CITY COUNCIL
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Planning and Development Services
Meeting Date: June 15, 2026
Report #: 2604-6272
TITLE
Adoption of a Resolution Authorizing the City Manager to Submit the City’s Prohousing Designation Program Application to the California Department of Housing and Community Development. CEQA Status: Not a Project.
RECOMMENDATION
Staff recommends that City Council adopt a resolution (Attachment A) authorizing the City Manager to submit the City’s Prohousing Designation Program application to the California Department of Housing and Community Development (HCD) upon completion of the required 30-day public comment period and after making any necessary adjustments to the application materials in response to public comments received.
BACKGROUND
The City of Palo Alto is applying for a Prohousing Designation from the HCD through the Prohousing Designation Program (PDP), established under Government Code section 65589.9.
The Program recognizes and rewards jurisdictions that go above and beyond State housing law by enacting prohousing local policies in areas such as favorable zoning and land use, streamlined permitting, cost reduction, and financial subsidies for affordable housing.
Designated jurisdictions receive meaningful benefits, including:
Additional scoring points or preferences in competitive HCD grant programs, including the Affordable Housing and Sustainable Communities (AHSC) program, the Infill Infrastructure Grant (IIG) program, and the Local Housing Trust Fund program; Eligibility to apply for the Prohousing Incentive Program (PIP), which has issued Notices of Funding Availability totaling approximately $56 million since 2022; and Public recognition as a State partner in addressing California's housing crisis.
As of March 2026, 74 California jurisdictions had earned a Prohousing Designation, including several of Palo Alto's closest Peninsula neighbors — Mountain View, Los Altos, Redwood City,
and Sunnyvale. Pursuing designation now is consistent with regional momentum and positions Palo Alto to compete more effectively for State housing funding alongside peer jurisdictions.
Staff sought and received technical assistance from HCD when preparing the draft application materials for this program, including a courtesy review of the preliminary self-scoring sheet and encampment best practices summary; that feedback has been incorporated into the current public review draft.
Consistent with HCD's Diligent Public Participation Process requirements, the materials were posted online and made available in person at the Development Center on May 18, 2026. These materials will remain available for the required 30-day public comment period, expected to conclude June 17, 2026. In the event the application materials are revised, such revisions will be posted for a 7-day period. On May 20, 2026, staff hosted a hybrid community info and listening session to share more information about the program and application process and to solicit community input on the draft application materials. On May 27, 2026, the Planning and Transportation Commission reviewed the materials in a study session, received public comment, and provided feedback. Public comments received and staff responses will be included as part of the City’s final application materials.
ANALYSIS
The draft application materials that were made available to the public starting on May 18, 2026, are included in Attachment B of this staff report. These materials are substantially complete and clearly indicate where certain check boxes and signatures will be added upon completion of the public review period and prior to the City’s application submission to HCD.
Staff believe the City has assembled a strong application and is likely to receive the Designation, based on careful review of other jurisdictions‘ successful applications. The Self-Scoring Sheet included in the draft application materials identifies enacted and proposed policies in 22 different areas earning an estimated score of 41 points — comfortably exceeding the 30-point minimum required for designation. Policies span all four required scoring categories: (1) Favorable Zoning and Land Use; (2) Acceleration of Housing Production Timeframes; (3) Reduction of Construction and Development Costs; and (4) Providing Financial Subsidies.
Several policies also qualify for “Enhancement Factors,” earning additional points above the base points available for a given policy type.
Following the close of the 30-day public comment period, staff will review public feedback and finalize the application. If there are any changes made to the application materials in response to public comments, staff will update and extend the publicly posted and available draft materials for an additional seven-day period, consistent with Prohousing Designation Program requirements. The proposed resolution in Attachment A authorizes the City Manager to complete that process and submit the final application package to HCD on the City’s behalf.
Once the application is received, HCD has 60 calendar days to complete its review and provide preliminary feedback on the application. Most reviews continue through an iterative process, in which HCD works with City staff to make additional revisions to the application. The length of time to receive final HCD approvals will depend on the scope, quality, and timeliness of any recommended revisions. The program is not competitive and any jurisdiction that meets the threshold requirements outlined in the application and earn 30 or more points on the Self- Scoring Sheet may expect to receive the Designation.
FISCAL/RESOURCE IMPACT
There is no direct fiscal impact to the City from submitting the Prohousing Designation application. Staff time required to finalize and submit the application is being absorbed within the existing Planning and Development Services budget. A Prohousing Designation would give Palo Alto a meaningful advantage when pursuing State housing and infrastructure funding, which could support future housing efforts.
STAKEHOLDER ENGAGEMENT
HCD requires applicants to demonstrate that a Diligent Public Participation Process was conducted as part of the Prohousing Designation application. The following engagement activities have been completed or are underway:
Notice of the PTC public hearing was published in the local newspaper (Daily Post) on May 15, 2026
Draft application materials posted online and available in person at the Development Center for a minimum 30-day public comment period beginning May 18, 2026 Online submission form for public comments available for at least 30 days starting on May 18, 2026
Community info and listening session held on May 20, 2026 (hybrid, translation available)
Planning and Transportation Commission study session held on May 27, 2026, at which public comment was received (hybrid, translation available) Comments received through the online submission form, community meeting and PTC study session will be documented and included with the final application A copy of the community flyer announcing the public comment period and engagement opportunities is included as Attachment C. This flyer was posted on May 13, 2026, at the Development Center, Downtown Library and City Hall. No written public comments have been received as of the publication of this report.
ENVIRONMENTAL REVIEW
Submission of the Prohousing Designation application is not a project subject to CEQA review.
The application is an administrative action that does not authorize or commit the City to any specific physical development.
ATTACHMENTS
A. Resolution Authorizing the City Manager to Submit the Prohousing Designation Program Application
B. Draft Prohousing Designation Program Application Materials C. Community Flyer
APPROVED BY:
Jonathan Lait, Planning and Development Services Director