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City Council
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: Planning and Development Services
Meeting Date: January 21, 2025
Report #:2411-3793
TITLE
FIRST READING: Adoption of an Ordinance Amending Title 18: Zoning Ordinance of the Palo Alto Municipal Code (PAMC) to Implement Programs 1.5A (Stanford University Lands), 3.6D (Expedited Project Review), 4.1A (Replacement Housing), and 6.5C-G (Alternate Housing) of the Housing Element 2023-2031, and Title 21: Subdivision and Other Divisions of Land to Incorporate Changes as Directed by Housing and Community Development (HCD).
Environmental Assessment: Impacts Revised Addendum to the Comprehensive Plan EIR, approved November 2023 (SCH 2014052101).
RECOMMENDATION
Staff recommends the City Council adopt an ordinance amending PAMC Title 18 (Zoning Ordinance) to implement components of the Housing Element Programs 1.5A (Stanford University Lands), 3.6D (Expedited Project Review), 4.1A (Replacement Housing), and 6.5C-G (Alternate Housing), and amending Title 21 (Subdivision and Other Divisions of Land) to incorporate changes as directed by Housing and Community Development (HCD) related to Senate Bill 9 implementation.
EXECUTIVE SUMMARY
The 2023-2031 Housing Element (Housing Element), adopted by the City Council on April 15, 2024, and certified by the California Department of Housing and Community Development (HCD) on August 20, 2024, includes implementation programs requiring amendments to the Palo Alto Municipal Code (PAMC). These amendments were City Council Priority Objectives for 2024. The programs support the development of affordable housing, supportive housing, and other multi-family housing opportunities.
The attached Draft Ordinance (Attachment A) amends PAMC Title 18 (Zoning) Sections:
•18.14.060 By Right Housing Projects (Neighborhood Commercial (NC), Community Commercial (CC), Service Commercial (CS), Downtown Commercial (CD), Research, Office, and Limited Manufacturing (ROLM), Research Park (RP), General Manufacturing (GM), Public Facilities (PF), and Pedestrian and Transit Oriented Development (PTOD) Districts.
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•18.20.030 Land Uses (Research Park (RP and RP (5) Districts), •18.20.040 Site Development Standards (Research, Office, and Limited Manufacturing (ROLM) District),
•18.28.020 Definitions,
•18.28.040 Land Uses (Open Space (OS) and Agricultural Conservation (AC) Districts, •18.28.070 Additional Open Space (OS) District Regulations, •18.28.080 Additional Agricultural Conservation (AC) District Design Requirements, •18.40.160 Replacement Project or Discretionary Review Required, and •18.77.070 Architectural Review Process.
The amendments are shown in underline/strikethrough. In aggregate, the amendments implement the requirements of the Housing Element Programs listed in Attachment B: 1.5A (Stanford University Lands), 3.6D (Expedited Project Review), 4.1A (Replacement Housing), and
6.5C-G (Alternate Housing).
The Draft Ordinance also includes amendments to Title 21 (Subdivisions and Other Divisions of Land), Section 21.10.040 General Requirements and Chapter 18.24 (Standards for Special Uses), to incorporate changes as directed by HCD to address an inconsistency within the City‘s Senate Bill (SB) 9 regulations.
The Housing Element implementation timeframe for all program components included in the proposed ordinance is January 2025, except Housing Element Program 6.5C Alternate Housing, is required by the end of June 2025.
BACKGROUND
The State requires jurisdictions to prepare Housing Elements to include programs that would encourage housing production and eliminate constraints to housing to meet the Regional Housing Needs Allocation (RHNA).
On May 8, 2023, the City Council adopted Resolution No. 10107, approving an addendum to the Comprehensive Plan Environmental Impact Report (EIR), making various findings, and adopting the 2023-2031 Housing Element for the City of Palo Alto. The City Council approved a Revised Addendum to the Comprehensive Plan EIR and adopted Ordinance No. 5608 on December 18, 2023, rezoning sites in the 2023-2031 Housing Element Sites Inventory to accommodate the City’s RHNA.
On April 15, 2024, The City Council adopted a Revised Housing Element (Resolution No. 10155) and authorized the Director of Planning and Development Services to take further actions necessary to achieve certification of the Housing Element by HCD. HCD found that the Revised 2023-2031 Housing Element, as further modified on July 17, 2024, was substantially compliant with the State law, certifying it on August 20, 2024.
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The Housing Element includes several programs outlined in Attachment B that require updates to the municipal code. These include components of the following Housing Elements Programs:
1.5 (Stanford University Lands), 3.6 (Expedited Project Review), 4.1 (Replacement Housing), and
6.5 (Alternate Housing).
The Planning and Transportation Commission (PTC) reviewed the proposed changes to the PAMC Titles 18 (Zoning Ordinance) and 21 (Subdivision and Other Divisions of Land) on November 13, 20241, and unanimously recommended the proposed changes to the City Council for adoption.
ANALYSIS
The Housing Element programs are organized into various categories based on their goals and broader housing objectives and reflect on the City’s commitment to increasing housing supply, enhancing housing affordability, and addressing housing needs comprehensively.
The amendments included in the Draft Ordinance (Attachment A) and outlined in this staff report are intended to implement Housing Element Programs (Attachment B) that require specific code amendments by January 2025. This is not an exhaustive list of ongoing Housing Element implementation programs or those requiring amendments throughout the 2023-2031 period.
Housing Element Program 1.5: Stanford University Lands: Housing Element Program 1.5 aims to establish a long-term policy framework for identifying additional housing sites on Stanford- owned lands. Components 1.5B and 1.5C encourages the City to engage with Stanford University, Simon Properties, and other stakeholders and identify additional housing opportunities by December 31, 2025. The draft amendment to the PAMC would implement Housing Element Program 1.5A.
Draft Zoning Text Amendment: The Conditional Use Permit restriction on multi-family residential in the RP and RP (5) zones has been removed as directed by the Housing Element Program 1.5A for most areas of the Research Park. The proposed change to the municipal code does not include sites subject to the City’s Hazardous Materials Ordinance (PAMC Section
18.42.200) and continues a Conditional Use Permit requirement when housing is proposed within 600 feet of a Tier 22 Hazardous Facility. Continuing with existing regulations, no housing is allowed within 300 feet of a Tier 2 Hazardous Materials facility.
Housing Element Program 3.6: Expedited Project Review: Housing Element Program 3.6 outlines four implementation components to expedite the project review time. Components
3.6A (amending municipal code to exempt housing projects from ARB review to the extent they 1 https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=13751 2 Uses with quantities of Toxic or Highly Toxic hazardous materials that are both above the threshold quantities in Health and Safety Code Division 20, Chapter 6.95 and below the Title 19 thresholds of the California Code of Regulations.
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comply with the City’s objective design standards) and 3.6C (formalizing the procedure to offer no-cost pre-application consultation services for housing projects) have already been completed and 3.6B (early ARB review) is underway. The draft amendment to the PAMC would implement Housing Element Program 3.6D, which limits the number of hearings before the Architectural Review Board for housing development projects, as defined in the Housing Accountability Act.
Draft Zoning Text Amendment: The municipal code currently has a maximum of three hearing limit unless additional reviews are requested by the applicant. The amendments to PAMC Section 18.77.070 (c) and (d) (Architectural Review Process) limit the number of hearings for housing projects before the Architectural Review Board (ARB) to a maximum of two meetings unless additional meetings are requested by the applicant.
Housing Element Program 4.1: Replacement Housing: Development on non-vacant sites with existing residential units must comply with specific State law(s) related to replacement requirements. The City is currently enforcing these mandates, and the amendment to PAMC codifies this practice and would implement Housing Element Program 4.1A.
Draft Zoning Text Amendment: PAMC Section 18.40.160 (Replacement Project or Discretionary Review Required) has been amended to include new subsection (a)(3) to meet and exceed the requirements of State law contained in the Housing Crisis Act of 2019 as amended by Assembly Bill (AB) 1218. The proposed zoning amendment further reduces the potential for displacement by requiring commercial project to replace all housing units demolished, even if they would not be considered “protected units” under State law.
Housing Element Program 6.5: Alternate Housing: The purpose of Program 6.5 is to promote alternative housing types such as large family units, single-room occupancy (SRO) units, supportive and transitional housing, and managed living units or “micro-units” to serve extremely-low-income households. Amendments to the PAMC would implement Housing Element Programs 6.5 (C: Group Homes, D: Supportive Housing, E: Low Barrier Navigation Centers, F: Emergency Shelters, and G: Farmworker Housing). Policy analysis on other alternative housing types (Program 6.5 B) is anticipated to begin in 2025.
Draft Zoning Text Amendments:
Housing Element Programs 6.5 (C, D, and E)
•PAMC Section 18.14.060 (By Right Housing Projects) is added to allow the following types of alternative housing:
oGroup homes are housing units that are shared by unrelated persons with disabilities that provide peer and other support for their residents’ disability related needs and in which residents share cooking, dining, and living areas.
Group homes are required by the State to be treated as a by-right land use in residential zones.
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oLow Barrier Navigation Centers are housing first, low barrier, temporary, service- enriched shelters that help homeless individuals and families to quickly obtain permanent housing. Low barrier navigation centers are required by the State to be treated as a by-right use in zones where multi-family and mixed uses are permitted, including nonresidential zones permitting multi-family uses, provided the proposed project satisfies all the requirements of State law. oThe proposed ordinance now also adds subsections (a) and (b), which implement SB 4 (2023 – Affordable Housing on Religious and Educational Institution Lands) and AB 2162 (2018 – Supportive Housing). These subsections had been included in a separate state-law implementation ordinance but have been shifted to this ordinance based on timing considerations. Implementation of AB 2162 (subsection (b)) is also included in Housing Element Program 6.5D.
Housing Element Program 6.5 (F)
•PAMC Section 18.20.030 (d) (Land Uses Table 1 Industrial/ Manufacturing District Land Uses) has been amended to ensure any proposed emergency shelter in the ROLM(E) district is reviewed ministerially without a discretionary review. •PAMC Section18.20.040(i) (Site Development Standards for Emergency Shelters for the Homeless) has been amended to comply with the State’s parking requirements and the building and site development standards for homeless and emergency shelters that includes providing interior waiting space, office areas for staff, and screening refuse area from view.
Housing Element Program 6.5 (G)
•PAMC Sections 18.28.020 (Definitions), 18.28.040 (Land Uses), 18.28.070 (Additional Open Space (OS) District Regulations), and 18.28.080 (Additional Agricultural Conservation (AC) District Design Requirements) are proposed for amendment to implement Housing Element Program 6.5G. As a requirement of the Program, no discretionary permit will be required for farmworker housing of up to 36 beds or 12 units in the AC or OS zones unless such a permit is required for agricultural use.
Additionally, farmworker housing for six or fewer people in the OS zone will be treated as a single-family use and will not require a discretionary permit unless a discretionary permit is required for a single-family dwelling of the same type.
Senate Bill (SB) 9 Zoning Text Amendments
During the review of the Housing Element, leading up to certification, HCD informed staff that modifications were required to the City’s SB 9 regulations for compliance with State law based on the most recent HCD guidance.
Draft Zoning Text Amendment: To address the issues identified by HCD, minor amendments to Section 21.10.040(d) have been made to allow for urban lot splits even in instances where existing structures or lot lines would otherwise prohibit a lot split. “Newly created lot lines shall 5 9
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not render an existing structure noncomplying in any respect (e.g., floor area ratio, lot coverage, parking, nor increase the degree of noncompliance of an existing non-compliant structure)”; identified as too restrictive by HCD3 has been removed.
FISCAL/RESOURCE IMPACT
There are no fiscal or resource impacts associated with the action.
POLICY IMPLICATIONS
The Housing Element is an integral component of the Comprehensive Plan of the City. The policies and implementation programs of the City’s adopted Housing Element remove the constraints to housing production. As part of the implementation of Program 3.2 (Monitor Constraints to Housing) of the Housing Element, the City is required to prepare an analysis in staff reports for initiatives proposing new regulations. This analysis should detail how the regulations may impact housing production, if at all, and recommend solutions to address any adverse impacts.
Amendments to the municipal code to implement Housing Element Programs 1.5A (Stanford University Lands), 3.6D (Expedited Project Review), 4.1A (Replacement Housing), and 6.5C-G (Alternate Housing), and amending Title 21 (Subdivision and Other Divisions of Land) to incorporate changes as directed by Housing and Community Development (HCD) related to Senate Bill 9 implementation advance the development of affordable housing, supportive housing, and other multi-family housing opportunities in the City.
STAKEHOLDER ENGAGEMENT
Preparation of the Housing Element included a range of community outreach methods, including surveys, Working Group meetings, community workshops, public review comment periods on draft documents, and public hearings. The community provided feedback on the programs as a part of the Housing Element update process. Additionally, the Planning and Transportation Commission meeting held on November 13, 2024, to discuss the amendments to the municipal code were agendized, noticed, and open to public. Staff received written comments from Palo Alto Forward and one public comment from Palo Alto Forward at the Planning and Transportation Commission meeting. The comments received were all in support of the changes made to the Ordinance language. The proposed amendments to the PAMC Titles 18 (Zoning) and 21 (Subdivisions and Other Divisions of Land) implement the 2023- 2031 Housing Element Programs adopted by the City Council and certified by HCD. Other minor amendments are included as required by HCD related to SB 9 implementation. 3 Earlier versions of the ordinance included a provision amending Section 18.42.180 to implement Housing Element Program 6.3A by increasing floor area limitation for some SB 9 projects from 800 square feet to 1,200 square feet. This change has been rendered moot by SB 450 (2024), which precludes the imposition of development standards on SB 9 projects that do not apply uniformly in the zone district. On December 16, 2024, the City Council adopted an ordinance amending the City’s SB 9 ordinance to implement SB 450. 5 9
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ENVIRONMENTAL REVIEW
The Revised Addendum to the Comprehensive Plan EIR analyzes the impacts of the City of Palo Alto 2023-2031 Housing Element, including the programs implemented by ordinance.
Therefore, no additional environmental analysis is required at this time.
ATTACHMENTS
Attachment A: Draft Ordinance Amending Sections of PAMC Title 18 (Zoning) and Title 21 (General Requirements).
Attachment B: Housing Element Programs
APPROVED BY:
Jonathan Lait, Planning and Development Services Director