City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Planning and Development Services
Meeting Date: March 9, 2026
Report #:2601-5829
TITLE
FIRST READING: Adoption of an Ordinance Adding a New Section 18.70.105 (Noncomplying facility - De minimis exceptions) to Chapter 18.70 (Nonconforming Uses and Noncomplying Facilities) of Title 18 (Zoning) of the Palo Alto Municipal Code; CEQA Status: Exempt Pursuant to CEQA Guidelines Section 15061(b)(3) (Common Sense Exemption).
RECOMMENDATION
Staff recommends that the City Council (Council) adopt the draft Ordinance (Attachment A) amending Palo Alto Municipal Code (PAMC) Title 18 (Zoning) regulations to add a new section regarding noncomplying facilities de minimis exceptions.
EXECUTIVE SUMMARY
On September 15, 2025, Council directed staff to prepare a text amendment within six months authorizing the Director of Planning and Development Services to approve de minimis exceptions from noncomplying facility regulations and similar minor adjustments that are not impactful to adjacent properties or public realm for residential properties. The proposed ordinance amending PAMC Chapter 18.70 to add a new code section for a de minimis exception for modifications to noncomplying facilities responds to Council’s direction. The proposed ordinance limits this exception to allow minor relocations of non-complying floor area for single-family homes as detailed further in this report.
On January 14, 2026, the Planning and Transportation Commission (PTC) unanimously recommended approval of the ordinance with minor modifications for clarity.
BACKGROUND
On May 8, 2025, the Director of Planning and Development Services issued a formal interpretation of PAMC Chapter 18.70, concluding that noncomplying gross floor area (GFA) may not be removed and replaced elsewhere on a site, even where total GFA is not increased.
This interpretation was prompted by a minor remodel of a single-family home that remains over the district’s GFA limit.
A timely appeal challenged the interpretation, arguing that the project does not intensify noncompliance and should be allowed. Staff believe that the Director’s interpretation (Attachment A to the September 15, 2025, Council staff report1) reflects the most reasonable and consistent application of the Municipal Code and that it supports the broader policy goal of reducing noncomplying conditions over time. While the proposal in the appellant’s case was minor, permitting it would have rendered portions of the code meaningless and could have created a precedent for larger changes inconsistent with the Code’s purpose.
Council Consideration and Direction
The appeal of the Director’s Interpretation was placed on the consent calendar on June 16, 2025, and was pulled by three members of City Council for full discussion. On September 15, 2025, Council held a public hearing to consider the appeal and approved the staff recommendation by a vote of 6-0-1, with Council Member Lu abstaining, with the following motion:
1. Uphold the Director of Planning and Development Services’ formal interpretation dated May 8, 2025, concluding that noncomplying residential gross floor area may not be removed and restored elsewhere on the property pursuant to Palo Alto Municipal Code (PAMC) Chapter 18.70, denying the associated appeal; and,
2. Direct staff to prepare a text amendment within six months authorizing the Director of Planning and Development Services to consider or approve de minimis exceptions from noncomplying facility regulations and similar minor adjustments that are not impactful to adjacent properties or public realm for residential properties.
The September 15, 2025, City Council meeting minutes are available online.2 On January 14, 2026, the PTC unanimously recommended approval of the draft ordinance with minor modifications for clarity.
ANALYSIS
The draft Ordinance (Attachment A), revised per the PTC’s recommendation, would add a new section to PAMC Chapter 18.70:
18.70.105 Noncomplying facility - De minimis exception
1 September 15, 2025, Council Staff Report:
https://cityofpaloalto.primegov.com/meetings/ItemWithTemplateType?id=9235&meetingTemplateType=2&comp iledMeetingDocumentId=16839
2 September 15, 2025, Council Summary Minutes:
https://cityofpaloalto.primegov.com/Public/CompiledDocument?meetingTemplateId=16227&compileOutputType =1
Notwithstanding the requirements of Sections 18.70.080, 18.70.090, and 18.70.100, up to 250 square feet of non-complying floor area (i.e. floor area associated with a non-complying feature) may be relocated as follows, provided that the degree and manner of non-compliance is not increased:
(a) The non-complying facility houses a single-family residential use in a low-density residential zone district; and
(b) Any proposal to relocate non-complying floor area will comply with the following:
1. Projects that include relocation of 150 to 250 square feet to a location above the ground floor shall be subject to Section 18.10.040, subd. (i), or 18.12.110, as applicable; or
2. Projects that include relocation of less than 150 sf above the ground floor and that are therefore not subject to Individual Review, shall comply with the objective standards for single-family development as applicable to the proposed relocation.
This proposal would allow minor relocations of non-complying floor area by right for single- family homes. While staff initially explored allowances for a broader range of exceptions, this would likely require a discretionary review process with flexible findings related to impacts on neighboring properties. Rather than creating more processes, which would require staff resources and add expense for applicants, staff is proposing the narrow and simple exception stated above. This proposed text was developed based on the following goals:
Six-month turnaround for code amendment;
Align with the meaning of “de minimis” – trivial or minor; Avoid additional process/delay/appeals;
Preventing impacts on neighboring properties;
Align with other floor area thresholds existing in the code; and Allow flexibility for projects similar in scale to the one proposed by the appellant.
Staff recommend 250 square feet as the proposed threshold of what constitutes de minimis for alignment with square foot thresholds used in other areas of the Zoning Code as it relates to allowances within low-density residential zone districts. Through the application of the Individual Review process, where applicable, or the two-story objective design standards (if Individual Review does not apply), any modifications to the second floor would be reviewed to minimize impact to adjacent properties or the public realm. Both the Individual Review guidelines and the objective standards address massing, neighborhood context, and privacy for residential properties.
FISCAL/RESOURCE IMPACT
Implementation of the draft ordinance is not anticipated to have significant fiscal or budgetary impact. The new de minimis exception is intended to be a ministerial process that would occur within an existing building permit review process and would therefore be absorbed within the department budget and resources. If a project were to require Individual Review, per PAMC Section 18.12.110, then standard application fees would apply.
STAKEHOLDER ENGAGEMENT
The Palo Alto Municipal Code requires notice of this public hearing be published in a local paper at least ten days in advance. Notice of a public hearing for this project was published in the Daily Post on February 27, 2026, which is 10 days in advance of the meeting. This recommendation is the culmination of stakeholder engagement through the meetings with City Council and stakeholders described earlier in this report.
ENVIRONMENTAL REVIEW
This action is categorically exempt from the California Environmental Quality Act (CEQA) under CEQA Guidelines Section 15061(b)(3), the common sense exemption, because it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment.
ATTACHMENTS
Attachment A: Draft Ordinance Amending PAMC Chapter 18.70 APPROVED BY:
Jonathan Lait, Planning and Development Services Director