How Can We Encourage More Housing?

Palo Alto has a severe housing shortage: a very low rate of home construction over the last fifty years combined with the booming tech economy has given Palo Alto the highest rents in the entire United States.

We’ve talked a little bit about WHY we have a housing shortage, ideas for WHERE we can place new housing, and that brings us to HOW we can encourage more housing stock. There are a lot of opaque policies and rules that govern our built environment and shape the amount of housing that we can build.

For Palo Alto's last Comprehensive Plan and Housing Element, the community already came together to design new pro-housing policies. Unfortunately, they were never implemented by the City Council into new zoning rules that would allow this new housing to be built. As such, there are a number of programs from our current plans that we should consider for our new Comprehensive Plan to encourage additional housing.

1) Relax development standards for second units 

Housing Element Program H-1.1.2: Consider modifying development standards for second units


Secondary units are separate homes established on the same lot, usually created as a cottage in the back.  They can be an excellent way to allow a property to accommodate an older parent, a returning college grad, a disabled relative, or a tenant while preserving the physical character of the neighborhood.  Palo Alto's senior population is expected to increase significantly, and this could enable many people to age in place independently. Palo Alto could encourage secondary units by relaxing some of the stringent development standards that the city currently requires.

There is a new wave of nearby communities doing just this: Belmont adjusted their second unit ordinances this past month, Menlo Park did so in 2013, and Redwood City and the County of San Mateo are currently reviewing their second unit ordinances for possible changes that would facilitate second units.

In Palo Alto, two of the primary hurdles are minimum lot size and parking requirements.  Allowing second units on regular single family lot sizes (current requirement is that the lot size must be 35% greater than a standard lot) and requiring only one uncovered parking space per second unit (vs two parking spaces, including one covered) would give many more families the flexibility they need to accommodate multi-generational living and caretaker scenarios.

Learn more in our earlier post about secondary units.

2) Relax limitations on building residential units above ground-floor retail

Comprehensive Plan Program L-10: Create and apply the following four new Mixed Use zoning standards: A “Live/Work”, “Retail/ Office,” “Residential/Retail,” and “Residential/Office” designations that permit a mix of uses on the same site or nearby sites.” 


There is charm in the old European town centers, and part of the charm is the 3-4 story residential over retail nature of those places. Underlying the charm are best practices that have supported walkable neighborhoods for centuries. Even though our Comp Plan currently supports this idea, Palo Alto's current zoning code does not include a Residential/Retail designation for mixed use, and the code actually limits the amount of residential square footage one can build on any commercial mixed use parcel:


Recently, a downtown parcel proposed adding 33,000 square feet overall (with a transfer of development rights), but only 11,000 sf was allowed to be for residential use.  This inherently makes our jobs/housing ratio worse.  But what if there was no cap on the residential square footage allowed?  Could the project have proposed 22,000 sf of housing instead and 11,000 sf of retail?  

3) Increase or uncap the number of residential units allowed on a parcel

From Comprehensive Plan Policy L-13: Evaluate alternative types of housing that increase density and provide more diverse housing opportunities.  

Multi-family sites are often designated by the number of units per acre allowed (RM-15 = max 15 units/acre, and RM-30 max 30 units/acre), but this discourages creation of many smaller units like studios or 1 bedrooms, or co-housing models.  

Consider an acre of land (43,560 sf) zoned RM-30. Up to 30 units can be constructed, for a total of 26,136 square feet (0.6 FAR per PAMC 18.13.010) Would a developer choose to build 30 2-bedroom units @ 871 square foot each or 30 1-bedroom units @ 500 square feet each?


Cities like Redwood City don’t restrict the total number of units, but pay special attention to maximum dimensions and setbacks of an overall structure.  Palo Alto currently restricts the total allowable square footage built on a parcel and the height/width/depth of the building. Why should we then also set a limit on the total number of units allowed?  Imagine what could happen on our hypothetical acre of land if there was no maximum number of units allowed?


4) Develop Precise Plans for University Avenue, California Avenue, and El Camino

This could be a new program in our next Comprehensive Plan. Mountain View has used Precise Plans for several decades to shape land use policies, design guidelines and structure the development process for small areas of the city.  The downtown Mountain View (Castro Street) precise plan has helped encourage hundreds of housing units around the Castro Street train station, and a recent precise plan for El Camino is starting to help shape that corridor just to our south.



Palo Alto has “concept” area plans for California Avenue and East Meadow, but refined precise plans can help us plan the quantity, location, and mix of housing with other uses.  They can also articulate design concepts such as heights, massing, setbacks, and transitions to match the neighborhood and community needs.

5)  For new housing, increase zoning standards and incentives for car-lite households 


We all bemoan housing affordability and are aware that high land cost is a major factor that increases new housing prices. Given our land constraints, most new housing for lower and middle incomes will be multifamily because of basic math: increasing the number of homes on a single land parcel reduces the land cost per unit. 

There is however a second major factor that increases new housing prices that not many people are talking about: parking space cost. Parking spaces, particularly underground spaces cost typically $60,000/space in a typical new building. The way in which our building codes prioritize parking can sometimes account for 40-75% of the square footage per housing unit. For example, a 400 square foot studio is required to have a gross 300 sf parking space!

High land cost has the math favoring more, smaller units to offset land costs, but the big elephant in those apartments are the requirements around parking which may be outdated or out of sync with modern modes of transportation.

Palo Alto has had a 50’ height limit since 1978.  For 2030, does it make sense to think about increasing densities or heights for new housing only, in targeted places near Caltrain stops, like 27 University Avenue or Fry’s?  Allowing some housing height or density bonuses could free up ground floor space for public or community open space.  To reduce parking costs, incentives for car-lite and car-free households, like lower parking requirements, paid parking, reduced transit passes, car-share or ride-share benefits can help right size the amount of parking needed and prevent unnecessary demand to drive.  

In Conclusion:

There are many policies, rules and constraints that govern our current housing possibilities.  But these rules are products of our community over time, and are not necessarily static.  With the Comp Plan Summit and upcoming revisions, we have a great opportunity before us to shape the future of our community, including the physical, social and economic make up.  While housing is a necessity for everyone, it is not necessary to house everyone in Palo Alto. But we certainly should think carefully about the community we hope to have now and in 2030, and plan for the housing that can enable us to achieve the community we envision. 

If you care about the high cost of housing in Palo Alto, please make your voice heard at The Comprehensive Plan Summit this Saturday May 30th in Mitchell Park Community Center. The housing discussion begins at 2:45pm. You need to pre-register here.

This post is the last of a three-part series. See our first post on why a housing shortage hurts everyone - residents and newcomers alike - and our second post on where can we add new homes in Palo Alto.


Image Credits:



MV ECR Precise Plan:

MV DTN Precise Plan:




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