TO: City Council Members
FROM: Council Member Fine, Vice Mayor Kniss, Council Member Wolbach
Palo Alto and the Bay Area region are experiencing a housing crisis, years in the making, which causes significant economic, social, and environmental harm. While Palo Alto may never be a truly affordable place to live, the City Council has an obligation to current and future residents to explore policies that expand housing choices for people of different incomes, generations, and needs.

This memo intends to begin the process to:
1. Update and improve the zoning code and other regulations to facilitate a greater variety and quantity of both below market rate (BMR) and moderately-sized market-rate housing; and
2. Increase housing density near jobs, transit, and services; and
3. Streamline the approval process for new housing projects.
We recommend our colleagues refer this memo to staff to return to Council with a Work Plan outlining the process and resources to study and implement the proposals listed in the Discussion section (and other relevant recommendations to support the Objectives). Following Council approval of the Work Plan, proposals should be reviewed by the Planning & Transportation Commission (PTC) and ultimately by Council for adoption. Some proposals will require less work than others, and so may be considered in advance of others.

  • Discussion:
    There are many policy tools to promote additional moderately-sized and reasonably-priced homes, especially near job centers, transit, and services. The following suggestions should be considered by the PTC and staff as a starting point. Any changes should be appropriately applied in different areas of our community with sensitivity to location and current land use patterns. For example, CD, CN, CS, CC1, CC2 zones in Downtown should be treated differently than an RM zone in a predominantly residential neighborhood.
    ● Housing Floor Area Ratio (FAR):
  •  Increase housing FAR where appropriate.
  •  Allow non-retail commercial FAR to convert to residential FAR.
    ● Affordable Housing:
  •  Explore increasing affordable housing (Below Market Rate – BMR) percentage
    requirements in market-rate developments up to 20%, based on economic
  •  Explore implementing inclusionary BMR program for rental units.
  •  Height and density for BMR projects: Allow additional height (not exceeding the
    city-wide height limit) or FAR for projects that contain substantially more BMR
    units than required.
    ● Units/Acre:
  •  Explore eliminating housing unit limits where/when possible, and use FAR in
    place of units/acre.
  •  Explore housing unit minimums rather than unit maximums (e.g. require building
    at least 80% of the units allowed under applicable zoning or land use designation).
  •  Implement a no net-loss policy when housing is redeveloped and preserve
    existing non-conforming cottage clusters.
    ● Parking:
  •  Allow residential projects to consolidate parking and TDM efforts with other
    projects or the Palo Alto TMA.
  •  Explore bringing underutilized parking spaces into a public market.
  •  Car-light housing: Explore car-light housing with reduced or eliminated off-street
    parking requirements. (e.g. TransForm’s GreenTRIP Certification)
  •  Transportation Demand Management (TDM): explore reducing residential
    parking requirements for projects which provide effective TDM measures.
    ● Retail/Residential Mixed-Use Projects: Encourage mixed-use zoning with ground-floor retail, community, or non-profit space; and one or more floors of housing; but no commercial office uses.
    ● Transit-Oriented Development: Expand and augment the Pedestrian Transit-Oriented Development (PTOD) zone.
    ● And other compatible housing-related implementation programs from the
    Comprehensive Plan update.