CITY COUNCIL
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: Planning and Development Services
Meeting Date: October 26, 2026
Report #: 2605-6362
TITLE
Adoption of an Ordinance Amending the Palo Alto Municipal Code (PAMC) Section 18.40.140 (Stream Corridor Protection). CEQA Status: Exempt pursuant to CEQA Guidelines Section 15308 (Actions for Protection of the Environment).
RECOMMENDATION
Staff recommend the City Council adopt the Draft Ordinance updating Palo Alto Municipal Code (PAMC) Section 18.40.140 (Stream Corridor Protection) of Title 18 (Zoning).
EXECUTIVE SUMMARY
The proposed draft ordinance updates Palo Alto’s existing Stream Corridor Protection Ordinance to align local regulations with the 2030 Comprehensive Plan's creek protection policies. The updated ordinance expands the City’s regulatory intent beyond basic bank safety and stormwater pollution control to actively emphasize the preservation and strengthening of vital water and riparian resources. To balance these environmental goals with local property constraints, the ordinance establishes a new “Streamside Setback” across three distinct subareas of the City. While the environmentally sensitive Hillside and Baylands Areas carry an expanded 150-foot setback, properties zoned Real Estate (RE) within the Hillside Area, such as the Esther Clark Park and Palo Alto Hills neighborhoods, are permitted to utilize the shorter 25- foot Central Area setback to avoid severe, unbuildable development restrictions on smaller lots containing ephemeral streams.
The draft ordinance also restructures and expands the Slope Stability Protection Area regulations, increasing the standard protective buffer from 20 feet to 25 feet in the Hillside and Baylands Areas to secure shifting stream banks against erosion and landslides. Heavily influenced by community feedback regarding trespassing, theft, and fire hazards, the PTC recommended a partial exemption for the Edgewood Drive neighborhood to permit private fences and ornamental landscaping within the slope stability zone without a mandatory fivefoot setback or a costly administrative exception process. However, a key item for City Council consideration involves a policy divergence between staff and the PTC: staff recommends the Council consider maintaining the standard Slope Stability Protection Area requirements for the Edgewood neighborhood without modification. Staff maintains that routing these proposals through the Public Works Director is important to ensure critical project coordination with regional water agencies, guarantee maintenance access, and preserve bank stability.
Extensive community engagement throughout this process revealed a divide between environmental organizations and some property owners advocating for robust riparian protections and other private property owners concerned about diminished property values, restrictions on use of their land and administrative burdens. Staff and the PTC actively responded to these concerns across multiple iterations of the ordinance by expanding the list of permitted exemptions to include State-mandated ADUs, properties directly abutting floodwalls, and properties separated from streams by existing concrete infrastructure like alleys or paved trails. Using objective land-use definitions and establishing a clear, simplified exception process, the final draft ordinance balances regional environmental stewardship with localized neighborhood safety, liability, and property rights.
BACKGROUND
City Council Priority
Since 2024, the City Council has included as a Council priority, direction to update the existing Stream Corridor Protection Ordinance consistent with the Comprehensive Plan policies related to creek protection.
Comprehensive Plan
The 2030 Comprehensive Plan (Comprehensive Plan), adopted in November 2017, includes several policies related to creek protection. The Comprehensive Plan recognizes the City’s creeks and riparian areas as “valuable resources for natural habitat, connectivity, community design, and flood control” that require protection and enhancement. As part of this recognition, the City’s Stream Corridor Protection Ordinance was identified for an update to reflect the importance of these resources.1
Policy N3.3 of the Comprehensive Plan calls for the protection of the City’s creeks from the impacts of future buildings, structures, impervious surfaces and ornamental landscaping and preservation of the City’s creeks’ function as habitat connectivity corridors by establishing a range of setback requirements that account for existing creek conditions, land use characteristics, property ownership and flood control potential. Policy N3.3 contains three programs that refer to the potential ordinance update:
1 The Comprehensive Plan uses the term “creek” rather than “stream,” except when discussing the update of the Stream Corridor Protection Ordinance. However, given that the update of the Stream Corridor Protection Ordinance is the subject of this undertaking, the term “stream” will be used within the context of this report and the ordinance.
• Program N3.3.1 calls for the exploration of an ordinance update that expands setbacks along creeks to 150 feet for properties west of Foothill Expressway. The Program also references establishing design recommendations for development of sites within the setback, exemption opportunities for single-family properties, and appropriate setbacks and conservation measures for undeveloped parcels.
• Program N3.3.2 calls for consideration of appropriate setbacks east of Foothill Expressway, given the varied conditions in that area. A key consideration is opportunity for an enhanced riparian setback along urban creeks as properties are redeveloped. • Program N3.3.3 calls for the minimization of impacts in all creeks by limiting recreational trails to one side of natural riparian corridors, and by careful lighting design near riparian corridors.
Existing Stream Corridor Protection Ordinance
The existing Stream Corridor Protection Ordinance, Palo Alto Municipal Code (PAMC) Section
18.40.140 (Attachment C), requires streamside review for properties abutting a stream or within 50 feet of the top of a stream bank. This applies to development within all zoning districts, with the exception of ministerial projects in the R-1, R-2, and RMD districts (i.e.
Accessory Dwelling Units). In addition to the streamside review area, the existing ordinance includes requirements for the “slope stability protection area,” which is measured 20 feet landward of top of bank or to a point measured at a 1:2 (rise (vertical): run (horizontal)) ratio landward from the toe of bank, whichever is greater. Within the slope stability protection area, all structures are prohibited, including decks, swimming pools, spas, hot tubs, and parking lots.
The slope stability area is intended to maintain the structural integrity of the bank, and functions like a setback because it does not allow any structures. Upon adoption of the proposed ordinance, the existing Stream Corridor Protection provisions of PAMC Section
19.40.140 will be replaced.
Regulatory Framework
Numerous Federal, State, and regional regulations govern the protection of streams and their corridors. These include the Clean Water Act, which requires permits for work impacting U.S.
Waters, and the Porter-Cologne Act, regulating waste discharge. The California Department of Fish and Wildlife also regulates streambed alteration. These regulations provide a framework for the City of Palo Alto to manage stream-side property in accordance with community goals, while adhering to Federal and State guidelines. The City has also endorsed the Santa Clara Valley Water Resources Protection Collaborative Guidelines, which may inform updates to local stream protection ordinances. In some areas Santa Clara Valley Water District has easements over private property that is adjacent to or includes a stream within their jurisdiction. Valley Water’s permitting through the Water Resources Protection Ordinance does not supersede or override any other approvals/permitting that any other agency/entity may have over a property, including local, State, and Federal agencies.
Planning and Transportation Commission Hearings
On May 13, 2026, the PTC unanimously recommended forwarding the draft ordinance for City Council consideration with several modifications intended to balance riparian protection with residents' security and property rights. Based on resident testimony regarding trespassing and fire hazards, the PTC prioritized immediate safety concerns perceived by Edgewood neighbors by recommending removal of the mandatory five-foot fence gap and slope stability requirements in that area. Additionally, to save homeowners in certain hillside neighborhoods the cost of hiring a biologist, they recommended utilizing the reduced Central Area setback of 25 feet for properties in the Residential Estate (RE) zoned hillside area. Finally, the PTC requested technical refinements, including replacing potentially confusing terminology (e.g. “urban” and “rural,” which have technical meanings under CEQA) with new, clearly-defined terms and clarifying flood wall specifications, while explicitly protecting homeowners’ rights to plant non-invasive ornamental landscaping within their fenced yards.
The motion made by the PTC at the end of their discussion, which is slightly reworded here for better organization and clarity, is:
Vice Chair Ji moved, seconded by Chair Chang, to forward staff recommendations with the following modifications (approved 6-0, Commissioner Hechtman absent):
• Rename subareas “Urbanized Area” and “Open Space and Rural Area” to avoid confusions with CEQA terms and other terms commonly used. • Revise the definitions section to:
o Update the “Floodwall” definition to include the phrase “extend above the top of bank”
o Update the “Floodwall” definition to replace “behind” with “directly abutting” o Remove definitions that are not used in the final draft ordinance (including but not limited to ephemeral streams, channelized streams)
• Implement Alternative 4 (defining the reduced setback area within the RE zone district) • Revise the exemption in Section 18.40.140 (d)(6) to apply to the Urbanized Area only • Allow the expanded exemption for the Edgewood neighborhood, which includes:
o Allowing ornamental landscaping in the slope stability protection area o Allowing fences within the slope stability protection area, without minimum distance or the exception process that requires Public Works Director’s approval In addition to the May 13, 2026, hearing, staff had numerous hearings with the PTC and also informed ARB about this effort. More details on the previous PTC hearings and summary of discussions are included in Attachment B.
ANALYSIS
This section describes the draft ordinance, highlights how it differs from existing regulations, and points out additional discussion items staff would like the City Council to consider before adoption. The draft ordinance (Attachment A) reflects the motion made by the PTC on May 13, 2026:
• Purpose. The intent of the ordinance has been expanded beyond bank safety and stormwater pollution minimization to emphasize preserving and strengthening riparian resources. This aligns with Comprehensive Plan policies on creek protection. • Streamside Setback. Compared to existing regulations, the draft ordinance introduces a "Streamside Setback" to create a larger buffer between banks and buildings. It divides the City into three subareas divided by Foothill Expressway and Highway 101 (as shown in Attachment C), applying tailored setback distances appropriate for each area's conditions:
Subarea Streamside Setback
Central Area
Area between Foothill Expressway and
Highway 101
25 feet or 1:2 (rise:run) measured from
top of bank, whichever is greater
Hillside Area**
Area west of Foothill Expressway
150 feet or 1:2 (rise:run) measured from
top of bank, whichever is greater
Baylands Area
Area east of Highway 101
150 feet or 1:2 (rise:run) measured from
top of bank, whichever is greater
**Note: Within the Hillside Area, properties zoned Real Estate (RE) shall use the shorter setback from the Central Area.
The 150-foot setback is consistent with the buffer distance stated in the Comprehensive Plan. Both the Hillside and Baylands Areas are environmentally sensitive; the vast green spaces in the hills and the San Francisco Bay abutting the Baylands serve as critical grounds for natural resources, supporting water quality, vegetation, and wildlife.
Most Hillside Area properties are large parcels with base zoning of Public Facilities (PF) or Open Space (OS). However, two established residential neighborhoods in this area would be more impacted by a standard 150-foot setback. Some of these properties feature multiple smaller, ephemeral streams (which remain dry for several years until heavy rains arrive) that would severely restrict buildable area and turn existing buildings into legal, nonconforming structures. To ameliorate this potential burden, the draft ordinance allows Hillside Area properties zoned Real Estate (RE) to utilize the shorter Central Area setback. This exception captures the entire Esther Clark Park neighborhood and nearly all of the Palo Alto Hills neighborhood.
• Slope Stability Protection Area. Existing requirements under the current Stream Corridor Protection Ordinance carry over but have been reorganized to fit the format of the draft ordinance. In general, no structures are allowed and only native vegetation may be planted. Any building encroaching into this area requires an exception and approval from the Public Works Director prior to installing any structures, including fences. An exception is only granted if the applicant provides a geotechnical slope stability analysis fulfilling the requirements of Section 18.40.140(h)(2) of the Draft Ordinance, including demonstration that the proposal doesn’t impede maintenance and repair of the stream. While this area is typically identified by measuring either 20 feet or a 1:2 (rise:run) ratio from the top of the bank, the flat measurement was expanded to 25 feet for the Hillside and Baylands Areas to provide additional protection where it is needed most. These requirements also apply to projects otherwise exempt from the draft ordinance, with the sole exception of fences within the single-family neighborhood along Edgewood Drive.
• Exemptions. The list of exemptions has expanded under the draft ordinance. While carrying over existing exemptions (interior construction, certain retaining walls, earthwork, and utility service laterals), it now includes:
o Accessory Dwelling Units (ADUs): ADUs and Junior ADUs are governed by PAMC Chapter 18.09 and directly implement State law.
o Properties Directly Abutting Floodwalls: Added because the PTC reasoned that once floodwall structures are installed, the riparian habitat value drops significantly, leaving little to protect or restore.
o Single-Family Homes Adjacent to San Francisquito Creek and Fronting on Edgewood Drive: Added in response to community feedback. Residents have asserted that the updated regulations would otherwise cause significant impacts and safety concerns due to neighborhood proximity to the creek. While all exempt projects remain subject to Slope Stability Protection Area requirements to ensure bank stability in the Draft Ordinance, the PTC recommended allowing a partial exemption for fences on the properties on Edgewood Drive to help residents manage reported concerns with encampments, theft, and trespassing occurring between the floodwalls and private property lines. The PTC also recommended that properties on Edgewood Drive be permitted to install new ornamental landscaping in the Slope Stability Protection Area. o Properties Separated from Streams by Streets, Alleys, Trails, or Service Roads:
The existing ordinance exempts properties separated from a stream by a public street. The draft ordinance clarifies and expands this to include private streets, alleys, paved public trails, and service roads, but limits the exemption to the Central Area. The PTC determined that once concrete infrastructure is introduced, it creates the same separating effect as a public street. This could be expanded to apply City-wide by removing “located in the Central Area” from this exemption, as some public comments have suggested.
• Exceptions. Early feedback indicated the draft ordinance should provide flexibility, especially regarding the 150-foot setback requirement. This mechanism allows applicants to request an exception without going through the onerous and lengthy Variance process. When tied to a development application, the exception request can be integrated into the project description. However, applicants must meet specific findings based on review by a qualified biologist to ensure the exception will not exacerbate stream or riparian conditions and that appropriate, feasible mitigations are provided.
• Fences. The draft ordinance allows fences within the Streamside Setback area, provided they comply with existing requirements in PAMC Chapter 16.24. Within the Hillside Area, fences inside this setback are strictly limited to wildlife-friendly designs; however, standard fences complying with PAMC Chapter 16.24 may still be installed on the property outside of the Streamside Setback. Because fences are classified as structures, they are prohibited within the Slope Stability Protection Area unless an exception is granted by the Public Works Director, with the sole exception of properties within the Edgewood Drive neighborhood (as detailed in the Exemptions section above).
Additional Consideration: Slope Stability Protection Area On May 13, 2026, the PTC recommended exempting the Edgewood neighborhood from the Slope Stability Protection Area exception process, which would eliminate both review by the Public Works Director and the mandatory five-foot fence setback from the top of the bank.
Throughout the public process, neighborhood residents testified that the gap between existing property fences and floodwalls creates safety risks, including trespassing, theft, and unhoused encampments. While the draft ordinance reflects the PTC recommendation to exempt this neighborhood, staff recommends the City Council consider retaining the existing Streamside Setback requirements. With this approach, all properties, including properties fronting Edgewood Drive, would be required to obtain an exception from the ordinance to place a structure (i.e.; wall or fence) within the Slope Stability Protection Area and maintain the fivefoot setback from the top of bank.
To implement this policy direction, the City Council would need to remove the following language from the Draft Ordinance (Exemption 8):
“These properties shall be allowed to install fences and ornamental landscaping within the Slope Stability Protection Area without seeking an exception under Section
18.40.140(h)(2).”
Making this modification to the Draft Ordinance and retaining the Slope Stability Protection Area requirements for Edgewood Drive with the exception process as previously described, serves several critical safety and administrative functions. By routing development proposals through the Public Works Director for review, the City ensures essential project coordination with key regional partners, specifically the Santa Clara Valley Water District and the San Francisquito Creek Joint Powers Authority and any other agency that may have jurisdictions over the property or easement within the property. This collaborative oversight guarantees that private improvements do not obstruct agency operations or conflict with upcoming environmental initiatives.
From a structural standpoint, preserving the Slope Stability Protection Area is vital to safeguard the natural stream bank from the load of new construction, reducing the risk of erosion, slope failure, and the subsequent need for intrusive concrete retaining walls. This setback also secures vital physical access for maintenance crews to service and repair the stream corridor.
Furthermore, these regulations align directly with the Santa Clara Valley Water Resources Protection Collaborative’s Guidelines and Standards, which treat the Slope Stability Protection Area as a critical safety factor against landslides, recognizing that banks naturally shift over time and require a buffer to prevent direct threats to private property.
Consequently, to protect both public infrastructure and private property, staff recommends retaining the existing Slope Stability Protection Area requirements and its current enforcement mechanisms in their entirety.
FISCAL/RESOURCE IMPACT
The implementation of the proposed ordinance is not anticipated to have any direct fiscal impact on the City budget.
STAKEHOLDER ENGAGEMENT
Two additional comment letters received since the last public hearing with PTC on May 13, 2026, are included in Attachment E. However, throughout the entire process, staff received approximately 50 public comment letters provided to PTC. Public feedback reveals a divide regarding the proposed stream setbacks, focusing primarily on environmental protection, property impacts, and regulatory justification. Environmental organizations like the Santa Clara Valley Audubon Society, the Midpeninsula Regional Open Space District, and the San Francisco Bay Regional Water Quality Control Board advocate for robust riparian protections to safeguard water quality, restore creeks, and protect wildlife habitat. Conversely, residents and property owners, particularly in the Esther Clark Park neighborhood, strongly opposed the original proposal to expand the setbacks to 40 or 150 feet, arguing that the local waterways are merely ephemeral, highly modified runoff channels, making the expansion scientifically unjustified and inconsistent with the City's urban planning. Homeowners express concerns that these expanded buffers will severely restrict backyard use, reduce buildable lot areas for garages and ADUs, lower property values by 15% to 25%, and conflict with State housing goals.
Furthermore, the community raised significant safety, liability, and fencing concerns, while criticizing the proposed exception process as a costly administrative burden on homeowners and demanding that any new rules exempt existing structures and landscaping. Staff addressed these community concerns across multiple versions of the draft ordinance and provided clear justifications for any feedback that could not be incorporated.
In addition, staff have engaged the community and other stakeholders by holding community workshops and sessions, conducting a neighborhood meeting, walking and driving around the residential neighborhoods, driving around the Edgewood neighborhood, holding individual meetings when requested by residents, engaging stakeholders through public hearings, and collecting their feedback via email. Their feedback has been incorporated directly and indirectly throughout the update process and has solidified staff's recommendation. A comprehensive summary of the community engagement for this effort is included in Attachment D, it should be noted that while the individually requested meetings’ dates aren’t listed, they have continued to occur through most of 2026.
POLICY IMPLICATIONS
The updated Stream Corridor Protection Ordinance implements Comprehensive Plan Policy N-3.3 and its associated programs, as discussed above. Policy N-3.3 aims to mitigate development impacts on creeks by establishing setback requirements that account for varying creek conditions.
While the Stream Corridor Protection Ordinance Update does not directly mandate energy or emissions reductions, it strongly contributes to the Sustainability/Climate Action (S/CAP) Plan goal of restoring and enhancing the resilience and biodiversity of the natural environment throughout the City. By restricting synthetic ground covers like artificial turf, maximizing the retention of existing woody riparian vegetation, and requiring the replacement of removed trees, the ordinance preserves critical habitat for aquatic and nocturnal wildlife species. In addition, by restricting development in flood-prone stream corridors, the Ordinance enhances the community’s resilience against climate-induced flooding and severe storm events.
As part of the implementation of Program 3.2 (Monitor Constraints to Housing) of the Housing Element, the City needs to examine in staff reports for initiatives proposing new regulations.
This analysis should detail how the regulations may impact housing production, if at all, and recommend solutions to address any adverse impacts. The update to the Stream Corridor Protection Ordinance is not anticipated to have a significant impact on housing production. The proposed ordinance does not limit or restrict floor area, density, height or other development standards that would adversely impact housing development. While new housing projects may experience some cost increases and design restrictions due to the Ordinance, these are expected to be minimal.
ENVIRONMENTAL REVIEW
The City has reviewed the proposed ordinance in accordance with that authority and criteria set forth in the California Environmental Quality Act (CEQA). The City, as the lead agency, anticipates that this ordinance will be exempt from CEQA in accordance with CEQA Guidelines Section 15308, which includes actions by regulatory agencies for the protection of the environment.
ATTACHMENTS
Attachment A: Draft Ordinance
Attachment B: PTC Discussion Summary
Attachment C: Map of Subareas
Attachment D: Community Engagement Summary
Attachment E: Public Comment
APPROVED BY: Jonathan Lait, Planning and Development Services Director