CITY COUNCIL
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Planning and Development Services
Meeting Date: June 15, 2026
Report #: 2606-6432
TITLE
SECOND READING and Adoption of Temporary Ordinances Implementing Senate Bill (SB) 79, and Introduction and Adoption of Interim Urgency Ordinances Excluding Certain Historic Resource Sites and Transit-Oriented Development (TOD) Eligible Sites from Government Code Section 65912.157 and Authorizing Corresponding Zoning Map Updates. CEQA Status: Exempt Under Government Code Section 65912.160(c)(2).
RECOMMENDATION
Staff recommends that the City Council:
1. Conduct second reading and adopt the temporary ordinance excluding historic resources designated on the City’s local register as of January 1, 2025, from development standards otherwise applicable under SB 79, through one year following adoption of the City’s 7th Cycle housing Element;
2. Conduct second reading and adopt the temporary ordinance establishing development standards for all TOD-eligible parcels subject to SB 79 at 50 percent of the otherwise allowable development capacity authorized under State law, and simultaneously exempting those properties from default SB 79 standards through one year following adoption of the City’s 7th Cycle Housing Element;
3. Introduce and adopt an interim urgency ordinance excluding historic resources designated as of January 1, 2025, from the development standards otherwise applicable under SB 79 and authorize corresponding zoning map updates; and
4. Introduce and adopt an interim urgency ordinance establishing interim TOD Combining District development standards for TOD-eligible parcels subject to SB 79 at 50 percent of the otherwise allowable development capacity authorized under State law, exempting those properties from default SB 79 standards, and authorizing corresponding zoning map updates.
EXECUTIVE SUMMARY
SB 79 takes effect on July 1, 2026, establishing state development standards for qualifying transit-oriented development (TOD) sites. To ensure continuity of local regulations and avoid a gap in implementation, the City Council is asked to adopt temporary and interim urgency ordinances that: (1) exempt locally designated historic resources from SB 79 standards through one year following adoption of the City’s 7th Cycle Housing Element, and (2) establish interim TOD development standards at 50 percent of the development capacity otherwise permitted under SB 79. The ordinances also authorize corresponding zoning map updates and support the City’s ongoing efforts to implement SB 79 while protecting historic resources and planning for future housing growth.
BACKGROUND
SB 79 becomes effective on July 1, 2026, and establishes state-mandated development standards for qualifying transit-oriented development (TOD) sites located within one-half mile of qualifying transit stops. On June 1, 2026, the City Council introduced temporary ordinances implementing Government Code Section 65912.161 and directing staff to return on June 15, 2026, for second reading of those ordinances together with companion interim urgency ordinances. The proposed urgency ordinances substantially mirror the temporary ordinances previously introduced by the City Council.
Interim Urgency Historic Resource Exemption Ordinance
The proposed interim urgency ordinance excludes all historic resources designated on the Palo Alto Historic Resources Inventory as of January 1, 2025, from the application of Government Code Section 65912.157 through one year following adoption of the City’s seventh cycle Housing Element.
The urgency ordinance contains findings that implementation of the default SB 79 standards beginning July 1, 2026, would create redevelopment pressure affecting historic resources located within TOD zones.
The ordinance additionally authorizes and directs the Director of Planning and Development Services to update the Zoning Map to indicate which sites within TOD zones are excluded from Government Code Section 65912.157.
Interim Urgency TOD Combining District Ordinance
Government Code Section 65912.161(b)(1) authorizes local agencies to exempt TOD-eligible sites from the default SB 79 standards where local zoning permits development capacity equal to at least 50 percent of the otherwise applicable SB 79 standards.
The proposed interim urgency ordinance establishes Section 18.14.070 of the Palo Alto Municipal Code creating a TOD Combining District applicable to TOD-eligible sites, excluding historic resource properties designated on the Palo Alto Historic Resources Inventory.
The ordinance establishes interim development standards including:
A maximum FAR of 1.75:1 for sites within one-quarter mile of a transit stop; A maximum FAR of 1.5:1 for sites between one-quarter mile and one-half mile of a transit stop;
A maximum FAR of 2.25:1 for sites adjacent (within 200 feet) of a transit stop; Minimum setbacks consisting of 10-foot front and rear setbacks and four-foot side setbacks unless otherwise prescribed by the underlying zone; and Daylight plane standards beginning at a height of 16 feet and extending at a 45-degree angle when the subject property is adjacent to low-density residential zoning districts.
The ordinances presented with this report also clarify that Maximum Site Coverage is 70% for the TOD Combining District. This does not substantively change the intensity of development permitted under the regulations introduced for first reading and simply removes a potential source of confusion.
As discussed in the June 1, 2026, staff report1, ordinances adopted through the standard process are generally subject to a 30-day referendum period and would not become effective until July 16, 2026. SB 79 comes into effect on July 1, 2026, resulting in a gap during which the City would lack locally adopted implementing measures if urgency ordinances were not adopted.
Palo Alto Municipal Code Chapter 2.04 and Government Code Section 65858 independently authorize the City Council to adopt emergency/interim urgency ordinances necessary to preserve the public peace, health, or safety, and to address current and immediate threats to the public health, safety, and welfare, respectively. Staff therefore prepared companion urgency ordinances to ensure continuity of local implementation measures during the period between SB 79’s effective date and the effective date of the temporary ordinances.
The urgency ordinance contains findings that implementation of the default SB 79 standards without interim local regulations would create increased demands on public infrastructure, transportation systems, and bicycle and pedestrian circulation facilities in a manner for which the City cannot adequately plan at this time. Similar findings are included in the version of the temporary ordinance presented here for second reading.
Next Steps
If the City Council adopts the temporary and interim urgency ordinances, staff will:
1 Council Staff Report and Supplemental Memo (June 1, 2026), available at:
https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=18727 Submit the adopted ordinances to the California Department of Housing and Community Development (HCD) as required by SB 79;
Update the City’s zoning maps to identify excluded historic resource sites and TOD Combining District sites;
Over the next six to twelve months, prepare implementing ordinances to codify the temporary ordinance while exploring opportunities to accelerate housing production on California Avenue and adjacent areas on El Camino Real; and Continue work related to the Downtown Housing Plan, engaging the SB 79 / Downtown Housing Plan Ad Hoc as appropriate on related next steps.
Staff will continue monitoring guidance issued by HCD and any future amendments to SB 79 currently under consideration by the California Legislature.
FISCAL/RESOURCE IMPACT
The adoption of the temporary and interim urgency ordinances would not result in additional fiscal impacts beyond existing staff resources currently allocated to SB 79 implementation and the Downtown Housing Plan work program.
Preparation of permanent implementing ordinances and any future TOD Alternative Plan may require additional consultant support and future appropriations, which staff would return to the City Council to request as appropriate.
STAKEHOLDER ENGAGEMENT
The City Council previously considered the implementation approaches during publicly noticed hearings and through discussions with the SB 79 / Downtown Housing Plan Ad Hoc Committee.
The urgency ordinances are intended to implement the policy direction previously provided by the City Council and maintain continuity in local implementation measures pending adoption of permanent ordinances and future community engagement processes.
Staff will continue outreach and engagement efforts associated with the Downtown Housing Plan and future permanent zoning ordinance amendments.
ENVIRONMENTAL REVIEW
The actions recommended in this report are exempt from review under the California Environmental Quality Act (CEQA) pursuant to Government Code Section 65912.160(c)(2) because they involve ordinances that make the City’s zoning code consistent with the provisions of SB 79 by implementing Government Code Section 65912.161(b) and by amending the zoning map to indicate sites that are not subject to Government Code Section 65912.157.
ATTACHMENTS
Attachment A: Attachment A Temporary Ordinance for SB 79 Historic Resources Attachment B: Temporary Ordinance for SB 79 50 Percent Option Attachment C: Interim Urgency Ordinance for SB 79 Historic Resources Attachment D: Interim Urgency Ordinance for SB 79 50 Percent Option APPROVED BY:
Jonathan Lait, Planning and Development Services Director