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0 City Council
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: City Manager
Meeting Date: August 24, 2026
Report #:2606-6479
TITLE
Recommendation from the Oversized Vehicles (OSV) Ad Hoc Committee to Launch Two Pilot OSV Parking Programs, Including Adoption of an Ordinance Establishing an OSV Parking Permit Program, an Ordinance Amending the Municipal Fee Schedule to Add an OSV Parking Permit Fee, Resolutions Establishing OSV Parking Permit Districts on Embarcadero Road and Coyote Hill Road, a Resolution Prohibiting OSV Parking on Numerous Streets in Palo Alto; a Resolution Adding Related Penalties to the Administrative Penalty Schedule; and Related Amendments to the FY 2027 Operating and Capital Budget; CEQA status – categorically and statutorily exempt.
RECOMMENDATION
Staff recommends that the City Council:
1. Approve a pilot OSV parking permit program on Embarcadero Road and Coyote Hill Road for an initial term of 12 months, substantially as described in this report. This includes adoption of the following:
a. An ordinance adding new PAMC Chapter 10.49 to establish an OSV Parking Permit Program and amending PAMC section 10.60.010 allowing civil penalties for parking violations of several chapters of the PAMC; b. An ordinance amending the FY 2027 Municipal Fee Schedule to add an OSV parking permit fee of up to $15 per month;
c. A resolution establishing an OSV Parking Permit District on a section of Embarcadero Road. This will prohibit parking except for vehicles with permits; d. A resolution establishing an OSV Parking Permit District on a section of Coyote Hill Road. This will prohibit parking except for vehicles with permits; and e. A resolution amending the Administrative Penalty Schedule to add penalties for violations of PAMC Chapter 10.49.
2. Approve a pilot to prohibit OSV parking on alternating sides of the street, for an initial term of 12 months, substantially as described in this report
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0 a. This includes adoption of a resolution prohibiting OSV street parking on alternating sides of the following street segments: 4000 block of Transport Street, 900 block of Commercial Street, 900 Block of Industrial Avenue, 100 block of Page Mill Road, 2800-3200 blocks of Park Avenue, 200-400 block of Olive Avenue, 2900 and 3200 blocks of Ash Street, 200-400 block of Lambert Avenue, 2400 block of Faber Place, 2400 block of Embarcadero Way, 1000 block of Corporation Way, 1000 block of Elwell Court, and 1000 block of East Meadow Circle.
3. Approve amendments to the Fiscal Year 2027 budget appropriation for the General Fund (2/3 vote required) by:
a. Increasing the City Manager’s Office contractual services appropriation by $194,300, and
b. Decreasing the Business Tax Reserve for Housing Affordability and Services for the Unhoused by $194,300.
4. Amend the Fiscal Year 2027 Budget Appropriation for the Capital Improvement Fund (requires a 2/3 vote) to:
a. Increase the Parking Infrastructure Improvements project (PL-12000) in the amount of $524,500; and
b. Decrease the infrastructure reserve ending fund balance by $524,500.
5. Direct the City Manager or their designee to return to Council in March and September 2027 with status reports and any recommendations regarding continuation, modification, expansion or termination of the pilot programs.
EXECUTIVE SUMMARY
This report presents the Oversized Vehicles (OSV) Ad Hoc Committee’s recommendation that the City Council approve the launch of two pilot programs intended to address ongoing neighborhood, business, public health, and safety impacts associated with OSVs used for habitation while also providing a more structured and humane response for individuals living in those vehicles. The first pilot permits eligible OSV dwellers to park in designated segments of specific streets. The second pilot prohibits OSV parking on specific sides of identified streets during designated six-month periods of the year.
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0 The recommendation builds on the Phase I implementation, previously approved by Council1, including enforcement, towing, cleanup, and service coordination measures, as well as subsequent OSV Ad Hoc Phase II development, including consideration of enhanced services, additional safe parking strategies, a pilot permit framework, and regional coordination. The February 23, 20262 study session materials specifically identified a pilot OSV permit program as a pragmatic next step because off-street safe parking expansion is constrained by land availability and cost.
The two recommended pilots are intended to complement each other. The first pilot program, the OSV parking permit program, will enable eligible OSV dwellers to park at dedicated areas with less impact to businesses and residential neighborhoods. The second pilot program will prohibit OSV parking on alternating sides of the street on a series of streets in Palo Alto; OSVs may park on one side of identified streets during six months of the year (while observing other parking restrictions such as street sweeping) and then the other side of the same identified streets during the other six months of the year. To facilitate a successful launch of both pilots, staff will continue outreach to adjacent properties as well as informing OSV dwellers about the pilot programs. Outreach to the OSV dwellers is focused on connecting them to services, gaining participants in the OSV parking permit pilot and notifying them of the pilot OSV parking prohibition on alternating sides of the street.
Approval of this action would authorize staff to begin the work needed to launch the OSV parking prohibition pilot by January and the permit pilot by March 2027. Staff expects recruiting of participants in the permit pilot, setting up services contracts as needed, and configuring the sites for safe operation will be completed approximately six months from pilot approval. The alternating prohibition pilot would launch by January 2027 or earlier. Both pilot programs will operate for a period of 12 months, expend the necessary appropriated funds, and return to Council with an evaluation of outcomes and recommendations for next steps.
BACKGROUND
Homelessness and vehicle habitation continue to present complex policy, operational, and community impacts in Palo Alto. Last year, the City reported increased concerns from residents and the business community regarding long-term parking of oversized vehicles (OSVs), reduced parking availability, debris and personal belongings in the public right-of-way, and improper disposal of human waste. About 73% of Palo Alto’s unhoused residents are living in vehicles – a 1 Council Staff Report, October 20, 2025
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=83666&dbid=0&repo=PaloAlto&searchid=7bf9966e -7dd8-4189-b428-086b2b158f4f
2 Council Staff Report, February 23, 2026
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=86646&dbid=0&repo=PaloAlto&searchid=d1be7c39 -257a-48d3-8ad3-c90298681508
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0 comparatively high share relative to the Countywide rate of 53%. The City has experienced increasing impacts to parking, traffic safety, on-street parking availability for other uses (e.g., residents, business employees and visitors) and necessitating outreach services, additional street cleaning, and waste disposal in relation to oversized vehicle habitation on public streets.
Following research and engagement locally and regionally, staff provided a status report to Council on June 8, 2026,5 regarding progress related to OSVs and the work of the OSV Ad Hoc.
The update noted that there was a decline in OSVs from 191 to 133 between January 15 and May 6, 2026. The report also noted that substantial staff effort across departments during Phase I reduced impacts, improved compliance, and provided insights for Phase II.
This current memo is a next step from the previous efforts. The OSV Ad Hoc Committee recommends moving from Phase I implementation and Phase II concept development into the launch of two pilot parking programs as Phase II.
ANALYSIS
Current Conditions and Policy Context
Palo Alto continues to experience impacts associated with OSVs used for habitation, including sanitation concerns, obstruction of public space, visibility concerns, reduced on-street parking availability, neighborhood and business impacts, and ongoing demands on City operations. The Ad Hoc Committee, with support from staff, has sought to balance public health and safety, neighborhood livability, legal constraints, service needs, and the reality that some vehicle dwellers have no viable housing alternative at this time. The City’s support for unhoused and vulnerable residents is reflected in Council-adopted values emphasizing equity and a healthy, safe, and welcoming community for all, as well as its ongoing commitments related to unhoused services, safe parking, outreach, and Palo Alto Homekey.
Phase I of the phased OSV work consisted of new ordinances to prohibit the parking of detached trailers and inoperable vehicles on public streets and to prohibit vanlording, adding street sweeping and cleanings to 18 identified impacted streets, increasing enforcement efforts, and exploring approaches such as safe parking expansion, and OSV buyback and storage programs. Phase I implementation demonstrated that focused cleaning, signage, towing, enforcement, and service offerings can improve conditions in specific locations.
During Phase I, staff explored a variety of ways to help alleviate the impact of oversized vehicles in residential and business neighborhoods, while also striving to find ways that provide a compassionate and supportive method for individuals and families residing in OSVs. The pilots enable on-street OSV parking in limited areas while implementing targeted restrictions on OSV 5 Council Staff Report, June 8, 2026
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=887100&dbid=0&repo=PaloAlto&searchid=eb20f96 d-f928-4d49-a57e-abd6ccc0a99b
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0 parking on heavily impacted streets. This program design balances the need to address impacts of OSVs with legal, practical, and humanitarian considerations. In addition, the pilots will allow for adjustments to real world conditions. Staff plans to return to Council with status reports and recommendations for next steps at six months and again at 12 months.
The cost of the OSV pilots is estimated at approximately $823,800. A broader citywide program would entail significant additional costs. For example, installing signage throughout the City to support broad parking restrictions is estimated at nearly $4.5 million and would require a significant staff effort to design, procure, install, monitor, maintain, and enforce. Compared with that scale of cost and workload, a $823,800 pilot provides a lower-cost to test effective service delivery and help connect OSV dwellers with services to transition into more permanent and stable housing.
OSV Parking Permit Pilot
The OSV parking permit pilot would launch as a 12-month pilot beginning by March 1, 2027, 7 and would permit OSV parking on a portion of Coyote Hill Road within the City’s jurisdiction and a portion of Embarcadero Road near the Wastewater Treatment Plant. The City is in ongoing discussions with the County of Santa Clara for the Coyote Hill Road pilot and is seeking to extend the program to parking spaces closer to Page Mill Road; however, pending agreement, this pilot would be limited to the segment of Coyote Hill Road within the City’s jurisdiction.
The OSV parking permit pilot is intended to reduce impacts on business districts and residential neighborhoods, provide a more structured approach to supporting individuals living in oversized vehicles, connect OSV dwellers with case management, and help them transition into permanent or more stable housing. Other vehicles would not be allowed to park in the permit zone.
While the OSV parking permit pilot is not intended to operate as a full safe parking program, it will include several safe parking-style supports. The City will provide overall program oversight, including permit issuance and enforcement as needed. A contracted service provider will support day-to-day participant engagement, regular site monitoring, outreach, case management, conflict resolution, and connections to housing and supportive services.
The case management support is included to support the pilot’s housing-focused goals. Existing case management resources are at- or over capacity and, at the City’s request, are focused on other priority service areas. A dedicated case manager for the OSV pilot would provide 7 Both pilot programs’ authorizing legislation are structured to allow them to continue until Council takes action otherwise.
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0 consistent participant engagement, help individuals develop and follow individualized housing plans, coordinate documentation and benefit needs, connect participants to appropriate housing pathways, and maintain forward progress toward permanent or more stable housing.
This dedicated support is intended to improve the pilot’s effectiveness as a transition toward housing stability and to reduce the likelihood that participants cycle back into unsheltered homelessness.
Staff will need about six months from Council approval to launch. This six-month window allows staff to prepare the identified areas for the OSVs, prepare and execute services contracts, and importantly, partner with the current outreach team to notify OSV dwellers throughout the city to help gain participants.
The work to prepare the areas for OSVs parking includes:
Landscaping to reduce fire risks along Coyote Hill Road Temporary restriping of Embarcadero Road to allow for OSVs to park without blocking the bike lane
Signage installation that clearly states ’parking by permit‘ only Outreach to current OSV dwellers to gain participants for the permit program Staff also need to execute service contracts for:
Case management and program support through a formal solicitation process Onsite port-a-potties and hand-washing stations
Waste management bins (via Greenwaste of Palo Alto)
Signage installation
Road restriping design and labor
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0 Site Configuration Rendering for Coyote Hill Road (total OSV capacity, up-to 20)* Aerial Map View of Coyote Hill Road
*This number is an approximation of capacity for the space and takes into account larger OSVs plus one personal vehicle per OSV.
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0 Site Configuration Rendering for Embarcadero Road (total OSV capacity, up-to 17)** Aerial Map View of Embarcadero Road East of Highway 101 **This number is an approximation of capacity for the space and takes into account larger OSVs plus one personal vehicle per OSV.
Under current estimates, the OSV parking permit pilot will have an approximate capacity of 37 permitted OSVs. Actual number of permits issued will be dependent on OSV size and remaining space in the permitted areas. A lower number of permits may be issued at the start of the program to allow staff to work out any issues that may arise.
Each permit will be valid for a period of one month. At the end of the one-month period, the permit may be renewed for an additional one month should the permit holder be actively engaging in case management, working toward the goals of moving into permanent housing, and causing no ongoing issues or safety concerns. Permits will expire at the close of the OSV parking permit pilot, and renewals will not be granted beyond the scope of the program.
Qualifications to participate in the parking permit pilot include:
A valid vehicle registration,
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0 Active insurance,
Agreement to sign, and abide by, a good neighbor agreement, Agreement to participate and engage with outreach workers to receive support to transition into permanent housing,
Priority to Palo Alto connections,
Restriction to low-income households, and
The ability to pay a $15 permit fee, per month.
Staff propose using the following metrics to gauge program success:
A reduction in complaints about OSVs
From residents
From businesses
Overall reduction of warnings, citations and calls for services Number of participants complying with good neighbor agreement and ability to meet other eligibility requirements
Consistent engagement with case management services
With the addition of these OSV parking spaces on Coyote Hill Road and Embarcadero Road, a complementary pilot will simultaneously be implemented to assist in reducing the impact of OSVs parked elsewhere. The OSV parking prohibited on alternating sides pilot is explained below.
OSV Parking Prohibited on Alternating Sides of Street
The OSV parking prohibited on alternating sides of street pilot would launch as a 12-month pilot beginning by January 2027. This pilot is intended to complement the OSV parking permit pilot, which will allow up to approximately 37 OSVs to park in dedicated spaces in the city.
There will be some logistical functions that arise as OSV dwellers, businesses, and surrounding neighborhoods adapt to the changes.
On identified-as-impacted streets, OSVs will be prohibited from parking on one side of the street for six months of the year and will then need to relocate for the remaining six months of the year. In the remaining six months of the year, parking will be available on the other side of the street. Permits will not be required to participate or park on these streets during this pilot.
However, compliance with posted signage will be required. Noncompliance can and will be enforced with towing. Given this new restriction on the streets where OSVs predominantly park in Palo Alto, there is likely to be spillover onto other streets in the city. By implementing this pilot incrementally, staff will be able to better closely monitor and address potential impacts to other areas, especially during street sweeping days. One anticipated impact is an increase in 1 0
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0 OSVs parked on streets adjacent to parks near the pilot area. To address this potential impact, signage will be installed to enable enforcement of no OSV overnight parking on the streets adjacent to those parks.
Proposed Signage Rendering for Alternating Sides of the Street OSV Parking Prohibition With this alternating sides parking prohibition, the streets in the pilot will retain parking for up- to approximately 116 OSVs during six months of the year and up-to approximately 125 OSVs during the remaining six months. These numbers are assuming 55’ of space per OSV which accounts for the OSV and a passenger vehicle. This capacity does not include the approximately 37 permitted OSV parking spots created by the companion pilot program.
Staff recommend:
The below streets for OSV parking prohibited on alternating sides of the street:
4000 Block of Transport Street
900 Block of Commercial Street
900 Block of Industrial Avenue
100 Block of Page Mill Road
2800-3200 Block of Park Boulevard
200-400 Block of Olive Avenue
2900 & 3200 Block of Ash Street
200-400 Block of Lambert Avenue
1000 Block of Elwell Court
1000 Block of Corporation Way
1000 Block of East Meadow Circle
2400 Block of Embarcadero Way
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0 2400 Block of Faber Place
The above list does not include the 900 block of San Antonio Road, 4000 block of Transport Street, 900 block of Industrial Avenue, and 1800-1900 block of Embarcadero Road because parking is already prohibited or unavailable on one side of the street on these blocks.
Red tips (no parking) painted along curbs on both sides of all impacted streets (i.e., including segments of San Antonio, Transport, Industrial, and Embarcadero Road) with about five feet (5') adjacent to driveways to aid with visibility for vehicles entering/exiting parking lots
Daylighting at intersections (20 feet of red curb paint) on streets included in the program
Street sweeping frequency to remain consistent at current twice per month frequency Installing no overnight OSV parking signage on streets adjacent to nearby parks (i.e., streets adjacent to Ramos Park and Greer Park)
Staff propose using the following metrics to gauge success:
Feedback from businesses: does it continue to be negative, manageable, or did feedback change altogether?
Spillover parking concerns from other streets, including residential areas Before launching the two pilots, staff would conduct outreach and address feedback, finalize the remaining administrative and operational details necessary to implement the Council- approved pilot structure, such as application materials, verification process, signage, communications, data tracking, and enforcement coordination.
Basis for Recommending Launch of Two Pilot Programs
The Ad Hoc Committee recommends the launch of two pilot programs to move from concept development into limited-duration operational testing. The OSV parking permit pilot, when coupled with the prohibiting OSV parking on alternative sides of the street pilot, provide a necessary step to establish conduct monitoring (e.g., permit holders adherence to standards, good neighbor conduct); optimize sanitation scheduling; evaluate impacts on pilot streets, adjacent streets, and adjacent parks; streamline permit eligibility verification; and evaluate success. Together, the pilots are intended to:
Reduce immediate neighborhood and business impacts,
Improve sanitation, safety, and accountability,
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0 Test structured standards and eligibility requirements, Strengthen service engagement and pathways towards housing, Evaluate operational feasibility and staff workload, and Provide Council with measurable results prior to any longer-term program or policy decision.
Benefits of Launching the Pilots
Approving launch of two pilot programs at this stage offers several benefits. First, a pilot-based launch gives the City a structured way to test whether these innovative approaches can reduce impacts more effectively than cleanup and enforcement alone. Additionally, these pilots set conduct standards and provide a greater level of support for the community, while also offering more dignity and predictability to participants. Second, the pilots advance the phased strategy already initiated by Council. Third, a limited pilot structure may reduce legal and operational risk relative to immediate permanent or citywide implementation because it allows the City to test processes on a manageable scale, monitor cost effectiveness and impacts closely, and return to Council before expanding the approach.
Performance Measures and Return to Council
If Council approves the launch of the pilots, staff recommends evaluating them using measurable criteria and returning to Council with a formal assessment. Recommended performance measures include:
Number of issued permits;
Compliance, and non-renewal rates;
Number and type of neighborhood and business complaints before and during the pilots;
Outreach contacts and service-engagement rates;
Housing, shelter, or safe-parking referrals and placements; Staff time and operating costs;
Enforcement actions associated with pilot and non-pilot areas; and Feedback from affected neighborhoods, businesses, service providers, and participants.
Staff anticipates returning to Council by Fall 2027 with a midpoint evaluation and Spring 2028 with a final evaluation and recommendations regarding continuation, modification, expansion, or termination.
Risks, Constraints, and Implementation Challenges
A pilot will not fully resolve impacts outside the pilot geography. For example, unpermitted OSVs could move from pilot areas into non-pilot areas. The Palo Alto Police Department continues to provide proactive enforcement and response to enforceable violations that are reported. However, implementation of the pilot programs may increase the number of calls for 1 0
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0 service, response needs, and follow-up enforcement activity. The Public Works team continues to divert their staff and resources to install signage throughout the identified streets. The Office of Transportation has delayed other projects to support Public Works in sign design and other associated tasks.
Following Council approval, staff anticipates being able to launch the OSV parking prohibited on alternating sides pilot by January 2027 and the permit pilot by March 2027. This will allow staff to do notification and outreach; finalize logistics, site, and design parameters for signage placement; hire additional staff as needed; establish contracts (e.g., for restriping designs, daily program operations oversight for the permit program, etc.); and refine programmatic details.
Additionally, during the six-month prep work period, staff will begin outreach and notifications about the programs to surrounding businesses, neighborhoods, and OSV dwellers. While the Ad Hoc and staff continue to pursue expanding safe parking locally and regionally, finding adequate locations for safe parking is challenging due to high land costs and limited suitable sites.
FISCAL/RESOURCE IMPACT
In October 2026, City Council authorized $707,000 for OSV Phase I using a mix of Measure K Business Tax Funds and one-time General Fund. The associated work included street sweeping, enforcement, signage design and installation, and outreach services. At the conclusion of Phase I, the $707,000 was exhausted in full and an additional $184,000 was appropriated one-time as part of the FY 2027 Budget by Council to support continued street sweeping services and ongoing enforcement of the areas identified in Phase I.
Phase II will focus on the launch of one or both of the pilots and associated capital improvements. Detailed cost and funding for the pilot programs are reflected below. 1 0
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OSV Parking Permit Pilot
Services/Capital Improvements Funding
Source
Pilot
Year*
Ongoing
Annual Cost**
Engineering; road restriping designs,
labor, materials
Capital Reserves $190,500
Signage Capital Reserves $16,000
Outreach and Case Management Business Tax Reserve $161,000 $177,000 *August 2026-March 2027 allows staff time to configure the permit program.
Permit program would operate March 2027-March 2028; this spans FY 2027 and FY 2028 ** Ongoing costs include an approximate 10% annual increase OSV Parking Prohibited on Alternative Sides of Street Pilot Services/Capital Improvements Funding
Source
Pilot
Year
Ongoing
Annual Cost*
Signage Capital Reserves $283,000
Red Curb Paint (20’ from intersections,
5’ on each side of driveway)
Capital Reserves $35,000 $20,000
Community Services Officer (CSO) FY 2027 Budget $105,000 $115,000 *Ongoing costs are for curb paint touch ups
OSV Parking Permit Pilot Totals $400,800 $213,000
OSV Parking Prohibited on
Alternative Sides of Street Totals
$423,000 $135,000
Combined Pilot Totals $823,800 $348,000
If the City Council approves the budget amendments associated with this item, the remaining balances will be $3.2 million in the Business Tax Reserve for Housing Affordability and $7.2 million in the Capital Infrastructure Reserve.
STAKEHOLDER ENGAGEMENT
Staff continue to monitor and respond to correspondence submitted to Council, engage the local service-provider network, meet with local businesses and the Chamber of Commerce, and meet with individuals and groups requesting discussion on this topic. Additionally, staff and the Ad Hoc participate in a regional convening hosted by Supervisor Margaret Abe-Koga regarding safe parking and regional collaboration.
ENVIRONMENTAL REVIEW
The parking pilot programs as detailed in this staff report are exempt under CEQA regulations 15301 (existing facilities), 15304 (minor alterations to land), and Public Resources Code section 21080.10(c).
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0 ATTACHMENTS
Attachment A: Ordinance Adding PAMC Ch. 10.49 (OSV Parking Permit Program) Attachment B: Resolution Establishing an OSV Parking Permit District on section of Embarcadero Road
Attachment C: Resolution Establishing an OSV Parking Permit District on section of Coyote Hill Road
Attachment D: Ordinance Adding a OSV Parking Permit Fee to the FY27 Municipal Fee Schedule Attachment E: Resolution Prohibiting OSV Parking on Alternating Sides of Several Street Segments
Attachment F: Resolution Amending the Administrative Penalty Schedule to Add Penalties for Violations of PAMC Chapter 10.49
APPROVED BY:
Ed Shikada, City Manager