CITY COUNCIL
Special Meeting
Wednesday, October 22, 2025
Council Chambers & Hybrid
5:30 PM
Palo Alto City Council meetings will be held as “hybrid” meetings with the option to attend by teleconference or in person. Information on how the public may observe and participate in the meeting is located at the end of the agenda.
The meeting will be broadcast on Cable TV Channel
26, live on YouTube
https://www.youtube.com/c/cityofpaloalto
, and streamed to Midpen Media
Center
https://midpenmedia.org
.
VIRTUAL PARTICIPATION
CLICK HERE TO JOIN
(
https://cityofpaloalto.zoom.us/j/362027238
)
Meeting ID: 362 027 238 Phone:1(669)900-6833
PUBLIC COMMENTS
General
Public
Comment
for
items
not
on
the
agenda
will
be
accepted
in
person
for
up
to
three
minutes
or
an
amount
of
time
determined
by
the
Chair.
General
public
comment
will
be
heard
for
30 minutes.
Additional
public
comments,
if
any,
will
be
heard
at
the
end
of
the
agenda.
Public
comments
for
agendized
items
will
be
accepted
both
in
person
and
via
Zoom
for
up
to
three
minutes
or
an
amount
of
time
determined
by
the
Chair.
Requests
to
speak
will
be
taken
until
5 minutes
after
the
staff’s
presentation
or
as
determined
by
the
Chair.
Written
public
comments
can
be
submitted
in
advance
to
and
will
be
provided
to
the
Council
and
available
for
inspection
on
the
City’s
website.
Please
clearly
indicate
which
agenda item you are referencing in your subject line.
PowerPoints,
videos,
or
other
media
to
be
presented
during
public
comment
are
accepted
only
by
to
at
least
24 hours
prior
to
the
meeting.
Once
received,
the
Clerk
will
have
them
shared
at
public
comment
for
the
specified
item.
To
uphold
strong
cybersecurity
management
practices,
USB’s
or
other
physical
electronic
storage
devices
are
not
accepted.
Signs
and
symbolic
materials
less
than
2 feet
by
3 feet
are
permitted
provided
that:
(1)
sticks,
posts,
poles
or
similar/other
type
of
handle
objects
are
strictly
prohibited;
(2)
the
items
do
not
create
a
facility,
fire,
or
safety
hazard;
and
(3)
persons
with
such
items
remain
seated
when
displaying
them
and
must
not
raise
the
items
above
shoulder
level,
obstruct
the
view
or
passage
of other attendees, or otherwise disturb the business of the meeting.
TIME ESTIMATES
Listed
times
are
estimates
only
and
are
subject
to
change
at
any
time,
including
while
the
meeting
is
in
progress.
The
Council
reserves
the
right
to
use
more
or
less
time
on
any
item,
to
change
the
order
of
items
and/or
to
continue
items
to
another
meeting.
Particular
items
may
be
heard
before
or
after
the
time
estimated
on
the
agenda.
This
may
occur
in
order
to
best
manage the time at a meeting or to adapt to the participation of the public.
1 October 22, 2025
Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas
.
CALL TO ORDER
BOARDS, COMMISSIONS, AND COMMITTEES APPOINTMENTS (5:30 - 5:45 PM)
1. Appointment of Candidates to the Human Relations Commission (HRC), Parks and Recreation Commission (PRC), and Public Art Commission (PAC); CEQA Status: Not a Project
AGENDA CHANGES, ADDITIONS AND DELETIONS
PUBLIC COMMENT (5:45 - 6:15 PM)
Members of the public may speak in-person ONLY to any item NOT on the agenda. 1-3 minutes depending on number of speakers. Public Comment is limited to 30 minutes. Additional public comments, if any, will be heard at the end of the agenda.
STUDY SESSION (Item 2: 6:15 - 7:15 PM, Item 3: 7:15 - 8:15 PM)
2. City Council Feedback on an Updated Housing Project Design Concept and Other Project Updates Related to the City and Alta Housing Partnership to Develop the Downtown Surface Parking lot at the Corner of Kipling Street and Lytton Avenue (Lot T) for Affordable Housing. CEQA Status – Not a Project.
3. Reinforcing Best Practices in Managing Consultant Services
BREAK (15 MINUTES)
ACTION ITEMS (8:30 - 10:00 PM)
Include: Report of Committees/Commissions, Ordinances and Resolutions, Public Hearings, Report of Officials, Unfinished Business and Council Matters.
4. Update and Direction to Staff on the Downtown Housing Plan Project and Implementation of Senate Bill 79 (2025-2026). CEQA Status: Exempt Under CEQA Guidelines Section 15262.
Late Packet Report Added
ADJOURNMENT
OTHER INFORMATION
2 October 22, 2025
Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas
.
Standing Committee Meetings this week
FInance Committee October 21, 2025
Public Comment Letters
Schedule of Meetings
SUPPLEMENTAL / AMENDED AGENDA ITEMS
4. Update and Direction to Staff on the Downtown Housing Plan Project and Implementation of Senate Bill 79 (2025-2026). CEQA Status: Exempt Under CEQA Guidelines Section 15262.
Late Packet Report Added
3 October 22, 2025
Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas
.
PUBLIC COMMENT INSTRUCTIONS
Members
of
the
Public
may
provide
public
comments
to
teleconference
meetings
via
email,
teleconference, or by phone.
1. Written public comments
may be submitted by email to
[email protected]
.
2. For
in
person
public
comments
please
complete
a
speaker
request
card
located
on
the
table
at
the
entrance
to
the
Council
Chambers
and
deliver
it
to
the
Clerk
prior
to
discussion of the item.
3. Spoken
public
comments
for
agendized
items
using
a
computer
or
smart
phone
will
be
accepted
through
the
teleconference
meeting.
To
address
the
Council,
click
on
the
link
below to access a Zoom-based meeting. Please read the following instructions carefully. ◦
You
may
download
the
Zoom
client
or
connect
to
the
meeting
in-
browser.
If
using
your
browser,
make
sure
you
are
using
a
current,
up-to-date
browser:
Chrome
30 ,
Firefox
27 ,
Microsoft
Edge
12 ,
Safari
7 .
Certain
functionality
may
be
disabled
in
older
browsers
including
Internet
Explorer.
Or
download
the
Zoom
application
onto
your
smart
phone
from
the
Apple
App
Store
or
Play
Store
and
enter
in
the
Meeting ID below.
◦
You
may
be
asked
to
enter
an
address
and
name.
We
request
that
you
identify
yourself
by
name
as
this
will
be
visible
online
and
will
be
used
to
notify
you
that it is your turn to speak.
◦
When
you
wish
to
speak
on
an
Agenda
Item,
click
on
“raise
hand.”
The
Clerk
will
activate
and
unmute
speakers
in
turn.
Speakers
will
be
notified
shortly
before
they
are called to speak.
◦
When
called,
please
limit
your
remarks
to
the
time
limit
allotted.
A
timer
will
be
shown on the computer to help keep track of your comments.
4. Spoken
public
comments
for
agendized
items
using
a
phone
use
the
telephone
number
listed
below.
When
you
wish
to
speak
on
an
agenda
item
hit
*9
on
your
phone
so
we
know
that
you
wish
to
speak.
You
will
be
asked
to
provide
your
first
and
last
name
before
addressing
the
Council.
You
will
be
advised
how
long
you
have
to
speak.
When
called
please limit your remarks to the agenda item and time limit allotted.
CLICK HERE TO JOIN
Meeting ID: 362-027-238 Phone: 1-669-900-6833
Americans
with
Disability
Act
(ADA)
It
is
the
policy
of
the
City
of
Palo
Alto
to
offer
its
public
programs,
services
and
meetings
in
a
manner
that
is
readily
accessible
to
all.
Persons
with
disabilities
who
require
materials
in
an
appropriate
alternative
format
or
who
require
auxiliary
aids
to
access
City
meetings,
programs,
or
services
may
contact
the
City’s
ADA
Coordinator
at
(650)
329-2550
(voice)
or
by
emailing
Requests
for
assistance
or
accommodations
must
be
submitted
at
least
24 hours
in
advance
of
the
meeting,
program,
or
service.
4 October 22, 2025
Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas
.
California
Government
Code
§84308
,
commonly
referred
to
as
the
"Levine
Act,"
prohibits
an
elected
official
of
a
local
government
agency
from
participating
in
a
proceeding
involving
a
license,
permit,
or
other
entitlement
for
use
if
the
official
received
a
campaign
contribution
exceeding
$500
from
a
party
or
participant,
including
their
agents,
to
the
proceeding
within
the
last
12 months.
A
“license,
permit,
or
other
entitlement
for
use”
includes
most
land
use
and
planning
approvals
and
the
approval
of
contracts
that
are
not
subject
to
lowest
responsible
bid
procedures
and
have
a
value
over
$50,000.
A
“party”
is
a
person
who
files
an
application
for,
or
is
the
subject
of,
a
proceeding
involving
a
license,
permit,
or
other
entitlement
for
use.
A
“participant”
is
a
person
who
actively
supports
or
opposes
a
particular
decision
in
a
proceeding
involving
a
license,
permit,
or
other
entitlement
for
use,
and
has
a
financial
interest
in
the
decision.
The
Levine
Act
incorporates
the
definition
of
“financial
interest”
in
the
Political
Reform
Act,
which
encompasses
interests
in
business
entities,
real
property,
sources
of
income,
sources
of
gifts,
and
personal
finances
that
may
be
affected
by
the
Council’s
actions.
If
you
qualify
as
a
“party”
or
“participant”
to
a
proceeding,
and
you
have
made
a
campaign
contribution
to
a
Council
Member
exceeding
$500
made
within
the
last
12 months,
you
must
disclose
the
campaign contribution before making your comments.
5 October 22, 2025
Materials submitted after distribution of the agenda packet are available for public inspection at www.paloalto.gov/agendas
.
City Council
Staff Report
Report Type: BOARDS, COMMISSIONS, AND COMMITTEES
APPOINTMENTS
Lead Department: City Clerk
Meeting Date: October 22, 2025
Report #:2508-5097
TITLE
Appointment of Candidates to the Human Relations Commission (HRC), Parks and Recreation Commission (PRC), and Public Art Commission (PAC); CEQA Status: Not a Project
RECOMMENDATION
Staff recommends the City Council appoint members to fill 3 vacancies on HRC, 3 vacancies on PRC, and 3 vacancies on PAC.
BACKGROUND
Recruitment
The Fall 2025 Boards and Commissions recruitment opened on August 22, 2025, and closed on September 24, 2025. Details on the vacancies and recruitment are summarized in the below table. Applications may be accessed online 1. The City Council conducted interviews on October 15, 2025, which may be viewed on the City’s YouTube Channel2 .
Board/
Commission
Number of
Vacancies
Term Number of
Applicants
Number of Applicants
Advanced to Interview
Stage
HRC 3 (Seat #s: 2, 3, 7) 11/1/25 – 10/31/28 12 8
PRC 3 (Seat #s: 2, 3, 4) 11/1/25 – 10/31/28 10 6
PAC 3 (Seat #s: 1, 4, 7) 11/1/25 – 10/31/28 10 7
Commission Membership Requirements
Membership requirements for HRC, PRC, and PAC are listed below. Additionally, no commissioners can be Councilmembers, officers, or employees of the City. 1 City Council, October 6, 2025; Agenda Item #2; SR # 2508-5096 https://portal.laserfiche.com/Portal/DocView.aspx?id=227109&repo=r-704298fc&searchid=01023e7f-f8c6-4c2b- 936d-ab3cd0cc41fa
2 City of Palo Alto YouTube Channel: https://www.youtube.com/@cityofpaloalto Item 1
Item 1 Staff Report
Item 1: Staff Report
Pg.
1 Packet Pg. 6 of 83
Human Relations Commission – Palo Alto residency 5
Parks and Recreation Commission – Palo Alto residency and demonstrated interest in parks, open space and recreation matters6
Public Art Commission - shall be either members of the architectural review board or professional visual artists, professional visual arts educators, professional visual arts scholars, or visual arts collectors whose authorities and skills are known and respected in the community and, whenever feasible, who have demonstrated an interest in, and have participated in, the arts program of the city7
Voting
The City Clerk will conduct live voting during the meeting and will announce the results and how each Councilmember voted. Each Councilmember may select up to 3 applicants per commission.
A majority of 4 votes is required to appoint a candidate. Additional rounds of voting may be required if there is a tie or no candidates receive a majority of votes.
FISCAL/RESOURCE IMPACT
None.
STAKEHOLDER ENGAGEMENT
City staff publicized the recruitment through the City’s Uplift Local community newsletter, City Clerk’s Office newsletters, the City’s website, and the City’s social media channels. The recruitment was also advertised in both print and online in the Palo Alto Daily Post and Palo Alto Weekly. Recruitment information was also posted at Palo Alto libraries and City Hall and emailed to previous applicants, community-based organizations and businesses related to the commissions’ issue areas.
ENVIRONMENTAL REVIEW
Council action on this item is not a project as defined by CEQA because it is an organizational or administrative activity that will not result in direct or indirect physical changes in the environment. CEQA Guidelines section 15378(b)(5).
APPROVED BY:
Mahealani Ah Yun, City Clerk
5 Palo Alto Municipal Code Section 1.22.010 https://codelibrary.amlegal.com/codes/paloalto/latest/paloalto_ca/0- 0-0-61320
6 Palo Alto Municipal Code Section 2.25.020 https://codelibrary.amlegal.com/codes/paloalto/latest/paloalto_ca/0- 0-0-61402
7 Palo Alto Municipal Code Section 2.18.020 https://codelibrary.amlegal.com/codes/paloalto/latest/paloalto_ca/0- 0-0-61257
Item 1
Item 1 Staff Report
Item 1: Staff Report
Pg.
2 Packet Pg. 7 of 83
City Council
Staff Report
From: City Manager
Report Type: STUDY SESSION
Lead Department: Planning and Development Services
Meeting Date: October 22, 2025
Report #:2505-4745
TITLE
City Council Feedback on an Updated Housing Project Design Concept and Other Project Updates Related to the City and Alta Housing Partnership to Develop the Downtown Surface Parking lot at the Corner of Kipling Street and Lytton Avenue (Lot T) for Affordable Housing.
CEQA Status – Not a Project.
RECOMMENDATION
Staff recommends City Council receive an update on the design development for a 100% affordable housing development located on Lot T and provide informal feedback on key design considerations and other project updates.
EXECUTIVE SUMMARY
On January 21, 2025, the City Council selected Alta Housing as their development partner for a 100% affordable housing project on the City-owned surface parking lot, Lot T. The purpose of this study session is to seek informal feedback from City Council on design options studied for this project. Alta Housing will incorporate the feedback received in this study session and from a community meeting which will be held in late 2025 into a development application to be submitted in early 2026.
In addition to other feedback that may be provided, Alta Housing is seeking the City Council’s input on the preferred project size in terms of height, unit count and mix as well as the orientation of the building’s courtyard. These design considerations will influence the project’s development costs and the developer’s requested financial contribution from the City.
Alta Housing is expected to seek project approval and a City contribution of $4.1 million to $5.5 million as part of a future development agreement in 20261. The City currently has approximately $7 million in unreserved affordable housing funds after the anticipated allocation of $5 million to 3001 El Camino Real next month for a 100% affordable housing project. A concept proposal for a third potential affordable housing project at the former Fry’s 1 This contribution is in addition to the provision of the land parcel itself which is contemplated to be provided as a ground lease to Alta.
Item 2
Item 2 Staff Report
Item 2: Staff Report
Pg.
1 Packet Pg. 8 of 83
Electronics site (a part of the 340 Portage development agreement) will be shared with the City Council next month that would also likely require City funding.
BACKGROUND
Program 1.4 – City-owned Land Lots of the City’s Certified 2023-2031 Housing Element targets the development of 290 affordable housing units on City-owned lands, over the course of the eight-year planning period, including several surface parking lots in the Downtown. In the first phase of this effort, the City Council selected Lot T as the site for the first affordable housing development, and also re-initiated the design of a six-story garage structure to provide replacement public parking on Lot D, the City-owned parking lot located at the corner of Waverley Street and Hamilton Avenue.
On January 21, 2025, the City Council reviewed the responses received and selected Alta Housing as their development partner for a 100% affordable housing project on Lot T3, the City- owned parking lot located at the corner of Kipling Street and Lytton Avenue. On June 17, 2025, City Council approved a one-year exclusive negotiation agreement with Alta Housing for the development of 100% affordable housing on Lot T4.
Previous Council Feedback
Following the execution of the agreement in June, staff worked collaboratively with the Alta Housing team to refine the project proposal based on the preliminary feedback received from City Council on January 21, 2025. Specifically, during that hearing City Council expressed support for an initial project proposal from Alta Housing that included 54 units of family housing in a five-story building with 27 on-site parking stalls serving residents only. However, in their motion the members of City Council directed staff and Alta Housing to come back to Council with a plan to maximize the total units provided by the project while:
Not exceeding seven stories in height;
Maintaining the ratio of family housing included in the initial proposal; and Providing on-site parking for residents at a ratio similar to the initial proposal.
For reference, the initial proposal included 57.4% family housing units (two- and three- bedroom units) and provided 0.5 parking spaces per unit.
3 See minutes for Action Item 9 for details: https://portal.laserfiche.com/Portal/DocView.aspx?id=137876&repo=r- 704298fc
4 See minutes for Consent Item 4 for details:
https://portal.laserfiche.com/Portal/DocView.aspx?id=223613&repo=r-704298fc Item 2
Item 2 Staff Report
Item 2: Staff Report
Pg.
2 Packet Pg. 9 of 83
ANALYSIS
The purpose of this study session is to receive City Council feedback on the design and development options studied in response to this direction. This section presents key design elements, cost considerations, and relationship to State laws relevant to the next steps for the proposed project.
Design Discussion
Alta Housing and staff have developed two additional design options for City Council’s consideration, in addition to the initial design Council supported in January 2025. For this report, the January 2025 design is referred to as Option 1 and the two new designs are referred to as Options 2 and 3. Conceptual plans for each of these options are included in Attachment C.
Options 2 and 3 both increase the total number of units provided compared to Option 1, which provides 54 units; Option 2 provides 72 units and Option 3 provides 68 units. Both Options 2 and 3 maintain the “C” shaped residential floorplate included in Option 1 but increase the building height from five to six stories in accordance with Council feedback.7 All three options currently assume an on-site transformer, however staff in the Utilities and Planning and Development Services departments are working closely together to explore additional options which may allow the project to achieve the upper end of the parking space ranges shown in Table 1 while also reducing construction costs.
The main difference between Option 2 and Option 3 is the orientation of the central courtyard.
Option 2 maintains the courtyard in the interior of the block as contemplated in the initial design (Option 1), while Option 3 explores a courtyard that faces the street. Alta Housing prefers Option 2 because it provides more units overall with a larger average unit size and better access to light and air within units. Alta Housing also shared that studio units, such as those included in Option 3, yield lower rents and can be harder to fill than one-bedroom units.
However, Option 3 significantly reduces the mass of the building on Kipling Street, opposite and adjacent to a collection of historic8, small-scale single-family homes and local businesses.
Table 1 summarizes these design differences. Staff encourages City Council to provide feedback on any preferences related to the overall building massing, height, average unit size, or unit quality.
7 Six stories is the greatest number of stories possible without requiring additional levels of concrete construction or changing construction types altogether; either of which would increase construction costs. Therefore, a seven story option is not proposed.
8 The nearby properties located at 405, 411, 421-423, 430, 431-433 and 443 Kipling Street are included in the City’s Historic Inventory, found here: https://www.paloalto.gov/files/assets/public/v/1/planning-amp-development- services/historic-preservation/historic-inventory/city-historic-inventory-list.pdf.
Item 2
Item 2 Staff Report
Item 2: Staff Report
Pg.
3 Packet Pg. 10 of 83
Table 1: Summary of Design Option Differences
Option 1 Option 2 Option 3
Stories 5 6 6
Total Units 54 units 72 units 68 units
Courtyard
Orientation
Inward-Facing Inward-Facing Outward-Facing
Unit Mix 1-BR: 23
2-BR: 15
3-BR: 16
1-BR: 33
2-BR: 20
3-BR: 19
STUDIO: 10
1-BR: 20
2-BR: 19
3-BR: 19
Percent Family
Units
57.4% (31 total) 54.2% (39 total) 55.9% (38 total)
Approx. Parking
Spaces*
27-31 spaces 30-34 spaces 29-34 spaces
Parking Ratio 0.5-0.57 spaces per
unit
0.42-0.47 spaces per
unit
0.43-0.5 spaces per unit
Units facing
interior lot lines
2 units per
residential floor
(8 units total)
3 units per residential
floor
(15 units total)
7 units per residential
floor
(35 units total)
Courtyard
Lighting
Courtyard receives
mostly direct sunlight
Courtyard receives
mostly direct sunlight
Courtyard receives mostly
indirect sunlight
* Parking space counts for each option are estimated and will vary based on final transformer and trash room locations; one or more of the parking spaces provided may be dedicated to passenger loading and unloading.
Total Development Costs and Funding Sources
Table 2 below provides a summary of the total development costs, the requested City contribution, and potential gap funding required (see following section for gap funding options) under each of the three design options studied. Under any of these scenarios, the total development costs for the project are expected to be higher than those included in the proposal City Council reviewed in January 2025 for the following reasons:
1. The Alta Team recommends holding more conservative cost assumptions for the project in response to increased financial/economic volatility including (but not limited to) changing markets, construction costs, and material costs; and
2. There is increasing uncertainty around and competitiveness for funding at all levels (County, State, and Federal).
Additionally, Options 2 and 3 also increase the total development size and unit count above what was proposed in Option 1, which also increases the total development cost.
Item 2
Item 2 Staff Report
Item 2: Staff Report
Pg.
4 Packet Pg. 11 of 83
The City’s contribution shown in all options is based on the per unit cost contribution of approximately $76,000 that Council indicated support for in January 2025. This funding would be drawn from the Housing In-Lieu – Residential, Housing In-Lieu – Commercial, and Residential Housing Impact Fee funds. The gap financing needed is calculated by subtracting the City’s contribution and other reliable funding sources (such as state tax credits and loans) from the total development cost.
The City Council may consider providing a per unit cost contribution above $76,000, if it would like to reduce the total amount of gap funding needed. However, this has not been assumed at this time and should be considered in the context of other potential affordable housing development projects the City might like to support in addition to Lot T. For instance, through grant funding, staff has analyzed a financial feasible 100% affordable housing project design concept that could be considered at the former Fry’s Electronics site. Through a development agreement, a portion of this land will be given to the City with the intent to create in the future, a park and affordable housing project. The work to date on the affordable housing concept plan, which will be presented to the City Council in November, could be used for a future request for proposals if directed by Council. Managing limited affordable housing funds, which includes about $7 million at the time of this report is unlikely to support Lot T and a third project without an additional funding from Measure K, which is expected, but also serves as a potential limiter on additional funding for the Lot T project. Staff will continue to monitor the affordable housing fund relative to these projects.
Table 2: Development Costs by Design Scenario
Scenario
Total
Development
Costs
Cost Per
Unit
City
Contribution
Per Unit
Total City
Contribution
Gap Financing
Needed after
City
Contribution,
State Tax
Credits, Loans*
Option 1** $57.9 M $1.07 M $76,667 $4.1 M $2,034,000
Option 2 $78.3 M $1.09 M $76,389 $5.5 M $2,270,000
Option 3 $74 M $1.10 M $76,471 $5.2 M $2,648,000
* See sample proforma included as an attachment to the June 17, 2025 staff report on this topic: https://portal.laserfiche.com/Portal/DocView.aspx?id=188894&repo=r- 704298fc&searchid=52b8bf89-81f9-42ee-97a7-2c9c252f8c77
** The January 2025 project proposal costs have been updated to reflect market conditions and political considerations as of June 2025.
Item 2
Item 2 Staff Report
Item 2: Staff Report
Pg.
5 Packet Pg. 12 of 83
Gap Funding Sources
Alta Housing proposes filling the funding gap created by changing market and funding landscape conditions in one of the following ways, without requesting a City contribution per unit over and above what the Council expressed support for in January 2025:
1. Seeking a partnership with the Housing Accelerator Fund, an independent nonprofit lender;
2. Requesting funding from the County of Santa Clara or other regional source; or
3. Restructuring the project to serve a higher AMI level and applying for California Housing Financing Agency (CalHFA)'s Mixed Income Program (MIP).
Table 3 below provides an overview of the pros and cons of each of these options.
Table 3: Pros and Cons of Additional Funding Source Options Source Funding
Description
Pros Cons Programming
Impact(s)
Housing
Accelerator
Fund (HAF)
Covers
anticipated
gap and
replaces State
tax credit and
Affordable
Housing
Program
(AHP) loan
Streamlines
financing process
and schedule
Over the counter
application
Would require project
team to meet
aggressive cost per
unit targets
Requires approval
from HAF investors
Limited experience in
the Peninsula; looking
to expand beyond San
Francisco
None
County or
Other
Regional
Funding
Covers the
gap, replaces
the AHP loan
and partially
replaces State
tax credits
Compatible with
most other funding
sources
Experienced funding
partner for
Peninsula projects
No funding currently
available; may
become available
next election cycle
May be
required to
serve Rapid
Re-Housing
(RRH)
families
CalHFA MIP Covers the
gap, replaces
the AHP loan
and partially
replaces State
tax credits
Yearly source
Less competitive
than most other
funding sources
Inclusion of higher-
income units may
present marketing,
cost, funding and/or
policy challenges
AMI levels
served shifts
from
30% - 60% to
30% -120%
Item 2
Item 2 Staff Report
Item 2: Staff Report
Pg.
6 Packet Pg. 13 of 83
Zoning Compliance and State Density Bonus Law
The zoning designation for this site is Public Facilities (PF). The project will aim to comply with the City’s objective design standards and the PF development standards to the greatest extent possible while still delivering a significant number of high-quality, new affordable housing units.
The design materials developed to date are conceptual in nature and require further refinement for staff to complete a detailed analysis for compliance with both the City’s objective design standards and development standards.
The project is eligible for up to five concessions and unlimited waivers to development standards to accommodate project in accordance with the State Density Bonus Law (California Government Code 65915) and PAMC Chapter 18.15.
The project anticipates requesting waivers from the following standards:
Lot coverage (~90% v. 30%)
Property line setbacks (all)
The project would also likely request the following concessions:
Floor Area Ratio (~4.0:1 v 1.0:1)
Required open space dimensions
The exact waivers and concessions associated with this project will be determined once Alta Housing submits and staff reviews the formal application materials. Alta Housing has provided a summary of their anticipated compliance with the PF development standards based on their preferred design (Option 2); Attachment B includes more information. Alta Housing had not yet provided a summary of compliance with objective design standards at the time of this packet’s publication.
NEXT STEPS
Following this study session, Alta Housing plans to hold a community meeting in the fall/winter to explore these options with the public. While staff will attend the community meeting, it will be hosted and facilitated by Alta Housing. Alta Housing will submit a project application in early 2026 that is informed by the feedback received in this study session and the community meeting.
Once filed, the formal application would be processed in accordance with the Streamlined Housing Development Project Review Process, as outlined in Palo Alto Municipal Code (PAMC) Section 18.77.073, which requires the project to comply with objective standards. This process requires one study session with the Architecture Review Board (ARB) and will then be presented to the City Council for a final decision in accordance with PAMC Section 18.40.170.
A Development Agreement (DA) will be acted upon by the Council in addition to approving the project design. The DA will confirm the City’s agreed upon funding contribution to the project and establish the terms and conditions for granting Alta Housing a long-term lease to develop an affordable housing project on Lot T.
Item 2
Item 2 Staff Report
Item 2: Staff Report
Pg.
7 Packet Pg. 14 of 83
POLICY IMPLICATIONS
The advancement of affordable housing development on Lot T supports Implementation Program 1.4 of the City’s 2023–2031 Housing Element, which prioritizes redevelopment of City- owned surface parking lots for 100% affordable housing projects. It also directly supports Objective 50 of the City Council’s 2025 Priorities: Advance affordable housing project on Downtown surface parking lot (Lot T). This study session specifically meets the project’s target milestone for Council review of a revised development proposal in Q4 of this year.
The proposed housing development on Lot T has the potential to deliver 54 to 72 units of affordable housing, which would help the City to meet its Regional Housing Needs Assessment (RHNA) target of 6,086 new housing units by 2031.
FISCAL/RESOURCE IMPACT
There is no direct fiscal impact associated with holding this study session. However, there would be a fiscal impact associated with the potential approval of the project and the anticipated Development Agreement between the City and Alta Housing. At this time, Alta Housing expects to request a City contribution of $4.1 million to $5.5 million to the project depending on the design option Alta Housing chooses to pursue based on Council and the community’s feedback. This monetary contribution would be in addition to the City’s land contribution, most likely in the form of a long-term land lease. The land costs are not included in any of the financial scenario figures outlined in this report.
Funding sources and details for the City’s contribution will be confirmed at the time of the project and Development Agreement’s approval in Spring 2026. As of October 2025, the City had approximately $7.0 million of total unaudited funds available across the Residential In-Lieu Fee Housing Fund ($3.8 million), Residential Impact Fee Housing Fund ($0.8 million), and Commercial Housing Fund ($2.4 million) that could be used for this purpose.
Mentioned previously, the voters recently passed implementation of a business tax (Measure K) of which approximately 1/3 of the funding is to be invested in affordable housing and unhoused support. There is $2.5 million in unspent funding at the time of this report’s publication though the Council has expressed in other conversation significant investment in support for unhoused which would likely draw from this same source.
There is also $180,000 available in the Stanford University Medical Center (SUMC) fund for Infrastructure, Sustainable Neighborhoods and Communities, and Affordable Housing.
STAKEHOLDER ENGAGEMENT
This study session was publicly noticed as part of the October 22, 2025 City Council agenda.
Prior engagement activities included:
Item 2
Item 2 Staff Report
Item 2: Staff Report
Pg.
8 Packet Pg. 15 of 83
Council hearing and direction to initiate a Request for Information to examine housing and parking development opportunities in the downtown area on December 6, 2021;11 Issuance and Review of a Request for Information in 2022 and 2023, including a public hearing on December 11, 2023;12
Issuance of a Request for Refined Proposals in 2024;
Council review of refined proposals and direction to staff to prepare the subject Exclusive Negotiation Agreement (ENA) in January 2025; and Housing Element community meetings and discussions identifying Lot T as a City-owned site suitable for affordable housing.
Additional engagement is anticipated during the ENA term and project application review process, specifically:
A community meeting hosted by Alta Housing in Fall 2025; An ARB study session in early 2026; and
A public hearing with City Council in spring 2026.
ENVIRONMENTAL REVIEW
This study session with City Council is not a project subject to environmental review under the California Environmental Quality Act (CEQA) per CEQA Guidelines Section 15378(b)(2). The formal application with be evaluated in accordance with CEQA as part of that review.
ATTACHMENTS
Attachment A: Location Map
Attachment B: Development Standards Compliance Summary
Attachment C: Conceptual Design Plans and Diagrams
APPROVED BY:
Jonathan Lait, Planning and Development Services Director 11 For details, see: https://www.cityofpaloalto.org/files/assets/public/v/8/agendas-minutes-reports/agendas- minutes/city-council-agendas-minutes/2021/12-december/20211206/20211206pccsm-amended-linked.pdf 12 For details, see: https://cityofpaloalto.primegov.com/viewer/preview?id=0&type=8&uid=433ee206-0e46-4856- aa54-d6aa54ee085d
Item 2
Item 2 Staff Report
Item 2: Staff Report
Pg.
9 Packet Pg. 16 of 83
7 7
7 7
7 7-11
135.0'112.5'
50.0'
112.5'
0'
112.5'
93.0'
75.0'
135.0'
100.0'
135.0'
100.0'
135.0'
25.0'
135.0'
25.0'
150.0'
112.5'
150.0'
112.5'
45.0'
112.5'
45.0'
112.5'
135.0'
25.0'
135.0'
25.0'
135.0'
50.0'
135.0'
50.0'
43.0'
79.0'
43.0'
79.0'
43.0'
33.5'43.0'
33.5'
45.0'
105.5'
45.0'
105.5'
50.0'
105.5'
50.0'
105.5'
50.0'
105.5'
50.0'
105.5'
93.0'
105.5'
93.0'
105.5'
37.5'
105.5'
37.5'
105.5'
37.5'
105.5'
37.5'
105.5'
93.0'
105.5'
93.0'
105.5'
168.0'
112.5'
168.0'
112.5'
50.0'
57.0'
50.0'
57.0'
71.5'
43.0'50.0'
30.4'
21.5'
21.5'
21.5'
30.4'
57.0'
43.0'
100.0'
50.0'
112.5'
50.0'
112.5'
50.0'
112.5'
50.0'
112.5'
50.0'
112.5'
88.0'
125.0'
93.0'
12.5'
25.0'
37.5'
30.0'
75.0'
143.0'
100.0'
43.0'43.0'
50.0'
40.0'
112.5'
40.0'
112.5' 50.0'
112.5'
50.0'
112.5'
50.0'
112.5'
50.0'
112.5'
36.0'
95.0'
36.0'
95.0'
39.0'
37.5'
18.0'
75.0'
57.0'
112.5'
107.0'
50.0'
107.0'
50.0'
107.0'
25.0'
107.0'
25.0'
20.0'
50.0'
130.0'
125.0'
37.5'
25.0'
112.5'
50.0'
112.5'
14.0'17.5'
36.0'
130.0'
130.0
50.0'
50.0'
218.0'
50.0'
218.0'
45.0'
112.5'
45.0'
112.5'
45.0'
105.5'
45.0'
105.5'
110.0'
100.0'
110.0'
100.0'
110.0'
25.0'
110.0'
25.0'
110.0'
50.0'
110.0'
50.0'
100.0'
50.0'
100.0'
50.0'
135.0'
25.0'
135.0'
25.0'
95.0'
50.0'
95.0'
50.0'
95.0'
0'
95.0'
25.0'
95.0'
95 25.0'
30.0' 40.0'
30.0'
80.0'
85.0'
80.0'
30.0'
70. 150.0'
55.0'
80.0'
125.0'
80.0'
125.0'
50.0'
143.0'
70.0'
118.0'
70.0'
118.0'
10.0'
50.0'
10.0'
50.0'
100.0'
75.0'
50.0'
112.5'
'
112.5'
50.0'
112.5'
50.0'
112.5' 37.5'
112.5'
37.5'
112.5'
37.5'
112.5'
37.5'
112.5'
30.0'
75.0'
30.0'
75.0'
97.0'
6.0'
3.0'
50.0'
100.0'
56.0'
28.0'
112.5'
25.0'
50.0'
3.0'
62.5'
50.0'
112.5'
50.0'
112.5' 40.0'
112.5'
40.0'
112.5' 60.0'
112.5'
60.0'
112.5'
60.0'
112.5'
60.0'
112.5'
60.0'
112.5'
60.0'
112.5'
50.0'
0.0'100.0'
50.0'
100.0'100.0'
12.5'
3.0'
56.5'
97.0'
69.0'
25.0'
112.5'
25.0'
112.5'
50.0'
112.5'
50.0'
112.5'
35.0'
62.5'
35.0'
62.5'
83.0'
62.5'83.0'
62.5'
118.0'
62.5'
118.0'
62.5'
118.0'
100.0'118.0'
100.0'
100.0'
112.5'
100.0'
112.5'
225.0'
130
225.0'
130.5'
225.0'
93.0'
112.5'
93.0'
112.5'
100.0'
112.5'
100.0'
112.5'53.0'
112.5'
53.0'
112.5'
13 50.0'
140.0'
65.0'
140.0'
65.0'
0 65.0'
140.0'
50.0'
100.0'
112.5'
100.0'
112.5'
100.0'
112.5'
100.0'
112.5'
100.0'
112.5'
100.0'
112.5'
100.0'
112.5'
100.0'
112.5'
100.0'
112.5'
100.0'
112.5'
100.0'
112.5'
100.0'
112.5'
130
225.0'
130.5'
225.0'
130
225.0'
130.5'
225.0'
130
225.0'
130.5'
225.0'
379
405
437
463
480
530
460
405
431
433
437
440
420
431
330
332
334
336
360
380
416-
424
373-
377
473- 479
425
415-419
384-396
436- 452
305-
313
489- 499
347-
359
426
411
385
333
69 411
421
320
328
332
330
340
344
348
452
456
321
325
327
333
335
337
474
472
328
418
08 412
461
353
355
367
415
379
375
401
366
436
390
425
419
405
401
450
407
401
423
443
451
463
440
480
430
431
444
441439
423
405
403
383
382
376
3 432
428
400
453
351349
361 457
451
465
420
430
3 515
342
340
338
502
450
327A
FLORENCE STREET
KIPLING STREET
LYTTON AVENUE
WAVERLEY STREET
NUE
COWPER STREET
KIPLING STREET
UNIVERSITY AVENUE
WAVERLEY S
COWPER STREET
LY
LANE 20 EAST
LANE 30
PF
PF
PC-4436
PC-
CD-D (NP)
4611
Lot F
Lot T
Bryan
Park
Union Bank
This map is a product of the
City of Palo Alto GIS
This document is a graphic representation only of best available sources.
Legend
Project Site
Current Features
0' 73'
Attachment A
Location Map
450 Lytton (Lot T)
CITY OF PALO ALTO
I
N
C
O R P O R A
T
E
D
CAL I FORN IA
P a l o A l t o
T h e C i t y o f
A
P
R
I L 1 6 1
8 9
4 The City of Palo Alto assumes no responsibility for any errors. ©1989 to 2016 City of Palo Alto ekallas, 2025-10-02 10:36:42
Attachment A. Location Map (\\cc-maps\Encompass\Admin\Personal\Planning.mdb) Item 2
Attachment A - Location Map
Item 2: Staff Report
Pg.
10 Packet Pg. 17 of 83
ATTACHMENT B
PRELIMINARY ZONING COMPARISON TABLE*
Lot T, 450 Lytton (APN 120-15-100)
Table 1: COMPARISON WITH CHAPTER 18.28 (PF DISTRICT)
Regulation Required Existing Proposed
Minimum Site Area Not Applicable
No Change (.44 acres [18,900 sf])
Min. front yard setback
(based on most restrictive
abutting district – [PF] but
not less than 20 feet)
20 feet (Lytton) None at Ground Floor / Varies at Levels 2-6 Min. street side yard
setback (based on most
restrictive abutting
district-[PF] but no less
than 10 feet)
20 feet (Kipling) None at Ground Floor / Varies at Levels 2-6 Min. interior side yard
setback (based on most
restrictive abutting
district-[PF] but no less
than 10 feet)
10 feet (parallel to
Kipling)
None at Ground Floor / Varies at Levels 2-6
Min. rear yard setback
(based on most restrictive
abutting district-[PF] but
no less than 10 feet)
10 feet (parallel to
Lytton)
None at Ground Floor / Varies at Levels 2-6
Max. Site Coverage 30% (5,670 sf)
92.2% (17,426 sf)
Max. Total Floor Area
Ratio
1:1 (18,900 sf)
No Density Limit for
Density Bonus projects
within ½ mile of major
transit
3.97 (75,019 sf)
Max. Building Height 50 ft or 35 ft when
located within 150 ft of
residential zone
+33 ft and + 3 stories
for Density Bonus
projects within ½ mile
of major transit
6 stories
60 feet measured to the roof structure
64 feet measured to top of roof at Elevator
69 feet measured to the top of roof at Stairs
.
Table 2: CONFORMANCE WITH CHAPTER 18.52 (Off-Street Parking and Loading) for Non-profit Office and Residential Uses
Type Required Proposed
Vehicle Parking 0.5 space per unit for
Transit-Oriented
Projects (72 units * 0.5
= 34)
30-34 spaces
Item 2
Attachment B -
Development Standards
Compliance Summary
Item 2: Staff Report
Pg.
11 Packet Pg. 18 of 83
Bicycle Parking 1 long-term space per
unit; 1 short-term
guest per 10 units
equals 79.2 total
spaces = 72 long-term,
7.2 short-term
80 (72 long term; 8 short term)
* This analysis is based on Design Option 2, Alta Housing’s preferred option.
Item 2
Attachment B -
Development Standards
Compliance Summary
Item 2: Staff Report
Pg.
12 Packet Pg. 19 of 83
83 83
:$67(
&2//(&7,21
%,.(6
67$,5
67$,5
%2+
/2%%< 0$,/
3$5.,1*
63$&(6
*6)
0(&+(/(&
9$1 $&&
2)),&(6 75$16)250(5
0(&+
0$,17(1$1&(
5220 0$,172)),&(
$&&
6(59,&(
7((15220
6725$*(
/<7721$9(
.,3/,1*67
0(&+
&255
/$1'6&$3,1*
$5($6
%5%5
%5
%5
/$81'5<
/281*(
67$,5
67$,5
:$67(
0(&+
%5
%5
%5
%5%5
%5
%5
%5
%5
%5
%5
%5
%5
&20081,7<5220/$81'5<
67$,5
67$,5
:$67(
0(&+
32',8023(163$&(/(9(/
8VDEOH*6)
/DQGVFDSHSODQWLQJDUHDVVHDWLQJDUHDV
FKLOGUHQ
VSOD\VSDFH
%5
%5
%5
%5
%5%5
%5
%5
32',80(*5(66
%5
Upper Levels (3-5)
Podium Level (2)
Ground Floor (1)
/(9(/
/(9(/
/(9(/
/(9(/
522)
723$5$3(7
/(9(/
/<7721$9(
.,3/,1*
67
/<7721$9(
Kipling Street (North)
3D Axon — Courtyard
3D Axon — Street
OPTION 1
Item 2
Attachment C - Conceptual
Design Plans and Diagrams
Item 2: Staff Report
Pg.
13 Packet Pg. 20 of 83
7UDQVIRUPHU%LNH6WRUDJH
6WDLU
6WDLU
/REE\
5HVLGHQWLDO3DUNLQJ
VSDFHV
JVI
0HFKDQLFDO
(OHFWULFDO
0HFKDQLFDO
0DLQWHQDQFH
2IILFH 6WRUDJH
/\WWRQ$YHQXH
.LSOLQJ6WUHHW
/DQGVFDSH$UHDV
0HFKDQLFDO
0DLO
3DFNDJHV
2IILFH
&XUE&XW
0HFK
6HFRQGDU\
(QWUDQFHIRU
%LNHV
%LNH6WRUDJH
0DLQ
(QWU\
:DVWH
&ROOHFWLRQ
/HYHO3ODQ
6HWEDFNVSHU3)=RQLQJ6WDQGDUGV
*XHVW
%LNH3DUNLQJ
VSDFHV
%HGURRP
%HGURRP
%HGURRP
%HGURRP
6WDLU
6WDLU
:DVWH
%HGURRP
%HGURRP
%HGURRP
%HGURRP %HGURRP
%HGURRP
%HGURRP
-DQ
%HGURRP
%HGURRP
%HGURRP
%HGURRP
PD[PD[
/HYHOV3ODQ
6HWEDFNVSHU3)=RQLQJ6WDQGDUGV
.LSOLQJ6WUHHW
/\WWRQ$YHQXH
$[RQ6WUHHW9LHZ
/HYHO
/HYHO
/HYHO
/HYHO
5RRI
723DUDSHW
/HYHO
/HYHO
(OHYDWRU3HQWKRXVH%H\RQG
6WDLU3HQWKRXVH%H\RQG
.LSOLQJ6WUHHW(OHYDWLRQ
1RUWK
$[RQ&RXUW\DUG9LHZ
.LSOLQJ6WUHHW
/\WWRQ$YHQXH
&RPPXQLW\5RRP
/DXQGU\5HVWURRP
JVI
6WDLU
6WDLU
:DVWH
3RGLXP2SHQ6SDFH
8VDEOHJVI
/DQGVFDSHSODQWLQJDUHDV
FKLOGUHQ
VSOD\VSDFH
VHDWLQJDUHDV
2IILFHV%UHDN5RRP
&RS\5RRP5HVWURRP
JVI
-DQ
PD[
PD[
%HGURRP
%HGURRP
%HGURRP
%HGURRP
%HGURRP
%HGURRP
%HGURRP
%HGURRP
%HGURRP
%HGURRP
%HGURRP
%HGURRP
/HYHO3ODQ6HWEDFNVSHU3)=RQLQJ6WDQGDUGV
3<$72.$5&+,7(&785( 85%$1'(6,*1
5(9,6,216&+('8/(
12 ,668( '$7(
67$03
6+((7
'5$:1%<
&+(&.('%<
,668('$7(
6&$/(
7,7/(
-2%180%(5
35(/,0,1$5<1RWIRU&RQVWUXFWLRQ
7(/(*5$3+$9(
68,7(
2$./$1'&$
7_)
ZZZS\DWRNFRP
30
/277
$OWD+RXVLQJ
$16
$16
/277&21&(378$/3/$16
$
/\WWRQ$YH
3DOR$OWR&$
6REUDWR&HQWHUIRU
1RQ3URILWV
3DOR$OWR&$
3DUFHO7
/\WWRQ$YHQXH
$31
6LWH$UHD
VI
*URXQG)ORRU/DQGVFDSLQJ
*6)
3RGLXP *6)
VIXQLW
8VDEOH2SHQ6SDFH
&RXUW\DUG *6)
VIXQLW
6HWEDFN/LJKWZHOO6SDFHV *6)
VIXQLW
81,70,;
7RWDO8QLWV
7RWDO5HVLGHQWLDO8QLW*6)
*6)DYHUDJH
%5
*6)
%5
*6)
%5
*6)
*5266%8,/',1*$5($
*6)
%<)/225
1DPH )ORRU$UHD
/HYHO
$PHQLW\ 6)
&LUFXODWLRQ+RUL] 6)
&LUFXODWLRQ9HUWLFDO 6)
*DUDJH 6)
6HUYLFH 6)
6)
/HYHO
$PHQLW\ 6)
&LUFXODWLRQ+RUL] 6)
&LUFXODWLRQ9HUWLFDO 6)
5HVLGHQWLDO
6)
6HUYLFH 6)
6)
/HYHO
&LUFXODWLRQ+RUL] 6)
&LUFXODWLRQ9HUWLFDO 6)
5HVLGHQWLDO 6)
6HUYLFH 6)
6)
/HYHO
&LUFXODWLRQ+RUL] 6)
&LUFXODWLRQ9HUWLFDO 6)
5HVLGHQWLDO 6)
6HUYLFH 6)
6)
/HYHO
&LUFXODWLRQ+RUL] 6)
&LUFXODWLRQ9HUWLFDO 6)
5HVLGHQWLDO 6)
6HUYLFH 6)
6)
/HYHO
&LUFXODWLRQ+RUL] 6)
&LUFXODWLRQ9HUWLFDO 6)
5HVLGHQWLDO 6)
6HUYLFH 6)
6)
7RWDO%XLOGLQJ$UHD
6)
%5
%5
%5
/ / / / 7RWDO
3$5.,1*
&DU)DFLOLWLHV
5HTXLUHG
VSDFHVXQLW
0D[LPXPIRUDIIRUGDEOHKRXVLQJSURMHFWVZLWKLQ
PLOHRIPDMRUWUDQVLWVWRS
3URYLGHG
VSDFHV
VSDFHXQLW
6WDQGDUG6SDFHV
[
&RPSDFW6SDFHV
[
$FFHVVLEOH6SDFHV
$&&
[9DQ[$&&
$OOVSDFHVWREH(9&6LQVWDOOHGRU/RZ3RZHU/HYHOSHU &DO*UHHQ7LHU3DOR$OWR5HDFK&RGH
%LF\FOH)DFLOLWLHV
6SDFHSHU5HVLGHQWLDO8QLW5HTXLUHG
/RQJ7HUPVSDFHVLQVWDFNHGUDFNV
ELNHURRPV
6SDFHSHU5HVLGHQWLDO8QLWV5HTXLUHGIRU*XHVWV
VKRUWWHUPVSDFHVLQELF\FOHKRRSVZLWKLQIW0DLQ(QWU\ /27&29(5$*(
6)
6)
)$5
,QFOXGHG)ORRU$UHD
6)
/RW$UHD
6)
/
&RQFHVVLRQV
5HDU6HWEDFN
HQFURDFKPHQWIURQWDJH
*6)JVIDGGLWLRQDOVHWEDFNDUHD
=RQLQJ,QIRUPDWLRQ
(OLJLEOHIRU$IIRUGDEOH+RXVLQJ'HQVLW\%RQXVZLQPLOHWUDQVLWVWRS =RQLQJ'LVWULFW
3)
3XEOLF)DFLOLWLHV
&RPSUHKHQVLYH3ODQ
&&
)ORRG=RQH
;
3DUNLQJ'LVWULFW
8QLYHUVLW\$YH
7UDIILF,PSURYHPHQW'LVWULFW
1RQH
(DVHPHQWV
1R
+RXVLQJ,QFHQWLYH3URJUDP
1R
OPTION 2
Item 2
Attachment C - Conceptual
Design Plans and Diagrams
Item 2: Staff Report
Pg.
14 Packet Pg. 21 of 83
%LNH6WRUDJH
6WDLU
6WDLU
/REE\
5HVLGHQWLDO3DUNLQJ
VSDFHV
JVI
0HFKDQLFDO
(OHFWULFDO
0HFKDQLFDO
0DLQWHQDQFH
2IILFH 6WRUDJH
/\WWRQ$YHQXH
.LSOLQJ6WUHHW
/DQGVFDSH$UHDV
0HFKDQLFDO
0DLO
3DFNDJHV
2IILFH
&XUE&XW
:DVWH
&ROOHFWLRQ
6HFRQGDU\
(QWUDQFHIRU%LNHV
0DLQ
(QWU\
*XHVW%LNH3DUNLQJ
VSDFHV
6HWEDFNVSHU3)
=RQLQJ6WDQGDUGV /HYHO3ODQ
7UDQVIRUPHU
0HFKDQLFDO
6WXGLR
%HGURRP
6WDLU
:DVWH
%HGURRP
6WXGLR
%HGURRP
%HGURRP
%HGURRP
%HGURRP
-DQLWRU
%HGURRP
%HGURRP
%HGURRP
6WDLU
%HGURRP
0HFK
%HGURRP
%HGURRP
6HWEDFNVSHU
3)=RQLQJ
6WDQGDUGV
/HYHOV3ODQ
.LSOLQJ6W
/\WWRQ$YH
$[RQ6WUHHW9LHZ
/HYHO
/HYHO
/HYHO
/HYHO
5RRI
723DUDSHW
/HYHO
/HYHO
(OHYDWRU3HQWKRXVH%H\RQG
6WDLU3HQWKRXVH%H\RQG
.LSOLQJ6W(OHYDWLRQ
1RUWK
.LSOLQJ6W
/\WWRQ$YH
$[RQ9LHZ&RXUW\DUG
&RPPXQLW\5RRP
/DXQGU\5HVWURRP
JVI
6WDLU
6WDLU
:DVWH
2IILFHV%UHDN5RRP
&RS\5RRP5HVWURRP
JVI
-DQLWRU
%HGURRP
%HGURRP
6WXGLR6WXGLR
0HFK
%HGURRP
JVI
JVI
3RGLXP2SHQ6SDFH
8VDEOHJVI
6HWEDFNVSHU3)
=RQLQJ6WDQGDUGV
/HYHO3ODQ
%HGURRP
%HGURRP
%HGURRP%HGURRP
%HGURRP
%HGURRP
%HGURRP
3<$72.$5&+,7(&785( 85%$1'(6,*1
5(9,6,216&+('8/(
12 ,668( '$7(
67$03
6+((7
'5$:1%<
&+(&.('%<
,668('$7(
6&$/(
7,7/(
-2%180%(5
35(/,0,1$5< 1RWIRU&RQVWUXFWLRQ
7(/(*5$3+$9(
68,7(
2$./$1'&$
7_)
ZZZS\DWRNFRP
30
/277
$OWD+RXVLQJ
$16
$16
/277&21&(378$/3/$16
$
/\WWRQ$YH
3DOR$OWR&$
6REUDWR&HQWHUIRU
1RQ3URILWV
3DOR$OWR&$
3DUFHO7
/\WWRQ$YHQXH
$31
6LWH$UHD
VI
*URXQG)ORRU/DQGVFDSLQJ *6)
3RGLXP *6)
VIXQLW
8VDEOH2SHQ6SDFH
&RXUW\DUG *6)
VIXQLW
6HWEDFN/LJKWZHOO6SDFHV *6)
VIXQLW
81,70,;
7RWDO8QLWV
7RWDO5HVLGHQWLDO8QLW*6)
*6)DYHUDJH
678',2
*6)
%5
*6)
%5
*6)
%5
*6)
*5266%8,/',1*$5($
*6)
%<)/225
1DPH )ORRU$UHD
/HYHO
$PHQLW\
6)
&LUFXODWLRQ+RUL] 6)
&LUFXODWLRQ9HUWLFDO 6)
*DUDJH 6)
6HUYLFH
6)
6)
/HYHO
$PHQLW\
6)
&LUFXODWLRQ+RUL] 6)
&LUFXODWLRQ9HUWLFDO 6)
5HVLGHQWLDO
6)
6HUYLFH 6)
6)
/HYHO
&LUFXODWLRQ+RUL] 6)
&LUFXODWLRQ9HUWLFDO 6)
5HVLGHQWLDO
6)
6HUYLFH 6)
6)
/HYHO
&LUFXODWLRQ+RUL] 6)
&LUFXODWLRQ9HUWLFDO 6)
5HVLGHQWLDO
6)
6HUYLFH 6)
6)
/HYHO
&LUFXODWLRQ+RUL] 6)
&LUFXODWLRQ9HUWLFDO 6)
5HVLGHQWLDO
6)
6HUYLFH 6)
6)
/HYHO
&LUFXODWLRQ+RUL] 6)
&LUFXODWLRQ9HUWLFDO 6)
5HVLGHQWLDO
6)
6HUYLFH 6)
6)
7RWDO%XLOGLQJ$UHD
6)
678',2
%5
%5
%5
/ / / / 7RWDO
3$5.,1*
&DU)DFLOLWLHV
0D[5HTXLUHG
VSDFHVXQLW
0D[LPXPIRUDIIRUGDEOHKRXVLQJSURMHFWVZLWKLQ
PLOHRIPDMRUWUDQVLWVWRS
3URYLGHG
VSDFHV
VSDFHXQLW
6WDQGDUG6SDFHV
[
&RPSDFW6SDFHV
[
$FFHVVLEOH6SDFHV
$&&
[9DQ[$&&
$OOVSDFHVWREH(9&6LQVWDOOHGRU/RZ3RZHU/HYHOSHU &DO*UHHQ7LHU3DOR$OWR5HDFK&RGH
%LF\FOH)DFLOLWLHV
6SDFHSHU5HVLGHQWLDO8QLW5HTXLUHG
5HTXLUHG
/RQJ7HUPVSDFHVLQVWDFNHGUDFNV
ELNHURRPV
6SDFHSHU5HVLGHQWLDO8QLWV5HTXLUHGIRU*XHVWV
VKRUWWHUPVSDFHVLQELF\FOHKRRSVZLWKLQIW0DLQ(QWU\
SURYLGHG
/27&29(5$*(
6)
6)
)$5
,QFOXGHG)ORRU$UHD
6)
/RW$UHD
6)
/
&RQFHVVLRQV
6HWEDFNV
)URQW6LGH5HDU
2SHQ6SDFH
=RQLQJ,QIRUPDWLRQ
(OLJLEOHIRU'HQVLW\%RQXV
$IIRUGDEOH+RXVLQJ
ZLQPLOHWUDQVLWVWRS
=RQLQJ'LVWULFW
3)
3XEOLF)DFLOLWLHV
&RPSUHKHQVLYH3ODQ
&&
)ORRG=RQH
;
3DUNLQJ'LVWULFW
8QLYHUVLW\$YH
7UDIILF,PSURYHPHQW'LVWULFW
1RQH
(DVHPHQWV
1R
$IIRUGDEOH+RXVLQJ,QFHQWLYH3URJUDP
1R1R
OPTION 3
Item 2
Attachment C - Conceptual
Design Plans and Diagrams
Item 2: Staff Report
Pg.
15 Packet Pg. 22 of 83
City Council
Staff Report
From: City Manager
Report Type: STUDY SESSION
Lead Department: City Manager
Meeting Date: October 22, 2025
Report #:2507-4924
TITLE
Reinforcing Best Practices in Managing Consultant Services
RECOMMENDATION
City Council review and discussion of ongoing work to ensure high quality and valuable services developed through the engagement of professional consultants.
EXECUTIVE SUMMARY
This report provides a review of the current and planned work for the consultant engagement review project. At its meeting on May 28, 2025, the Policy & Services Committee received a report on this effort and provided feedback to staff. This report provides an updated status report based on the Committee’s feedback as well as subsequent progress by staff.
BACKGROUND
The City of Palo Alto regularly engages professional consultants for a wide variety of functions.
These include, for example:
Planning, architectural, engineering, and construction management for capital improvement projects;
Specialized and supplemental staffing for land use planning, processing entitlement applications, building permitting and inspection, as well as other operations; Specialized recreation, arts, and enrichment programming for community classes, summer camps, and other public services;
Development of studies and plans on a broad range of topics in areas such as economic development, transportation, and facilities planning.
Attachment A provides a list of consultant contracts approved by the City Council in 2024, reflecting the broad range of consultant services used by the City.
The majority of City Council priority objectives rely on consultant services for their timely completion. The use of consultants is critical to the City’s ability to produce the volume and range of services expected and required by the community. It is equally important that circumstances Item 3
Item 3 Staff Report
Item 3: Staff Report
Pg.
1 Packet Pg. 23 of 83
under which consultants are engaged be clearly identified and that the quality of work products provide the value expected.
The ongoing work effort described here seeks to enhance the clarity and effectiveness of these engagements. It focuses on elevating the visibility of outsourcing decisions, staff expectations, and strengthening consultant management protocols.
At the May 28, 2025 Policy and Services Committee meeting, the Committee expressed support for improving transparency, staff capacity, and consistency in consultant use, while noting concerns about overreliance and safeguarding community trust. The Committee discussed the interplay of cost and expertise in long-term staff development, having clearer expectations for consultants, and maintaining ongoing public engagement.
ANALYSIS
In order to strengthen the City’s approach to consultant engagement and management, staff is undertaking a structured review of current practices and a path to process improvements. It should be recognized that as indicated by research to date, much of this work is a leading practice. While within the local government management profession there is a wealth of established practices on topics such as procurement and contract management, topics such as ensuring value in products and building organizational capacity are seldomly addressed in the comprehensive manner described here.
The overarching goal is to clarify expectations around consultant management and ensure practices that ensure effective products, meet organizational needs, and support professional growth among the City’s professional staff while also maintaining flexibility for the range of consultant engagements. The priority focus centers on professional services related to studies, plans, and similar scopes of work, with particular attention to the roles and responsibilities of City project managers and supporting departments. This represents a subset of the contract types listed in Attachment A.
To inform this effort, a working group composed of representatives from departments that regularly engage consultants is involved and providing critical feedback and expertise to help shape the resulting recommendations.
Core Principles
At the heart of this work is a recognition that contracting is a partnership. Consultants bring valuable technical and professional expertise, while City staff offer familiarity with local context, including community expectations, data resources, and internal procedures. City staff are also responsible for ensuring that community and other stakeholders are engaged effectively. The effectiveness of consultant engagements depends on the balance of these perspectives through skillful coordination, communication, and teamwork.
Project Timeline and Activities
The following key steps and milestones are guiding the implementation of this workplan:
Item 3
Item 3 Staff Report
Item 3: Staff Report
Pg.
2 Packet Pg. 24 of 83
1. Review of Current Practices: In December 2024, the City’s Management Fellow conducted initial interviews with staff across departments. A follow-up questionnaire with refined and expanded questions was distributed to gather additional insights.
2. Budget Review: As part of the FY 2026 budget development process, the City Manager and Budget Office led a department-by-department review of contractual services line items to assess their necessity and identify opportunities where in-house staffing may be more cost-effective or strategically beneficial. This is expected to be an ongoing part of the City’s annual budget development process.
3. Initial presentation to Policy and Services Committee and implementation of feedback, followed by full City Council study session.
4. Practice Improvements: Into the summer, feedback from departments and management identified priority areas for improvement in consultant engagement. This builds on currently ongoing efforts led by the Administrative Services Department (ASD) and the City Attorney’s Office with training sessions on contract management.
5. Defining the Consultant Management Lifecycle: To ensure all steps are covered in a standard format, city staff are reviewing all elements of the management lifecycle, from the first step of decision to outsource to the final closeout and work review of the project.
6. Interdepartmental Staff Engagement: Staff convened a half-day working session this summer with representatives from departments that regularly engage consultants. The workshop validated the overall approach to the workplan and furthered practical steps toward the goals of this project. Since the initial outline, staff has oriented the effort toward developing visible tools available citywide to project managers and departments.
7. Clarifying Local Knowledge Roles: City staff play a vital role in ensuring that consultants understand Palo Alto’s specific context. Through the Summer, expectations around sharing prior work, guiding community engagement processes, and providing historical knowledge have been explored in order to establish clear expectations for staff that can be communicated throughout the City.
8. Identifying Skill and Role Gaps: Into the Fall, this review will also examine where project managers may require additional training or role clarification to effectively manage consultant relationships and deliverables, as well as review the workload capacity required to fulfill these roles.
9. Training and Tools: Through the Fall and into 2026, potential outcomes of this work include the development of workflow templates, dashboards for progress tracking, and structured training for project managers in collaboration with Human Resources and relevant departments. The development of a best practices guide is under way, and will Item 3
Item 3 Staff Report
Item 3: Staff Report
Pg.
3 Packet Pg. 25 of 83
serve as a training and reference point for all materials related to carrying out effective consultant engagements.
10. Consultant Engagement: Input from consultants will be solicited throughout the process to gather insights from their perspective into what makes engagements successful.
Overview of the Consultant Engagement Process and Areas for Reinforcement The following paragraphs provide an overview of the typical consultant engagement process in the City and provide an initial sampling of specific areas that have been identified for evaluation and reinforcement of best practices.
Precursors to Outsourcing
As part of the annual budget development process, each department’s proposed consultant funding levels is reviewed to assess whether those funds might be more effectively allocated to hiring in-house staff. In some cases, the City outsources as a first step before adding permanent staff due to concerns around long-term financial commitments and the need to sustain consistent workloads. The budget cycle provides a regular opportunity to review this practice in the context of department-specific work forecasts. When consultants perform tasks that are similar in some respects to those of City employees, the annual budget review provides an appropriate point at which to consider whether in-house capacity could better serve the City over time. This informs staffing changes proposed in the City Manager’s Proposed Budget released every April.
In addition, the City Manager recently directed additional internal review and approvals of task orders issued under master agreements. Master agreements are consultant contracts established for “as needed” or “on-call” services, where a contract is established without a specific scope of services. Task orders are subsequently issued to the consultant with a specific scope of services and budget. In order to ensure that best practices are being applied to task orders, task orders at specified thresholds now require City Manager approval.
The Decision to Outsource
The decision to outsource to meet specific project needs is based on the expertise required as well as in-house capacity. Scopes of service are developed in consultation with the Administrative Services Department’s Purchasing Division and the City Attorney’s Office.
Determining a Scope of Services
Departments develop scopes of services that are then used to solicit consultant proposals through issuance of Requests for Proposals (RFPs). Major projects may also involve City Council review of scopes of services. Practices are being reviewed to determine when further refinements in the development of scopes of services would be beneficial. This includes prompts such as:
How to best complement consultant’s specialized skills with in-house staff local knowledge and other roles throughout a project
Item 3
Item 3 Staff Report
Item 3: Staff Report
Pg.
4 Packet Pg. 26 of 83
How artificial intelligence and other technologies might best assist in delivering cost- effective outcomes
How to ensure outsourcing aligns with City long-term goals for building internal expertise Scoping the Approach to Community Engagement
Community engagement is a central element of virtually all studies and planning efforts in Palo Alto. It is therefore important to ensure the consultant is aware of the nature and extent of community engagement expected. Department staff consult with the City Manager’s Office communications staff to develop community engagement plans for RFPs and updated as projects proceed. Roles between the consultant and staff requires specific attention; in general, staff take primary responsibility for identifying key stakeholders and arranging for meeting venues and logistics. Online engagement tools are also coordinated with the City Manager’s Office.
Selecting the Service Provider
In selecting consultants, departments consider not only cost but also expertise, alignment with project needs, and prior performance. The process emphasizes open and fair opportunities to submit proposals that are objectively evaluated and a selection based on the best interests of the City. Practices are being reviewed to determine whether any enhancements to the procurement process would be beneficial.
Managing Contingencies
At various points, circumstances can arise that cause consideration of a change in direction. This could include issues such as cost proposals that exceed budget, and a lack of strong proposals. In such cases, staff must balance the tension between proceeding and changing direction. Project managers must then engage department management and the City Manager’s Office in order to evaluate options and determine appropriate steps forward.
Establishing Points of Contact, Communication Expectations, and Handling Professional Differences
At project kick-off, an important first step in the successful completion of a consultant engagement is establishing primary points of contact on both the City’s and consultant’s teams, and reviewing the scope and key understandings needed for the project. Topics to be covered include: reviewing scope of services, schedule, and deliverables; establishing recurring meetings or other means of progress coordination; project documentation responsibilities; and, lead time and turnaround expectations for follow-up and review of deliverables.
This is also the point at which to establish escalation paths, secondary points of contact when needed due to disagreements or performance concerns from either the City or consultant.
Escalation paths may also be reinforced contractually, including implications for delays in the case of time-sensitive projects. One of the most difficult dimensions of the consultant-client relationship is handling professional differences. Consultants are typically engaged for subject matter expertise, which can conflict with organizational sensitivities and staff perspectives on how issues should be addressed. Escalation paths can be a critical tool for resolving such disagreements.
Item 3
Item 3 Staff Report
Item 3: Staff Report
Pg.
5 Packet Pg. 27 of 83
Contract Management
Contractual terms specify processes such as overall schedules, progress payments, and penalties for non-performance. Project managers and departments ensure that consultant payments align with project milestones, to ensure accountability and timely progress.
Performance Management and Quality Control
Effective performance management requires establishing clear standards for deliverables, timelines, and budget compliance, as well as regular reviews and prompt resolution of issues.
The ongoing review is ensuring that clear expectations are reinforced throughout consultant engagements. This includes staff responsibilities for oversight and quality assurance during the engagement, while recognizing that consultant engagements involve a level of independence to be exercised by the consultant and limitations on staff ability to direct certain elements of work.
Risk Management
Project managers are responsible for identifying, categorizing, and mitigating risks associated with consultant projects. This includes structured risk assessments that weigh probability, impact, and mitigation strategies. Ideally, risks will be surfaced early and reviewed routinely. This is an area that is currently largely handled informally, and therefore a point of review in the current effort.
Closeout and Evaluation
Post-project review assesses the extent to which project objectives were met and identifies lessons learned that can be applied in the future, as well as evaluates consultant performance to provide back to the provider and inform future engagements. The ongoing review is confirming expectations for such review and implementing practices.
FISCAL/RESOURCE IMPACT
The activities described in this report are being conducted within existing city resources.
STAKEHOLDER ENGAGEMENT
Staff invites feedback from City Council and public through this study session and in response to this report, to ensure their perspectives are reflected in the work underway. Looking ahead, staff also intends to seek feedback from consultants the city has worked with in the past and present.
As reflected in the workplan, engagement of City staff and the consultant community is an integral part of ensuring this work is grounded in current practice and results in implementable conclusions.
ENVIRONMENTAL REVIEW
The work is not a project as defined in the California Environmental Quality Act (CEQA).
ATTACHMENTS
Attachment A: Consultant Contracts Approved by City Council in 2024 APPROVED BY: Ed Shikada, City Manager
Item 3
Item 3 Staff Report
Item 3: Staff Report
Pg.
6 Packet Pg. 28 of 83
Service Provider Description
Contract or
Amendment Value
Safebuilt, Integrated Design 360, CSG Consultants,
4LEAF, True North Compliance Services, TRB and
Associates, West Coast Code Consultants
Development Services On Call Services ‐ Staffing and Subject Matter Experts: Inspection, Plan Review, Green Building 4,000,000$ Carollo Engineers Regional Water Quality Control Plant Long Range Facilities Plan 2,742,774$ Watry Design Downtown Parking Garage Design 2,403,592 $ WaterTalent, LLC Temporary Licensed Water Operator Staffing Services ( 3 years) 1,896,000$ AgreeYa Solutions, Elegant Enterprise‐Wide Solutions,
Forsys, Object Technology Solutions, Techlink Systems,
Zion Cloud Solutions, Inspyr Solutions
IT Consulting 1,540,000 $
Wallace Roberts & Todd Downtown Housing Plan 1,508,254 $ Carollo Engineers Construction management and inspection for RWQCP 12kV Electrical Power Distribution Loop (Amend 5) 1,314,192$ MuniServices, LLC Tax and Fee Consulting (5 years) 1,161,550 $ Park Engineering Electric Construction Inspection (5 years) 925,000 $ Cumming Management Group (formerly Nova Partners) Construction Management for PSB & Other Infrastructure Plan 827,418$ Nova Partners, Inc. Construction Management for PSB & Other Infrastructure Plan 766,919$ Lexington, Metropolitan Planning Group, Arnold
Mammarella Architecture and Consulting, Page
Sotherland Page AE, Placeworks, Urban Planning
Partners, Michael Baker International
Planning On Call Services ‐ Staffing and Subject Matter Experts:
Long Range Planning Projects, Application Processing,
Environmental Review
750,000$
Concordia Development of a Revised Master Plan for the Cubberley Site 631,966$ GDS Associates, Inc. Electric and Gas Cost of Service Analysis (5 years) 505,723 $ Lexington, Metropolitan Planning Group, Arnold
Mammarella Architecture and Consulting, Page
Sotherland Page AE, Placeworks, Urban Planning
Partners, Michael Baker International
Planning On Call Services ‐ Staffing and Subject Matter Experts:
Long Range Planning Projects, Application Processing,
Environmental Review
500,000$
Kittelson and Associates South Palo Alto Bike/Pedestrian Connectivity Project (2 years) 499,490$ Woodard & Curran Sewer Master Plan Study (2 years) 498,866 $ 3Di Systems Rental Registry Program 443,256 $
BKF Engineers Charleston/Alma Railroad Crossing Plans (5 years) 397,705 $ Urban Field Studio Car ‐free Streets Study 384,990 $
Good City Company Downtown Housing Plan Project Manager 375,522 $ Kittelson & Associates Bike and Pedestrian Plan Update 333,945 $ A3 Immersive Projection Mapping Production Services for the 2025 Code:ART Interactive Media Public Art Festival 275,692$
4Leaf, Inc. WGW Construction Inspection (5 years) 264,247 $ Michael Baker International, Inc. CDBG Program Administration (2 years) 211,310 $ Rincon Consultants California Environmental Quality Act (CEQA) Review of a Revised Master Plan for the Cubberley Site 202,322$
Townsend Public Affairs, Inc. Legislative Advocacy & Grant Consulting 186,000 $ Urban Planning Partners, Inc. Car ‐free Ramona Street Design 165,573 $ Kimley‐Horn Quiet Zone Study (Churchill, Meadow, Charleston) 162,359 $ Rankin Stock Heaberlin Oneal Legal Services 150,000 $
Integrated Design 360 Reach Code Development 132,200 $ Anne Rosenthal Fine Art Conservation Services 118,624 $ HdL Coren & Cone Property Tax Consulting (5 years) 111,800 $ BKF Engineers Foothills Nature Preserve Design 109,583 $ OIR Group Policing Auditing Services 105,000 $
Salas O'Brien RWQCP 12kV Electrical Power Distribution Loop Design (Amend 4) 99,200$ DNV GL USA, Inc Gas Modeling 85,000 $
Schaaf & Wheeler Design for 3 stormwater ballot measure projects 77,360 $ Sandis Civil Engineers Construction Admin. for Churchill Enhanced Bikeway 59,975 $ Matrix Consulting Group Department Fee Study 56,500 $
Raftelis Financial Consulting, Inc. Water and Wastewater Collection Cost of Service Analysis (5 years) 48,905$ CSW/Stuber‐Stoeh Engineering University Ave. Streetscape Conceptual Design 25,000 $ Hexagon Transportation Consultants Development Review Support 10,000 $ Schaaf & Wheeler PSB Stormwater Construction Observation & Certification 9,600 $ 27,073,412$
ATTACHMENT A
CONSULTING SERVICES APPROVED BY CITY COUNCIL IN 2024
Item 3
Attachment A - Consultant
Contracts Approved by City
Council in 2024
Item 3: Staff Report
Pg.
7 Packet Pg. 29 of 83
City Council
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: Planning and Development Services
Meeting Date: October 22, 2025
Report #:2510-5298
TITLE
Update and Direction to Staff on the Downtown Housing Plan Project and Implementation of Senate Bill 79 (2025-2026). CEQA Status: Exempt Under CEQA Guidelines Section 15262.
This report will be a late packet report published on October 16, 2025.
Item 4
Item 4 Staff Report
Item 4: Staff Report
Pg.
1 Packet Pg. 30 of 83
City Council
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: Planning and Development Services
Meeting Date: October 22, 2025
Report #:2506-4861
TITLE
Update and Direction to Staff on the Downtown Housing Plan and Implementation of Senate Bill 79. CEQA Status: Exempt Under CEQA Guidelines Section 15262.
RECOMMENDATION
Staff recommends the City Council provide direction to staff on the next steps for the Downtown Housing Plan, including citywide implementation of Senate Bill (SB) 79.
EXECUTIVE SUMMARY
This report provides an update on the Downtown Housing Plan and discusses the implications of SB 79, which mandates increased residential density, height, and floor area within one-half mile of major transit stations, including Downtown Palo Alto.
The Downtown Housing Plan, initiated in 2024, is intended to expand housing opportunities in the downtown core while maintaining community character. Public outreach shows broad support for additional housing near transit and jobs, though most projects are unlikely to proceed under current market conditions due to high development costs, small parcel sizes, and stronger financial performance of office uses.
SB 79, effective July 1, 2026, establishes new state minimums for building height, residential density, and floor area near transit. Cities may prepare a state-approved Transit-Oriented Development (TOD) Alternative Plan to guide how and where this new housing capacity is applied.
Staff seeks City Council direction on completing the Downtown Housing Plan; a proposal to refocus staff and consultant efforts on an SB 79 compliant TOD Alternative Plan, and potentially formation of a Council ad hoc to support staff planning efforts given the limited time available for Alternative Plan development.
Item 4
Item 4 Late Packet Report
Item 4: Staff Report
Pg.
1 Packet Pg. 31 of 83
BACKGROUND
This report provides an update on the Downtown Housing Plan and frames a discussion to inform the City Council’s deliberation and direction to staff related to the Downtown Housing Plan and potentially additional initiatives to respond to the recent signing of SB 79.
Downtown Housing Plan: Initiation and Purpose
The City initiated the Downtown Housing Plan in February 2024.1 This followed City action to designate the University Ave / Downtown Area as a Priority Development Area (PDA) on January 13, 2020.2 This designation, later approved by the Association of Bay Area Governments (ABAG), encompasses approximately 206 acres within a half mile radius of the Palo Alto Caltrain Station and generally includes downtown University Avenue, the South of Forest Area Coordinated Area Plan and the Stanford Shopping Center. PDAs as envisioned by the Metropolitan Transportation Commission (MTC) are established to guide growth around transit and connect housing to jobs and areas of interest.
The Downtown Housing Plan is a focused planning initiative intended to facilitate the development of new housing in Palo Alto’s downtown core, with an emphasis on accelerating housing production. The Downtown Housing Plan seeks to create a comprehensive framework that supports increased residential capacity while maintaining compatibility with existing urban form, infrastructure, and community character. Through policy development, land use analysis, and community engagement, the Downtown Housing Plan will identify strategic opportunities for housing growth, establish updated development standards, and evaluate necessary infrastructure and mobility improvements to support a more livable and inclusive downtown.
The ultimate goal is to advance the City’s housing production targets, enhance economic vitality, and promote a vibrant, mixed-use downtown neighborhood.
This effort is supported by a grant from the MTC and allocation from the City’s General Fund.
Downtown Housing Plan: Outreach and Reports
The Community Advisory Group (CAG), a diverse collective of stakeholders, plays a key role in the Downtown Housing Plan process by offering valuable insights and guidance. Comprising of local business owners, nonprofit representatives, housing developers, residents, and property owners, the CAG’s input informs the planning process and is intended to reflect community needs and fosters broad support.
1 https://cityofpaloalto.primegov.com/api/compilemeetingattachmenthistory/historyattachment/?historyId=454870f4- 764a-4aef-a47a-85ea3f582fbb
2 Attachment E: Draft Resolution of Proposed Priority Conservation Area Designation of Foothills and Baylands Item 4
Item 4 Late Packet Report
Item 4: Staff Report
Pg.
2 Packet Pg. 32 of 83
In the project’s initial phase, extensive outreach was conducted to engage community members. Key activities included:
Online Presence: A dedicated project website for updates and feedback. Stakeholder Interviews: Confidential one-on-one interviews with key stakeholders to gather interests and concerns.
Public Events: A Community Open House, a Community Workshop, pop-up booths at local events, and meetings with property owners.
Surveys: Community surveys to capture broader resident feedback.
These efforts attempt to build a transparent and inclusive engagement process with the intention of cultivating support and alignment with the community’s vision for downtown Palo Alto. The summary of the process and the feedback received is available on the project webpage.5
Community Assessment Report
In June 2025, staff published the Community Assessment Report for the Plan area.6 In summary, the document provides an overview of current conditions and key challenges affecting new housing development in downtown Palo Alto. It finds that very little housing has been built in the downtown area in the past decade, largely due to challenges such as small parcel sizes, high land costs, a 50-foot building height limit, and requirements for ground-floor retail and parking.
These factors make most housing projects unlikely to build under current regulations and market conditions. The report also identifies clear opportunities in this area due to the downtown’s proximity to transit, services, and jobs, making it well-suited for smaller housing types, including units for seniors and essential workers. Community input shows support for more housing, especially if it is well-designed and in alignment with downtown’s character.
Housing Development Economic Feasibility Analysis
As part of the Downtown Housing Plan, an economic feasibility analysis was prepared to help inform future policy discussions in support of greater housing production. The feasibility analysis assessed a range of development prototypes designed to represent typical site conditions and housing product types in the downtown area. These prototypes, which included variations of mixed-use buildings with retail, office, and residential components, as well as mid- rise residential buildings, were analyzed to understand the financial factors influencing housing 5 Downtown Housing Plan – City of Palo Alto, CA
6 https://www.paloalto.gov/files/assets/public/v/1/planning-amp-development-services/long-range-planning/area- plans-and-studies/downtown-housing/june-16-item-b-staff-report.pdf Item 4
Item 4 Late Packet Report
Item 4: Staff Report
Pg.
3 Packet Pg. 33 of 83
production and identify policy opportunities for increasing the likelihood of development. The analysis focused on key factors such as construction costs, potential revenues, and the impact of City fees and requirements on overall project feasibility. This analysis is available on Attachment A. The report findings are summarized below.
Key Findings
Current Feasibility: Under current market conditions, the development prototypes analyzed do not generally meet financial feasibility thresholds. Ownership vs. Rental: Smaller ownership prototypes (condominiums) outperform rental prototypes due to a high local price premium for luxury ownership housing. Mid-Rise Rental Projects: Mid-rise rental prototypes are unlikely to be built under current conditions, but their feasibility can change quickly with shifts in development conditions.
Office vs. Residential: Office uses continue to outperform residential uses financially in the Plan Area, although office performance is also constrained by broader development challenges.
Parking Costs: Parking spaces add substantial costs to housing development, ranging from $25,000 to $123,000 per housing unit, depending on the parking format. Impact Fees: Removal of affordable housing requirements has a minor positive impact on financial feasibility. The removal of all City fees (including impact and permitting fees) results in a substantial increase in the financial feasibility performance of the prototypes.9
Challenges:
Broader Market Trends: Construction cost inflation and increased thresholds for return on investment (related to higher interest rates) pose challenges to housing development throughout the Bay Area.
Site Constraints: Difficulty providing market-required parking and efficiently using smaller sites. Lot consolidation has historically been rare in Palo Alto, underscoring the need for development incentives or other tools to encourage parcel assembly. 9 NOTE: The feasibility analysis and this report do not recommend eliminating fees as these serve other important City service and infrastructure needs. However, the analysis suggests as part of a future policy discussion some re- calibration to balance impact fees with housing production. This work is soon to get underway as part of the Development Impact Fee update with results expected to be shared with Council in 2026.
Item 4
Item 4 Late Packet Report
Item 4: Staff Report
Pg.
4 Packet Pg. 34 of 83
Office Competition: The strong desirability of office uses in the Downtown Housing Plan area creates competitive challenges for housing development, as property owners may prefer to maintain high-value office uses.
Fees: The City's affordable housing requirements and other fees are not the main reason the prototypes are unlikely to develop under current conditions, but the requirements and fees create an additional cost challenge that reduces the likely timing and pace of housing delivery as development conditions improve.
Opportunities to Support Housing Production
Adjust Zoning and Land Use Requirements: Increase height and FAR (Floor Area Ratio) to support higher-density housing, allow a greater variety of housing product types, provide flexibility in accommodating parking, and increase the opportunity to produce housing under different market cycles.
Link Office Production with Housing Production and Encourage Site Assembly: Create requirements or incentives, such as an office transfer development rights program, that link office production with housing production and encourage site assembly; modify restrictive zoning that limits existing non-conforming office from redeveloping. Reduce City Impact Fees for Housing: Consider reducing or waiving impact fees for housing to improve financial feasibility, while also weighing the importance of these fees in funding critical City infrastructure needs.
Flexible Affordable Housing Requirements: Consider greater flexibility in meeting affordable housing requirements, especially for ownership housing products (e.g., allowing fees in lieu of on-site units).
Downtown Housing Plan: Next Steps
Prior to the adoption of Senate Bill 79, staff and the consultant team were preparing for a community workshop event to refine input on where within the Downtown Housing Plan area greater development potential, such as increased building height and floor area, should be allowed, and where the existing downtown character should be preserved. The project team assigned subareas to the project boundary to gather feedback on where to increase height and floor area. While there was no clear consensus, there was general support for increased height and floor area in Subarea A, closest to the Caltrain station. Opinions regarding future development along Lytton and Hamilton Avenues in Subareas C and D, respectively, and along University Avenue in Subarea B, were mixed between maintaining existing standards and allowing varying levels of increased height (Attachment B). Figure 1 depicts the subareas.
Item 4
Item 4 Late Packet Report
Item 4: Staff Report
Pg.
5 Packet Pg. 35 of 83
The community
workshop and related
outreach were also
intended to address
concerns about
potential impacts on
adjacent residential
neighborhoods and to
evaluate properties
unlikely to redevelop
due to factors such as
historic designation,
recent construction, or
continued office use.
In addition, the project team sought to begin discussion about revisiting City policies that currently discourage the redevelopment of noncomplying commercial spaces . As highlighted in the Economic Feasibility Analysis, staff began exploring concepts that would allow noncomplying office floor area to be rebuilt or transferred to another site when paired with new housing. The goal is to encourage additional residential development, either as part of a mixed-use project that includes office space, or as a standalone housing project where the existing office use is relocated and its development potential combined with another commercial site.
These and other factors continue to warrant evaluation and Council and community input as work progresses on the Downtown Housing Plan. However, the recent passage of SB 79 alters the planning process significantly. Rather than relying on a community-driven engagement effort, SB 79 effectively establishes the location, height, and density of housing development not only within the Downtown Housing Plan area but also across much of the broader Priority Development Area.
The law allows jurisdictions to adopt a TOD Alternative Plan, subject to approval by the California Department of Housing and Community Development (HCD). This Plan must ensure that local agencies maintain at least the same overall zoned capacity as required by the state for total housing units and residential floor area across all designated transit-oriented development zones.
Figure 1: Downtown Housing Plan Sub Areas
Item 4
Item 4 Late Packet Report
Item 4: Staff Report
Pg.
6 Packet Pg. 36 of 83
Key provisions of an TOD Alternative Plan include maintaining at least 50 percent of the statutory density for individual residential sites, except in high-risk areas such as very high fire hazard zones, sites vulnerable to sea level rise, or those with historic designations. Additionally, no single site may accommodate more than 200 percent of the capacity established by state law.
This framework provides local governments limited flexibility to manage development while remaining consistent with the state’s overall housing policy objectives. Additional context and specific requirements of SB 79 are provided below.
Senate Bill 79 (2025-2026)
The legislature approved the bill on September 12, 2025 and it was signed into law by Governor Newsom on October 10, 2025; the law becomes effective on July 1, 2026. The stated intent of SB 79 is to increase the supply of affordable housing, reduce greenhouse gas emissions through reduced vehicle miles traveled, and enhance the efficiency of public transit systems. A copy of the legislation is available online.11
The primary effect of SB 79 is the mandated upzoning of land located within proximity to rail stations and rapid bus corridors to encourage transit-oriented development. The degree of upzoning depends on the classification of the transit stop and the distance from the station, as measured from the pedestrian access points to the stations. The location of “pedestrian access points” requires additional clarity from MTC; the exhibits included with this report are for reference and are subject to change.
Classification of Transit Stops: SB 79 designates transit stops as Tier 1 or Tier 2, with corresponding development standards applicable to areas within one-half mile of a designated stop. The Palo Alto Station, California Avenue Station, and San Antonio Station are all classified as Tier 1 stops (Attachment C). (Gov. Code § 65912.156) Applicable Development Standards for Tier 1 Stops (Downtown Palo Alto, California Avenue, and San Antonio Caltrain Stops) (Gov. Code § 65912.157, subd. (a)):
Within one-quarter mile, local governments must allow:
oBuilding height of 75 feet.
oResidential density of 120 dwelling units per acre (average unit size 1,750 square feet).
oResidential floor area ratio (FAR) of 3.5.
oIf site is “adjacent” to the transit stop (within 200 feet of a pedestrian access point) it is allowed an additional 20 feet in allowable height, an additional 40 11 SB 79 Legislative Text: https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202520260SB79 Item 4
Item 4 Late Packet Report
Item 4: Staff Report
Pg.
7 Packet Pg. 37 of 83
dwelling units per acre in allowable density, and an increase of 1.0 in allowable residential FAR.
Between one-quarter and one-half mile, local governments must allow:
oBuilding height of 65 feet.
oResidential density of 100 dwelling units per acre (average unit size 1,750 square feet).
oResidential FAR of 3.0.
Additional Provisions of Interest:
A project under SB 79 must include at least five dwelling units and meet the greater of a minimum of at least 30 dwelling units per acre or the minimum density required under local zoning.
Inclusionary Housing Requirements (Gov. Code § 65912.157, subd. (c) and (i)) oSB 79 requires each transit-oriented development to satisfy one of the following minimum affordability standards:
7% of units affordable to extremely low-income households; 10% of units affordable to very low-income households; or 13% of units affordable to lower-income households.
oWhere a local jurisdiction requires a higher percentage of inclusionary units, the local requirement supersedes SB 79.
Density Bonus Eligibility (Gov. Code § 65912.157, subd. (d)) oA transit-oriented development shall remain eligible for density bonuses, incentives, concessions, waivers, or reductions in development standards pursuant to Government Code Section 65915 (Density Bonus Law) or a local density bonus program.
oFor purposes of calculating density bonuses, the base density shall be the minimum density mandated by SB 79.
oIf the proposed building height for a project exceeds the local limit, the local jurisdiction need not provide a waiver of height beyond the height mandated by SB 79.
Relationship to CEQA and Ministerial Approvals (Gov. Code §§ 65912.157, subd. (l), and 65912.159)
oSB 79 does not modify the requirements of the California Environmental Quality Act (CEQA). However, individual projects may still take advantage of various CEQA streamlining provisions and exemptions.
Item 4
Item 4 Late Packet Report
Item 4: Staff Report
Pg.
8 Packet Pg. 38 of 83
oSB 79 does not establish a new ministerial approval process. However, projects qualifying under existing state streamlining statutes (SB 35 and SB 423) may be eligible for ministerial approval, subject to compliance with those statutes.
Affordable housing requirements for such projects are not contingent upon the jurisdiction’s RHNA compliance status.
TOD Alternative Plan Provision: As noted above, a local jurisdiction may elect to adopt a local TOD Alternative Plan in lieu of implementing SB 79 directly. Requirements for the TOD Alternative Plan include (Gov. Code § 65812.161):
Maintains at least the same net zoned capacity (both total units and residential FAR) as prescribed by SB 79.
Does not reduce the maximum allowed residential density for any site by more than 50 percent of the density required under SB 79, except in cases where the site:
oIs located within a Very High Fire Hazard Severity Zone; oIs vulnerable to at least one foot of projected sea level rise; or oContains a designated historic resource on a local register.
In aggregate, such exceptions may not exceed 10 percent of the eligible TOD zone area. Does not allow any site to exceed 200 percent of the maximum density prescribed by SB
79. Excludes from capacity calculations any sites exempted on the basis of fire hazard, sea level rise vulnerability, or historic resource designation.
A local TOD Alternative Plan may provide an opportunity to guide higher building height, density and floor area away from lower density single family or lower density zoning or potentially from University Avenue if there is interest in maintaining a lower profile experience to match the existing character of this retail-oriented street. However, this effort will not preserve the lower density development standards for single family districts within the SB 79 radius.
The most the City could reduce allowable density or a property’s floor area ratio through an TOD Alternative Plan is to 50 percent of the new minimum standards established by the legislation. This effectively establishes a baseline development capacity of 1.5 FAR and 50 dwelling units per acre for these sites. For comparison, the City’s R-1 Single-Family Residential zoning currently allows an FAR of 0.45 for lots 5,000 square feet or smaller, and 0.30 for lots larger than 5,000 square feet. In addition, it is unclear whether a 3.0 FAR development would occur on a typically sized R-1 lot in Palo Alto if the statutory density is not modified by an alternative plan.
ANALYSIS
The original intent of this scheduled discussion with the City Council was to provide an update on the Downtown Housing Plan, describe upcoming community outreach, and receive feedback Item 4
Item 4 Late Packet Report
Item 4: Staff Report
Pg.
9 Packet Pg. 39 of 83
on the project’s next steps. With the passage of SB 79, staff’s focus now broadens to seek Council feedback not only on the future of the area planning initiative but also on related efforts connected to SB 79’s broader community implications. This discussion is also informed by other recent legislative changes, including updates to state density bonus law, AB 2097 (which exempts on-site parking for new development), and AB 130 (which provides for streamlined application processing and exemptions from certain state environmental laws).
To help focus the Council’s discussion, staff has identified the following components and requests feedback on how the Council would like staff to proceed:
1.Continue to work on the Downtown Housing Plan. Staff believes there continues to be value in completing the Housing Plan. At a minimum, it can serve as a vision document reflecting Council and community interests for the future development of this area.
Completing the Downtown Housing Plan is not a requirement of the Housing Element.
There is no obligation to reimburse MTC for any grant funds expended on this project should the City choose not to complete the initiative. Staff recommends this effort continue in parallel with but ultimately trailing work on item 2 below, the TOD Alternative Plan.
2.Focus Resources on Implementing a TOD Alternative Plan. If the City Council determines that a more tailored approach to SB 79 standards is appropriate for Palo Alto, staff recommends temporarily redirecting efforts on the Downtown Housing Plan to prioritize development TOD Alternative Plan. Due to the substantial geographic overlap between the Downtown Housing Plan area and the scope of SB 79, work on the TOD Alternative Plan would also advance the broader goals of the Downtown Housing Plan. The TOD Alternative Plan would be a distinct effort from the Downtown Housing Plan; at this time, staff does not anticipate that this shift in focus will significantly impact the Downtown Housing Plan’s overall timeline.
If directed by the Council, staff would seek to accelerate development of the TOD Alternative Plan by utilizing scheduled and noticed public meetings before City boards and commissions, rather than initiating a separate outreach process. Once a plan is endorsed by the City Council, HCD will have up to 120 days to complete its review. Based on prior experience, an iterative review process is expected, and staff will engage HCD early and collaboratively to help reduce potential delays.
While completion of the TOD Alternative Plan before SB 79 takes effect on July 1 is unlikely, staff anticipates finalizing the plan by the fourth quarter of 2026. The plan would cover the Downtown Housing Plan area as well as all locations within a half-mile radius of the University Avenue Caltrain station, including SOFA, the Transit Center, and the Stanford Shopping Center (see Attachment D). If the Council directs staff to proceed, the existing contract with Wallace Roberts & Todd (WRT) would need to be amended to include the additional scope of work related to the TOD Alternative Plan.
Item 4
Item 4 Late Packet Report
Item 4: Staff Report
Pg.
10 Packet Pg. 40 of 83
3.Consider directing staff to create a TOD Alternative Plan for the California Avenue and San Antonio Road Caltrain stops. If the City Council supports pursuing a TOD Alternative Plan for the University Avenue Caltrain station, a similar approach may be appropriate for the California Avenue and San Antonio Road stations, which also serve the Palo Alto community. These areas, due to their proximity to single-family neighborhoods and historic districts, may warrant additional attention to address potential impacts from the increased height and density allowances permitted under SB 79.
While a TOD Alternative Plan would not preserve the current development potential on lower-density parcels, it could facilitate improved transitions in height and density between higher- and lower-intensity areas. To promote efficiency, staff recommends that, if the University Avenue plan proceeds, the existing contract with WRT be amended to include the development of SB 79 implementation strategies and TOD Alternative Plans for the California Avenue and San Antonio Road stations.
If supported, this work would be conducted concurrently, with public outreach occurring through scheduled, noticed meetings before City boards, commissions, and the City Council.
Initiating this additional task could also support the Council’s previous direction to accelerate housing efforts around the California Avenue station.
4.Identify additional sites and opportunities for affordable housing development. Housing Element Program 1.4 contemplates using the Downtown Housing Plan to identify alternate sites for affordable housing development if the City is not on track to meet its quantified objective of 290 affordable units by 2027. Given the current uncertainty surrounding the City’s ability to meet this objective, staff recommends commencing this work as part of its TOD Alternative Plan, if supported, or Downtown Housing Plan, as appropriate.
5.Consider input from the Transit Center ULI study. The Santa Clara Valley Transportation Authority, City of Palo Alto, and Stanford University are hosting the Urban Land Institute’s Advisory Services Program to assess operational efficiency and connectivity at the Palo Alto Transit Center. At the time of this report, a panel of experts are conducting more than 60 stakeholder interviews. This initiative aims to improve transit circulation, enhance station functionality, and explore redevelopment opportunities. Staff will consider the results of this study when developing recommendations for the TOD Alternative Plan, if supported, or Downtown Housing Plan, as appropriate.
6.Explore opportunities to unlock downtown properties for housing production.
Independent of SB 79, certain properties are unlikely to redevelop unless the City amends policies that discourage the rebuilding of older, noncomplying commercial buildings. Staff Item 4
Item 4 Late Packet Report
Item 4: Staff Report
Pg.
11 Packet Pg. 41 of 83
recommends evaluating options to promote housing production, including allowing commercial office floor area to be transferred from a sender site within the Downtown Housing Plan area to facilitate higher-quality office space in conjunction with new multi-family housing, either as mixed-use or standalone residential development, at another site.
7.Appoint a Downtown Housing Plan/SB 79 Implementation Ad Hoc Committee. Given the volume of work and accelerated timeline, staff recommends considering a City Council ad hoc committee to work with staff and serve as a resource to reflect Council and community values related to changes in the development standards. While most of this work implements state law, these changes represent a significant departure from current City requirements. Where local discretion remains, the ad hoc committee could help staff respond quickly and effectively. The ad hoc would serve for a limited term of less than one year and would not have decision-making authority. Engagement with the ad hoc would not be subject to Brown Act requirements; however, all recommendations and actions would be reviewed through publicly noticed hearings before applicable boards, commissions, and the City Council.
The combined effects of recent state housing laws, including changes to the density bonus law, AB 2097, AB 130, and now SB 79, require the City to allow greater height, floor area, density, and development concessions within one-half mile of a Caltrain station than previously anticipated in local planning efforts, including the Housing Element. Staff anticipates that these legislative actions will result in significant physical changes to the City’s built environment over the next several years, particularly if market conditions improve.
While the City can establish a vision for how areas around the Caltrain stations should evolve, local control is increasingly more limited. State density bonus law allows developers to request waivers of physical development standards as well as concessions that reduce costs to support inclusionary housing, a threshold that is generally easy to meet. These concessions may include removing retail requirements or increasing office floor area, both of which can affect the character and activity level of these areas.
Establishing clear, locally informed visions for the Caltrain station areas that align with state laws, and reflect community priorities to the extent feasible, offer the best opportunity to achieve balanced outcomes that support an evolving built environment in Palo Alto.
NEXT STEPS
Based on Council feedback, staff will continue to proceed with developing the Downtown Housing Plan, while pivoting initially to develop one or more TOD Alternative Plans to implement a modified version of SB 79, as directed by Council. Work related to the Downtown Housing Plan is not anticipated to be significantly impacted as this work aligns with other necessary tasks to complete the plan. Future community outreach for the TOD Alternative Plan Item 4
Item 4 Late Packet Report
Item 4: Staff Report
Pg.
12 Packet Pg. 42 of 83
and Downtown Housing Plan will be directed to noticed public meetings before applicable City boards, commissions and City Council. A contract amendment for expanded services and resulting budget implications will be presented to Council in a separate consent calendar report. While staff will work to get as close to the implementation schedule for SB 79 as possible, conducting the analysis, preparing the plan, having it reviewed, potentially iteratively, by HCD and preparing any required environmental analysis will likely extend the effort to Q4 2026. If supported, staff will engage the Council ad hoc to maximize Council and community values and expectations in the TOD Alternative Plan and Downtown Housing Plan initiatives.
FISCAL/RESOURCE IMPACT
The Downtown Housing Plan is funded by the PDA Planning Grant (administered by the MTC, $0.8 million) and in the General Fund FY 2026 Adopted Budget. The City Council approved a professional services agreement with Wallace Roberts & Todd on February 26, 2024, 2025, totaling $1,371,14013 for this project, of which $0.6 million has been expended to-date. With the enactment and forthcoming implementation of SB 79, staff anticipates the need to revise the project scope to encompass additional geographic areas not previously included within the Downtown Housing Plan boundary. Following Council direction, staff will return with an updated cost assessment and contract amendment as appropriate.
In addition to the anticipated fiscal impacts, the accelerated timeline and expanded scope required to develop TOD Alternative Plans for up to three Caltrain stations will demand significant staff resources from both the Planning and Development Services Department and the City Attorney’s Office. To meet the projected completion date in 2026, work would need to begin immediately following Council authorization.
While this effort is not expected to significantly affect the City Council’s current priority objectives, it will require additional managerial oversight, which may impact timelines and responsiveness for certain projects. Looking ahead, implementation of the TOD Alternative Plans and related activities is expected to affect the department’s capacity to take on new Council priority initiatives in the following year.
STAKEHOLDER ENGAGEMENT
To support community engagement and transparent communication, staff and the consultant team have implemented a comprehensive outreach strategy that includes a dedicated project webpage, regular updates through social media, formation of a Community Advisory Group (CAG) and a Technical Advisory Group (TAG), stakeholder interviews, community workshops, open houses, surveys, and pop-up outreach at public events and local venues such as farmers markets.
13 Professional Services Agreement with Wallace Roberts & Todd, LLC:
https://cityofpaloalto.primegov.com/api/compilemeetingattachmenthistory/historyattachment/?historyId=6a9a1f e5-16fb-44c4-9675-89bbc13567a6
Item 4
Item 4 Late Packet Report
Item 4: Staff Report
Pg.
13 Packet Pg. 43 of 83
Over the past year, the project team has conducted the following outreach activities:
Community Workshop (June 18, 2025) – Held at the Downtown Library and attended by approximately 25 participants, the workshop included an interactive mapping exercise to identify areas suitable for increased residential density within the Downtown Plan Area. Community Survey (September 6–28, 2025) – Approximately 270 responses were received.
Staff is consolidating and analyzing the results.
Community Open House (October 10, 2024) – Hosted in the Community Meeting Room at City Hall, the event provided an opportunity for participants to share perspectives on key challenges and opportunities related to housing development in the Downtown area. Essential and Service Worker Survey (Fall 2024) – Conducted through two focus groups and a printed survey distributed to downtown business employees; approximately 50 participants provided input on housing needs and commuting patterns. Resident Community Survey (November 18–December 20, 2024) – Received approximately 406 responses. Results have been published on the project webpage for public access. Pop-Up Engagement Events – Project staff participated in the City’s Annual Tree Lighting Event, the California Avenue “3rd Thursday” event, and the Farmers Market, and distributed informational materials to commuters at the Palo Alto Caltrain Station. Community Advisory Group (CAG) Meetings – Convened on January 14, 2025, and July 1, 2025, to review site test fits, discuss feasibility analyses, and provide feedback on engagement strategies and preliminary planning concepts.
These activities reflect the City’s commitment to a transparent, inclusive, and ongoing planning process that incorporates the perspectives of residents, businesses, and other key stakeholders throughout development of the Downtown Housing Plan.
ENVIRONMENTAL REVIEW
The actions recommended in this report are exempt from review under the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15262: A project involving only feasibility or planning studies for possible future actions that has not been approved, adopted, or funded would not have significant impact on the environment. The City will prepare an environmental analysis for the Downtown Housing Plan when more project specifics have been identified.
The City will conduct appropriate environmental review for the Downtown Housing Plan and any SB 79 transit-oriented-development Alternative Plans directed by the City Council.
ATTACHMENTS
Attachment A: Housing Development Economic Feasibility and Implementation Analysis Attachment B: Community Outreach Summary and Preliminary Policy Recommendations Based on Feasibility Analysis
Item 4
Item 4 Late Packet Report
Item 4: Staff Report
Pg.
14 Packet Pg. 44 of 83
Attachment C: SB 79 Map Based on Caltrain Platform Location15 Attachment D: SB 79 boundary in relation to Downtown Housing Plan and SOFA Boundary APPROVED BY:
Jonathan Lait, Planning and Development Services Director 15 The area impacted by SB 79 on based on pedestrian access points rather than platform location, which may result in an expanded boundary. Identification of these points is still being evaluated by staff.
Item 4
Item 4 Late Packet Report
Item 4: Staff Report
Pg.
15 Packet Pg. 45 of 83
Housing Development Economic
Feasibility and Implementation
Analysis
PALO ALTO DOWNTOWN HOUSING PLAN
Prepared for:
City of Palo Alto
October 10, 2025
Item 4
Attachment A - Housing
Development Economic
Feasibility and
Implementation Analysis
Item 4: Staff Report
Pg.
16 Packet Pg. 46 of 83
Housing Development Economic Feasibility and Implementation Analysis 2 Table of Contents
INTRODUCTION .............................................................................................................................. 4 APPROACH AND USE OF ANALYSIS RESULTS.............................................................................. 5 PROTOTYPES AND DEVELOPMENT ASSUMPTIONS ..................................................................... 6 FINANCIAL FEASIBILITY ANALYSIS FINDINGS ............................................................................. 9 OPPORTUNITIES FOR THE CITY OF PALO ALTO TO SUPPORT HOUSING PRODUCTION............18 APPENDIX: PRO FORMA ANALYSIS ASSUMPTIONS AND PRO FORMA STATEMENTS .............20
Item 4
Attachment A - Housing
Development Economic
Feasibility and
Implementation Analysis
Item 4: Staff Report
Pg.
17 Packet Pg. 47 of 83
Housing Development Economic Feasibility and Implementation Analysis 3 Table of Figures
Figure 1: Development Prototypes Studied in the Feasibility Analysis ..................................................... 8 Figure 2: Residual Land Value per Square Foot of Land for each Development Prototype Compared to Typical Current Land Costs per Square Foot ........................................................................................... 11 Figure 3: California Statewide Cost Inflation and Santa Clara County Rent Inflation, 2011 to 2025. 12 Figure 4: Cap Rates and Sales Price per Unit for Multifamily Rental Buildings (20+ Units) Sold Between 2014 and 2025 in Santa Clara County ................................................................................... 13 Figure 5: Residual Land Value Sensitivity under Historic Market Conditions and Revenue Growth Scenarios (Prototype #5: Mid-rise Residential) ....................................................................................... 13
Figure 6: Residual Land Values per Square Foot for each Prototype with Varying Affordable Housing Requirements and Fee Level Scenarios .................................................................................................. 17
Figure 7: Revenue and Supportable Value Calculation and Results for Rental Prototypes................. 21 Figure 8: Revenue and Project Value Calculation and Results for Ownership Prototypes ................... 22 Figure 9: Total Development Cost Results for Rental Prototypes .......................................................... 23 Figure 10: Total Development Cost Results for Ownership Prototypes ................................................. 24 Figure 11: Pro Forma Feasibility Results for Rental Prototypes ............................................................ 25 Figure 12: Pro Forma Feasibility Results for Ownership Prototypes...................................................... 25 Figure 13: Revenue Assumptions for Rental Prototypes ........................................................................ 26 Figure 14: Cost Assumptions for Rental Prototypes ............................................................................... 27 Figure 15: Municipal Fee Calculations for Rental Prototypes ................................................................ 28 Figure 16: Revenue Assumptions for Ownership Prototypes ................................................................. 29 Figure 17: Cost Assumptions for Ownership Prototypes ........................................................................ 30 Figure 18: Municipal Fee Calculations for Ownership Prototypes ......................................................... 31
Item 4
Attachment A - Housing
Development Economic
Feasibility and
Implementation Analysis
Item 4: Staff Report
Pg.
18 Packet Pg. 48 of 83
Housing Development Economic Feasibility and Implementation Analysis 4 I ntroduction
This report describes the findings and conclusions of an analysis completed to help identify ways to enable and attract housing growth in the Palo Alto Downtown Housing Plan area (“Plan Area”). The findings and recommendations can inform related policy considerations and decisions for inclusion in the City of Palo Alto’s Downtown Housing Plan . The Downtown Housing Plan seeks to enable and attract market rate housing development when market conditions allow, while also safeguarding affordability, livability, and fiscal sustainability.
The analysis consisted of a “financial feasibility” assessment for seven market rate housing development prototypes that correspond to typical site conditions in downtown Palo Alto. A financial feasibility analysis reflects the perspective of a housing developer, since production of market rate housing (along with any associated on-site affordable housing units or affordable housing fee revenue for the City of Palo Alto) requires developer interest in pursuing projects. This report’s findings and policy recommendations are one subset of the many considerations for crafting a plan that achieves affordability and livability in downtown Palo Alto.
The approach to the analysis reflect ed the goals of identifying challenges and opportunities for enabling housing production in the Downtown Housing Plan area through policy changes that are within the control of the City of Palo Alto. A sensitivity analysis examined ways in which different policies and evolving development conditions can improve the financial performance of the prototypes and therefore incentivize housing development activity.
The remainder of this report opens with a discussion of the approach to and appropriate use of the analysis results. The report then details the development prototype characteristics and describes findings from the financial feasibility analyses of the prototypes. Se ction V describes conclusions regarding potential policy changes to better enable and support market rate housing production in the Plan Area.
Item 4
Attachment A - Housing
Development Economic
Feasibility and
Implementation Analysis
Item 4: Staff Report
Pg.
19 Packet Pg. 49 of 83
Housing Development Economic Feasibility and Implementation Analysis 5 Approach and Use of Analysis Results
A financial feasibility analysis represents a developer’s perspective on whether the financial return for a given potential development project merits pursuing that project. Strategic Economics examined the financial feasibility of seven housing development prototypes using a static pro forma model that estimated the current costs, required returns, and supportable land values for each prototype. The assumptions used in the pro forma model were based on market research, review of recent feasibility analyses, and interviews with experienced developers in the region who have completed or are pursuing projects comparable to the prototypes.
The pro forma analysis used an approach that “solves” for the remaining residual value of a development project. The analysis measured the financial performance of each prototype using residual land value analysis. In residual land value analysis, the land cost estimate is initially taken out of the equation. Instead, the analysis begins by estimating project market value, hard costs, and soft costs, and applies a minimum acceptable return threshold for a typical developer pursuing the project. The supportable land value is then calculated last, as a residual value after all costs and the minimum return are subtracted from the project’s market value.
The residual value approach is especially helpful for comparing the performance of alternative development projects since the results are expressed in equivalent terms. The residual value conceptually represents the price a developer could pay for a property while still achieving a financially feasible project. If the residual land value is negative or below the typical range of sales prices for land or underutilized prop erties, then the development project is likely to be infeasible under current conditions.
The financial feasibility results should be used as a general guide to the impact of policies on a range of development types rather than a prediction of feasibility for specific development projects. The results of the pro forma analysis represent current development conditions relevant to the generalized and prototypical housing development projects in downtown Palo Alto. This approach aligns with the analysis purpose of informing policy decisions for the Palo Alto Downtown Housing Plan. However, any actual property and development project will benefit from or be challenged by unique conditions such as existing uses, property owner motivations and acquisition/holding costs, access to financing, site - specific land use regulations, and unique pricing for construction labor and materials.
Given that development conditions undergo cyclical changes over time and the Downtown Housing Plan will implement longstanding policy changes, the feasibility analysis is focused on assessing local opportunities to enhance the likely interest in and the pace of housing development. As discussed further in this chapter’s findings and conclusions, the financial performance of development projects shifts over time as changes occur in factors often outside the City’s control. The analysis therefore focused on l ocal changes that can improve the financial feasibility of housing development in downtown Palo Alto. This perspective emphasizes ways to better enable development under current conditions and throughout the ongoing changes in the development market cycle. Market rate housing production can be supported by ensuring housing developments in downtown Palo Alto are more likely to provide a competitive return on investment and pose an acceptable level of risk for developers.
Item 4
Attachment A - Housing
Development Economic
Feasibility and
Implementation Analysis
Item 4: Staff Report
Pg.
20 Packet Pg. 50 of 83
Housing Development Economic Feasibility and Implementation Analysis 6 Prototypes and Development Assumptions
The financial feasibility analysis examined five primary development prototypes based on two differently sized sites, with three variations of Prototype 1 located at the smaller site. The development prototypes represent a range of development densities, heights, configurations, and overall housing product types. Figure 1 provides an overview of the prototypes, followed by further details.
The development prototypes and feasibility analysis do not reflect conditions at a specific site.
However, the prototypes derive from a series of buildout “test fits” prepared by WRT based on properties in downtown Palo Alto. The relevant test fits reflected conditions for properties located at 318 University Avenue (a small mid-block parcel) and 136 Hamilton Avenue / 650 High Street (a large three-parcel site with common ownership, located near the Palo Alto Caltrain Station). The test fits were based on physical site characteristics and typical housing product types found in Palo Alto, rather than on the existing zoning and development standards in downtown Palo Alto.
In addition to their residential components, all prototype s except Prototype 5 included office and ground-floor retail space. This was to acknowledge ground floor retail requirements in areas of downtown and is based on developer feedback that office space is desirable and financially beneficial for development projects in downtown Palo Alto.
The prototypes include on-site parking for the residential units, but only in the minimal quantities likely required to make the units marketable to buyers or renters. Most of the project area is located within a half-mile radius of the Palo Alto Caltrain station. Under State l egislation authorized by AB 2097, no minimum parking requirements apply to those qualifying parcels.
Prototypes 1a, 1b, and 1c are four-story mixed-use buildings on a small 8,000 square foot (.18 acre) site. The prototypes include 2,000 square feet of retail on the first floor, 6,000 square feet of office on the second floor and up to eight residential units on the upper floors. The parking is accessed via an alley at the rear of the building and tucked under the upper floors. Prototype 1a was analyzed as a rental project and prototypes 1b and 1c were analyzed as ownership projects. Prototype 1b best reflects recently completed and proposed development projects on similar sites in downtown Palo Alto, with most projects including the maximum allowable office space and a limited number of larger ownership condominium housing units.
Prototype 2 is a horizontal mixed-use development that includes two buildings at a 20,937 square foot site (.48 acres). The buildings consist of a seven -story residential building and a four -story retail and office building. This prototype includes 55 rental housing units and approximately 21,000 square feet of office space, with parking located underground. The average residential unit size for this prototype is the same as Prototype 3 at 725 net square feet.
Prototype 3 is a vertical mixed-use building located at a property with the same site characteristics as Prototype 2. Prototype 3 includes 63 rental housing units above retail and office space on the first two floors, with parking located underground.
Prototype 4 is a horizontal mixed-use building located at a property with the same site characteristics as Prototype 2. Prototype 4 is similar to Prototype 2, but includes fewer rental housing units, more office space, and relatively cost efficient “podium” parking . This prototype was included to examine whether additional office space improves the financial performance of a mixed -use housing project and the impact of podium versus underground parking.
Item 4
Attachment A - Housing
Development Economic
Feasibility and
Implementation Analysis
Item 4: Staff Report
Pg.
21 Packet Pg. 51 of 83
Housing Development Economic Feasibility and Implementation Analysis 7 Prototype 5 is a mid-rise residential building located at a property with the same site characteristics as Prototype 2. This prototype consists of an entirely residential seven-story rental apartment building with podium parking . The prototype was included to examine the performance of this building type without the influence of other commercial uses in the analysis results.
As with all real -world development projects, the prototypes’ heights and uses dictate different construction “types” that consist of differing materials with different costs per square foot of building area. Building codes specify the use of different materials for different building heights and uses based on safety requirements. Construction labor and materials costs vary with different construction “types.” As a result, costs per square foot of the building area vary with the prototypes:
• The small-scale prototypes 1a, 1b, and 1c were assumed to primarily consist of Type II light steel construction.
• Prototypes 2, 3, 4, and 5 were assumed to use mixes of “Type I” concrete or steel construction for parking structure s and office space, and Type IIIa wood frame construction for upper residential floors above the concrete podium.
• Generally, construction costs per square foot are highest for Type I construction, lower for Type II and lower still for Type IIIa.
• The analysis did not include a prototype taller than eight stories. Towers taller than mid-rise seven- to eight-story projects typically must consist entirely of Type I construction.1 These high- rises therefore incur a relatively high increase in overall fixed costs and incur high construction costs per square foot of building area compared to mid-rise “podium” buildings with a mix of Type I and IIIa construction. Type I buildings often require substantial additional height to include sufficient square feet of revenue-generating space that overcomes the large increase in fixed development costs associated with these high-rise projects. High -rise projects are typically only built under extremely favorable development conditions when rents or sales prices exceed these high construction costs.
1 “Mass timber” construction (Type IVa.-c.) can also be used to construct buildings taller than eight stories, especially in conjunction with a Type I concrete podium. Mass timber is a relatively new construction type in the Bay Area for taller residential development projects. Although costs per square foot are slightly higher than Type I construction, mass timber may become an increasingly attractive alternative for taller residential building construction as supply chains become better established and construction costs decline.
Item 4
Attachment A - Housing
Development Economic
Feasibility and
Implementation Analysis
Item 4: Staff Report
Pg.
22 Packet Pg. 52 of 83
Housing Development Economic Feasibility and Implementation Analysis 8 FIGURE 1: DEVELOPMENT PROTOTYPES STUDIED IN THE FEASIBILITY ANALYSIS
Prototype 1a:
Small Vertical
Mixed-Use
Apartments
Prototype 1b:
Small Vertical
Mixed-Use
Condos (4 Unit)
Prototype 1c:
Small Vertical
Mixed-Use
Condos (8 Unit)
Prototype 2:
Horizontal
Mixed-Use
Apartments
Prototype 3:
Vertical
Mixed-Use
Apartments
Prototype 4:
Horizontal Mixed-
Use with Higher
Commercial FAR
Prototype 5:
Mid-rise
Residential
Property Characteristics
Site Size (square feet) 8,000 8,000 8,000 20,937 20,937 20,937 20,937 Gross Building Area 15,350 15,350 15,350 70,140 83,200 74,580 81,950 Retail 2,000 2,000 2,000 0 3,400 0 0
Office 6,000 6,000 6,000 20,900 22,600 34,385 0
Residential 7,350 7,350 7,350 49,240 57,200 40,195 81,950 Floor Area Ratio 1.92 1.92 1.92 3.35 3.97 3.56 3.91
Retail 0.25 0.25 0.25 0.00 0.16 0.00 0.00
Office 0.75 0.75 0.75 1.00 1.08 1.64 0.00
Residential 0.92 0.92 0.92 2.35 2.73 1.92 3.91
Parking
Parking Spaces 10 10 10 54 54 40 40
Parking Type Tuck-under Tuck-under Tuck-under Underground Underground Podium Podium Housing
Units 4 4 8 55 63 44 91
Average Unit Size 1,560 1,560 780 725 725 725 725
Tenure Rental Ownership Ownership Rental Rental Rental Rental Construction
Stories 4 4 4
7 (Residential)
4 (Office) 7
7 (Residential)
6 (Office) 7
Construction Type Type II Type II Type II Type IIIa / Type I Type IIIa / Type I Type IIIa / Type I Type IIIa / Type I Source: WRT, 2025; Strategic Economics, 2025.
Item 4
Attachment A - Housing Development
Economic Feasibility and
Implementation Analysis
Item 4: Staff Report
Pg.
23 Packet Pg. 53 of 83
Housing Development Economic Feasibility and Implementation Analysis 9 Financial Feasibility Analysis Findings
The financial feasibility analysis results illustrate the relative performance of the prototypes, factors influencing that performance, and how changes in development conditions and City requirements can enhance the feasibility of and better enable market rate housing development in downtown Palo Alto. The findings therefore focus on how to enhance the financial performance of housing development in the Plan Area to motivate developers and property owners to pursue new projects.
The findings cover the following topic areas and inform policy decisions for accelerating housing development as part of the Downtown Housing Plan:
• Relative financial feasibility performance of the prototypes under current conditions • Impacts of broader development trends and opportunities • Mid-rise housing performance and opportunities
• Influence of office uses
• Parking impacts
• Sensitivity to City fees and requirements
RELATIVE FINANCIAL FEASIBILITY PERFORMANCE OF THE PROTOTYPES UNDER
CURRENT CONDITIONS
The prototypes do not meet general financial feasibility thresholds under current conditions . Typical costs for developable sites in and near downtown Palo Alto vary widely, and few transactions have occurred in recent years. However, typical sales of land and underutilized properties in and near downtown Palo Alto range from $600 to $800 per squar e foot of land. As shown in Figure 2, no development prototype achieves a minimum $600 per square foot residual land value under current conditions; two prototypes support land values that are significantly positive but still below the $600 to $800 threshold. The following findings discuss results and implications for specific prototypes.
Developers and landowners have unique investment goals, property holding costs, and other unique conditions that may allow projects that do not meet the typical land cost threshold to still proceed — although any project must generate a competitive return on investment . Property owners and developers with low land costs may choose to pursue development of a project that does not achieve the typical return on investment (expressed in this analysis as meeting the required residual land value threshold). However, any development project must still generate a competitive return on investment that corresponds to the relatively high risk of pursuing a development project. D evelopers and landowners have a wide variety of options for use of property, including selling it, holding it for sale in anticipation of improved conditions, receiving revenue from the existing conditions, or developing the property.
The financial feasibility performance of the development prototypes c an readily improve over time based on a combination of broader changes in development market conditions and actions by the City of Palo Alto that improve development project values and reduce risk. As described in detail in Section II, the financial feasibility analysis results are based on current and generalized conditions to provide a tool for gauging how changes in market conditions and City policies can improve the prototypes’ performance. Later findings of this report describes broader challenges impacting housing feasibility in the Bay Area—primarily construction cost inflation and increased thresholds for return on investment Item 4
Attachment A - Housing
Development Economic
Feasibility and
Implementation Analysis
Item 4: Staff Report
Pg.
24 Packet Pg. 54 of 83
Housing Development Economic Feasibility and Implementation Analysis 10 (related to higher interest rates)–and the report’s conclusions describe opportunities to better enable housing development in the Plan Area.
The smaller ownership prototypes significantly outperformed rental prototypes due to the relatively high local price premium for larger luxury ownership housing units compared to rental units. As shown in Figure 2, the analysis found that large r luxury ownership products —such as prototype 1c and especially 1b —perform relatively well in downtown Palo Alto due to high achievable sales prices.
Prototype 1b achieves the highest residual value per square foot of land, at $505. Prototypes 1b and 1c represent small boutique condominium projects. Palo Alto attracts a substantial price premium for condominiums compared to the larger region, with the “Zillow Home Value Index” for July 2025 estimating that typical condominiums in Palo Alto command a 149 percent value premium compared to typical condominiums in Santa Clara County overall.2 While achievable rents in downtown Palo Alto are also among the highest in the surrounding area, they do not command a comparable overall premium. As of April 2025, CoStar reported that average effective rents per square foot for apartments in Palo Alto were only 6.3 percent higher than in Santa Clara County overall.3 The mid-rise rental prototypes are relatively infeasible in downtown Palo Alto under current conditions, but feasibility outcomes can change quickly for such larger and higher density products as development conditions shift. As shown in Figure 2, Prototypes 2, 3, 4, and 5 generated residual land values of between -$437 and $12 per square foot of land . These rental prototypes represent a mid- rise product that achieves a relatively high density in an efficient format—especially when built at sites of at least half an acre. However, broader market challenges are temporarily constraining the financial feasibility performance of these prototypes. The following subsection of this chapter describes these challenges and how shifting development conditions can especially support higher density mid -rise housing products.
2 Based on data gathered in August, 2025, the Zillow Home Value Index (ZHVI) estimated condominium values of $1,258,451 in Palo Alto and $842,418 in Santa Clara County. More details regarding the ZHVI are available at https://www.zillow.com/research/data/. 3 Based on CoStar data for all tracked apartments, gathered in April, 2025.
Item 4
Attachment A - Housing
Development Economic
Feasibility and
Implementation Analysis
Item 4: Staff Report
Pg.
25 Packet Pg. 55 of 83
Housing Development Economic Feasibility and Implementation Analysis 11 FIGURE 2: RESIDUAL LAND VALUE PER SQUARE FOOT OF LAND FOR EACH DEVELOPMENT PROTOTYPE COMPARED TO
TYPICAL CURRENT LAND COSTS PER SQUARE FOOT
Source: CoStar, 2025; Strategic Economics, 2025.
IMPACTS OF BROADER DEVELOPMENT TRENDS AND OPPORTUNITIES The following findings discuss how broader regional and national factors are influencing the financial feasibility outcomes of the housing development prototypes for downtown Palo Alto, and how changes in these factors can readily improve the prototypes’ performance in the future.
Each of the factors influencing financial feasibility is highly dynamic , and development activity and conditions are cyclical. Project costs can fluctuate due to changes in construction labor costs, materials costs, and a variety of other factors. Similarly, a development project’s revenue can vary depending on the availability of housing supply in the local market, changes in the attractiveness of a project’s location, or other factors impacting demand in the local market. The minimum threshold for investment return can also fluctuate based on external factors such as interest rates and trends in real estate capital markets—recognizing that real estate development must compete against all other investment options.
The current primary challenges for the financial feasibility of housing development throughout the Bay Area are related to construction cost inflation and increased thresholds for return on investm ent (related to higher interest rates). These are shared challenges that are slowing housing development throughout the Bay Area. Figure 3 shows the annual percent change in the California Construction Cost Index produced by the State of California . The index measures change in labor and materials costs in the San Francisco Bay Area and Los Angeles regions. Costs rapidly increased in 2021 through 2023, greatly outpacing rent growth in Santa Clara County. However, rent growth also often outpaces construction cost growth, such as in 2012 through 2015, 2018, and 2024. $23
$505
$394
($437)
($259)
$12
($76)
-$600
-$400
-$200
$0
$200
$400
$600
$800
$1,000
Prototype
1a:
Small
Vertical
Mixed-Use
Apartments
Prototype
1b:
Small
Vertical
Mixed-Use
Condos (4
Unit)
Prototype
1c:
Small
Vertical
Mixed-Use
Condos (8
Unit)
Prototype 2:
Horizontal
Mixed-Use
Apartments
Prototype 3:
Vertical
Mixed-Use
Apartments
Prototype 4:
Horizontal
Mixed-Use
with Higher
Commercial
FAR
Prototype 5:
Mid-rise
Residential
Residual Value per Square Foot of Land
Typical Range of Land Values in Downtown Palo Alto
Item 4
Attachment A - Housing
Development Economic
Feasibility and
Implementation Analysis
Item 4: Staff Report
Pg.
26 Packet Pg. 56 of 83
Housing Development Economic Feasibility and Implementation Analysis 12 Figure 4 shows that capitalization rates (which describe the ratio between a property’s annual income and its market value) increased in 2023, indicating a decline in investor confidence in multifamily investments. This decline was in response to higher interest rates at the national level and a softening of the rental market throughout much of the Bay Area. Increased perceptions of risk and required return on investment also led to a decline in t he average market value of multifamily properties per housing unit in Santa Clara County since 2020, as also shown in Figure 4.
Future changes in the aforementioned factors can readily enable more housing development projects to become financially feasible. Figure 5 demonstrates the variability of residual value for development Prototype 5 (the mid -rise housing-only product) in response to changes in cap rates and achievable rents.4 Essentially, the chart demonstrates that this prototype was financially feasible during a period of lower cap rates and required return on investment, and could again become financially feasible with modest increases in rents and eventual declines in required investment returns. These changes will take time to occur ; however, changes to local polic ies could better enable housing development in downtown Palo Alto once these market conditions turn favorable.
Developers in Palo Alto and nearby communities are still proposing housing projects, indicating confidence in the future financial feasibility of new development. Developers continue to propose new housing development projects anticipati ng future improvements in conditions and situation-specific advantages related to project financing, costs, investment goals, and site or project efficiency. For example, developers are pursuing at least five large mid-rise market rate housing projects within the boundaries of Palo Alto’s San Antonio Road Area Plan.
FIGURE 3: CALIFORNIA STATEWIDE COST INFLATION AND SANTA CLARA COUNTY RENT INFLATION, 2011 TO 2025
Source: California Department of General Services, 2025; CoStar, 2025; Strategic Economics, 2025.
4 The analysis presents a simplified example of current versus historic conditions and outcomes for two variables to gauge whether and how the mid-rise development prototype could become financially feasible. As noted earlier in this report, all aspects of development costs, revenues, and returns are, in reality, complexly dynamic and inter-related. -5%
0%
5%
10%
15%
20%
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Annual Percent Change
California Construction Costs Santa Clara County Multifamily Rents Item 4
Attachment A - Housing
Development Economic
Feasibility and
Implementation Analysis
Item 4: Staff Report
Pg.
27 Packet Pg. 57 of 83
Housing Development Economic Feasibility and Implementation Analysis 13 FIGURE 4: CAP RATES AND SALES PRICE PER UNIT FOR MULTIFAMILY RENTAL BUILDINGS (20+ UNITS) SOLD BETWEEN 2014 AND 2025 IN SANTA CLARA COUNTY
Source: CoStar, 2025; Strategic Economics, 2025.
FIGURE 5: RESIDUAL LAND VALUE SENSITIVITY UNDER HISTORIC MARKET CONDITIONS AND REVENUE GROWTH SCENARIOS (PROTOTYPE #5: MID-RISE RESIDENTIAL)
Note: As previously described, developers and landowners have unique investment goals, property holding costs, and other unique conditions that may allow projects that do not meet the typical land cost threshold to still proceed —although any project must generate a competitive return on investment relative to risk.
Source: CoStar, 2025; Strategic Economics, 2025.
MID-RISE HOUSING PERFORMANCE AND OPPORTUNITIES
While the small ownership prototypes currently perform relatively well, these prototypes are likely insufficient to meet the housing needs of downtown Palo Alto due to the prototypes’ high sales prices, creation of small increments of housing, high construction costs, and limited opportunity sites.
Prototypes 1b and 1c, located on a small typical site in downtown Palo Alto, support relatively high residual values . However, developers interviewed for this study noted that these prototypes are challenging to deliver due to the inefficiencies inherent in providing market -required parking and in making efficient use of small sites while meeting safety and circulation needs. Notably, Prototypes 1b 0%
1%
2%
3%
4%
5%
6%
$200,000
$250,000
$300,000
$350,000
$400,000
$450,000
$500,000
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Cap Rate
Sales Price per Unit
Sales Price per Unit Cap Rates
-$50,000
$0
$50,000
$100,000
$150,000
$200,000
$250,000
0% 5% 10%
Residual Land Values per Unit
Change in Market Rents
Typical Land Values per Unit in
Downtown Palo Alto
Range of Residual Land Values based
on Historic Cap Rates
Residual Land Value under
Approximate 2017-2019 Cap Rates
Residual Land Value under Current
Cap Rates
Item 4
Attachment A - Housing
Development Economic
Feasibility and
Implementation Analysis
Item 4: Staff Report
Pg.
28 Packet Pg. 58 of 83
Housing Development Economic Feasibility and Implementation Analysis 14 and 1c assumed use of tuck -under parking off a rear alley, but most sites in downtown would likely require the more expensive underground parking.
Although the financial feasibility outcomes for the mid -rise housing prototypes are currently largely negative, improving conditions can especially favor these product types due to their concentration of revenue generating space at a property. As noted above, the mid -rise housing prototype can move closer to becoming financially feasible through changes such as increased achievable rents, changing thresholds for returns on investment, and slower increases in construction costs. Mid -rise housing developments are relatively efficient development product s that concentrate a large amount of housing units at a given site—enabling mid-rise developments to become attractive investments under conditions in which each square foot of space provides a return on investment. Larger mid-rise housing products—such as those in Prototypes 2, 3, 4, and 5 —also support production or relatively large increments of housing that can help meet the production goals of the City of Palo Alto.
Mid-rise housing generally achieves better financial feasibility outcomes at relatively large and regularly shaped sites —creating the potential need for developers of these properties to assemble parcels in the Plan Area. As described in the Community Assessment Report for the Downtown Housing Plan, the ideal site for a mid -rise housing development is a rectangular site of at least a half-acre in size. Few sites in downtown Palo Alto fall within this size range, making it likely that developers would prefer to assemble properties to create larger development opportunity sites ; however, lot consolidations have historically been rar e in Palo Alto, underscoring the need for development incentives or other tools to encourage parcel assembly.
INFLUENCE OF OFFICE USES
Based on the financial feasibility analysis of the prototypes, office uses currently outperform residential uses in the Plan Area —although office performance is also constrained by broader development challenges. As shown in Figure 1, Prototype 5 consists of an entirely residential mid-rise podium building while Prototype 4 consists of an office building (with 34,385 square feet of office space rather than the 20,937 square feet that is currently allowed) and a residential building. The prototype floor area ratios (FAR) are 3.91 and 3.56 overall, respectively. The financial feasibility results in Figure 2 show that the entirely residential Prototype 5 only supports a -$76 residual value per square foot of land area, compared to $12 for Prototype 4. Office use supports higher residual land values than the residential use for these prototypes under current conditions, although office products are still unlikely to be financially feasible due to broader weakness in the office market and increased thresholds for required return on investment.
The relatively strong desirability of office uses in the Plan Area creates competitive challenges for housing development. The relatively strong performance of office space in downtown Palo Alto reinforces input from local developers that the area has long been a highly desirable office location that commands exceptionally high rents within the Silicon Valley. This creates a challenge for housing development in that property owners would often prefer to maintain existing high value office uses rather than p ursue redevelopment to include other uses . This is especially true given that the base zoning in downtown Palo Alto only allows a maximum 1.0 base FAR for office space , discouraging developers from redeveloping properties that exceed this FAR under a prior nonconforming use.
The desirability of office space in the Plan Area may also create opportunities that encourage housing development through policies that support office and residential uses . Examples include allowing transfers of office development rights between properties in exchange for housing development or allowing “bonus” office space in exchange for housing development on the same property.
Item 4
Attachment A - Housing
Development Economic
Feasibility and
Implementation Analysis
Item 4: Staff Report
Pg.
29 Packet Pg. 59 of 83
Housing Development Economic Feasibility and Implementation Analysis 15 Office development in downtown Palo Alto may raise other public policy and community concerns.
Examples of these concerns include the potential to exacerbate the City’s already high ratio of jobs to housing, and t he risk of spillover impacts on adjacent neighborhoods from additional automobile traffic and demand for limited on-street parking—especially since minimum parking requirements for new development projects do not apply within one-half mile of the Palo Alto Caltrain station under AB 2097.
PARKING IMPACTS
Parking spaces add substantial costs to housing development. The parking spaces included in the development prototypes serve the housing units. The parking components of these prototypes added $25,000 to $50,000 in additional “hard” costs (labor and materials) per housing unit for Prototypes 1a through 1c, $107,000 to $123,000 per unit for Prototypes 2 and 3, and $17,000 to $34,000 for Prototypes 4 and 5. These varying costs relate to the parkin g format and ratio of spaces to housing units, but demonstrate the high additional costs for providing parking.
Minimum parking requirements (and related in-lieu fee requirements) do not apply in most of the Plan Area, creating flexibility for developers to reduce housing development costs. As noted in the Community Assessment Report for the Downtown Housing Plan, nearly the entire Plan Area falls within a half mile radius of the Caltrain station and is therefore subject to AB 2097. AB 2097 eliminates minimum parking requirements near robust transit service such as the Palo Alto Caltrain station.
Housing developers believe that they must still provide sufficient on -site parking to make their units marketable to potential residents—although proximity to transit and amenities can reduce resident parking demand. Parking ratios can typically be reduced more for rental housing projects than ownership projects. However, developers still typically seek to provide at least 1 to 1.25 spaces per unit, but with the opportunity to reduce ratios below 1.0 in locations with excellent regional transit service (such as blocks immediately adjacent to the Caltrain station) and access to local jobs and amenities.
Expanding opportunities for parking to be provided in an above -ground “podium” format rather than subterranean—can reduce overall construction costs. The cost to provide a parking space increases significantly when built underground versus in an at - or above -grade podium level. D eveloper interviews suggest an approximate hard cost of $40,000 per space in a podium versus $100,000 or more per space below grade (with especially high costs if space constraints result in the need for parking access solely via a vehicle elevator). Parking lifts or stackers can increase efficiency, but the spaces are less desirable for residents and still add $15,000 to $40,000 in additional construction cost per space for the mechanical equipment (which then must be maintained and eventually replaced).
SENSITIVITY TO CITY FEES AND REQUIREMENTS
Strategic Economics analyzed the sensitivity of the financial feasibility outcomes to two sets of requirements directly imposed on housing development by the City of Palo Alto. These analyses complement the preceding findings that discussed financial feasibility outcomes and opportunities related to land uses, housing product types, broader development conditions, competition with office uses, and parking quantity and format.
The sensitivity analysis explored two scenarios to gauge relative improvement of the prototypes’ financial performance. The first scenario examined outcomes if all local affordable housing Item 4
Attachment A - Housing
Development Economic
Feasibility and
Implementation Analysis
Item 4: Staff Report
Pg.
30 Packet Pg. 60 of 83
Housing Development Economic Feasibility and Implementation Analysis 16 requirements applicable to the housing uses were waived. As originally applied to the prototypes based on City of Palo Alto mandates, these requirements included:
• payment of an affordable housing impact fee for all rental prototypes (1a, 2, 3, 4, 5), • payment of a fractional inclusionary housing in -lieu fee for the small four -unit ownership housing project in Prototype 1b, and
• provision of one inclusionary unit and payment of a fractional in-lieu fee for Prototype 1c.
The second sensitivity analysis scenario examined outcomes if, in addition to the removal of local affordable housing requirements, all other City impact fees and entitlement/permitting fees were also waived (regardless of whether those fees apply to the residential, retail, or office components of the prototypes).
The testing of these scenarios was not intended to directly represent a recommended course of action since the waived requirements support other City of Palo Alto goals. Affordable housing requirements impact where and how the City provides affordable housing and supports the creation of mixed income communities. Impact fees support capital improvements that serve new public infrastructure and facilities associated with housing.
Removal of affordable housing requirements resulted in only minor improvements to the residual values of the development prototypes. The positive financial feasibility impact of removing affordable housing requirements from the development prototypes was relatively minor, as shown in Figure 6.
However, the cost impacts of Palo Alto’s affordable housing requirements can vary depending on the type and magnitude of the requirements. For example, a large gap exists between sales prices for market rate housing units versus affordable housing units. For Prototype 1c, this gap is equivalent to an $800,000 revenue loss due to inclusion of its single affordable housing unit. In contrast, the in-lieu fee payment for the affordable housing unit would be approximately $412,000. This difference partly explains why Prototype 1b, which was assumed to pay an in -lieu fee for its fractional .6 affordable housing unit obligation, outperforms prototype 1c.
Removal of all City fees , in addition to affordable housing requirements , resulted in a substantial increase in the financial feasibility performance of the prototypes. As shown in Figure 6, elimination of all City impact and permitting fees markedly improved the residual value of the development prototypes. This includes Prototype 5, which solely consists of residential use. Removal of the Park Impact Fee resulted in the greatest cost savings for the prototypes, with this fee constituting a quarter to half of total fee costs for all prototypes—except for Prototype 1b in which the affordable housing in- lieu fee is higher than the Park Impact Fee
The City’s affordable housing requirements and other fees are not the main reason the prototypes do not achieve financial feasibility, but the requirements and fees create an additional cost challenge that reduces the likely timing and pace of housing delivery as development conditions improve. Due to the broader challenges for housing development identified earlier, Figure 6 shows that only the small ownership prototypes 1b and 1c are relatively likely to achieve financial feasibility without application of affordable housing requirements and impact fees. However, Figure 6 also shows that the residual values of all prototypes significantly improve without those requirements . Such improvements can better enable housing development by reducing risk for developers and creating further financial incentives for them to pursue new projects.
Item 4
Attachment A - Housing
Development Economic
Feasibility and
Implementation Analysis
Item 4: Staff Report
Pg.
31 Packet Pg. 61 of 83
Housing Development Economic Feasibility and Implementation Analysis 17 FIGURE 6: RESIDUAL LAND VALUES PER SQUARE FOOT FOR EACH PROTOTYPE WITH VARYING AFFORDABLE HOUSING REQUIREMENTS AND FEE LEVEL SCENARIOS
Source: Strategic Economics, 2025.
-$600
-$400
-$200
$0
$200
$400
$600
$800
$1,000
Prototype
1a:
Small
Vertical
Mixed-Use
Apartments
Prototype
1b:
Small
Vertical
Mixed-Use
Condos (4
Unit)
Prototype 1c:
Small
Vertical
Mixed-Use
Condos (8
Unit)
Prototype 2:
Horizontal
Mixed-Use
Apartments
Prototype 3:
Vertical
Mixed-Use
Apartments
Prototype 4:
Horizontal
Mixed-Use
with Higher
Commercial
FAR
Prototype 5:
Mid-rise
Residential
Residual Land Value / Square Foot of Land
Typical Range of Land Values in Downtown
Palo Alto
Residual Land Value (Current Requirements
and Conditions)
Residual Land Value (no Residential
Affordable Housing Requirements/Fees)
Residual Land Value (no Affordable Housing
Requirements/Fees and no Municipal Fees)
Item 4
Attachment A - Housing Development
Economic Feasibility and
Implementation Analysis
Item 4: Staff Report
Pg.
32 Packet Pg. 62 of 83
Housing Development Economic Feasibility and Implementation Analysis 18 Opportunities for the City of Palo Alto to Support
Housing Production
Based on the pro forma analysis findings, the following conclusions describe opportunities for the City of Palo Alto to better enable housing production in the Downtown Plan Area by improving the financial feasibility of market rate housing projects. These conclusions indicate potential policy changes for further exploration and refinement by the WRT team based on input from City decision makers.
As described throughout this report, actions to better support market rate housing development must enhance financial incentives and reduce risks for developers and property owners in order to encourage their undertaking of new housing development projects —given that new development generally represent s the greatest investment risk and that housing development conditions are unfavorable due to broader regional conditions . Developers and landowners each have their own unique investment goals , property holding costs, and other unique conditions. Developers and landowners also have a wide variety of options for use of property, including selling it, holding it for sale in anticipation of improved conditions, receiving revenue from the existing conditions, or developing the property. Furthermore, current regional conditions—such as high construction materials and labor cost s and elevated interest rates and required return on investment —are unfavorable for housing development. Palo Alto has a range of options to better enable downtown homebuilding in response, from modest adjustments that position housing to move forward when conditions improve, to more proactive measures that could stimulate housing production even under today’s challenging market environment.
Based on the financial feasibility results for the development prototypes, the following opportunities exist to improve the financial feasibility of market rate housing development in the Downtown Housing Plan area to better enable housing production . The suggested opportunities can also potentially be structured in ways that balance improving of financial feasibility with creating incentives for supporting affordable housing contributions.
1. Adjust zoning and land use requirements —including increased height and FAR to support higher density housing—to allow a greater variety of housing product types , provide flexibility in accommodating parking, and increase the opportunity to produce housing under different market cycles: Allowing additional flexibility to increase building height s and FAR, and potentially relaxing other design and use requirements can increase the potential for the Downtown Housing Plan area to produce new housing . For exampl e, these relaxed requirements could enable Downtown Palo Alto to produce a significant quantity of housing in mid-rise housing projects during periods when those products are financially feasible as discussed in this report
13. Increased allowable heights can also reduce construction costs by enabling less expensive above -ground parking options as opposed to the more expensive subterranean parking option15.
2. Create requirements or incentives that link office production with housing production and encourage site assembly: 14Office space in downtown Palo Alto has stronger long -term demand and performs relatively well from a financial feasibility perspective . The City of Palo Alto historically limited office development downtown through imposition of a 1.0 FAR limit (unless using transfers of development rights from other properties) and configuration and location requirements that essentially limit the ability to replace existing office use at a Item 4
Attachment A - Housing
Development Economic
Feasibility and
Implementation Analysis
Item 4: Staff Report
Pg.
33 Packet Pg. 63 of 83
Housing Development Economic Feasibility and Implementation Analysis 19 property. These limitations create an opportunity to link highly valued office development rights to housing production. Examples include:
o Creating an incentive structure that link s granting of office development rights with production of housing;
o Allowing transfers of office development rights between properties when linked to housing production at the property that “sends” office development rights to a “receiving” property—thereby creating larger and more efficient office development opportunities while potentially freeing housing development sites and encouraging lot consolidation for creating more efficient housing development projects.
o Reducing allowable commercial FAR f rom the current 1.0 in order to reduce competition between office and residential uses or to increase the attractiveness of the incentive concepts described above.
3. Reduce City impact f ees for housing: 15Removal of impact fees significantly improve s the financial feasibility of the development prototypes. However, any waivers or reductions in fees should be weighed against the important role these fees play in funding critical City infrastructure needs. For example, the analysis found that the Park Impact Fee represents a substantial share of total housing development fees. However, the fee provides a critical source of revenue for acquisition of land and improvements for parks in Palo Alto.
4. Consider potential flexibility in ways to meet affordable housing requirements , especially if linked with the other incentives described above: 15Affordable housing requirements reduce the financial feasibility of the development prototypes, although this impact varied depending on whether the prototype was subject to an impact fee, in-lieu fee, or on-site affordable housing requirement. However, these requirements do support the critical affordability needs and goals of Palo Alto. Therefore, greater flexibility to pay fees for ownership housing products (rather than provide on -site affordable housing units) could be considered as a means of reducing the substantial cost impact of the inclusionary requirement . These fees would still generate revenues that the City of Palo Alto can leverage to produce more affordable housing units at deeper levels of affordability in 100% affordable housing projects.
Item 4
Attachment A - Housing
Development Economic
Feasibility and
Implementation Analysis
Item 4: Staff Report
Pg.
34 Packet Pg. 64 of 83
Housing Development Economic Feasibility and Implementation Analysis 20 Appendix: Pro Forma Analysis Assumptions and
Pro Forma Statements
Item 4
Attachment A - Housing
Development Economic
Feasibility and
Implementation Analysis
Item 4: Staff Report
Pg.
35 Packet Pg. 65 of 83
Housing Development Economic Feasibility and Implementation Analysis 21 FIGURE 7: REVENUE AND SUPPORTABLE VALUE CALCULATION AND RESULTS FOR RENTAL PROTOTYPES
Prototype 1a:
Small Vertical Mixed-
Use Apartments
Prototype 2: Horizontal
Mixed-Use Apartments
Prototype 3:
Vertical Mixed-Use
Apartments
Prototype 4: Horizontal
Mixed-Use with Higher
Commercial FAR
Prototype 5: Mid-Rise
Residential
Revenue
Residential
Gross Potential Rent (Market Rate) $506,048 $3,190,752 $3,706,560 $2,604,636 $5,310,360 Less Operating Costs -$151,814 -$957,226 -$1,111,968 -$781,391 -$1,593,108 Less Vacancy -$25,302 -$159,538 -$185,328 -$130,232 -$265,518 Plus Parking Rent $18,000 $97,200 $97,200 $72,000 $72,000 Residential NOI $346,931 $2,171,189 $2,506,464 $1,765,013 $3,523,734
Retail
Gross Potential Rent $170,000 $0 $289,000 $0 $0
Less Operating Costs -$8,500 $0 -$14,450 $0 $0
Less Vacancy -$17,000 $0 -$28,900 $0 $0
Retail NOI $144,500 $0 $245,650 $0 $0
Office
Gross Potential Rent $720,000 $2,508,000 $2,712,000 $4,126,200 $0 Less Operating Costs -$216,000 -$752,400 -$813,600 -$1,237,860 $0 Less Vacancy -$36,000 -$125,400 -$135,600 -$206,310 $0
Office NOI $468,000 $1,630,200 $1,762,800 $2,682,030 $0
Supportable Development Value
Residential
Total Net Operating Income $346,931 $2,171,189 $2,506,464 $1,765,013 $3,523,734 Yield on Cost (Required Return) 6.25% 6.50% 6.50% 6.50% 6.50% Supportable Development Value $5,551,000 $33,403,000 $38,561,000 $27,154,000 $54,211,000
Retail
Total Net Operating Income $144,500 $0 $245,650 $0 $0
Yield on Cost (Required Return) 7.00% 7.00% 7.00% 7.00% 7.00% Supportable Development Value $2,064,000 $0 $3,509,000 $0 $0
Office
Total Net Operating Income $468,000 $1,630,200 $1,762,800 $2,682,030 $0 Yield on Cost (Required Return) 8.50% 8.50% 8.50% 8.50% 8.50% Supportable Development Value $5,506,000 $19,179,000 $20,739,000 $31,553,000 $0 Total Supportable Development Value $13,121,000 $52,582,000 $62,809,000 $58,707,000 $54,211,000 NOI: Net Operating Income
Source: CoStar, 2025; Strategic Economics, 2025
Item 4
Attachment A - Housing Development
Economic Feasibility and
Implementation Analysis
Item 4: Staff Report
Pg.
36 Packet Pg. 66 of 83
Housing Development Economic Feasibility and Implementation Analysis 22 FIGURE 8: REVENUE AND PROJECT VALUE CALCULATION AND RESULTS FOR OWNERSHIP PROTOTYPES
Prototype 1b:
Small Vertical Mixed-Use
Condos (4 Unit)
Prototype 1c:
Small Vertical Mixed-Use
Condos (8 Unit)
Sales and Rental Revenue
Residential
Gross Sale Value (Market Rate) $9,996,000 $8,746,500
Sale Value (Below Market Rate Units) n/a $438,048
Less Sales and Marketing Costs -$499,800 -$459,227
Residential Value $9,496,200 $8,725,321
Retail
Gross Potential Rent $170,000 $170,000
Less Operating Costs -$8,500 -$8,500
Less Vacancy -$17,000 -$17,000
Retail NOI $144,500 $144,500
Office
Gross Potential Rent $720,000 $720,000
Less Operating Costs -$216,000 -$216,000
Less Vacancy -$36,000 -$36,000
Office NOI $468,000 $468,000
Project Value
Residential
Residential Value $9,496,200 $8,725,321
Commercial
Total Commercial NOI $612,500 $612,500
Blended Commercial Cap Rate 6.75% 6.75%
Commercial Capitalized Value $9,074,074 $9,074,074
Total Project Value $18,570,274 $17,799,395
NOI: Net Operating Income
Source: Costar, 2025; Strategic Economics, 2025.
Item 4
Attachment A - Housing
Development Economic
Feasibility and
Implementation Analysis
Item 4: Staff Report
Pg.
37 Packet Pg. 67 of 83
Housing Development Economic Feasibility and Implementation Analysis 23 FIGURE 9: TOTAL DEVELOPMENT COST RESULTS FOR RENTAL PROTOTYPES
Prototype 1a:
Small Vertical
Mixed-Use
Apartments
Prototype 2:
Horizontal Mixed-
Use Apartments
Prototype 3:
Vertical Mixed-Use
Apartments
Prototype 4: Horizontal
Mixed-Use with Higher
Commercial FAR
Prototype 5: Mid-
rise residential
Estimated Project Cost
Direct Costs
Demolition and Site Work $160,000 $418,750 $418,750 $418,750 $418,750 Building Area $7,208,750 $30,834,750 $34,155,000 $31,551,250 $32,780,000 Parking $200,000 $6,750,000 $6,750,000 $1,600,000 $1,600,000 Tenant Improvements $800,000 $2,090,000 $2,600,000 $3,438,500 $0 Subtotal Direct Costs $8,368,750 $40,093,500 $43,923,750 $37,008,500 $34,798,750
Indirect Costs
Soft Costs $1,087,938 $5,212,155 $5,710,088 $4,811,105 $4,523,838 Impact and Other Fees $1,516,508 $7,615,106 $8,967,606 $8,282,084 $8,477,242 Misc Additional Impact & Permit Fees $251,063 $1,202,805 $1,317,713 $1,110,255 $1,043,963 Developer Overhead $640,970 $2,000,582 $2,174,450 $1,913,233 $1,842,189 Financing $482,354 $2,793,185 $3,035,937 $2,671,230 $2,572,039 Subtotal Indirect and Financing Costs $3,978,832 $18,823,833 $21,205,793 $18,787,907 $18,459,269
Contingency $593,261 $2,806,207 $3,104,680 $2,656,259 $2,534,299 Total Project Cost (Excluding Land) $12,940,844 $61,723,540 $68,234,223 $58,452,666 $55,792,318 Source: Strategic Economics, 2025.
Item 4
Attachment A - Housing Development
Economic Feasibility and
Implementation Analysis
Item 4: Staff Report
Pg.
38 Packet Pg. 68 of 83
Housing Development Economic Feasibility and Implementation Analysis 24 FIGURE 10: TOTAL DEVELOPMENT COST RESULTS FOR OWNERSHIP PROTOTYPES
Prototype 1b:
Small Vertical Mixed-Use
Condos (4 Unit)
Prototype 1c:
Small Vertical Mixed-Use
Condos (8 Unit)
Estimated Project Cost
Direct Costs
Demolition and Site Work $160,000 $160,000
Building Area $7,282,250 $7,282,250
Parking $200,000 $200,000
Tenant Improvements $800,000 $800,000
Subtotal Direct Costs $8,442,250 $8,442,250
Indirect Costs
Soft Costs $1,097,493 $1,097,493
Impact and Other Fees $1,352,845 $1,437,299
Misc Additional Impact & Permit Fees $253,268 $253,268
Developer Overhead $637,834 $641,212
Financing $492,536 $495,144
Subtotal Indirect and Financing Costs $3,833,975 $3,924,415
Contingency $358,771 $367,684
Total Development Cost (Excluding Land) $12,634,996 $12,734,350 Source: Strategic Economics, 2025.
Item 4
Attachment A - Housing
Development Economic
Feasibility and
Implementation Analysis
Item 4: Staff Report
Pg.
39 Packet Pg. 69 of 83
Housing Development Economic Feasibility and Implementation Analysis 25 FIGURE 11: PRO FORMA FEASIBILITY RESULTS FOR RENTAL PROTOTYPES
Prototype 1a:
Small Vertical
Mixed-Use
Apartments
Prototype 2:
Horizontal
Mixed-Use
Apartments
Prototype 3:
Vertical Mixed-
Use Apartments
Prototype 4:
Horizontal
Mixed-Use with
Higher
Commercial FAR
Prototype 5:
Mid-rise
residential
Residual Land Value
Total Supportable Value $13,121,000 $52,582,000 $62,809,000 $58,707,000 $54,211,000 Total Project Cost (Excluding Land) $12,940,844 $61,723,540 $68,234,223 $58,452,666 $55,792,318 Residual Value $180,156 -$9,141,540 -$5,425,223 $254,334 -$1,581,318 Per Square Foot of Land $22.52 -$436.61 -$259.12 $12.15 -$75.53
Typical Land Costs $4,800,000 $12,562,500 $12,562,500 $12,562,500 $12,562,500 Per Square Foot of Land $600 $600 $600 $600 $600
Residual Value Less Land Costs -$4,619,844 -$21,704,040 -$17,987,723 -$12,308,166 -$14,143,818 Source: Strategic Economics, 2025.
FIGURE 12: PRO FORMA FEASIBILITY RESULTS FOR OWNERSHIP PROTOTYPES
Prototype 1b:
Small Vertical Mixed-Use
Condos (4 Unit)
Prototype 1c:
Small Vertical Mixed-Use
Condos (8 Unit)
Residual Land Value
Total Project Value $18,570,274 $17,799,395
Less Total Project Cost $12,634,996 $12,734,350
Less Required Developer Profit $1,895,249 $1,910,152
Residual Value $4,040,029 $3,154,893
Per Square Foot of Land $505 $394
Typical Land Costs $4,800,000 $4,800,000
Per Square Foot of Land $600 $600
Residual Value Less Land Costs -$759,971 -$1,645,107
Source: Strategic Economics, 2025.
Item 4
Attachment A - Housing
Development Economic
Feasibility and
Implementation Analysis
Item 4: Staff Report
Pg.
40 Packet Pg. 70 of 83
Housing Development Economic Feasibility and Implementation Analysis 26 FIGURE 13: REVENUE ASSUMPTIONS FOR RENTAL PROTOTYPES
Units
Prototype
1a:
Small
Vertical
Mixed-Use
Apartments
Prototype 2:
Horizontal
Mixed-Use
Apartments
Prototype 3:
Vertical
Mixed-Use
Apartments
Prototype
4:
Horizontal
Mixed-Use
with Higher
Commercial
FAR
Prototype
5: Mid-
Rise
residential
Residential
Average rent (Market Rate) per nsf $81 $81 $81 $81 $81
Parking Rent per space $150 $150 $150 $150 $150
Annual Operating Costs % of GSI 30% 30% 30% 30% 30%
Vacancy % of GSI 5% 5% 5% 5% 5%
Retail
Average rent per gsf $85 $85 $85 $85 $85
Annual Operating Costs % of GSI 5% 5% 5% 5% 5%
Vacancy % of GSI 10% 10% 10% 10% 10%
Office
Average rent per gsf $120 $120 $120 $120 $120
Annual Operating Costs % of GSI 30% 30% 30% 30% 30%
Vacancy % of GSI 5% 5% 5% 5% 5%
Profit Margin
Residential Yield on Cost 6.25% 6.50% 6.50% 6.50% 6.50% Retail Yield on Cost 7.00% 7.00% 7.00% 7.00% 7.00%
Office Yield on Cost 8.50% 8.50% 8.50% 8.50% 8.50%
NSF: Net Square Foot
GSI: Gross Scheduled Income
Source: Strategic Economics, 2025.
Item 4
Attachment A - Housing
Development Economic
Feasibility and
Implementation Analysis
Item 4: Staff Report
Pg.
41 Packet Pg. 71 of 83
Housing Development Economic Feasibility and Implementation Analysis 27 FIGURE 14: COST ASSUMPTIONS FOR RENTAL PROTOTYPES
Units
Prototype
1a:
Small
Vertical
Mixed-Use
Apartments
Prototype 2:
Horizontal
Mixed-Use
Apartments
Prototype 3:
Vertical
Mixed-Use
Apartments
Prototype 4:
Horizontal
Mixed-Use
with Higher
Commercial
FAR
Prototype 5:
Mid-Rise
residential
Hard Costs
Demolition and Site Work per sf land $20 $20 $20 $20 $20 Building Area Construction
Retail per gross sf $325 $0 $325 $0 $0
Office per gross sf $450 $450 $450 $450 $0
Residential - Type I/II per gross sf $525 $525 $0 $0 $0 Residential - Type IIIA per gross sf $0 $400 $400 $400 $400 Parking per space
Tuck-Under per space $20,000
Podium per space $40,000 $40,000
Underground per space $125,000 $125,000 $125,000 $125,000 Interior / Tenant
Improvement Allowance per net sf $100 $100 $100 $100 $100
Soft Costs
Arch, Eng & Consulting % of hard costs 5.0% 5.0% 5.0% 5.0% 5.0% Taxes, Insurance, Legal &
Accounting % of hard costs 5.0% 5.0% 5.0% 5.0% 5.0%
Other Soft Costs % of hard costs 3.0% 3.0% 3.0% 3.0% 3.0% Total Soft Costs (Excluding
Fees) % of hard costs 13.0% 13.0% 13.0% 13.0% 13.0%
Misc. Impact and Permit
Fees % of hard costs 3.0% 3.0% 3.0% 3.0% 3.0%
Contingency
% of hard + soft
costs 5.0% 5.0% 5.0% 5.0% 5.0%
Developer Share
Developer Overhead Fee
% of hard + soft
costs 4.0% 3.0% 3.0% 3.0% 3.0%
Target Developer Yield-on-
cost
Residential
% of total dev
cost 6.25% 6.50% 6.50% 6.50% 6.50%
Retail
% of total dev
cost 7.0% 7.0% 7.0% 7.0% 7.0%
Office
% of total dev
cost 8.5% 8.5% 8.5% 8.5% 8.5%
Financing
Amount Financed (Loan-to-
cost)
% of hard + soft
costs 55% 55% 55% 55% 55%
Average outstanding
balance
% of Amt
Financed 55% 55% 55% 55% 55%
Construction Loan Fee
% of Amt
Financed 1.0% 1.0% 1.0% 1.0% 1.0%
Construction Interest
(annual) 7.75% 7.75% 7.75% 7.75% 7.75%
Term Months 12 18 18 18 18
SF: Square Foot
NSF: Net Square Foot
Source: Strategic Economics, 2025.
Item 4
Attachment A - Housing
Development Economic
Feasibility and
Implementation Analysis
Item 4: Staff Report
Pg.
42 Packet Pg. 72 of 83
Housing Development Economic Feasibility and Implementation Analysis 28 FIGURE 15: MUNICIPAL FEE CALCULATIONS FOR RENTAL PROTOTYPES
Prototype 1a:
Small Vertical
Mixed-Use
Apartments
Prototype 2:
Horizontal
Mixed-Use
Apartments
Prototype 3:
Vertical Mixed-
Use Apartments
Prototype 4:
Horizontal
Mixed-Use with
Higher
Commercial
FAR
Prototype 5:
Mid-Rise
Residential
Impact Fees Calculation Units Rate Fee
Non-Residential
General Government Facilities Retail (gsf) $0.97 $1,934 $0 $3,288 $0 $0 Office (gsf) $1.30 $7,806 $27,191 $29,403 $44,735 $0
Public Safety Facilities Retail (gsf) $0.77 $1,534 $0 $2,608 $0 $0 Office (gsf) $1.10 $6,618 $23,053 $24,928 $37,927 $0
Community Center Impact Fees Retail (gsf) $1.53 $3,066 $0 $5,212 $0 $0 Office (gsf) $1.53 $9,198 $32,040 $34,646 $52,712 $0
Library Impact Fee Retail (gsf) $0.91 $1,828 $0 $3,108 $0 $0 Office (gsf) $0.91 $5,484 $19,103 $20,656 $31,428 $0
Park Impact Fee Retail (gsf) $19.84 $39,674 $0 $67,446 $0 $0 Office (gsf) $19.84 $119,022 $414,593 $448,316 $682,095 $0 Housing Impact Fee Retail (gsf) $27.00 $54,000 $0 $91,800 $0 $0 Office (gsf) $80.00 $480,000 $1,672,000 $1,808,000 $2,750,800 $0 School Impact Fee Commercial (gsf) $0.78 $6,240 $16,302 $20,280 $26,820 $0 Residential
Community Center Impact Fee Units $3,867.92 $30,943 $212,736 $243,679 $170,188 $351,981 General Government Facilities Units $1,394.64 $11,157 $76,705 $87,862 $61,364 $126,912 Housing Impact Fee Residential (nsf) $26.00 $162,435 $1,024,192 $1,189,760 $836,056 $1,704,560 Library Impact Fee Units $2,304.49 $18,436 $126,747 $145,183 $101,398 $209,709 Park Impact Fee Units $50,034.40 $400,275 $2,751,892 $3,152,167 $2,201,514 $4,553,130 Public Safety Facilities Units $1,107.96 $8,864 $60,938 $69,801 $48,750 $100,824 School Impact Fee Residential (gsf) $4.79 $35,207 $235,860 $273,988 $192,534 $392,541 Project-Level
Public Art In-Lieu Fee
Construction
Valuation 1% $83,688 $400,935 $439,238 $370,085 $347,988 Traffic Impact Fee
Net new PM peak
hour trip $10,103.99 $29,099 $520,820 $806,238 $673,677 $689,597 Total Fees $1,516,508 $7,615,106 $8,967,606 $8,282,084 $8,477,242 GSF: Gross Square Foot
NSF: Net Square Foot
Note: Permit fees, connection/capacity fees, and other miscellaneous fees are included in general soft cost assumptions.
Note: Fees charged for all applicable square feet; analysis did not include credits for hypothetical pre-existing square feet at the development prototype sites.
Source: City of Palo Alto Fiscal Year Adopted Municipal Fee Schedule, 2025; Strategic Economics, 2025.
Item 4
Attachment A - Housing Development
Economic Feasibility and
Implementation Analysis
Item 4: Staff Report
Pg.
43 Packet Pg. 73 of 83
Housing Development Economic Feasibility and Implementation Analysis 29 FIGURE 16: REVENUE ASSUMPTIONS FOR OWNERSHIP PROTOTYPES Units
Prototype 1b:
Small Vertical Mixed-
Use Condos (4 Unit)
Prototype 1c:
Small Vertical Mixed-
Use Condos (8 Unit)
Residential
Average Sale Price (Market Rate) per nsf $1,600 $1,600
Average Sale Price (Market Rate) per unit $2,499,000 $1,249,500 Average Sale Price (BMR) per unit n/a $438,048
Sales and Marketing Expense % of GSI 5% 5%
Retail
Average rent per nsf $85 $85
Annual Operating Costs % of GSI 5% 5%
Vacancy % of GSI 10% 10%
Office
Average rent per gsf $120 $120
Annual Operating Costs % of GSI 30% 30%
Vacancy % of GSI 5% 5%
Valuation and Profit Margin
Blended Commercial Cap Rate NOI / project value 6.75% 6.75% Developer Profit Margin % of project cost 15% 15%
NSF: net square foot
GSF: gross square foot
GSI: gross scheduled income
NOI: net operating income
Source: Strategic Economics, 2025.
Item 4
Attachment A - Housing
Development Economic
Feasibility and
Implementation Analysis
Item 4: Staff Report
Pg.
44 Packet Pg. 74 of 83
Housing Development Economic Feasibility and Implementation Analysis 30 FIGURE 17: COST ASSUMPTIONS FOR OWNERSHIP PROTOTYPES
Units
Prototype 1b:
Small Vertical Mixed-
Use Condos (4 Unit)
Prototype 1c:
Small Vertical Mixed-
Use Condos (8 Unit)
Hard Costs
Demolition and Site Work per sf land $20 $20
Building Area Construction
Retail per gross sf $325 $325
Office per gross sf $450 $450
Residential - Type I/II per gross sf $535 $535
Residential - Type IIIA per gross sf
Parking per space
Tuck-Under per space $20,000 $20,000
Underground per space
Interior / Tenant Improvement
Allowance per net sf $100 $100
Soft Costs
Arch, Eng & Consulting % of hard costs 5.0% 5.0%
Taxes, Insurance, Legal & Accounting % of hard costs 5.0% 5.0% Other Soft Costs % of hard costs 3.0% 3.0%
Total Soft Costs (Excluding Fees) % of hard costs 13.0% 13.0%
Misc. Impact and Permit Fees % of hard costs 3.0% 3.0%
Contingency
% of hard + soft
costs 5.0% 5.0%
Developer Share
Developer Overhead Fee
% of hard + soft
costs 4.0% 4.0%
Financing
Amount Financed (Loan-to-cost)
% of hard + soft
costs 55% 55%
Average outstanding balance % of Amt Financed 55% 55%
Construction Loan Fee % of Amt Financed 1.0% 1.0%
Construction Interest (annual) 8.0% 8.0%
Term Months 12 12
SF: square foot
GSF: gross square foot
NSF: net square foot
Source: Strategic Economics, 2025.
Item 4
Attachment A - Housing
Development Economic
Feasibility and
Implementation Analysis
Item 4: Staff Report
Pg.
45 Packet Pg. 75 of 83
Housing Development Economic Feasibility and Implementation Analysis 31 FIGURE 18: MUNICIPAL FEE CALCULATIONS FOR OWNERSHIP PROTOTYPES
Prototype 1b:
Small Vertical Mixed-
Use Condos (4 Unit)
Prototype 1c:
Small Vertical Mixed-
Use Condos (8 Unit)
Impact and In-Lieu Fees Calculation Units Rate Fee
Non-Residential
General Government Facilities Retail (gsf) $0.97 $1,946 $1,946 Office (gsf) $1.30 $7,806 $7,806
Public Safety Facilities Retail (gsf) $0.77 $1,546 $1,546 Office (gsf) $1.10 $6,618 $6,618
Community Center Impact Fees Retail (gsf) $1.53 $3,066 $3,066 Office (gsf) $1.53 $9,198 $9,198
Library Impact Fee Retail (gsf) $0.91 $1,828 $1,828
Office (gsf) $0.91 $5,484 $5,484
Park Impact Fee Retail (gsf) $19.84 $39,674 $39,674
Office (gsf) $19.84 $119,022 $119,022
Housing Impact Fee Retail (gsf) $27.00 $54,000 $54,000
Office (gsf) $80.00 $480,000 $480,000
School Impact Fee Commercial (gsf) $0.78 $6,240 $6,240
Residential
Community Center Impact Fee Units $3,867.92 $15,472 $30,943 General Government Facilities Units $1,394.64 $5,579 $11,157 Housing In-Lieu Fee Residential (gsf) $66.00 $247,401 $82,467 Library Impact Fee Units $2,304.49 $9,218 $18,436
Park Impact Fee Units $50,034.40 $200,138 $400,275
Public Safety Facilities Units $1,107.96 $4,432 $8,864
School Impact Fee Residential (gsf) $4.79 $35,207 $35,207 Project-Level
Public Art Fee
Construction
Value 1.0% $84,423 $84,423
Traffic Impact Fee
Net new PM peak
hour trip $10,103.99 $14,550 $29,099
Total Fees $1,352,845 $1,437,299
GSF: gross square foot
NSF: net square foot
Note: Permit fees, connection/capacity fees, and other miscellaneous fees are included in general soft cost assumptions Note: Fees charged for all applicable square feet; analysis did not include credits for hypothetical pre-existing square feet at the development prototype sites
Source: City of Palo Alto Fiscal Year 2025 Adopted Municipal Fee Schedule, 2025; Strategic Economics, 2025.
Item 4
Attachment A - Housing
Development Economic
Feasibility and
Implementation Analysis
Item 4: Staff Report
Pg.
46 Packet Pg. 76 of 83
1 Attachment B: Community Outreach Summary and Preliminary Policy Recommendations Based on Feasibility Analysis
Community Outreach
As a part of the community outreach and engagement strategy, the project team created a large map of the downtown area sectioned into smaller subareas based on locational attributes, general character of development, and shared physical features were provided as the base. The subareas were intended to encourage participants to take a contextual and place-based approach towards distributing density.
The subareas1 as presented to the community were:
• Subarea A: Encompasses blocks adjacent to the Caltrain Station, including Alma and High Streets, characterized by its proximity to regional transit and existing development.
• Subarea B: Parcels on University Avenue, characterized by development with active retail frontage, a mix of uses, smaller scale, fine-grained development pattern, and a consistent street canopy that defines University Avenue’s characteristic experience. • Subarea C and D: Parcels along Lytton and Hamilton Avenues, generally characterized by adjacent residential neighborhoods.
As a part of the exercise, participants were asked to distribute three dimensional blocks representing residential and commercial development within the identified project boundary. The following were recurring themes that emerged from the exercise, the pop-up event, and the survey:
• Subarea A should accommodate the highest levels of new density due to transit proximity.
• University Avenue’s existing character should be preserved, with minimal changes to scale and form.
• Increased residential density is appropriate in Subareas C and D, provided transitions to adjacent neighborhoods are context sensitive.
While feedback received at the pop-up event regarding Sub Areas A, C & D are similar to those stated here, the feedback received through the pop up exhibited more openness to height on University Avenue ranging up to 8 stories.
Feasibility Analysis
The project team analyzed five market-rate housing development prototypes on three representative sites within the plan area to assess their financial feasibility. Financial 1 https://www.paloalto.gov/files/assets/public/v/1/planning-amp-development-services/long-range- planning/area-plans-and-studies/downtown-housing/cag-meeting-2-presentation-slides.pdf Item 4
Attachment B - Community
Outreach Summary and
Preliminary Policy
Recommendations Based
on Feasibility Analysis
Item 4: Staff Report
Pg.
47 Packet Pg. 77 of 83
2 feasibility of a project indicates the potential return on investment and helps determine the likelihood that a project would be built by developers. The analysis also identifies key factors influencing financial feasibility and highlights opportunities and policy considerations to encourage housing production under favorable market conditions, while advancing the City’s goals for housing affordability, fiscal sustainability, and overall livability. • Prototype 1 (1a–1c): Four-story mixed-use buildings on 8,000 sq. ft. parcels with retail, office, and four to eight housing units. • Prototype 2: Seven-story residential building with four stories of office/retail on a 0.48-acre parcel; 55 units with underground parking. • Prototype 3: Seven-story residential-over-office vertical mixed-use development on a 0.48-acre parcel; 63 units, FAR 2.73. • Prototype 4: Horizontal mixed-use development emphasizing office uses with podium parking on a 0.48-acre parcel. • Prototype 5: Seven-story mid-rise residential development with podium parking, entirely residential on a 0.48-acre parcel. Findings and Assumptions in the Feasibility Analysis (Attachment A) were developed using a static pro forma financial model based on the current market research, review of recent financial feasibility analyses of development projects (including construction costs, require returns, land values), interviews with experienced developers, and assumptions including affordable housing funding gap needs, fees, parking provisions, and changing market conditions. Each prototype developed is built on comparable protypes of current projects and account for the current construction costs, required returns, and supportable land values to ensure feasibility. Findings from the Feasibility Analysis The analysis used the residual land value approach. This method estimates a project’s market value, hard and soft costs, and applies a minimum return threshold. The land cost is excluded initially, with supportable land value determined in the end; representing the maximum price a developer would pay while maintaining financial viability. The feasibility analysis conducted yielded the following results: 1. Market conditions are cyclical, and the broader challenges currently impacting housing production are not limited to the project area, but affect the region. This is expected to change when the market conditions improve. 2. None of the development prototypes are likely to be financially feasible under current conditions due to high land value. 3. Small luxury ownership products significantly outperformed rental products due to high achievable sale prices; and Item 4
Attachment B - Community
Outreach Summary and
Preliminary Policy
Recommendations Based
on Feasibility Analysis
Item 4: Staff Report
Pg.
48 Packet Pg. 78 of 83
3 4. Mid-rise rental prototypes are relatively infeasible in downtown Palo Alto under current conditions, but as development conditions shift, feasibility outcomes can change quickly for projects that can achieve higher densities in an efficient format, especially on half-acre or larger sites. This indicates a potential need for parcel assembly in the Plan Area.; and 5. Office uses outperform residential uses in the Plan Area, creating a strong desirability, increasing the competitiveness for residential development. Preliminary Policy Recommendations The analysis takes into consideration associated project costs such as labor, construction materials, and other factors such as market demand and interest rates to determine the investment return in the current market. While no prototype tested yields favorable results to make a project financially feasible, the analysis identifies local strategies to improve development viability and accelerate housing production by ensuring competitive returns and manageable risks for developers, recognizing that market conditions and project-specific factors will vary over time. 1. Amending development regulations to allow for greater variety of housing product types, flexibility in accommodating parking, and increased opportunity to produce housing under different market cycles: a. Increased maximum building height to encourage mid-rise residential typology: Blocks closer to the Caltrain Station (between Alma and Emerson Streets), parcels in the Plan area interfacing with the South of Forest Ave (SOFA) district and blocks along Lytton and Hamilton Avenues could potentially have a greater building height of up to 85’-0”. This could facilitate increased ground floor heights ideal for ground floor active uses, stacked parking, and the use of modular/prefabricated construction materials. 2. Increased maximum Floor Area Ratio (FAR) by-right for residential use: a. Downtown Commercial (CD-C) and RM-zones in the Plan area can take advantage of increased residential FAR to maximize residential capacity and encourage variety of unit types at different affordability levels. b. Additional FAR (beyond the inclusionary requirement) can be used to incentivize Below Market Rate (BMR) units. c. Granting “bonus” office development rights through the production of housing, allowing for transfer of office development rights between properties; and facilitating lot consolidation in the Plan Area for residential development. 3. Updated open space and common use space requirements to improve project feasibility. 4. Updated maximum unit size standards and updated development requirements on smaller parcels:
Item 4
Attachment B - Community
Outreach Summary and
Preliminary Policy
Recommendations Based
on Feasibility Analysis
Item 4: Staff Report
Pg.
49 Packet Pg. 79 of 83
4 a. A parcel size-based approach to on-site inclusionary unit and open space requirements. 5. Reducing impact fees for housing and providing flexibility with affordable housing requirements.
Item 4
Attachment B - Community
Outreach Summary and
Preliminary Policy
Recommendations Based
on Feasibility Analysis
Item 4: Staff Report
Pg.
50 Packet Pg. 80 of 83
5 Item 4
Attachment B - Community
Outreach Summary and
Preliminary Policy
Recommendations Based
on Feasibility Analysis
Item 4: Staff Report
Pg.
51 Packet Pg. 81 of 83
R - 1
P F ( D )
R P
P F
P F
R - 1
P F
R E
R - 1
R - 1
P F
G M
R E
R - 1
R - 1 ( 8 0 0 0 )
C C
R P - 5
P F
P F
R - 1 ( 1 0 0 0 0 )
R P - 5 ( D )
A C ( D )
R - 1 ( 1 0 0 0 0 )
R - 1
R - 1
R E
R O L M
P F
P F
R - 1 ( 7 0 0 0 )
R - 1
R - 1
R - 2
P F ( D )
R - 2
P F ( D )
R - 1 ( S )
C N
R P
C C
C N
R - 1 ( 1 0 0 0 0 )
P F
R - 1 ( 8 0 0 0 )
R - 1 ( S )
R M - 3 0
C S
R - 1 ( 8 0 0 0 ) ( S )
R - 1 ( 7 0 0 0 ) ( S )
R M - 3 0
P F
H D
R - 1
C N
P C - 4 6 3 7
P F
P F
R T - 3 5
P F
P F
P F
R - 1
P F
R P - 5 ( D ) ( L )
C S
C S ( H )
P F
R - 1 ( 8 0 0 0 )
P F
C N
C S
C D - C ( G F ) ( P )
P F
P F
R - 1 ( S )
R - 1 ( S )
R M - 2 0
R M - 2 0
R P ( A S 2 )
R - 1 ( 1 0 0 0 0 )
P F
R M - 3 0
P F
P C - 2 7 1 1
P F
O S
R - 1 ( 2 0 0 0 0 )
P F
R O L M ( E ) ( D ) ( A D )
P F
P F
N V - R 4
C S
C S
R O L M ( D ) ( A D )
G M
P F
P F
R - 1 ( 7 0 0 0 ) ( S )
R M D ( N P )
P F
P F
C S
N V - M X M
R - 2
R - 1
R M - 3 0
R - 1 ( 8 0 0 0 ) ( S )
R M - 2 0
C D - C ( P )
R M - 4 0
R - 1 ( 7 0 0 0 )
R M - 3 0
R O L M ( E ) ( D ) ( A D )
P F
R - 2
R M - 3 0
P F
R M - 3 0
R M - 4 0
C N ( G F / P )
P C - 4 9 1 8
R O L M ( E ) ( D ) ( A D )
C S
R - 1 ( 8 0 0 0 )
P C - 4 4 4 8
R M - 2 0
R M - 2 0
C D - C ( P )
R M - 3 0
R M - 2 0
P F ( A S 3 )
A M F
P C - 2 6 4 0
R M - 3 0
P F
P C - 3 0 2 3
R M - 3 0
C S
P C - 4 1 8 2
C N
P F
R M - 2 0
C S ( H )
R - 1
R O L M
R M - 2 0
R - 1 ( 1 0 0 0 0 )
C S
R M - 2 0
R - 1 ( 7 0 0 0 )
C N
P C - 4 8 4 7
H D
R - 1 ( S )
R - 1 ( S )
G M
R M - 3 0
R - 2
R O L M
R M - 3 0
R M - 2 0
R M - 2 0
R M - 4 0
C S
N V - R 1
D H S
C S
C S
R M - 2 0
P C - 2 9 3 0
C S
D H S
C S
C N ( G F / P )
R M - 3 0
P C - 4 9 5 6
R M - 2 0
R - 2
C S
C S ( D ) ( A D )
R M - 3 0
P C - 5 1 5 0
P C - 4 8 4 3
P C - 4 9 1 7
R M - 3 0
R M - 2 0
P C - 1 7 5 2
N V - M X H
R - 2
P F
R M - 3 0
R - 2
C S ( A D )
P F
P F
P F
P F
R M - 2 0
R M - 3 0
P F
P C - 1 9 9 2
R M - 3 0
R M - 4 0
C S
C S ( A S 1 )
R - 2
P C - 8 6 5 9
R - 2
C D - N ( P )
R - 2
R - 2
P C - 3 0 3 6
R M - 3 0
G M
P C - 2 6 4 9
P F
P F
C S
P F
R M - 2 0
R T - 5 0
P F
C D - C ( P )
P C - 2 9 6 2
A M F
C S ( A D )
C S
R M - 2 0
R - 2
R M - 2 0
C D - C ( P )
R P ( L )
C C ( 2 ) ( R ) ( P )
C C ( 2 ) ( R ) ( P )
R P ( L )
N V - M X H
R M - 2 0
R - 1 ( 1 0 0 0 0 )
C C ( L )
R M - 2 0
P C - 2 8 3 6
R M - 4 0
R M - 2 0
P C - 5 5 9 6 ; P C - 5 5 9 7
P C - 5 6 0 0
R M - 3 0
R M D ( N P )
N V - R 2
C S ( L )
C C ( 2 )
P C - 2 7 4 4
R - 2
R - 2
R M - 2 0
R - 1 ( 8 0 0 0 )
R M - 3 0
R O L M
P C - 2 6 5 6
R M - 3 0
R - 1 ( 7 0 0 0 )
R - 2
P C - 1 8 8 9
R M - 2 0
P C - 2 2 3 6
R M - 2 0
C S ( H )
R M - 3 0
P C - 5 1 1 6
R M - 3 0
R M - 2 0
R M - 4 0
R M - 2 0
D H S
P F
R - 2
R - 1 ( 7 0 0 0 )
R M - 2 0
P C - 2 2 1 8
P C - 4 3 7 4
R - 2
P F
C C ( 2 ) ( R )
P C - 3 1 8 3
R M - 2 0
P C - 5 0 6 9
R M - 2 0
P F
P F
P F
C S ( A D )
R - 2
R M - 3 0
R M - 4 0
R O L M ( E ) ( D ) ( A D )
P F ( R )
P C - 4 5 1 1
R M - 4 0
R M - 3 0
P F
P F
R M - 4 0
P C - 3 4 0 5
P C - 2 2 2 4
R M - 2 0
P C - 2 5 4 5
R T - 5 0
P F
P C - 4 1 7 3
P C - 4 4 6 5
P C - 2 1 3 0
R - 1
C C ( 2 ) ( R )
R M - 3 0
P F
R M - 3 0
P F
P C - 4 7 7 9
P C - 4 6 1 1
P C - 4 2 4 3 P C - 2 1 5 2
R M - 2 0
R M - 2 0
P C - 3 9 9 5
P C - 4 4 6 3
R - 2
P C - 3 6 8 8
P C - 4 8 3 1
P F
R - 2
P C - 1 6 4 3
R - 2
R M - 2 0
R - 2
R - 2
P F
R M - 3 0
R - 2
R M - 3 0
P F ( R )
R - 2
R - 2
R - 2
P C - 5 6 2 2
R M - 3 0
C N
P T O D
P C - 4 3 5 4
R M - 3 0
P C - 3 0 2 0
R M D ( N P )
R - 2
P C - 4 3 3 9
C N
P C - 3 2 6 6
R M - 3 0
R - 2
P C - 3 0 2 8
R M - 3 0
P C - 3 1 3 3
C D - C ( P )
P C - 2 9 6 8
C N
N V - M X M
R - 2
C C ( 2 ) ( R )
C C ( 2 )
P F ( W H )
C C ( 2 ) ( R )
R M - 2 0
P C - 4 2 6 8
R - 2
P C - 5 5 9 9
R P ( L )
R M - 2 0
R - 2
C S
R - 2
P C - 1 4 1 7
P C - 5 0 3 4
R M - 2 0
R M - 3 0
P F ( R )
C C ( 2 )
N V - M X L
P C - 2 1 4 5
P C - 4 0 5 3
R M - 3 0
R M - 2 0
P C - 2 9 6 7
N V - M X M
P C - 2 1 9 7
R M - 3 0
C N ( R )
C S
A M F ( M U O )
P C - 3 4 3 7
P C - 2 3 4 3
P C - 4 1 2 7
R M - 3 0
P C - 4 6 1 2
R E
R - 2
R M - 2 0
R - 2
P C - 3 4 2 9
R - 2
R M - 3 0
P C - 3 0 4 1
C C ( 2 )
R M - 3 0
R - 2
P C - 2 0 4 9
P C - 4 1 9 0
G M
P C - 3 8 7 2
C N
P C - 5 1 5 8
R - 2
P C - 4 7 8 2
C S
R M D ( N P )
C C ( 2 ) ( R )
R M - 2 0
C D - N ( P )
R - 2
R M - 4 0
P C - 4 2 8 3
C D - S ( P )
C D - C ( P )
P C - 3 0 0 7
P C - 2 2 9 3
P C - 4 4 3 6
P C - 3 1 1 1
R T - 5 0
P C - 4 3 8 9
C C
P C - 5 5 9 8
P C - 3 7 0 7
P C - 4 2 9 6
C N ( L ) ( G F / P )
P C - 2 6 6 6
P C - 3 9 7 4
P F
R M - 2 0
C S ( L )
R M - 3 0
C D - C ( G F ) ( P )
P C - 5 6 2 1
C S ( L ) ( D )
C C ( 2 ) ( P )
P C - 4 9 7 3
P C - 3 5 1 7
C D - S ( G F ) ( P )
P C - 4 0 5 2
C C ( 2 )
P F ( R )
P C - 3 7 5 3
P C - 2 6 6 6
P C - 3 6 2 3
R M - 3 0
R M - 3 0 ( L )
P C - 3 5 7 1
R M D
P C - 3 6 9 3
P C - 3 7 2 6
C D - S ( P )
P C - 4 2 6 2
P T O D ( R )
P C - 3 1 0 2
P C - 4 0 6 3
R M - 3 0 ( L )
P C - 4 7 5 3
P C - 5 6 0 0
P C - 4 1 9 5
P F ( D )
M i d d l e f i e l d R o a d
C o w p e r S t r e e t
W a v e r l e y S t r e e t
A l m a S t r e e t
E l C a m i n o R e a l
L o u i s R o a d
H y 1 0 1 S o u t h
R o s s R o a d
H y 1 0 1 N o r t h
W e b s t e r S t r e e t
B r y a n t S t r e e t
C h a n n i n g A v e n u e
E a s t B a y s h o r e R o a d
P a g e M i l l R o a d
H a m i l t o n A v e n u e
O r e g o n E x p r e s s w a y
L i n c o l n A v e n u e
S a n A n t o n i o R o a d
U n i v e r s i t y A v e n u e
N e w e l l R o a d
S e a l e A v e n u e
S o u t h C o u r t
H i g h S t r e e t
P a r k B o u l e v a r d
E a s t M e a d o w D r i v e
S t a n f o r d A v e n u e
W e s t B a y s h o r e R o a d
C o l o r a d o A v e n u e
H a n o v e r S t r e e t
M i r a n d a A v e n u e
F o o t h i l l E x p r e s s w a y
F a b i a n W
a y
H o m e r A v e n u e
G r e e r R o a d
R a m o n a S t r e e t
C h a r l e s t o n R o a d
E d g e w o o d D r i v e
L o m a V e r d e A v e n u e
E v e r e t t A v e n u e
C h u r c h i l l A v e n u e
A r a s t r a d e r o R o a d
M a t a d e r o A v e n u e
L o w e l l A v e n u e
C e n t e r D r i v e
T e n n y s o n A v e n u e
L o s R o b l e s A v e n u e
C a l i f o r n i a A v e n u e
B a r r o n A v e n u e
H i l l v i e w A v e n u e
P a l o A l t o A v e n u e
K i n g s l e y A v e n u e
M a y b e l l A v e n u e
H a n s e n W
a y
W i l k i e W a y
C o l e r i d g e A v e n u e
B y r o n S t r e e t
E l y P l a c e
M
a n u e l a A v e n u e
O r e g o n A v e n u e
A m a r i l l o A v e n u e
M a r i o n A v e n u e
N o r t h C a l i f o r n i a A v e n u e
E m e r s o n S t r e e t
P i t m a n A v e n u e
L a g u n a A v e n u e
G r o v e A v e n u e
F e r n e A v e n u e
N e l s o n D r i v e
P o r t e r D r i v e
C a s t i l l e j a A v e n u e
C h i m a l u s D r i v e
H a l e S t r e e t
C o l l e g e A v e n u e
A m h e r s t S t r e e t
S e n e c a S t r e e t
L a n e 6 6
B o w d o i n S t r e e t
S t o c k t o n P l a c e
H a r k e r A v e n u e
D e e r C r e e k R o a d
E m b a r c a d e r o R o a d
A m e s A v e n u e
E l D o r a d o A v e n u e
L a P a r a A v e n u e
G r a n t A v e n u e
B i r c h S t r e e t
H a w t h o r n e A v e n u e
H a r r i e t S t r e e t
C o y o t e H i l l R o a d
C o l u m b i a S t r e e t
C l a r a D r i v e
G e o r g i a A v e n u e
R h o d e s D r i v e
S a n A n t o n i o A v e n u e
E l V e r a n o A v e n u e
O l i v e A v e n u e
L a D o n n a S t r e e t
E l C a m
i n o W
a y
P a r k i n s o n A v e n u e
K i p l i n g S t r e e t
K e l l o g g A v e n u e
H e a t h e r L a n e
A l g e r D r i v e
F l o r a l e s D r i v e
O x f o r d A v e n u e
F o r e s t A v e n u e
1 0 1 O r e g o n - E m b a r c a d e r o R a m p N o r t h G r e e n w o o d A v e n u e
M o n r o e D r i v e
C o r n e l l S t r e e t
S h e r m a n A v e n u e
B o y c e A v e n u e
A m a r a n t a A v e n u e
O b e r l i n S t r e e t
W e s t C h a r l e s t o n R o a d
N a t h a n W
a y
D o n a l d D r i v e
U r b a n L a n e
H a r v a r d S t r e e t
H o p k i n s A v e n u e
W i l t o n A v e n u e
D a n a A v e n u e
S u t h e r l a n d D r i v e
F i f e A v e n u e
I r i s W a y
F u l t o n S t r e e t
L a m b e r t A v e n u e
M a r s h a l l D r i v e
J o s i n a A v e n u e
1 0 1 O r e g o n - E m b a r c a d e r o R a m p S o u t h W i l l i a m s S t r e e t
D a v i d A v e n u e
( n o n e )
O l d A d o b e R o a d
E l C a r m e l o A v e n u e
G e n g R o a d
O r m e S t r e e t
M
o n t r o s e A v e n u e
P a r k s i d e D r i v e
P r i n c e t o n S t r e e t
W a l n u t D r i v e
M a d d u x D r i v e
S h e r i d a n A v e n u e
C u r t n e r A v e n u e
W
i l d w o o d L a n e
E l s i n o r e D r i v e
M o r r i s D r i v e
M a r i p o s a A v e n u e
F e r n a n d o A v e n u e
S t a n l e y W
a y
M i l l e r A v e n u e
L e l a n d A v e n u e
M o r e n o A v e n u e
B a r b a r a D r i v e
C r e e k s i d e D r i v e
S u t t e r A v e n u e
M a r g a r i t a A v e n u e
E d l e e A v e n u e
V e n t u r a A v e n u e
A r b u t u s A v e n u e
C h a u c e r S t r e e t
S h o p p i n g C e n t e r W a y
E m b a r c a d e r o W
a y
W a l t e r H a y s D r i v e
J a c k s o n D r i v e
W i l l m a r D r i v e
K e n n e t h D r i v e
C a r o l i n a L a n e
M a r t i n A v e n u e P a t r i c i a L a n e
W h i t c l e m D r i v e
C e r e z a D r i v e
P a u l A v e n u e
G u i n d a S t r e e t
T o w l e W a y
O l d T r a c e R o a d
T e n n e s s e e L a n e
O r i n d a S t r e e t
I l i m a W a y
S a n t a A n a S t r e e t
E n c i n a G r a n d e D r i v e
B r i a r w o o d W a y
B r u c e D r i v e
L o s P a l o s A v e n u e
C o m
m e r c i a l S t r e e t
L a n e 2 1
F a b e r P l a c e
R u t h v e n A v e n u e
M i r a m o n t e A v e n u e
L o i s L a n e
W e s t M
e a d o w D r i v e
G a i l e n A v e n u e
L a g u n a W a y
W h i t s e l l S t r e e t
N o r t h a m p t o n D r i v e
S o u t h a m p t o n D r i v e
S c r i p p s A v e n u e
P o m o n a A v e n u e
J a n i c e W a y
B i b b i t s D r i v e
M a d r o n o A v e n u e
W a r r e n W a y
Y a l e S t r e e t
M a y v i e w A v e n u e
E v e r g r e e n D r i v e
S t e l l i n g D r i v e
R o r k e W a y
E l C e n t r o S t r e e t
I v y L a n e
A s h t o n A v e n u e
M i l i t a r y W a y
M c K e l l a r L a n e
C e d a r S t r e e t
R o b b R o a d
J e f f e r s o n D r i v e
D a k e A v e n u e
S a n t a R i t a A v e n u e
A d d i s o n A v e n u e
S a i n t C l a i r e D r i v e
R i n c o n a d a A v e n u e
S e m i n o l e W a y
A l e s t e r A v e n u e
S i l v a A v e n u e
K e l l y W a y
I n d i a n D r i v e
E s c o b i t a A v e n u e
Q u a r r y R o a d
G l e n b r o o k D r i v e
M a n u e l a C o u r t
G a r l a n d D r i v e
H u b b a r t t D r i v e
C h r i s t i n e D r i v e
L a n e 3 9
K i n g s L a n e
B r y s o n A v e n u e
T a l i s m a n D r i v e
C a m p a n a D r i v e
O a k H
i l l A v e n u e
F a b i a n S t r e e t
M u r d o c h D r i v e
D e o d a r S t r e e t
T e r m a n D r i v e
N e v a d a A v e n u e
M a d i s o n W a y
S e q u o i a A v e n u e
S o u t h w o o d D r i v e
C r e s c e n t D r i v e
C o l o n i a l L a n e
E a s t M e a d o w C i r c l e R i c h a r d s o n C o u r t L a n e 3 3
L u p i n e A v e n u e
C a m p e s i n o A v e n u e
H i l b a r L a n e
P o r t o l a A v e n u e
P a r k A v e n u e
S u z a n n e D r i v e
L a C a l l e
C y p r e s s L a n e ( P r i v a t e )
C h e s t n u t A v e n u e
R o b l e R i d g e ( P r i v a t e )
K e n d a l l A v e n u e
M u m f o r d P l a c e
S y c a m o r e D r i v e
V e r n o n T e r r a c e
C e l i a D r i v e
W a s h i n g t o n A v e n u e
R e d w o o d C i r c l e
D e n n i s D r i v e
A r b o r e t u m R o a d
R o o s e v e l t C i r c l e L a S e l v a D r i v e S o l a n a D r i v e
M a n z a n a L a n e
A s h S t r e e t
D e S o t o D r i v e
R a m b o w D r i v e
P o r t a g e A v e n u e
B r y a n t C o u r t
R u t h e l m a A v e n u e
M a g n o l i a D r i v e
P a r a d i s e W a y
C o r k O a k W a y
M a n u e l a W a y
C a r l s o n C i r c l e
C l e m o A v e n u e
C o a s t l a n d D r i v e
W e l l s b u r y W a y
F a i r m e d e A v e n u e
S t e r n A v e n u e
M i t c h e l l L a n e
F a l l e n L e a f S t r e e t
M a c l a n e
C o m m u n i t y L a n e
V e r d o s a D r i v e
T h o m a s D r i v e
A b e l A v e n u e
F i e l d i n g D r i v e
M
a p l e w o o d A v e n u e
T u l i p L a n e
R o s s C o u r t
M a c k a y D r i v e
B e r r y e s s a S t r e e t
I l i m a C o u r t
T a s s o S t r e e t
M e s a A v e n u e
S t o n e L a n e
L a n e B E a s t
C o u l o m b e D r i v e
L y t t o n A v e n u e
L a n e D E a s t
M i r a n d a G r e e n
M a r k T w a i n S t r e e t
E l C e r r i t o R o a d
M
a p l e S t r e e t
W h i t m a n C o u r t
L a n e B W e s t
O r c h a r d L a n e
L a u r a L a n e
D i n a h ' s C o u r t
L a n e D W e s t
G a s p a r C o u r t
P r i m
r o s e W
a y
T a n l a n d D r i v e
L a n e 5 9 E a s t
I r v e n C o u r t
A g n e s W a y
B a k e r A v e n u e
M o r t o n S t r e e t
M a y C o u r t
M u r r a y W a y
D r i f t w o o d D r i v e
M e l v i l l e A v e n u e
S i l v a C o u r t
P e a r L a n e
G r e e n m e a d o w W a y
C o r i n a W
a y
P h i l l i p s R o a d
P a l m
S t r e e t
S a i n t M i c h a e l D r i v e
L a n e 3 0
B l a i r C o u r t
G i l m a n S t r e e t
P a l o m
a D r i v e ( P r i v a t e )
W e l l e s l e y S t r e e t
T h o r n w o o d D r i v e
H o l l y O a k D r i v e
C e r r i t o W a y
E l C a j o n W a y
T i o g a C o u r t
W r i g h t P l a c e
V i n e y a r d L a n e
P i s t a c h e P l a c e
W e s t C r e s c e n t D r i v e
D u n c a n P l a c e
S a n d r a P l a c e
S a n J u d e A v e n u e
M
c G r e g o r W
a y
M i l l e r C o u r t
D o w n i n g L a n e
B e n L o m o n d D r i v e
S h a s t a D r i v e
E n s i g n W a y
D i a b l o C o u r t
W
i l s o n S t r e e t
B r e t H a r t e S t r e e t
E r s t w i l d C o u r t
C a r m e l D r i v e
C a s s W a y
A r c a d i a P l a c e
B u r n h a m W a y
S a i n t F r a n c i s D r i v e
R a m o s W a y ( P r i v a t e )
C a r d i n a l W a y
H e m l o c k C o u r t
F l o w e r s L a n e
T i m l o t t L a n e
L i n d e r o D r i v e
W i n t e r g r e e n W a y
M
a r l o w e S t r e e t
S h a u n a L a n e
D i x o n P l a c e
C o r p o r a t i o n W a y
M a y b e l l W a y
S i e r r a C o u r t
P o r t a l P l a c e
C o w p e r C o u r t
C h a b o t T e r r a c e
A s h b y D r i v e
E l C a p i t a n P l a c e
n o n e
M a u r e e n A v e n u e
L a M a t a W a y
Q u a i l D r i v e ( P r i v a t e )
C l i f t o n C o u r t
A r r o w h e a d W a y
H i g g i n s P l a c e L a w r e n c e L a n e
F e d e r a t i o n W a y
S h a r o n C o u r t
L a n e 2 0 E a s t
J u n i p e r L a n e ( P r i v a t e )
R a n d e r s C o u r t
M a n c h e s t e r C o u r t
R o s e w o o d D r i v e
S w e e t O l i v e W a y
M o f f e t t C i r c l e
M a g n o l i a D r i v e S o u t h
A d o b e P l a c e
M e t r o C i r c l e
A n t o n C o u r t
T o y o n P l a c e
A m h e r s t W a y
L o u i s a C o u r t
V a n A u k e n C i r c l e
E a s t G r e e n w i c h P l a c e
K e n t P l a c e
M
a t a d e r o C o u r t
S a i n t M i c h a e l C o u r t
P e n a C o u r t
C o l u m b i a P l a c e
T e v i s P l a c e
C o l u m b i a C o u r t
P a l o R o a d
N e l s o n C o u r t
A m e s C o u r t
R i n c o n C i r c l e
I s l a n d D r i v e H a m
i l t o n C o u r t
N e w e l l P l a c e
D u l u t h C i r c l e
P i e r s C o u r t
R e g e n t P l a c e
G a r y C o u r t
G e n e v i e v e C o u r t
G a i l e n C o u r t
E l m d a l e P l a c e
C h a r l e s t o n C o u r t
G r e e n M a n o r
F o r e s t C o u r t
O l d P a g e M
i l l R o a d
M a g n o l i a D r i v e N o r t h
F r a n d o n C o u r t
C a r l i t o s C o u r t
W i l k i e C o u r t
V i c t o r i a P l a c e
B o r o n d a L a n e
S o m e r s e t P l a c e
L o m a V e r d e P l a c e
N e w b e r r y C o u r t
L a g u n a O a k s P l a c e
L a g u n a C o u r t
D a r l i n g t o n C o u r t
F a i r f i e l d C o u r t
D a v i d C o u r t
M a r i o n P l a c e
F e r n e C o u r t
D y m o n d C o u r t ( P r i v a t e )
A m h e r s t C o u r t
E m m a C o u r t
M a r t i n s e n C o u r t
W e l l s b u r y C o u r t
L o s P a l o s C i r c l e
G e o r g e H o o d L a n e
B y r o n S t r e e t
P a g e M i l l R o a d
H a w t h o r n e A v e n u e
E m e r s o n S t r e e t
H a m i l t o n A v e n u e
B r y a n t S t r e e t
H i g h S t r e e t
P a r k B o u l e v a r d
R a m o n a S t r e e t
E m e r s o n S t r e e t
K i p l i n g S t r e e t
O r e g o n A v e n u e
D a n a A v e n u e
S u t t e r A v e n u e
M a t a d e r o A v e n u e
S a n t a R i t a A v e n u e
E m e r s o n S t r e e t
S o u t h C o u r t
S h e r i d a n A v e n u e
F u l t o n S t r e e t
S a n t a R i t a A v e n u e
B y r o n S t r e e t
G e o r g i a A v e n u e
M i r a n d a A v e n u e
G u i n d a S t r e e t
F o o t h i l l E x p r e s s w a y
F u l t o n S t r e e t
R a m o n a S t r e e t
K i p l i n g S t r e e t
A d d i s o n A v e n u e
W a s h i n g t o n A v e n u e
M o r e n o A v e n u e
S a n J u d e A v e n u e
M o r e n o A v e n u e
K e n d a l l A v e n u e
T a s s o S t r e e t
R a m o n a S t r e e t
W i l k i e W a y
Q u a r r y R o a d
M a c l a n e
A m e s A v e n u e
N o r t h C a l i f o r n i a A v e n u e
L y t t o n A v e n u e
T h o m a s D r i v e
S a n A n t o n i o R o a d
T a s s o S t r e e t
H y 1 0 1 N o r t h
O r e g o n A v e n u e
P a r k B o u l e v a r d
O r e g o n E x p r e s s w a y
A r a s t r a d e r o R o a d
S o u t h C o u r t
W e b s t e r S t r e e t
A s h S t r e e t
W
e s t B a y s h o r e R o a d
C o l o r a d o A v e n u e
O r e g o n A v e n u e
K e l l o g g A v e n u e
K i p l i n g S t r e e t
S y c a m o r e D r i v e
R a m o n a S t r e e t
P a l o A l t o A v e n u e
F u l t o n S t r e e t
B y r o n S t r e e t
E m e r s o n S t r e e t
A d d i s o n A v e n u e
N e v a d a A v e n u e
T a s s o S t r e e t
Los Altos
Los Altos Hills
Stanford University
Menlo Park
Mountain View
East Palo Alto
Atherton
C C ( 2 ) ( R )
This map is a product of
City of Palo Alto GIS
[
0 0.35 0.70.175
Miles
Q u a r t e r - M i l e & H a l f - M i l e f r o m S B 7 9 T r a n s i t P l a t f o r m s
Legend
S B 7 9 T r a n s i t P l a t f o r m
SB 79 Buffer from Transit Platform
"d 1 / 4 M i l e
> 1 / 4 - "d 1 / 2 M i l e
Z o n i n g
S c h o o l s
P a r k s
C i t y L i m i t
£¤101
§¨¦
280
R e v : J u l y 3 , 2 0 2 5
Palo Alto Caltrain Station
California Ave. Caltrain Station
San Antonio Caltrain Station
Location
Distance to
Transit Stop
(Miles)
Max
Height
(Feet)
Maximum
Density
(dwelling
units per acre
(du/ac))
Minimum
Residential
FAR
(du/ac)
Additional
DBL
Concessions
"d ¼ 7 5 1 2 0 3 . 5 3
> ¼ a n d "d ½ 6 5 1 0 0 3 2
Adjacent to
transit stop + 2 0 + 2 0 1 0
Tier 1
Item 4
Attachment C - SB 79 Map Based on
Caltrain Platform Location
Item 4: Staff Report
Pg.
52 Packet Pg. 82 of 83
Item 4
Attachment D - SB 79
boundary in relation to
Downtown Housing Plan
and SOFA Boundary
Item 4: Staff Report
Pg.
53 Packet Pg. 83 of 83