Benefits of Market-Rate Housing in Palo Alto
Steve Levy, Palo Alto Forward Board Member
Adding housing for residents who make more than 120% of the area median income is the largest component (2,621 of 6,086) or over 40% of Palo Alto’s RHNA housing goal. These units will be almost all apartments, townhouses, condominiums and ADUs. As a result of their smaller size, most will be in the $1-2 million range for sale and equivalent for rentals.
I understand that many residents and council members and candidates place a higher priority on increasing the number of BMR units but the two goals are actually complementary and not in conflict.
And adding market-rate housing has added benefits as well.
Market-Rate Housing Helps Add BMR Units - Under the council-adopted Planned Housing Zone (PHZ) program, applicants must include 20% BMR units. And other market-rate developments must include at least 15% BMR units.
Council has recently heard 3 prescreens for projects that include 20% BMR units as part of the PHZ program that allows council to waive some development standards to make the project feasible. Council was generally supportive and I hope this leads to actual applications. And next week council will hear a prescreen on a project at ECR and Matadero that would include 76 BMR units, more than the Wilton Court project.
And previously council approved 2 projects that included 15% BMR units—on San Antonio and West Bayshore.
All new projects will still be evaluated by council if applications come forth, but the connection between market-rate and BMR units is clear.
Market-Rate Housing Adds Higher Income Customers for Our Small Businesses - I, along with many/most residents, city council members and candidates, support adding more housing for low-income residents. Yet, I often hear on Town Square and elsewhere, talk of adding mainly or only BMR housing paired with a call for more retail. I don’t think this works economically. Many small businesses are struggling with the loss of customers to online shopping, the pandemic and, especially for our restaurants, the loss of daytime customers to work from home.
Adding marker-rate housing will help add higher income customers, something I think will be appreciated by small businesses and the city budget. Once again, the pairing of BMR and market-rate housing helps achieve multiple city objectives.
Market-Rate Housing Can Help Avoid School Closures and Program Cuts - K-12 enrollment continued go decline in the new school year even as COVID cases are declining and schools are returning to normal. This is especially true in the lower grades. These declines will continue, absent a great amount of new housing, as birth rates continue to fall.
This does not pose a money problem for the district as we are funded by property taxes, but it can lead to closing or consolidating schools that are too small to function effectively and to program cuts where attendance is too small to support all programs. So some students will likely lose their neighborhood school unless enrollment starts to increase.
For many years the narrative about housing and schools was that more housing would create burdens. That narrative is now turned on its head. More housing is likely the only way to prevent inconvenience to parents, students and the district. This is true for all housing including BMR housing.
Market-Rate Housing Can Give Seniors an Option to Downsize and Remain in Palo Alto - Most of our friends our age still live in their single-family home. But some, as we did, sold their home and bought a smaller and less expensive place often near services and shopping. And some moved to places like Channing House.
As the years pass, more seniors may no longer want or need their larger single-family home and desire to remain in Palo Alto but in a setting with less upkeep and more access.
I think there will a market for housing like the downtown condo we live in that will help seniors downsize and at the same time open up larger homes for families. And I wonder if the market is there for another facility like Channing House.