Housing to Help Local Retail
Many of Palo Alto’s retail businesses are struggling with lost daytime foot traffic, caused by continued remote work, growth in online shopping, and stiff competition from Stanford Shopping Center and Town & Country.
Our City Council agrees based conclusions from the recently adopted Economic Development Strategy prepared by the City’s consultant, Streetsense. The Strategy is based on a year of work with stakeholders, data analysis, and guidance from the City Council.
To keep our commercial street life vibrant, our neighborhoods thriving, and our tax base secure, our retailers need additional customers - especially customers that are close enough to walk or bike to shopping areas. Consistent with Recommendation #10 of the strategy, we need to build new homes near our shopping districts and the Housing element should be amended accordingly to accommodate this growth.
What Did the Strategy Find?
The Economic Development Strategy makes three key findings:
Retail vacancy rates are 15% on California Avenue and 10% on University Avenue. (The national average is 4%.)
Remote work is a significant cause of this problem. Fewer people are commuting to Palo Alto for work and shopping while here. While some are returning to the office part-time, this issue is anticipated to persist into the future.
This problem will not fix itself. As the report states, “without intervention, demand [for retail space] will not reach parity with the existing retail supply over the next 10 years.”
How Do Help Local Retail?
To solve this problem, the strategy recommends that Palo Alto “Grow the market [for retail space] by enabling residential development in select areas of Downtown Palo Alto and California Avenue.” To do so, we need to “[increase] allowable height and floor area ratio.” This means updating outdated zoning regulations. In addition to adopting the strategy, the City Council “direct[ed] staff to return to Council with options for increasing housing in the California Avenue corridor.”
This is welcome news. Palo Alto needs more homes near all of our retail business districts. And these new homes must be for people at all income levels. This includes people who may work at these retail businesses and those who contribute significantly to our city’s air pollution and climate-changing emissions who might currently have long commutes.
Will This Strategy Work?
Well, let’s simply look to our neighbor to the north. Downtown Redwood City is bustling. The restaurants are full and there are few vacancies in the core area. To quote an article from the San Francisco Chronicle:
When Gebhard Ebenhoech opened Véloro Bicycles downtown, “Main Street used to be a little depressing,” he said. Fox Theater was boarded up. There were few people walking around. “Now there is a lot more foot traffic. I see young families, seniors, couples walking. You get people saying, ‘Oh we just moved in down the street.’ I’m definitely getting some new clients from the housing.”
What will help Palo Alto’s struggling retail businesses? New homes for customers and employees near our shopping districts. We are for it!
How Can You Help?
Interested in helping fight for more housing? Join our Housing Focus Group by emailing us.