With new housing plan, Palo Alto sets sights on downtown

When it comes to housing, the city’s development pipeline continues to tilt heavily toward the southern half of the city, with builders largely focusing on sites along El Camino Real and San Antonio Road.

The city’s downtown area, meanwhile, remains relatively devoid of new development. Despite boasting a busy transit center with a Caltrain station, a premier bike boulevard, numerous parks and a wealth of retail, the prominent area around University Avenue has played a surprisingly marginal role in the city’s plan to add 6,086 dwellings by 2031.

The Housing Element that the City Council approved last May includes a few downtown-centric policies such as allowing construction of affordable housing on downtown parking lots and upzoning at a Stanford University-owned site on Welch Road to enable more than 400 new apartments. That pales, however, in comparison to the city plans for the San Antonio Road area, where city leaders hope to add more than 2,000 dwellings in sites that are currently zoned for industrial and commercial use.

This strategy has rubbed some housing advocates the wrong way. The group Palo Alto Forward submitted a letter to the state Department Housing and Community Development in December 2022 expressing concern with the city’s plans to put so much housing on San Antonio.

“The City has located the majority of lower-income housing in manufacturing and industrial areas next to the 101 freeway, rather than near public transit, jobs, and schools near downtown,” the Palo Alto Forward board wrote. “This decision is at utterly odds with the City’s fair housing obligations, as well as its climate and sustainability goals.”

That, however, may soon change. The City Council approved on Feb. 26 a pair of contracts to create a Downtown Housing Plan, a planning document that could upend the zoning designations and design standards in the downtown area and identify the infrastructural improvements that would need to get built to accelerate housing production.

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Seeded by an $800,000 grant from the Metropolitan Transportation Commission, the plan will focus on a 76-acre portion of downtown that is roughly bounded by Alma Street on the west and Cowper Street on the east, between Lytton and Hamilton avenues. It will be steered by a stakeholder committee consisting of residents, housing advocates, business leaders and representatives from Stanford University, Caltrans and the Palo Alto Unified School District.

To get the effort started, the council approved a three-year, $1.5-million deal with Wallace Roberts & Todd for planning and consulting work and a $375,522 contract with Good City Company to manage the project and ensure that the plan gets completed within three years, consistent with the MTC deadline.

While the council voted 5-2 to approve the new contracts, not everyone was thrilled about the decision. Penny Ellson, who lives in south Palo Alto, lamented the fact that the city is commencing a major plan in the downtown area just as San Antonio and El Camino are getting inundated with housing projects and zoning revisions.

Ellson said she was concerned about the city issuing “substantive and irrevocable development approvals” in south Palo Alto before master planning work can be complete to inform those decisions. Even as the council is preparing to invest close to $2 million to hire consultants for the downtown plan, the bulk of the planning work around San Antonio has been conducted by a group of urban planning students from California Polytechnic State University in San Luis Obispo for a nominal fee of about $15,000, she noted.

“The money in these contracts for downtown is more than 100 times what is being spent on south Palo Alto, where the lion’s share of housing development will go,” Ellson told the council. “Will the downtown master plan yield 100 times more housing than south Palo Alto upzoned areas?”

She wasn’t the only person who felt that way. Council member Lydia Kou, who in 2022 voted against accepting the MTC grant for the downtown plan, reiterated her opposition during the Feb. 26 discussion. Like Ellson, she contrasted the city’s lavish spending on the downtown plan with its relatively meager expenditure on San Antonio.

She called the current San Antonio plan a “hodge-podge, willy-nilly way of planning” and lamented the lack of public transportation services, rideshare stops and other transportation amenities in the plans that had been developed by the Cal Poly students.

“At this point, it seems there is professional planning conducted for downtown,” Kou said. “But for south Palo Alto … I don’t know if it’s a good idea, but we seem to be a test case to help further land use and planning college courses. I don’t think that is a very good way of representing south Palo Alto.”

It’s not just those with southern sympathies who are objecting to the new downtown plan. David Lanferman, a land use attorney who often works with downtown developers, called the city’s forthcoming effort “misguided and premature.” He specifically took issue with a Housing Element policy that calls for constructing affordable housing on public parking lots in the downtown area — a policy that the new downtown plan would presumably expand on.

He argued in a letter to the council that the policy is illegal because it effectively disregards the assessment payments that downtown developers have made to the city’s parking fund, with the understanding that the money would result in addition of convenient parking facilities. The issue was at the heart of a recent lawsuit against the city by Charles “Chop” Keenan, which resulted in the city refunding $900,000 in fees to Keenan last year. Lanferman represented Keenan in that suit.

“The city is not free to disregard the important rights of those who have for many years paid assessments to provide for the creation and preservation of well-located and convenient permanent Downtown parking facilities, or the commitments made by the City in order to secure the approvals of Downtown property owners for the formation and funding of the assessment district,” Lanferman wrote.

Kou and Council member Greg Tanaka were the only dissenters in the vote to approve the contracts. Tanaka said he agreed with Ellson about the “inequity” of spending so much on the downtown plan while San Antonio is getting most of the growth and suggested that the contracts warranted more discussion.

Most council members, however, voted to support the contract after City Manager Ed Shikada assured them that San Antonio will also go through an extensive planning effort, which is scheduled to kick off later this year. The council is preparing to discuss on March 4 its priorities and objectives for the year. The list of items includes approving a consulting contract by the end of this year to initiate a specific plan for the San Antonio Road corridor.

“The planning effort for the San Antonio corridor has included the work being done by our team of students from Cal Poly, San Luis Obispo, but it is not limited to that,” Shikada said.