June 1, 2026 www.paloalto.gov
Senate Bill (SB) 79 and
Downtown Housing Plan
Considerations
Vishnu Krishnan, Senior Planner
Background
• Initial findings presented to the Council on October 22, 2025. • The Downtown Housing Plan/SB 79 Implementation Ad Hoc was formed in January 2026 and met with staff on January 27, March 25, and April 21, 2026. o Ad Hoc Members:
▪ Councilmember Ed Lauing
▪ Councilmember Patrick Burt
• The Ad Hoc considered the preliminary analysis and has recommendations on how the Council could implement State law:
• Exempt historic resources within ½ mile through January 31, 2032, as allowed by the law • Ensure qualifying properties meet 50% of the development potential of SB 79, as allowed by law.
2 Purpose
• Receive update and provide direction to staff on the implementation of Senate Bill 79 (SB 79) and the work related to the Downtown Housing Plan;
• Consider introduce for first reading two temporary ordinances implementing SB 79, adopting a Transit Oriented Development Combining District, excluding certain sites from Government Code Section 65912.157, and authorizing the Planning and Development Services Director to make corresponding updates to the Zoning Map; and
• Consider directing staff to return on 6/15 with second reading of the temporary ordinances and adoption of urgency/emergency versions of the ordinances. 3 SB 79 (2025) Objectives
• Increase housing supply near transit, lower housing and transportation costs, and strengthen public transit
ridership and financial sustainability with expected
reductions in VMT and GHG emissions as outcomes.
• Mandates upzoning near rail stations and rapid bus
corridors, tiered by transit type and distance from
pedestrian access points.
44 SB 79: Transit-tiering and applicable standards
Distance from
TOD Stop
Minimum Height
Requirement
Residential Density
(du/ac) Residential FAR
Directly Adjacent Sites
(≤ 200 ft)
95 ft
(75 + 20 ft bonus)
160 du/ac
(120 + 40 bonus)
4.5 (3.5 + 1 bonus)
Within ¼ Mile 75 ft 120 du/ac 3.5
¼ – ½ Mile 65 ft 100 du/ac 3.0
• Allowable density cannot be reduced to less than 50 percent of the default standards for any individual site.
• TOD projects are eligible for a density bonus and waivers of development standards except height above the SB 79 standard.
• Inclusionary Housing requirements (one of the following):
• 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.
• Local inclusionary requirements that exceed these minimums can be enforced. • Application processing generally unchanged:
• SB 79 does not modify CEQA requirements, though AB 130 may exempt many projects. • SB 79 does not establish a new ministerial approval process, though other laws like SB 35 can still be used.
5 SB 79: Exclusions
Until January 31, 2032, Palo Alto may exclude by ordinance:
• Sites zoned with capacity ≥50% of SB 79 default standards • Sites in very high fire severity zones
• Sites subject to sea level rise risk
• Sites with a locally registered historic resource (as of January 1, 2025) After January 31, 2032, excluded sites must meet SB 79 default density or be incorporated into an Alternative Plan.
6 SB 79: Alternative Plans
Alternative Plans
Jurisdictions may redistribute density across TOD zones, subject to:
• Overall capacity across all TOD zones must be maintained • Individual sites may not fall below 50% of SB 79 default (except fire, sea level rise, or historic sites)
• Historic sites may not exceed 10% of the area within any single TOD zone
• Individual sites may not be credited above 200% of SB 79 default capacity
• Individual TOD zones may not fall below 50% of SB 79 default capacity 7 What might redevelop?
In addition to sites excluded by ordinance (i.e. due to hazards, historic protections), there are additional sites across all three areas that have a very low likelihood to redevelop.
Sites excluded for the purpose of calculating staff's housing projections:
• Parcels developed within the last 25 years.
• Condominiums and Planned Communities (PC).
• Sites with existing Office-use and an FAR >= 1.50.
• Parcels less than 0.12 acre have low development feasibility. 0.12-acre (~5200 sq. ft.) yields 6 to 8 smaller units (average unit size of 780 sq.ft.). SB 79 requires a minimum of 5 dwelling units for a project to qualify.
Historical trends show roughly 10% of parcels citywide have redeveloped over the last 25 years; less projected for R1-zoned properties – 1% (excluding single family home rebuilding and new accessory units).
8 9
University Ave Caltrain Station
What can be excluded per SB 79?
• Very High Fire Severity Zone – not applicable
• Flooding – not applicable
• Historic Properties – 22.25%
SB 79 Area
Distance Acres
200 feet 52.86
200 feet – 0.25 mile 120.53
0.25 mile – 0.5 mile 151.85
Total 325.23
SB 79 Area – excluding PF, PC, and parcels <= 0.12 acre Distance Acres
200 feet 0
200 feet – 0.25 mile 64.56
0.25 mile – 0.5 mile 66.64
Total 163.26
10 California Ave Caltrain Station
What can be excluded per SB 79?
• Very High Fire Severity Zone – not applicable
• Flooding – not applicable
• Historic Properties – 1%
SB 79 Area
Distance Acres
200 feet 48.38
200 feet – 0.25 mile 111.11
0.25 mile – 0.5 mile 324.18
Total 483.67
SB 79 Area – excluding PF, PC, and parcels <= 0.12 acre Distance Acres
200 feet 0
200 feet – 0.25 mile 47.73
0.25 mile – 0.5 mile 141.35
Total 222.72
11 San Antonio Caltrain Station
What can be excluded per SB 79?
• Very High Fire Severity Zone – not applicable
• Flooding – not applicable
• Historic Properties – 17%
SB 79 Area
Distance Acres
200 feet 0
200 feet – 0.25 mile 27.39
0.25 mile – 0.5 mile 147.28
Total 174.28
SB 79 Area – excluding PF, PC, and parcels <= 0.12 acre Distance Acres
200 feet 0
200 feet – 0.25 mile 0.65
0.25 mile – 0.5 mile 16.58
Total 32.79
Approaches – SB 79
The City can choose to allow State Law to go into effect as written, adopt an ordinance clarifying how State Law applies locally, and/or propose a“transit-oriented development alternative plan” (ordinances and plans are subject to State approval). Default SB 79 densities go into effect on July 1, 2026.
Note: An ordinance is required to exempt historic resources and requires HCD review. • Approach 1: No action on SB 79.
• Approach 2: Adopt a local implementing ordinance to protect historic resources. • Provides additional local control.
• Approach 3: Rezone all TOD eligible sites to allow 50 percent of the SB 79 development potential. • Provides the City approximately six years to consider advancing a TOD Alternative Plan. • Approach 4: Prepare a TOD Alternative Plan.
• Provides the City with maximum control through development standards, infrastructure plan, and structured community outreach process.
12 Approaches – Downtown Housing Plan
• Option A: Refocus the Downtown Housing Plan on Development Standards. o The Plan will produce updated development standards but may not result in a complete Area Plan policy document.
• Option B: Resume and complete the Downtown Housing Plan. o Model the Plan on SB 79 standards while addressing other local considerations. • Option C: Discontinue the Downtown Housing Plan.
Except for SB 79 Approach 4, the Downtown Housing Plan can reasonably continue under other options provided – or may be discontinued altogether if SB 79 is thought to address Downtown Housing Plan's housing interests.
13 Staff / Ad Hoc Recommendation
• Introduce a temporary ordinance excluding historic resources designated on the City's local register as of 1/1/2025 from applicable SB 79 standards; • Introduce a temporary ordinance establishing development standards for all TOD-eligible parcels at 50% of SB 79 standards;
• Direct staff to return with interim urgency versions of the above ordinances to be introduced and adopted on 6/15/2026;
• Direct staff to prepare permanent ordinances to be presented to the PTC, incorporating the provisions of the interim ordinances; and
• Direct staff to continue work to advance the Downtown Housing Plan and amend the scope as appropriate.
14 Proposed Ordinance – Historic Resource
Exemption
Historic Resource Exemption Ordinance:
a. Temporarily exempts qualifying historic resources from default development SB 79 standards. b. Authorizes PDS Director to update the Zoning Map to indicate sites and TOD areas subject to default SB 79 standards.
15 Proposed Ordinance – 50% SB 79 Capacity
50 Percent SB 79 Development Standards Ordinance:
• Establishes PAMC Section 18.14.070: TOD Combining District that applies to all TOD-eligible sites except sites excluded as historic resources.
• Establishes development standards equalling to at least 50 percent of default SB 79 standards. • Where underlying zoning is more generous, those standards will apply (e.g. setback and daylight plane in the commercial districts)
• Authorizes and direcirector to update the Zoning Map to indicate sites and TOD areas subject to default SB 79 standards.
16 Distance from
TOD Stop
Minimum
Density
Residential
FAR
Minimum
Setbacks
Daylight
Plane
Directly Adjacent
Sites
(≤ 200 ft)
30 units/ acre or
5 units-
whichever is
greater
2.25 10' (front,
rear)
4' (side)
16' from
property line
and
extending at
a 45-degree
angle.
Within ¼ Mile 1.75
¼ – ½ Mile 1.5
17 Proposed Ordinance – Change to Qualifying R1 Properties Achievable FAR 1.75
Lot Size (Typical) 6,000 square feet (60' x 100')
Setback Proposed Current
Front 10 feet Contextual
Rear 10 feet 20 feet
Side 4 feet 6 feet
Daylight Plane Initial Height: 16'-0", measured
from property line. Slope: 45
degrees (modeled from HIP
provision)
Site Coverage 4,160 square feet
Total Floor Area
Floor 1 4,160 square feet
Floor 2 4,160 square feet
Floor 3 2,240square feet
Total 10,560 square feet
Council Direction / Next Steps
18 Based on the Ad Hoc recommendation:
1. Return for second reading of the temporary ordinances for historic sites and 50 percent SB 79 capacity on June 15, 2026, and interim urgency ordinances covering the same subject matter;
2. Prepare permanent ordinances for review by the PTC;
3. Continue work on the Downtown Housing Plan and coordinate with SB 79/ Downtown Housing Plan Ad Hoc Committee through 2026 for additional guidance on both the Area Plan and amendments to SB 79.
Vishnu Krishnan
Senior Planner
[email protected]
650.329.2425
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