New report offers contrasting pictures of 2 cities and their approach to housing crisis
Palo
Alto's efforts to build affordable housing are hobbled by disjointed plans,
inadequate funding strategies and insufficient efforts by city leaders to
obtain community support, according to a report that the Santa Clara County
Civil Grand Jury released on Thursday.
Mountain
View, meanwhile, has been far more successful in adding affordable housing,
thanks in large part to the city's ability to work with property owners on
"area plans" with mixed-use developments, the report notes.
Titled
"Affordable Housing: A Tale of Two Cities," the new report targets
the two north county cities of Palo Alto and Mountain View and, after reviewing
their respective planning processes, funding sources, political climates and
actual accomplishment, concludes that the latter city is doing far better than
the former when it comes to meeting its regional mandates for below-market-rate
housing. As of 2019, the report notes, Mountain View was on a path to meet 56%
of its affordable housing targets for the period between 2015 and 2023, a
number established through the Regional Housing Needs Allocation (RHNA)
process. Palo Alto, meanwhile, was on pace to meet just over 10% of its targets
for low-income housing.
Things
had only slightly improved since then. By the end of 2020, Palo Alto has
approved permits for 101 residences in the "very low" income category
and 65 in the "low" category, which in both cases constitute about
15% of the city's RHNA targets between 2015 and 2023. Mountain View did
somewhat better, approving 218 and 212 dwellings in the two respective
categories for an accomplishment rate of 27% and 43%, respectively.
The
grand jury report includes recommendations for both cities to improve their
housing policies, though it saves the bulk of them for Palo Alto, which has
fallen considerably behind its neighbor to the south. Failure to build
affordable housing comes at a high cost, the report argued, with insufficient
housing impacting the social fabric of the community.
"Homelessness
was increasing in the County before the pandemic and the current economic
uncertainty has made it worse," the report states. "Many low-income
wage earners are one paycheck away from eviction."
Meanwhile,
moving to lower-cost areas carries its own consequences, the report states,
chief among them long commutes.
"About
120,000 Silicon Valley workers live long distances from their jobs," the
report states. "Silicon Valley 'super commuters' drive three hours one way
to work, resulting in traffic gridlock, air pollution, and degraded health and
quality of life."
The
report focuses chiefly on housing in the three below-market-rate categories:
"low income," which is up to 80% of the county's area median income;
"very low income," which is up to 50% of area median income; and
"extremely low income" which is up to 30% of area median income. The
area median income in Santa Clara County ranges from $82,450 for a one-person
household to $127,200 for a five-person household.
In
Palo Alto, the City Council has regularly designated "affordable
housing" as one of its top priorities, though it has consistently failed
to meet its goals for housing production. To explain the challenge they face,
council members routinely point to the high cost of building affordable housing
as a top impediment and the lack of state funding to support regional mandates.
The
grand jury argues in the new report that the fault, to a great extent, lies
with the council itself. It blames Palo Alto's elected leaders for relying too
heavily on the city's planning staff to raise awareness about the importance of
affordable housing, an approach that is not as effective as actually
facilitating these conversations themselves.
"City
staff do not have the same stature as elected leaders," the grand jury
states. "Therefore, Palo Alto city council members cannot expect staff
alone to lead community conversations that enable Palo Alto residents to understand
(AH) affordable-housing needs and cost requirements and to build community
support," the report states.
To
support its case, the report focuses on two specific planning projects that had
gone askew because of inadequate community consensus. One is the 2013
referendum over a housing development on Maybell Avenue that included 60
apartments for low-income seniors as 12 single-family homes. While the council
approved a zone change to make the project possible, residents subsequently
overturned the zone change in a referendum, scuttling the development.
Another
is the city's more recent effort to redevelop a portion of the Ventura
neighborhood by creating an area plan that includes, among other features,
affordable housing, park space and other community amenities. A working group
of area residents and citizens had spent more than a year developing a plan,
only to end up with three alternatives that left most members disappointed.
Residents of the neighborhood, the report notes, feel that "staff and consultants
controlled the process and did not listen to community concerns," leading
to an outcome that one member characterized as "a terrible, disappointing,
and unfortunate failure."
While
the grand jury viewed the Palo Alto's council's failure to engage the residents
as a major factor in the failures of the two efforts, the city's planning
strategies are also to blame, according to the report. While Mountain View
clearly identifies areas of the city that can accommodate affordable housing
and has 25 "precise plans" throughout the city, which it updates
every several years, Palo Alto has no such scheme. As a result, affordable
housing in Palo Alto is addressed "in a confusing combination of general
and specific approaches," according to the grand jury.
By
contrast, the grand jury lauds the Mountain View approach, pointing to the
city's strong communication between city leadership and the community
throughout the planning process. The report notes that there is an ongoing
dialog between staff and the community about the need for affordable housing —
including the high costs and necessary trade-offs for new construction — and
which areas are currently zoned for affordable housing development. The result
is that residents are not blindsided when a developer comes forward with a
proposal and are more likely to accept it.
"With
this proactive communication, specific projects may be modified by resident
input but are rarely derailed," the report states.
The
report also makes a case that Mountain View residents are simply more inclined
to support housing growth. Renters comprise close to 60% of the city's
population and have been politically active for years, aligning themselves with
affordable housing advocates and passing rent control in 2016 as a direct
response to the lack of affordable units.
Residents
generally accept that some level of growth is necessary, which translates into
less resistance and more community buy-in when projects are up for approval,
said Mountain View City Council member Margaret Abe-Koga. She said one of the
attractions that lured her and many others to Mountain View is the city's
diversity, and that residents are willing to build the housing needed to
protect it.
"It
is such a diverse community and there definitely is a feel here, a vibe that
residents really cherish that diversity and do whatever we need to do to maintain
it," Abe-Koga said.
While
the grand jury report creates a contrasting picture of Palo Alto and Mountain
View planning strategies — with the former depicted as a laggard and the latter
as a leader — its evidence does not always align with this view. As an example
of Mountain View's proactive approach, the grand jury points to the North
Bayshore Precise Plan, where two property owners, Google and SyWest, could not
agree on a development approach, prompting the city to create a new set of
development standards for a 30-acre section. The plan includes a requirement
for between 1,200 and 2,800 homes.
That
plan, however, has not been universally welcomed. SyWest claimed that the
city's approach is financially infeasible and, as such, is "fatally
flawed." The company also accused the city in a letter of forcing its
conclusion on property owners "without actual buy-in" and argued that
its input has been largely dismissed.
Palo
Alto's efforts in Ventura are also less doomed as the report makes them out to be.
Despite a lack of consensus on the working group, the council generally agreed
in September on an alternative that would gradually phase out office use and
add about 500 housing units. For all its complications and disappointments, the
planning exercise helped facilitate conversions between the city and the three
major property owners in the planning area: The Sobrato Organization, Jay Paul
and Smith Development, each of whom had contributed ideas for future housing
development. And it raised awareness in the wider community about the lack of
recreational amenities in Ventura, prompting a new effort to build a city gym
in the area.
The
grand jury report does, however, accurately capture a wide discrepancy in Palo
Alto between its plethora of housing policies and its meager results. To spur
housing production, the city had adopted new zoning designations (including an
"affordable housing" zone with less restrictive design standards) and
a new "housing incentive program" aimed to streamline approval for
housing projects in certain portions of the city. It had also regularly updated
its Housing Element and Comprehensive Plan to add policies pertaining to
affordable housing.
Despite
these efforts, the only major affordable housing development that the city has
approved in recent years is the Wilton Court project at 3703 El Camino Real,
which is now being developed by the nonprofit Alta Housing and which features
59 apartments for low-income residents and adults with developmental
disabilities.
The
grand jury blames the city's failure to craft clearly defined area plans, in
the manner of Mountain View, as a chief reason for the city's inadequate
results on housing.
"To
match affordable-housing outcomes with their policy goals and campaign
platforms, Palo Alto leaders need to employ best planning practices such as
creating specific planned areas with identified densities, setbacks, height limits,
etc., that support affordable-housing development," the report states.
"The Palo Alto City Council should identify specific regions where zoning
will allow affordable-housing to be feasible and clarify and simplify zoning
requirements. This should be done with wide community input and
education."
Abe-Koga
said she has really come to believe in Mountain View's precise plan approach,
which benefits both residents and developers by providing clarity on important
aspects like allowed densities and design standards across large swaths of the
city. It also lays out what mitigation measures are needed to accommodate
growth, and what community benefits developers can offer up to allay those
concerns. Once a precise plan is established, developers can often slide
through the review process by following those zoning rules.
To
some extent, the conversation is already happening in Palo Alto. The introduction
of the "planned home" zone, which allows developers to negotiate with
the city over development standards, has succeeded in bringing about new
applications for housing proposals. Over the past year, the council has been
weighing the merits of each proposal and gradually modifying the parameters of
what these projects should include and where they should — and should not — be
located. In April, council members rejected a proposal for a 24-apartment
complex that was eyed for a single-family zone in the College Terrace
neighborhood and prohibited future planned-home projects in single-family
neighborhoods. The council also signaled its support over the past year for
several housing projects in commercial and mixed-use zones, including a
70-apartment complex at 660 University Ave. and a 113-apartment development
proposed for 2951 El Camino Real.
Both
of these projects, however, still face a long road toward approval. Palo Alto's
process requires developers behind "planned zone" projects to go
through a preliminary review before filing formal applications, which then must
go through formal reviews by the Architectural Review Board, the Planning and
Transportation Commission and the council.
In
its review, the grand jury concluded that Palo Alto's process is far longer
than it needs to be. In Mountain View, the report notes, the city approved two
developments — a 58-townhome project at 535-555 Walker Drive and a 144-unit
project at 394 Ortega Ave. — in less than a year.
In
Palo Alto, it took the city two years and one month from the date of the
preliminary screening to approve a 57-unit project at 2755 El Camino Real,
while the 102-unit project at 788 San Antonio Road took one year and eleven
months (it should be noted that both of these projects relied on newly created
zoning designation to win approval and neither is "affordable" by the
grand jury's definition).
To
speed things up, the grand jury offers two ideas. One is following the Mountain
View approach by creating area plans with precisely defined design standards,
thus obviating the need for preliminary reviews. Another is combining the
Planning and Transportation Commission and the Architectural Review Board into
a single body, thus reducing the number of meetings that are required for a
project to advance.
The
report also recommends that both cities conduct "housing impact
studies" to evaluate the impact that new commercial development has on
demand for affordable housing. Palo Alto has maintained for years that the link
is essential. In recent years, it has moved to limit commercial development
both through an annual cap and through a citywide limit in the Comprehensive
Plan. Council members and city officials have consistently argued that reducing
commercial development and limiting job growth reduces the demand for housing
and helps both the city — and the region — attain a better jobs-housing
balance.
Council
member Eric Filseth made that argument in October, when he made his appeal to
reduce the city's housing targets for the Regional Housing Needs Allocation
next cycle, which spans from 2015 to 2023.
"We're
now producing more housing supply faster than new housing demand, which is just
unheard of in Bay Area cities," Filseth told an Association of Bay Area
Governments committee, which subsequently rejected the city's appeal.
While
ABAG rejected the city's arguments that limiting commercial development is in
itself a pro-housing policy, the grand jury takes a more nuanced position on
commercial development. Its report acknowledges that funding is a major
challenge for affordable-housing projects and argues that mixed-use
developments with commercial components can represent a partial solution to the
housing crisis.
On
this approach, more than any other, Palo Alto and Mountain View have taken
different paths. Mountain View has welcomed mixed-use developments, recently
rezoning the East Whisman area for 2 million additional square feet of offices
alongside 5,000 new homes. Palo Alto has largely opposed all projects that
include major commercial components and rejected them as alternatives in the
Ventura plan. Allowing more offices, city officials have argued, would
effectively nullify its progress on housing.
The
grand jury report tries to take the middle road. It recommends that Palo Alto
put together a plan for funding affordable housing through mixed-use projects,
as well as other mechanisms such as a property tax and a business tax (the city
is already exploring the latter). But recognizing the unintended consequences
of commercial development — namely, additional housing demand — it recommends
that both Mountain View and Palo Alto perform a housing impact study that
"informs decision-makers about how the proposed project affects the
job-to-housing ratio."
The
report also calls on both Mountain View and Palo Alto to come up with new plans
to pay for affordable-housing projects by July 30. Oddly, it claims that Palo
Alto does not have an affordable housing fund. The city in fact has such a
fund, which the council relied on in recent years to support the preservation
of the Buena Vista Mobile Home Park and the construction of the Wilton Court
project.
The
city of Mountain View has yet to formally respond to the grand jury report and
its recommendations, but reaffirmed its commitment to building more affordable
housing units in the coming years. Mayor Ellen Kamei said in a statement Friday
that the city has 1,000 additional affordable housing units in the planning
pipeline, including 120 deed-restricted units on one of the city's downtown
parking lots, and that more are planned on a former Santa Clara Valley
Transportation Authority lot near the downtown transit center.
"These
are only a few examples of how our City's affordable housing strategy is
working to address a critical need in Mountain View and in our region,"
Kamei said.
In
discussing the new report, Palo Alto Mayor Tom DuBois argued that the grand
jury report fails to consider many of the city's current and past efforts to
encourage affordable housing. He noted that 9% of the city's existing housing
stock consists of units in the "extremely-low" to
"moderate" categories, which is a higher rate than in most cities in
the county (Mountain View's rate is 3.9%, according to the housing advocacy
group SV@Home).
"We've
done a lot of zoning changes and we're trying to incentivize housing,"
DuBois said in an interview. "We've also spent tens of millions of
dollars, under council direction, out of our affordable-housing fund."
There
are areas, he said, where Mountain View is leading and Palo Alto is trying to
follow its example. This includes a tax for large businesses to pay for
transportation and housing. Palo Alto, he noted, is planning to place a similar
measure on the 2022 ballot.
DuBois
said he was not convinced, however, that area plans with commercial components
are necessarily a solution. If you're creating more demand for housing that
you're building, he asked, are you really getting ahead?
"We're
really trying to take a new tact, where I think a lot of cities in the county
are sticking to the old recipe of mixed-use development, which doesn't seem to
be working," DuBois said. "At least Palo Alto is trying to do
something different — restraining office growth and trying to incentivize
housing."
Randy
Tsuda, president and CEO of the nonprofit housing developer Alta Housing, said
the report underscores just how much work is needed to construct more
affordable housing, and cautioned against seizing on just any one solution
proffered by the grand jury. Area-specific plans help, he said, but there also
needs to be financial mechanisms to make affordable housing feasible while
state-level support continues to fall short. That could mean more public
subsidies or easing of design standards for projects that bring badly needed
affordable units to the community.
"The
report pointed to a need for an ecosystem of support for affordable housing to
make it successful," Tsuda said. "It's not simply political will,
it's not simply community support or effective land use policies and plans. You
need it all, and you need the funding."
Mountain
View Voice
by Gennady Sheyner and Kevin Forestieri / Embarcadero Media
December 17, 2021
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