1 Ordinance No.
Ordinance of the Council of the City of Palo Alto Amending: Chapter 18.14 (Housing Incentives) of the Palo Alto Municipal Code to Implement Program 3.4E of the 2023-2031 Housing Element to Expand and Revise Regulations for the El Camino Real Focus Area; Making Conforming Amendments to Chapter 16.58 (Development Impact Fees)
SECTION 1. Findings and Declarations. The City Council finds and declares as follows:
A. 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.
B. On November 13, 2023, the City Council approved a Revised Addendum to the Comprehensive Plan EIR and introduced Ordinance No. 5608, rezoning sites in the 2023- 2031 Housing Element Sites Inventory to accommodate the City’s Regional Housing Needs Allocation.
C. On April 15, 2024, the City Council adopted Resolution No. 10155, making various findings, adopting a Revised 2023-2031 Housing Element, and authorizing the Director of Planning and Development Services to take further actions necessary to achieve certification of the Housing Element by the California Department of Housing and Community Development (HCD).
D. On August 19, 2024, HCD found that the Revised 2023-2031 Housing Element, as further modified on July 17, 2024, was substantially compliant with state law.
E. Program 3.4E of the City’s Revised 2023-2031 Housing Element directs the City to expand the geographic boundaries of the El Camino Focus Area to incentivize housing production in appropriate locations.
F. On March 26, 2025, the Planning and Transportation Commission considered and recommended that the City Council adopt this ordinance to implement the 2023-2031 Housing Element.
SECTION 2. Section 18.14.020 (Housing Element Opportunity Sites) of Chapter 18.14 (Housing Incentives) of Title 18 (Zoning) of the Palo Alto Municipal Code is hereby amended to read as follows (additions underlined; deletions struck through; and unchanged text omitted with bracketed ellipses):
18.14.020 Housing Element Opportunity Sites and Focus Areas This subsection implements the rezoning required to meet the RHNA in the 2023-2031 Housing Element, pursuant to Appendix D. Regulations identified in Table 1 and Table 2 modify and replace development standards provided in base zoning district and applicable combining district 2 regulations. This section additionally provides regulations for Housing Focus Areas in portions of El Camino Real and in the GM/ROLM districts that further the goals of the Housing Element. (a) Applicability: This subsection applies to Housing Development Projects, as defined in Cal. Gov’t Code § 65589.5, on Housing Element opportunity sites listed in Appendix D and on sites within the GM/ROLM and El Camino Real Focus Areas depicted in Figure 1 and Figure 3. [. . .]
(c) Development Standards: Refer to base zoning district and applicable combining districts for development standards except:
(i) Residential uses on R-1 zoned sites (faith-based institutions) shall be subject to the development standards for the RM-30 zoning district, pursuant to Chapter 18.13.040, except that Maximum FAR shall be 1.25 and minimum density shall be 20 units per acre. (ii) RM-20, RM-30, RM-40, CN, CS, CC, CC(2), CD-C, and CD-N zoned sites as modified by Table
1. (iii) GM, ROLM, and RP zoned sites as modified by Table 2. (iv) PF zoned sites shall meet the following development standards:
(A) Downtown sites: CD-C standards, pursuant to Table 1 below. (B) California Avenue sites: CC(2) standards, pursuant to Table 1 below. (v) Specific Stanford University-owned sites and El Camino Real Focus Area sites may, as an alternative to State Density Bonus Law, meet base district regulations as modified by Table
3. Housing Development Projects that utilize State Density Bonus Law shall be subject to base district standards or standards provided in Tables 1 and 2, as applicable. Additionally, El Camino Real Focus Area sites shall:
(A) Complete Major Architectural Review pursuant to Section 18.77.020 or Streamlined Housing Development Project Review pursuant to Section 18.77.073, as applicable. (B) Except as provided in paragraph (C) below, Pprovide at least 20% of total units as on- site below-market rate housing affordable to households earning up to 80% of AMI.
This requirement shall apply in place of the basic requirements set forth in Sections
16.65.030 and 16.65.040. The below-market rate units affordable to lower income households and/or their square footage shall be exempt from payment of development impact fees.
(C) Projects proposed on a site for which the Director determines a valid, pending application meets the definition of a “builder’s remedy project” may provide on-site below-market rate housing consistent with “housing for very low, low-, or moderate- income households,” as those terms are defined in Government Code Section 65589.5.
This requirement shall apply in place of the enhanced requirements set forth in subdivision (c)(v)(B) above and shall be credited toward fulfillment of the basic requirements set forth in Sections 16.65.030 and 16.65.040. The below-market rate 3 units provided pursuant to this paragraph (C) shall be subject to payment of development impact fees as set forth in Title 16 of this code. (vi) Combining district design and development standards shall not apply to exclusively residential projects on housing opportunity sites designated in Appendix D of the Housing Element to accommodate lower income households.
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Table 3
Site- Specific Development Standards (Stanford-Owned Sites & El Camino Real Focus Area) Location Pasteur Dr. & 1100 Welch
Rd. (1)(3)
(Figure 2)
El Camino Real Focus Area(1)
(Figure 3)
Minimum Setbacks (feet)
Setback lines imposed by a special setback map pursuant to Chapter
20.08 of this code may apply
Minimum Front (7)
Setback
15 feet 0' - 10' to create a 12' effective
sidewalk width See base district
regulations
Abutting low density residential (RE,
R2, NV-R2, RMD), R1, or NV-R1 zone
district: 20’
Abutting other residential zone
district: 10’
Rear and Interior
Side
Abutting non-residential zone
district: 10’ for residential use; none
for non-residential use
Street Side(7)
See base district
regulations: 18.13.040
5’
Maximum FAR (Total) 3.5 (Total) Lot size => 10,000 sq. ft.: 4.0 (Total) Lot size < 10,000 sq. ft.: 3.0 (Total)
Maximum FAR (Non-
Residential)
See base district
regulations: 18.13.040
See base district regulations, except
that an additional 5,000 square feet
of retail and retail-like uses may be
permitted, subject to Total FAR limits.
Maximum Site/
Minimum
Landscape/Open
Space Coverage
(2) (2)
Maximum Lot
Coverage
60% Lot size => 10,000 sq. ft.: 80%
Lot size < 10,000 sq. ft.: 70%
Maximum Density
(du/ac)
None None
Maximum Height(6)
(feet) for residential
85 Lot size => 10,000 sq. ft.: 85
Lot size < 10,000 sq. ft.: 65
4 portion
Maximum Height(6)
(feet) for non-
residential portion
50 50
Daylight Plane Sand Hill Rd. frontage only:
initial height 60 feet above
grade at the Sand Hill Rd.
setback line and a 45-
degree angle
For lot lines abutting an R1 or NV-R1
zoning district:
Initial height: 16 feet, measured at
the property line
Slope: 45 degrees
Other locations: See base district
regulations for standards for daylight
planes
Height Transitions n/a Within 100 ft. of low density
residential (RE, R2, or RMD) or R1
single family zone district property
line: 35 ft.
Between 100 and 150 ft. of low
density or R1 zone district property
line: 45 ft.
Upper Story Step Back None El Camino Real frontage above 55 feet in height: minimum 10 6 foot
step-back from lower facade, for a
minimum 70% of the facade length.;
and average setback from the
property line for the entire facade
shall be 20 feet(7).
See Figure 4.
Minimum Usable
Open Space
100 sq. ft./unit (any
combination of common
and/or private)
100 sq. ft./unit (any combination of
common and/or private)
Minimum Residential
Parking(5)
0.5 spaces/unit 1 space/unit
(Per AB2097: 1 0 space/unit within ½
mile of Caltrain)
Other Development
Standards
See base district
regulations: 18.13.040
See base district regulations
Design
Criteria/Standards
Compliance with Objective
Design Standards pursuant
to 18.24(4)
Architectural Review Streamlined
Housing Development Project Review
and compliance with either Objective
Deign Standards pursuant to Chapter
18.24 or Architectural Review and
compliance with Context-Based
Design Criteria pursuant to base
district regulations(4).
Notes:
5 [. . .]
(4) Except, the following objective design standards shall be modified to meet the realistic capacity identified in the Housing Element:
(a) 18.24.050(b)(5): Diversity of Housing Types shall not apply. (b) 18.24.060(b)(7): Parking/Loading/Utilities, shall be replaced with the following standard:
Above grade structured parking levels facing a public right-of-way or publicly accessible open space/path with the exception of vehicular alleys, shall compose no more than 50% of any public frontage. Garage facades fronting on public right-of-way shall be screened with decorative architectural screening (e.g. perforated metal panels, murals), lined with habitable uses, or screened with landscaping (e.g., green wall, climbing vines). (c) 18.24.050(b)(1): Upper Floor Step Backs & Daylight Planes shall not apply. [. . .]
(7) Average setback from the property line may be calculated by taking the area between the property line and the upper facade. This area, in square feet, shall be greater than or equal to the facade length multiplied by 20. Example: 200-foot facade length x 20-foot average setback + minimum 4,000 sq. ft. area of setback per floor. For purposes of this calculation, portions of the upper facade with a setback greater than 40 feet shall be treated as if the facade is located at 40 feet from the property line. For purposes of this calculation, roof projections and eaves up to four feet in depth shall be excluded.
For the purposes of this development standards table, the following definitions apply:
“Abutting” refers to parcels that share a property line, exclusive of parcels with intersecting corners, parcels separated by a street, or parcels under common ownership. “Lot Size” refers to the total lot area of a proposed project, which may be composed of one or more parcels, generally under common ownership, which may include parcels developed in phases over time.
“Front Setback” for properties on El Camino Real means the setback from El Camino Real. “Street Side Setback” for properties on El Camino Real means the setback from a street that intersects El Camino Real.
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6 Figure 3: El Camino Focus Area
7 Figure 4: Upper Story Step Back (El Camino Real Focus Area) portions of buildings more than 49 feet from the property line shall be counted as 40 feet Figure 4b
8 SECTION 3. Section 16.58.030 (Exemptions) of Chapter 16.58 (Development Impact Fees) of Title 16 (Building Regulations) of the Palo Alto Municipal Code is hereby amended to read as follows (additions underlined):
16.58.030 Exemptions.
The provisions of this chapter shall not apply to the following:
(a) City buildings or structures;
(b) Public school buildings or structures;
(c) Residential housing, either for sale or rental, which, by recordable means, is permanently obligated to be 100% affordable, as defined in Section 18.14.040(c); (d) Retail service, eating and drinking service, personal service, or automotive service when the total additional square footage is 1,500 square feet or less. This exemption shall apply only when the additional square footage of new development does not exceed 1,500 square feet. New development that is larger than 1,500 square feet shall pay a fee for all square footage, including the first 1,500 square feet;
(e) Day care centers used for child care, nursery school or preschool education; (f) Below market rate housing units above and beyond the minimum number required for projects subject to the City's Below Market Rate (BMR) Housing program or other housing incentive programs. The additional units must be offered and constructed in a manner consistent with all requirements of the BMR program;
(g) Accessory dwelling units (ADU) less than 750 square feet in size. Any impact fees to be charged for an accessory dwelling unit of 750 square feet or more shall be proportional to the square footage of the primary dwelling unit;
(h) Junior accessory dwelling units (JADU);
(i) Any residential subdivision for which land dedication or fees in lieu thereof are required pursuant to Chapter 21.50 of the Palo Alto Municipal Code. This exemption shall only apply to the park development fee described in Section 16.58.020(a). (j) Below market rate housing units affordable to lower income households constructed pursuant to the El Camino Focus Area standards pursuant to Section 18.14.020, subdivision (c)(v)(B), of the Palo Alto Municipal Code.
9 SECTION 4. Section 18.14.030 (Housing Incentive Program) of Chapter 18.14 (Housing Incentives) of Title 18 (Zoning) of the Palo Alto Municipal Code is hereby amended to read as follows (additions underlined; text unchanged and omitted indicated by bracketed ellipses):
18.14.030 Housing Incentive Program
(a) Purpose
The housing incentive program modifies base zoning district standards and streamlines review to encourage higher-density multi-family housing production. The program is a local alternative to State Density Bonus Law.
(b) Applicability
The housing incentive program shall apply to the following zoning districts or locations:
(1) Chapter 18.13: RM-20, RM-30, RM-40
(2) Section 18.14.020: GM/ROLM Focus Area (see Figure 1) (3) Chapter 18.16: CC(2), except the sites at 156-164 California Avenue; CN or CS-zoned sites on El Camino Real, except sites in the Automobile Dealership (AD) Combining District; CS sites on San Antonio Road between Middlefield Road and East Charleston Road
(4) Chapter 18.18: CD(C)
(5) Chapter 18.29: NV-R3, NV-R4, NV-MXL, NV-MXM, NV-MXH, NV-PF [. . .]
(e) Development Standards
[. . .]
Table 6
FAR and Building Height Standards, by Eligible Zone District [. . .]
Notes:
(1) Nothing in this section increases the non-residential floor area permitted in any district.
Maximum Floor Area Ratio shall be increased by 0.5:1 for projects in which at least 10% of all units contain three or more bedrooms.
[. . .]
[. . .]
SECTION 5. If any section, subsection, clause or phrase of this Ordinance is for any reason held to be invalid, such decision shall not affect the validity of the remaining portion or sections of the 10 Ordinance. The Council hereby declares that it should have adopted the Ordinance and each section, subsection, sentence, clause or phrase thereof irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases be declared invalid.
SECTION 6. In accordance with the California Environmental Quality Act (CEQA), the City prepared an Addendum to the 2017 Comprehensive Plan Environmental Impact Report (EIR), analyzing the potential environmental impacts of the 2023-2031 Housing Element. On May 8, 2023, the City Council adopted Resolution No. 10107, and on November 17, 2023, the City Council approved a Revised Addendum, finding that the Addendum, as revised, and the 2017 EIR adequately analyzed the environmental impacts of the Housing Element, including the Programs implemented by this ordinance.
SECTION 7. This Ordinance shall be effective on the thirty-first day after the date of its adoption.
INTRODUCED:
PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
City Clerk Mayor
APPROVED AS TO FORM: APPROVED AS TO CONTENT:
Assistant City Attorney City Manager
Director of Planning and
Development Services