EAST PALO ALTO
CITY COUNCIL
STAFF REPORT
DATE: February 1, 2022
TO: Honorable Mayor and Members of the City Council
VIA: Jaime M. Fontes, City Manager
BY: Amy Chen, Community & Economic Development Director SUBJECT: Ravenswood Business District Specific Plan – Housing Locations and CEQA Scenarios
Recommendation
That the City Council:
1. Provide direction on the total number of housing units for the two CEQA study scenarios
2. Confirm additional locations where housing will be allowed in the amended Specific Plan= Alignment with City Council Strategic Plan
This recommendation is primarily aligned with:
Priority No. 2: Enhance Economic Vitality
Priority No. 6: Create a Healthy and Safe Community
Background
On November 18, 2021, the City Council hosted a Study Session1 on the Ravenswood Business District / 4 Corners Specific Plan Update Project. City Council provided direction on the growth scenarios to be studied under California Environmental Quality Act (CEQA) for the Specific Plan Update and the additional requirements needed to accompany any increase in development capacity for the RBD/4 Corners area. Council determined it was best to study the following scenarios:
• Scenario 1: 2.82 million s.f. of office and R&D uses. • Scenario 2: 3.35 million s.f. of office and R&D uses.
Additionally, Council also accepted staff’s recommendations:
• Recommendation 2: Continue Community Engagement on the Scenarios • Recommendation 3: Select Housing Scenarios and Study Locations • Recommendation 4: Explore Additional Plan Concepts and Strategies 1 11/18/21 Council Study Session: http://eastpaloalto.iqm2.com/Citizens/Detail_Meeting.aspx?ID=1432 The purpose of this staff report is to follow up on Recommendation #3, related to the amount and location of housing in the Plan area. The report addresses the following questions that were asked during the November 18, 2021 study session:
1. Where should housing be allowed in the Specific Plan Area (where it currently is not)?
2. How many total housing units should be studied under CEQA corresponding to the two study scenarios? Scenario 1 (2.82 MSF) and Scenario 2 (3.35 MSF) Table 1: CEQA Study Scenarios
Base Scenario Scenario 1 Scenario 2
Office/R&D s.f 1,420,000 2,820,000 3,335,000
Light Industrial 175,000 250,000 300,000
Retail 112,000 112,000 112,000
Community/Civic 60,000 90,000 120,000
Housing 835 ? ?
Analysis
Estimate of Potential Housing Capacity in RBD
Raimi + Associates developed realistic estimates (with a low and a high) for the total amount of housing units that the City can expect to be developed in the RBD Specific Plan area, distinguishing between units that would be built in zones where residential is currently allowed and units that would be built on sites where housing would be allowed in the amended Plan.
The methodology is described below.
Figure 1: Methodology for Realistic Estimation
Minor Pipeline Projects
Three smaller residential projects are presently in various stages of processing and/or entitlement:
Currently
Allowed Zones
Additional
Sites
Pipeline
Projects
Low and High
Realistic
Scenarios
Identify the
pipeline projects
(entitled/in
process)
Calculate realistic
potential for new
units in Specific
Plan zones where
residential use is
currently allowed.
Identify new
sites to allow
residential and
generate unit
estimates on
suitable sites
Develop low +
high scenarios
for total new
housing units
• 965 Weeks Rd (136 units, 100% affordable)
• 1201 Runnymede St (32 units, condominiums)
• 1804 Bay Rd (66 units, mixed-use)
These three projects are assumed to be built during the Plan timeframe, and account for a total of 234 new housing units.
Major Projects
As previously discussed, there are four major proposed projects within the area. Three of these have proposed residential uses (though it is currently allowed only at one of these project sites), as shown on the image at right:
• 2020 Bay Road (no housing proposed)
• Four Corners (180 units, allowed)
• The Landing (95 units on adjacent site)
• EPA Waterfront (260 units on-site)
Together these projects have proposed a total of 535 units. (Note: this does not represent the maximum possible yield of housing from these parcels. The housing potential of these sites is analyzed further below.)
Figure 2: Minor Projects Figure 3: Major Projects
Table 2 below shows how the combination of minor and major pipeline projects would almost exhaust the entire capacity for housing in the Plan area under the adopted 2013 EIR.
Table 2: Current Housing Capacity
Units
Minor Pipeline 234
Major Proposed Projects 535
2013 EIR Study Number 835
Remaining Capacity 66
Allowed Zones - Methodology for Estimating Housing Capacity The analysis then focused on parcels where new housing is permitted currently. Singlefamily zones were not included in this analysis as no land use change is anticipated as a part of this Specific Plan update. To generate a realistic estimate for potential new units within the three zones where multifamily residential use is allowed (see Figure 5; 4 Corners, Bay Rd Central, & Urban Residential), R+A used the following approach:
1. Remove the three minor pipeline projects from the analysis under the assumption that these projects will be developed.
2. Select “change parcels” (those with reasonable potential to become housing in the mid-term – shown in Figure 4 below):
a) All ‘vacant’ sites which currently allow housing are assumed to redevelop with housing.
b) Half (50%) of ‘redevelopment’ sites - sites with existing uses that are older or significantly underdeveloped compared to the maximum development potential - redevelop with housing (i.e., half of the total potential capacity is built)
3. Calculate unit capacity. This is calculated by multiplying the total acres of change parcels times the maximum allowed density under current Plan zoning with the following additional assumptions:
a) Assume all change parcels build to 90% of maximum density. b) Apply State Density bonus for affordable housing (Base density + 35%); City’s inclusionary ordinance means all projects qualify for bonus (i.e. 40 DUA + bonus = 53 DUA, 50 DUA + bonus = 67 DUA)
Figure 4: “Change Parcels” (Analysis of Likelihood of Change/Redevelopment) Going zone by zone in Figure 5, the potential for housing is as follows:
• Dark Red area: Four Corners zoned parcels (excluding proposed major project): up to 275 units
• Orange area: Bay Road Central zoned parcels: up to 350 units • Light Brown area: Urban Residential zoned parcels: up to 125 units Figure 5: Residential Allowed Zones
Generally speaking, vacant sites are far more likely to redevelop than sites with existing uses/tenants/businesses (such as challenges in meeting SB330 requirements). Separating out the potential housing generated by vacant sites from non-vacant sites provides a way to establish a realistic low and high-end estimate of future housing potential. Within the existing zones, the potential for housing can be categorized as follows:
Table 3: Estimated Housing Capacity from Change Sites (excludes Pipeline) Estimated Units Capacity Low (Vacant) High (Vacant and
Non-Vacant)
Currently Allowed Zones
Four Corners zoned parcels 50 275
Bay Road Central zoned parcels 45 350
Urban Residential zoned parcels 105 125
Subtotal 200 750
Adding together pipeline, proposed projects, and change parcels generates overall estimates.
As mentioned above, the difference between the low and high estimate comes from differing assumptions about the density of major projects and the redevelopment of non-vacant parcels:
• The low-end estimate includes 1) pipeline projects, 2) the Four Corners site built at moderate residential density as proposed, and 3) housing built on all vacant parcels. • The high-end estimate includes 1) pipeline projects, 2) the Four Corners site built at higher residential density than proposed, 3) housing built on all vacant parcels, and 4) housing redeveloped on half of the identified change parcels with existing uses.
As the table shows, the total combined potential for new housing under current Specific Plan zoning ranges from ~625 to ~1,325.
Table 4: Estimated Housing Capacity from Allowed Zones Plus Pipeline Estimated Units Capacity Low End High End
Minor Pipeline
Three projects 234 234
Major Projects
Proposed Four Corners project 180 350
Currently Allowed Zones
Vacant Change Sites 200 200
Non-Vacant Change Sites 0 550
Subtotal 200 750
Total Potential from Allowed Zones ~625 ~1,325
Given that the low-end estimate of total new housing produced under existing zoning regulations might not even achieve the (presently adopted) target of 835 units, that housing proposals have been submitted in additional locations, and that the community has shown support for increasing the total amount of new housing, staff has provided recommendations below for locations where additional housing should be included in the Specific Plan update and studied under CEQA.
Potential Additional Locations
Several new sites in the Plan area were previously shown to Council for consideration to allow housing (Figure 6 on the left). These are analyzed below as four separate potential locations (Figure 7 on the right, with proposed housing in dark orange):
Figure 6: Map from November CC Meeting Figure 7: Potential New Locations, Numbered
These four locations are as follows (see Attachment 1 for additional detail on each location):
1. Waterfront Site - This is part of the proposed Waterfront Development but currently does not allow housing
2. Demeter St. Industrial Sites – These sites contain a variety of smaller light industrial uses.
3. Pulgas Street East Sites – These parcels contain several vacant parcels and R.E.
Borrmann's Steel
4. South of Weeks Site – This is a vacant parcel that had a proposal for a school. (Note: Staff is not recommending that any new housing be allowed on sites with deed restrictions that prohibit or limit residential. Potential contamination or hazardous soils will be analyzed during CEQA to confirm residential can be built on all newly recommended sites with potential environmental impacts (#1 Waterfront and #3 Pulgas East).) If Council supports allowing housing in all four potential additional zones, the City can expect up to 825 housing units. If the Council supports housing in the new zones as recommended by staff, the City can expect up to 660 new units to be built in these additional areas (260 to 320 units on #1 Waterfront, 200 units on #3 Pulgas Ave East sites, and 80 to 140 units on #4 South of Weeks). See table 6 below for a summary of these estimated housing units:
Table 5: Estimated Housing Capacity from Additional Areas Additional Sites
Recommended
?
No
Change Low End High End Recommended Capacity
#1 Waterfront Y 0 260 320 260-320
#2 Demeter St N 0 90 120 0
#3 Pulgas Ave East Y (portion) 0 200 250 200
#4 South of Weeks Y 0 80 140 80-140
Total from Additional Sites 0 ~625 ~825 540 - 660
Summary of Total Housing Potential
Combining the pipeline, the allowed zones, and the additional areas produces an overall estimate of housing development for the RBD. R+A’s analysis identified three potential levels of housing: a “maximum theoretical” estimate (~2,500 units), a “realistic high end” estimate (~1,975 units), and a “realistic low end” estimate (~1,150 units). • A maximum theoretical buildout could only be achieved with completion of all pipeline projects, proposed projects at higher densities, and all vacant & non-vacant change parcels redeveloped with housing. It is not a realistic estimate given the plan timeframe, existing uses on the ground, and market conditions, and therefore this number is not utilized for planning.
• A “realistic high-end” estimate would be achieved with completion of all pipeline projects, proposed projects being built at higher densities than currently proposed, all vacant change parcels and half of non-vacant change parcels redeveloped with housing. This would result in around 1,975 units.
• A “realistic low-end” estimate would be achieved with pipeline projects, proposed projects at proposed densities, and only vacant change parcels redeveloped with housing (not sites with existing uses). This scenario produces ~1,150 units. To be more conservative, this scenario removes the redevelopment change parcels (as financial feasibility decreases, these sites become less and less likely to turn over and some face SB 330 requirements related to protecting existing low-income households).
Table 6: Summary of Realistic Potential from All Housing Sites Category Low End High End
Pipeline Projects
Three projects 234 234
Currently Allowed Zones
Vacant change parcels 200 200
Non-Vacant change parcels (redeveloped
parcels w/existing uses)
0 550
Four Corners site w/proposed major project 180 350
Subtotal ~625 ~1,325
Recommended New Zones
#1 Waterfront site w/proposed 260 320
#2 (Demeter Street, not recommended) - -
#3 Pulgas Ave East w/proposed, w/o library 200 200
#4 South of Weeks 80 140
Subtotal ~540 ~660
Total Realistic Potential 1,150 1,975
The midpoint between the low and high-end realistic scenarios is 1,600 units.
Note on Affordable Housing
The total potential for affordable units was calculated using the assumption that all housing projects meet the 20% inclusionary unit requirement per City Ordinance, except where it is known to be higher (e.g., 965 Weeks, 1103 Weeks, etc.), and results in the following estimated development of affordable housing:
• Approximately 425 affordable units created under the Low-End Scenario • Approximately 575 affordable units created under the High-End Scenario Staff Recommendations
Recommendation: Housing Locations
Question 1: Where should new housing be allowed in the Specific Plan Area? Staff recommends zoning should be modified in the following locations in the Specific Plan to allow housing:
• #1 Waterfront – the site is recommended for residential use, given the proximity to an existing residential area, the lack of deed restrictions on the parcel, and the housing proposal submitted to staff/City.
• #3 Pulgas Street East - it is recommended to allow both residential and non-residential uses (to remain in conformance with current zoning), but exclude parcels earmarked for the library relocation for residential uses.
• #4 South of Weeks – it is recommended to allow residential uses.
Staff further recommends that the Demeter Street sites not be changed to allow housing so as to protect existing light industrial businesses and employees from redevelopment into non-job producing uses.
Figure 8: Final Recommended Locations to Allow Housing
Recommendations: Housing Scenarios
Question 2: How much housing should be studied in Scenario 1 and Scenario 2? Housing Scenarios
Staff is recommending that the amount of housing vary between the two scenarios and that the total amount for each scenario is higher than the current adopted total of 835 units. Specifically, staff is recommending that:
For Scenario 2 (3,250,000 sf office/R&D): Study 1,600 units. Staff recommends the maximum amount of housing studied be increased to 1,600 units for the higher office/R&D scenario. As described above, 1,600 units represents a useful midpoint between the low-end and high-end realistic residential development estimates, providing a buffer between two extreme outcomes and serving as a median outcome.
Secondly, studying 1,600 units would essentially double (2x) the number of allowed housing units compared to the existing EIR which seems appropriate given that this 3 1
2 4
update is similarly analyzing roughly a 2x to 2.5x increase in the amount of office/R&D development allowed.
For Scenario 1 (2,820,000 sf office/R&D): Study 1,350 units. Staff further recommends that the amount of housing studied under the reduced office/R&D scenario be proportionally smaller, which calculates out to 1,350 units. This maintains the same proportional relationship between housing and office/R&D development, underscoring the concept that office/R&D will be used to help subsidize the production of housing (and especially affordable development) in the city.
Questions for Council
Question 1: Housing Locations
Do you support staff recommendation of allowing housing on the Waterfront site, the East Side of Pulgas Street, and the South of Weeks site, and not allowing housing on Demeter Street sites?
Question 2: Housing Scenarios
Do you support the EIR housing scenarios recommended by staff? • Scenario 2 (3,250,000 sf office / R&D + 1,600 units)
• Scenario 1 (2,820,000 sf office / R&D + 1,350 units)
Fiscal Impact
There are no fiscal impacts associated with the items discussed in this staff report. Any final decision made regarding the ultimate balance of residential and non-residential development in the Specific Plan area may have fiscal impacts to the City, to be discussed at that time.
Public Notice
The public was provided notice of this agenda item by posting the City Council agenda on the City’s official bulletin board outside City Hall and making the agenda and report available at the City’s website and at the San Mateo County Library located at 2415 University Avenue, East Palo Alto.
Environmental
The action being considered does not constitute a “Project” within the meaning of the California Environmental Quality Act (CEQA), pursuant to CEQA Guideline section 15378 (b)(5), in that it is a government administrative activity that will not result in direct or indirect changes in the environment.
Attachments
1. Detail on Potential Housing Sites