 1033 (2024). C. Upon recommendation of City Staff and the Planning and Transportation Commission, the Council of the City of Palo Alto desires to amend its ADU and Subdivision ordinance to implement AB 1033 and to make additional clerical amendments and minor amendments to conform with State law. D. Section 2 of this Ordinance amends Chapter 18.09 (Accessory and Junior Accessory Dwelling Units to align with the new Chapter 21.09 (Parcel Maps for Separate Sale of ADUs) of the Palo Alto Municipal Code. These are minor amendments to address Council’s direction to allow for ADUs to be sold separately from the primary dwelling. E. Section 3 of this Ordinance introduces a new Chapter, Chapter 21.09 (Parcel Maps for Separate Sale of ADUs), in Title 21 (Subdivisions and Other Divisions of Land) of the Palo Alto Municipal Code. This new chapter intends to address Council’s direction to allow for ADUs to be sold separately from the primary dwelling. F. This ordinance is adopted to incorporate changes in state law that have occurred since the adoption of Ordinance ____ and to respond to direction from the City Council. SECTION 2. Chapter 18.09 (Accessory Dwelling Units and Junior Accessory Dwelling Units) of Title 18 (Zoning) of the Palo Alto Municipal Code (“PAMC”) is amended to read as follows (additions underlined and deletions struck-through): [. . .] 18.09.030 Units Exempt from Generally Applicable Local Regulations [. . .] Item 2 Attachment A - Draft Ordinance Packet Pg. 14 *NOT YET APPROVED* 2 0160208_20260902_ay16 (k) The unit An ADU allowed under Table 1 shall not be sold separately from the primary dwellingresidence, except as allowed under Government Code Section 66341 and PAMC 21.09. [. . .] 18.09.040 Units Subject to Local Standards [. . .] (n) Miscellaneous requirements (k) TheAn ADU allowed under Table 2 unit shall not be sold separately from the primary dwellingresidence, except as allowed under Government Code Section 66341 and PAMC 21.09. [. . .] SECTION 3. Chapter 21.09 (Parcel Maps for Separate Sale of ADUs) of Title 21 (Subdivisions and Other Divisions of Land) of the Palo Alto Municipal Code is added to read: 21.09.010 Purpose and Applicability The intent of this Chapter is to implement California Government Code Section 66342 and to apply objective local development standards for condominium subdivisions that facilitate separate conveyance of accessory dwelling units. Except as expressly stated in this Chapter, all other objective policies and requirements governing subdivisions shall apply. 21.09.020 Permit Required Pursuant to Government Code Section 66342, this Chapter provides for the streamlined approval of subdivisions for condominium purposes to permit separate conveyance of existing or proposed Accessory Dwelling Units (ADU) from a primary dwelling. These condominiums shall be sold or otherwise conveyed separate from the primary residence only under the conditions outlined in this Chapter. 21.09.030 ADU Condominium Requirements All projects shall conform to the following requirements: Item 2 Attachment A - Draft Ordinance Packet Pg. 15 *NOT YET APPROVED* 3 0160208_20260902_ay16 (a) The Director of Planning is authorized to promulgate regulations, forms, and/or checklists setting forth application requirements for a preliminary parcel map and parcel map for condominium purposes pursuant to this Chapter. (b) All structures and buildings included as part of an ADU condominium project shall conform to the building and zoning requirements applicable to the zoning district in which the project is proposed to be located and Chapter 18.09, as applicable. Designation of individual condominium units shall not be deemed to reduce or eliminate any of the building and zoning requirements applicable to any such buildings or structures. (c) Permitted Use of Condominium ADUs. Except as preempted by state law, all condominium ADUs created through this shall only be used as a dwelling unit as defined by Title 18. (d) The maximum number of ADU condominiums permitted is based on the allowable combinations of ADUs permitted under Table 1 and Table 2 of PAMC 18.09, or Government Code 66314-66331, as applicable. (e) The condominium shall be created pursuant to the Davis-Stirling Common Interest Development Act (Part 5 (commencing with Section 4000) of Division 4 of the Civil Code). (f) The condominium shall be created in conformance with all applicable objective requirements of the Subdivision Map Act (Division 2 (commencing with Section 66410)) and all other objective requirements of this Chapter. (1) Neither a subdivision map nor a condominium plan shall be recorded with the county recorder without each lienholder’s consent. The following shall apply to the consent of a lienholder: (A) A lienholder may refuse to give consent. (B) A lienholder may consent provided that any terms and conditions required by the lienholder are satisfied. (2) Prior to recordation of the initial or any subsequent modifications to the condominium plan, written evidence of the lienholder’s consent shall be provided to City staff and the county recorder along with a signed statement from each lienholder that states as follows: “(Name of lienholder) hereby consents to the recording of this condominium plan in their sole and absolute discretion and the borrower has or will satisfy any additional terms and conditions the lienholder may have.” Item 2 Attachment A - Draft Ordinance Packet Pg. 16 *NOT YET APPROVED* 4 0160208_20260902_ay16 (3) The lienholder’s consent shall be included on the condominium plan, or attached to the condominium plan that includes the following information: (A) The lienholder’s signature. (B) The name of the record owner or ground lessee. (C) The legal description of the real property. (D) The identities of all parties with an interest in the real property as reflected in the real property records. (E) The lienholder’s consent shall be recorded in the office of the county recorder of the county in which the real property is located. (g) An ADU shall be sold or otherwise conveyed separate from the primary dwelling only under the conditions outlined in this Chapter, Title 21 of the Palo Alto Municipal Code, and under the applicable conditions of Government Code Section 66342. Prior to approval of a parcel map, a home or property owners’ association or similar entity shall be formed for any condominium project. In addition to such covenants, conditions, and restrictions that may be required by the Department of Real Estate of the State of California pursuant to Title 6 (Condominiums) of the Civil Code or other State laws or policies, the organization documents shall provide for the following: (1) Conveyance of units. (2) Management of common areas within the project. (3) A proposed annual operating budget containing a reserve fund to pay major anticipated maintenance, repair, or replacement expenses; and indicating the association fees needed for the operating budget and reserve fund. (4) Collection of dues. (5) Payment of public utilities not billed separately to each unit. (h) The owner of a property or a separate interest within an existing planned development that has an existing association, as defined in Section 4080 of the Civil Code, shall not record a condominium plan to create a common interest development under Section 4100 of the Civil Code without the express written authorization by the existing association. For purposes of this paragraph, written authorization by the existing Item 2 Attachment A - Draft Ordinance Packet Pg. 17 *NOT YET APPROVED* 5 0160208_20260902_ay16 association means approval by the board at a duly noticed board meeting, as defined in Section 4090 of the Civil Code, and if needed pursuant to the existing association’s governing documents, membership approval of the existing association. (i) The applicant shall prepare a declaration of covenants, conditions and restrictions (CC&Rs) which shall be recorded and apply to each owner of a condominium unit within the project. The CC&Rs shall be recorded at, or prior to, the time of parcel map approval, and shall include all applicable conditions of approval and requirements of the City. The CC&Rs shall, at a minimum, provide: (1) That any amendment to the CC&Rs related to the conditions of approval or other requirements of this Chapter may not be approved without prior consent of the City. (2) That there shall be an entity created (e.g., a property or homeowners’ association) which shall be financially responsible for and shall provide for the effective establishment, operation, management, use, repair and maintenance of all common areas and facilities. (3) A provision containing information regarding the conveyance of units and any assignment of parking, an estimate of any initial assessment fees anticipated for maintenance of common areas and facilities, and an indication of appropriate responsibilities for maintenance of all utility lines and services for each unit. (4) A provision addressing the payment of utilities including water, sewer, gas and electricity by the homeowner or through the association. (5) A provision requiring that any owner who rents his/her condominium unit shall conform to the homeowners’ association, or similar entity, which is responsible for management of the common areas and enforcement of the CC&Rs. (6) That rental of any dwelling unit created by the parcel map shall be for a term longer than 30 consecutive days. (j) The homeowner shall notify providers of utilities, including water, sewer, gas, and electricity, of the condominium creation and separate conveyance. (k) Prior to approval of the parcel map, a safety inspection of the ADU(s) shall be conducted as evidenced through issuance of a final Building Permit inspection by the City or a housing quality standards report from a building inspector certified by the United States Item 2 Attachment A - Draft Ordinance Packet Pg. 18 *NOT YET APPROVED* 6 0160208_20260902_ay16 Department of Housing and Urban Development when applicable, and which conforms to current Building Code and Fire Code requirements. (l) The Director of Planning shall review and approve a parcel map for an ADU Condominium if they determine that the parcel map application meets all requirements of this Chapter, Chapter 18.09, Title 21, and any published checklist. The Director of Planning shall deny a parcel map application that does not meet any requirement of this Chapter, Chapter 18.09, and Title 21. (m) In addition to other application submittal requirements created by the City and published on its website, the following information shall be provided: (1) Statement regarding current ownership of all improvements and underlying land. (2) A site plan and boundary map showing the location of all existing or proposed: easements, structures, mature and/or scenic trees, and other improvements upon the property. (3) Dimensions and location of each building or unit and the location of all fences and walls. (4) The location, size, and design for all common areas, including all facilities and amenities provided within the common areas for use by unit owners. (5) Location and condition for all paved areas, including pedestrian walkways. (6) Maintenance plan of all buildings and common areas and facilities. (n) The Director of Planning shall determine the appropriate fee required for an application for subdivision for an ADU condominium, which may be the fee currently established for a Preliminary Parcel Map and/or Parcel Map. SECTION 4. If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have passed this Ordinance and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of the ordinance would be subsequently declared invalid or unconstitutional. SECTION 5. The Council finds that the adoption of this Ordinance is exempt from the provisions of the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Item 2 Attachment A - Draft Ordinance Packet Pg. 19 *NOT YET APPROVED* 7 0160208_20260902_ay16 sections 15061(b)(3), because it constitutes amendments to the City’s zoning ordinance to conform with State law, including Article 4 (commencing with Section 66342) of Chapter 13 of Division 1 of Title 7 of, the Government Code, as well as other minor and non-substantive amendments. As such, it can be seen with certainty that the proposed action will not have the potential for causing a significant effect on the environment. SECTION 7. This ordinance shall be effective on the thirty-first date after the date of its adoption. INTRODUCED: PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: ____________________________ ____________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ____________________________ ____________________________ City Attorney or Designee City Manager ____________________________ Director of Planning and Development Services Item 2 Attachment A - Draft Ordinance Packet Pg. 20 Item No. 3. Page 1 of 1 Planning & Transportation Commission Staff Report From: Planning and Development Services Director Lead Department: Planning and Development Services Meeting Date: September 9, 2026 Report #: 2609-6718 TITLE Approval of Planning & Transportation Commission Draft Summary Minutes of August 12, 2026 RECOMMENDATION Staff recommends that the Planning & Transportation Commission (PTC) adopt the meeting minutes. BACKGROUND Draft summary minutes for the August 12, 2026, Planning & Transportation Commission (PTC) meeting were made available to the Commissioners prior to the September 9, 2026, meeting date. The draft PTC minutes can be viewed on the City’s website at https://bit.ly/PaloAltoPTC ATTACHMENTS None AUTHOR/TITLE: Samuel Tavera, Administrative Associate III Item 3 Item 3 Staff Report Packet Pg. 21 Planning & Transportation Commission Supplemental Report Report Type: ACTION ITEMS Lead Department: Planning and Development Services Meeting Date: September 9, 2026 Report #:2609-6733 TITLE Recommendation on an Ordinance Amending Palo Alto Municipal Code Titles 18 and 21 to Address Direction from City Council Regarding Separate Sale of Accessory Dwelling Units. CEQA Status: Exempt Pursuant to CEQA Guidelines Section 15061(b)(3). This supplemental report provides a revised version to the draft ordinance. Attachment A – Draft Ordinance, was published as part of Staff Report 2608-6688, Item 2 on the September 9, 2026, Planning & Transportation Commission Agenda. The version included in the staff report contained an error. This supplemental report provides the corrected and final draft ordinance for consideration. ATTACHMENTS Attachment A: Draft Ordinance (Revised) APPROVED BY: Jennifer Armer, Assistant Director PDS Item 2 Item 2 Supplemental Report Packet Pg. 22 *NOT YET APPROVED* 1 0160208_20260902_ay16 Ordinance No. _____ Ordinance of the Council of the City of Palo Alto Amending Title 18 (Zoning) and Title 21 (Subdivisions) of the Palo Alto Municipal Code to Allow Sale of Accessory Dwelling Units Separately from a Primary Dwelling Unit The Council of the City of Palo Alto does ORDAIN as follows: SECTION 1. Findings and Declarations. A. On ______, 2026, the City of Palo Alto adopted Ordinance ____, amending the City’s requirements for ADUs and JADUs to reflect changes in State law. B. On August 17, 2026, the City Council directed staff to evaluate modifying the City’s ordinance to allow ADU condominiums as allowed under AB 1033 (2024). C. Upon recommendation of City Staff and the Planning and Transportation Commission, the Council of the City of Palo Alto desires to amend its ADU and Subdivision ordinance to implement AB 1033 and to make additional clerical amendments and minor amendments to conform with State law. D. Section 2 of this Ordinance amends Chapter 18.09 (Accessory and Junior Accessory Dwelling Units to align with the new Chapter 21.09 (Parcel Maps for Separate Sale of ADUs) of the Palo Alto Municipal Code. These are minor amendments to address Council’s direction to allow for ADUs to be sold separately from the primary dwelling. E. Section 3 of this Ordinance introduces a new Chapter, Chapter 21.09 (Parcel Maps for Separate Sale of ADUs), in Title 21 (Subdivisions and Other Divisions of Land) of the Palo Alto Municipal Code. This new chapter intends to address Council’s direction to allow for ADUs to be sold separately from the primary dwelling. F. This ordinance is adopted to incorporate changes in state law that have occurred since the adoption of Ordinance ____ and to respond to direction from the City Council. SECTION 2. Chapter 18.09 (Accessory Dwelling Units and Junior Accessory Dwelling Units) of Title 18 (Zoning) of the Palo Alto Municipal Code (“PAMC”) is amended to read as follows (additions underlined and deletions struck-through): [. . .] 18.09.030 Units Exempt from Generally Applicable Local Regulations [. . .] Item 2 Attachment A - Draft Ordinance (Revised) Packet Pg. 23 *NOT YET APPROVED* 2 0160208_20260902_ay16 (k) The unit An ADU allowed under Table 1 shall not be sold separately from the primary dwellingresidence, except as allowed under Government Code Section 66341 and PAMC 21.09. [. . .] 18.09.040 Units Subject to Local Standards [. . .] (n) Miscellaneous requirements (k) TheAn ADU allowed under Table 2 unit shall not be sold separately from the primary dwellingresidence, except as allowed under Government Code Section 66341 and PAMC 21.09. [. . .] SECTION 3. Chapter 21.09 (Parcel Maps for Separate Sale of ADUs) of Title 21 (Subdivisions and Other Divisions of Land) of the Palo Alto Municipal Code is added to read: 21.09.010 Purpose and Applicability The intent of this Chapter is to implement California Government Code Section 66342 and to apply objective local development standards for condominium subdivisions that facilitate separate conveyance of accessory dwelling units. Except as expressly stated in this Chapter, all other objective policies and requirements governing subdivisions shall apply. 21.09.020 Permit Required Pursuant to Government Code Section 66342, this Chapter provides for the streamlined approval of subdivisions for condominium purposes to permit separate conveyance of existing or proposed Accessory Dwelling Units (ADU) from a primary dwelling. These condominiums shall be sold or otherwise conveyed separate from the primary residence only under the conditions outlined in this Chapter. 21.09.030 ADU Condominium Requirements All projects shall conform to the following requirements: (a) The Director of Planning is authorized to promulgate regulations, forms, and/or checklists setting forth application requirements for a preliminary parcel map and parcel map for condominium purposes pursuant to this Chapter. Item 2 Attachment A - Draft Ordinance (Revised) Packet Pg. 24 *NOT YET APPROVED* 3 0160208_20260902_ay16 (b) All structures and buildings included as part of an ADU condominium project shall conform to the building and zoning requirements applicable to the zoning district in which the project is proposed to be located and Chapter 18.09, as applicable. Designation of individual condominium units shall not be deemed to reduce or eliminate any of the building and zoning requirements applicable to any such buildings or structures. (c) Permitted Use of Condominium ADUs. Except as preempted by state law and PAMC Section 18.42.060 (Home Occupation), all condominium ADUs created through this shall only be used as a dwelling unit as defined by Title 18. (d) The maximum number of ADU condominiums permitted is based on the allowable combinations of ADUs permitted under Table 1 and Table 2 of PAMC 18.09, or Government Code 66314-66331, as applicable. (e) The condominium shall be created pursuant to the Davis-Stirling Common Interest Development Act (Part 5 (commencing with Section 4000) of Division 4 of the Civil Code). (f) The condominium shall be created in conformance with all applicable objective requirements of the Subdivision Map Act (Division 2 (commencing with Section 66410)) and all other objective requirements of this Chapter. (1) Neither a subdivision map nor a condominium plan shall be recorded with the county recorder without each lienholder’s consent. The following shall apply to the consent of a lienholder: (A) A lienholder may refuse to give consent. (B) A lienholder may consent provided that any terms and conditions required by the lienholder are satisfied. (2) Prior to recordation of the initial or any subsequent modifications to the condominium plan, written evidence of the lienholder’s consent shall be provided to City staff and the county recorder along with a signed statement from each lienholder that states as follows: “(Name of lienholder) hereby consents to the recording of this condominium plan in their sole and absolute discretion and the borrower has or will satisfy any additional terms and conditions the lienholder may have.” (3) The lienholder’s consent shall be included on the condominium plan, or attached to the condominium plan that includes the following information: (A) The lienholder’s signature. (B) The name of the record owner or ground lessee. Item 2 Attachment A - Draft Ordinance (Revised) Packet Pg. 25 *NOT YET APPROVED* 4 0160208_20260902_ay16 (C) The legal description of the real property. (D) The identities of all parties with an interest in the real property as reflected in the real property records. (E) The lienholder’s consent shall be recorded in the office of the county recorder of the county in which the real property is located. (g) An ADU shall be sold or otherwise conveyed separate from the primary dwelling only under the conditions outlined in this Chapter, Title 21 of the Palo Alto Municipal Code, and under the applicable conditions of Government Code Section 66342. Prior to approval of a parcel map, a home or property owners’ association or similar entity shall be formed for any condominium project. In addition to such covenants, conditions, and restrictions that may be required by the Department of Real Estate of the State of California pursuant to Title 6 (Condominiums) of the Civil Code or other State laws or policies, the organization documents shall provide for the following: (1) Conveyance of units. (2) Management of common areas within the project. (3) A proposed annual operating budget containing a reserve fund to pay major anticipated maintenance, repair, or replacement expenses; and indicating the association fees needed for the operating budget and reserve fund. (4) Collection of dues. (5) Payment of public utilities not billed separately to each unit. (h) The owner of a property or a separate interest within an existing planned development that has an existing association, as defined in Section 4080 of the Civil Code, shall not record a condominium plan to create a common interest development under Section 4100 of the Civil Code without the express written authorization by the existing association. For purposes of this paragraph, written authorization by the existing association means approval by the board at a duly noticed board meeting, as defined in Section 4090 of the Civil Code, and if needed pursuant to the existing association’s governing documents, membership approval of the existing association. (i) The applicant shall prepare a declaration of covenants, conditions and restrictions (CC&Rs) which shall be recorded and apply to each owner of a condominium unit within the project. The CC&Rs shall be recorded at, or prior to, the time of parcel map approval, and shall include all applicable conditions of approval and requirements of the City. The CC&Rs shall, at a minimum, provide: Item 2 Attachment A - Draft Ordinance (Revised) Packet Pg. 26 *NOT YET APPROVED* 5 0160208_20260902_ay16 (1) That any amendment to the CC&Rs related to the conditions of approval or other requirements of this Chapter may not be approved without prior consent of the City. (2) That there shall be an entity created (e.g., a property or homeowners’ association) which shall be financially responsible for and shall provide for the effective establishment, operation, management, use, repair and maintenance of all common areas and facilities. (3) A provision containing information regarding the conveyance of units and any assignment of parking, an estimate of any initial assessment fees anticipated for maintenance of common areas and facilities, and an indication of appropriate responsibilities for maintenance of all utility lines and services for each unit. (4) A provision addressing the payment of utilities including water, sewer, gas and electricity by the homeowner or through the association. (5) A provision requiring that any owner who rents his/her condominium unit shall conform to the homeowners’ association, or similar entity, which is responsible for management of the common areas and enforcement of the CC&Rs. (6) That rental of any dwelling unit created by the parcel map shall be for a term longer than 30 consecutive days. (j) The homeowner shall notify providers of utilities, including water, sewer, gas, and electricity, of the condominium creation and separate conveyance. (k) Prior to approval of the parcel map, a safety inspection of the ADU(s) shall be conducted as evidenced through issuance of a final Building Permit inspection by the City or a housing quality standards report from a building inspector certified by the United States Department of Housing and Urban Development when applicable, and which conforms to current Building Code and Fire Code requirements. (l) The Director of Planning shall ministerially review and approve a parcel map for an ADU Condominium if they determine that the parcel map application meets all requirements of this Chapter, Chapter 18.09, Title 21, and any published checklist. The Director of Planning shall deny a parcel map application that does not meet any requirement of this Chapter, Chapter 18.09, and Title 21. (m) In addition to other application submittal requirements created by the City and published on its website, the following information shall be provided: (1) Statement regarding current ownership of all improvements and underlying land. Item 2 Attachment A - Draft Ordinance (Revised) Packet Pg. 27 *NOT YET APPROVED* 6 0160208_20260902_ay16 (2) A site plan and boundary map showing the location of all existing or proposed: easements, structures, mature and/or scenic trees, and other improvements upon the property. (3) Dimensions and location of each building or unit and the location of all fences and walls. (4) The location, size, and design for all common areas, including all facilities and amenities provided within the common areas for use by unit owners. (5) Location and condition for all paved areas, including pedestrian walkways. (6) Maintenance plan of all buildings and common areas and facilities. (n) The Director of Planning shall determine the appropriate fee required for an application for subdivision for an ADU condominium, which may be the fee currently established for a SB 9 application. SECTION 4. If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have passed this Ordinance and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of the ordinance would be subsequently declared invalid or unconstitutional. SECTION 5. The Council finds that the adoption of this Ordinance is exempt from the provisions of the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines sections 15061(b)(3), because it constitutes amendments to the City’s zoning ordinance to conform with State law, including Article 4 (commencing with Section 66342) of Chapter 13 of Division 1 of Title 7 of, the Government Code, as well as other minor and non-substantive amendments. As such, it can be seen with certainty that the proposed action will not have the potential for causing a significant effect on the environment. SECTION 7. This ordinance shall be effective on the thirty-first date after the date of its adoption. INTRODUCED: PASSED: AYES: NOES: ABSENT: Item 2 Attachment A - Draft Ordinance (Revised) Packet Pg. 28 *NOT YET APPROVED* 7 0160208_20260902_ay16 ABSTENTIONS: ATTEST: ____________________________ ____________________________ City Clerk Mayor APPROVED AS TO FORM: APPROVED: ____________________________ ____________________________ City Attorney or Designee City Manager ____________________________ Director of Planning and Development Services Item 2 Attachment A - Draft Ordinance (Revised) Packet Pg. 29