CITY COUNCIL
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Planning and Development Services
Meeting Date: April 20, 2026
Report #: 2603-6092
TITLE
Adopt a Resolution Authorizing the Director of Planning and Development Services to Make Minor Modifications to the 2023-2031 Housing Element Site Inventory. CEQA Status: The City Council adopted a Revised Addendum to the Comprehensive Plan Final Environmental Impact Report on December 18, 2023, that, in conjunction with the Comprehensive Plan Final EIR, fully analyzes the impacts of the 6th Cycle Housing Element, including minor modifications to the site inventory.
RECOMMENDATION
Staff recommends that the City Council adopt a resolution to authorize the Director of Planning and Development Services to make modifications to the 2023-2031 Housing Element site inventory that are consistent with the adopted Housing Element.
BACKGROUND
On April 15, 2024,1 a joint meeting of the Planning and Transportation Commission and the City Council was held, and the City Council adopted a resolution adopting a revised 2023-2031 Housing Element. As part of its action to adopt the Revised Housing Element, the City Council directed and authorized the Director of Planning and Development Services to make any non- substantive changes or amendments to the Housing Element requested by the Department of Housing and Community Development (HCD) and to take all other actions necessary to achieve certification. Over the following months, the Director engaged with HCD and made several minor changes to the adopted Housing Element, including changes to the site inventory. The City’s Housing Element was certified by HCD on August 20, 2024.2 1https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=82774&dbid=0&repo=PaloAlto&searchid=a9993a9 6-367c-4f66-877a-65b4c99ca3a2&cr=1
2https://www.paloalto.gov/files/assets/public/v/1/planning-amp-development-services/housing- element/housing-element_2023_2031/palo-alto-housing-element.pdf
Regional Housing Need Allocation (RHNA) and Maintaining Adequate Sites Per State law requirements, the Housing Element contains information about the City’s housing needs, constraints to building housing, available housing sites, an explanation of City resources for supporting housing development, as well as goals, policies, and programs that will help address the City’s share of regional housing needs as identified by the Association of Bay Area Governments (ABAG). The City’s housing needs are quantified in the RHNA, which includes housing targets at all income levels. As shown in Table 1, the minimum RHNA requirement for Palo Alto in the 2023-31 planning period is 6,086 homes across four income levels.
Table 1: City of Palo Alto 2023-31 RHNA Requirement
Income Level
Very Low
Income Low Income
Moderate
Income
Above
Moderate
Income Total
Area Median
Income (AMI) <50% AMI
50-80% of
AMI 80-120% AMI >120% AMI
Units 1,556 896 1,013 2,621 6,086
Program 1.1 Adequate Sites Program of the Housing Element, consistent with State law, requires the City to maintain a residential site inventory that is adequate to accommodate the City’s share of regional housing needs through the duration of planning period. Program 1.2 Site Inventory Monitoring Program, requires the City to identify additional housing inventory sites if there is a shortfall of adequate RHNA capacity for any income level.5 The City Council adopted a 2026 priority objective in March to identify and designate additional Housing Element site capacity to maintain RHNA compliance. This was identified in anticipation of estimated shortfalls occurring in 2026.
ANALYSIS
The Housing Element site inventory6 includes estimated capacities and income levels based on the best available information at the time of adoption. It is normal for the site inventory to require periodic updates over the course of an eight-year housing element cycle. The proposed resolution would allow the Planning Director to maintain the site inventory as a living document to respond to mid-cycle conditions and to ensure that the City’s site inventory remains compliant with state law.
Updates to the site inventory may be required for a variety of reasons. As sites in the inventory develop, the actual number of units and income levels will vary based on the unique circumstances of each project and likely will not match the City’s projections. A recent example is the project at 2100-2400 Geng Road recently approved by the City Council on March 16, 5 Note: for purposes of determining adequate capacity in a site inventory, the RHNA requirements for very low- and low-income are combined. (See Gov. Code Section 65583.2(c)(3).) 6 https://www.paloalto.gov/files/assets/public/v/1/planning-amp-development-services/housing- element/housing-element_2023_2031/appendix-d_site-inventory.pdf 2026. The site was identified with an estimated capacity of 175 moderate income units, but the actual project developed with 145 units, none of which are at the moderate income level (126 units are above-moderate income and 19 units are deed restricted for lower income households). This project created a deficit in the City’s moderate income RHNA category, requiring the City to identify new sites to meet the capacity within 180 days. New sites to accommodate the RHNA must be “suitable and available” for residential development and will be subject to the same rigorous analysis performed in 2023 and 2024.
The Housing Element also includes programs which may require identification of new sites. For example, if the Downtown parking lot sites (Program 1.4) and faith-based sites (Program 1.1E) included in the inventory are not progressed or developed within a specific timeline, they require the projected unit capacity be identified elsewhere.
In addition, staff have heard from property owners who wish for their properties to be added to the site inventory in order to access the upzoning the City has adopted in Chapter 18.14 of the PAMC. These requests will be evaluated as new opportunity sites are considered for inclusion in the Housing Element site inventory. However, developer interest alone will not result in sites being added to the inventory. Each new site will be evaluated for housing development suitability.
Changes to the site inventory in response to these conditions are routine and are expected to be consistent with the substantive analysis, policies, and programs contained in the Housing Element, as well as the environmental impacts analyzed in the Revised Addendum to the Comprehensive Plan Final EIR adopted by the City Council. These changes are generally reported to and reviewed by HCD on an annual basis (and City Council) as part of the Housing Element Annual Progress Report (APR). This process recognizes that the Housing Element site inventory is dynamic, requiring periodic updates as sites are developed and without the need for formal amendment of an adopted Housing Element.
Adoption of the draft resolution (Attachment A) would streamline the process of maintaining the site inventory by allowing sites to be added at various income levels based on current conditions to comply with State law.
FISCAL/RESOURCE IMPACT
Adoption of the resolution recommended by staff would not have additional fiscal impact.
To accomplish the critical and time-sensitive work of identifying suitable replacement sites, staff has issued a task order through the Council approved on-call planning contracts for technical analysis associated with evaluating new housing opportunity sites for inclusion in the inventory. The resolution proposed for approval by City Council will ensure that the process of maintaining the inventory through changing conditions is timely and efficient.
STAKEHOLDER ENGAGEMENT
Staff placed an ad in the Daily Post newspaper on April 10, 2026, 10 days in advance of the hearing. Preparation of the Housing Element included a range of community outreach methods including surveys, Working Group meetings, community workshops, and public hearings.
Identification of new housing opportunity site to include in the inventory will include coordination with property owners.
The site inventory is located on the City’s website. Any revisions to the inventory would be posted to the same webpage.
ENVIRONMENTAL REVIEW
On April 15, 2024, the City Council adopted Resolution No. 10155, approving a Revised Addendum to the Comprehensive Plan Environmental Impact Report (EIR). The addendum analyzed potential environmental impacts of the 6th Cycle Draft Housing Element. This includes housing production to meet the RHNA through implementation of Housing Element programs, including the program requiring maintenance of the Housing Element sites inventory. Minor updates to the site inventory are consistent with the intensity of development studied in the Revised Addendum and are not anticipated to have an additional environmental impact beyond what was analyzed in the Revised Addendum.
ATTACHMENTS
Attachment A: Draft Resolution
APPROVED BY:
Jonathan Lait, Planning and Development Services Director