City of Palo AltoHousing Element Update
What is a Housing Element?
The Housing Element is one of the State-mandated components of the City’s Comprehensive Plan. It offers a comprehensive strategy for the City to provide enough sites for safe, decent, and affordable housing in the community. The Housing Element has two main purposes:
- To provide an assessment of current and future housing needs and the constraints people can encounter in meeting these needs
- To provide a strategy that establishes housing goals, policies, and programs
State law requires that cities and counties update their housing elements according to statutory deadlines. The update is undertaken to identify the jurisdiction’s housing needs and establish a strategic plan to meet those needs. The updated Housing Element must be certified by the California Department of Housing and Community Development (HCD) by a pre-determined deadline, which for Palo Alto is January 31, 2023. Additional information on the process and requirements can be found in Related Regulations and FAQs.
Monday August 22, 2022 | 5:00 – 6:30 PM | Zoom
City Council Review of Draft Housing Element Goals, Policies, and Programs
This Housing Element update represents the City of Palo Alto’s sixth Housing Element and plans for the years 2023 through 2031. The City values the input of residents and stakeholders throughout the update process and will offer numerous opportunities to be involved in a variety of ways.
The existing Housing Element can be accessed from the Related Planning Documents section of this webpage.
What will the Housing Element update include?
As communities evolve, the needs of residents change, and with these changes, housing needs also change. The Housing Element update will assess how current demands are being met and will plan for projected housing needs over the next eight years. Palo Alto continues to prioritize housing availability for all residents, tailored to the unique demographics of the community. The results of the Regional Housing Needs Assessment (RHNA) allocation will guide planning and development to support the evolving housing needs of Palo Alto residents.
In accordance with State law, the Housing Element update must include the following:
- Community Needs Assessment: A complete analysis of the specific housing needs and an inventory of the resources and constraints relevant to addressing housing needs
- Sites Inventory: An inventory of land suitable for residential development that could accommodate the City’s RHNA allocation
- Constraints Analysis: an evaluation of governmental and nongovernmental barriers to housing production in Palo Alto
- Goals, Policies, and Programs: Identification of specific policies and actions to implement the Housing Element
- Other analyses, policies, and goals required to meet community housing needs, and/or comply with applicable State law
Draft Sites Inventory Map
Sites that are proposed to be included in the Sites Inventory can be viewed in this interactive map
Frequently Asked Questions
What is a Housing Element and what does it contain?
Since 1969, California has required all local governments to plan to meet the housing needs of everyone in the community through the development of a Housing Element. A component of the General (or Comprehensive) Plan, the Housing Element provides a strategy for promoting safe, decent and affordable housing. The Comprehensive Plan is Palo Alto’s blueprint for how the city will grow and develop.
Per state law, the specific purposes of the Housing Element are to assess both current and future housing needs and constraints, and to establish housing goals, policies and programs that provide a strategy for meeting the city’s housing needs.
The current City of Palo Alto’s Housing Element, adopted in 2014, identifies strategies and programs that focus on these five objectives to satisfy housing needs:
- Conserving and improving existing affordable housing
- Maximizing housing opportunities
- Assisting in the provision of affordable housing
- Removing constraints to housing investment, and
- Promoting fair and equal housing opportunities.
When and why does the Housing Element need to be updated?
State law requires regular updates to the Housing Element to ensure relevancy and accuracy. These updates are required every eight years. The time from one update to the next is called a housing cycle. Palo Alto is in the fifth housing cycle that began in 2015 and will end in 2023. The upcoming sixth Housing Element cycle will cover the next eight-year planning period (2023-2031).
To comply with state law, the Palo Alto City Council must adopt an updated Housing Element by January of 2023. Following adoption, and as a final step, the updated element will require state review and certification.
If Palo Alto does not meet this deadline, the City would need to prepare a new Housing Element in just four years and could face tens of thousands of dollars in fines per month until it approves a plan. In addition, without an approved housing plan, the risk of housing-related lawsuits and challenges to the City’s entire Comprehensive Plan increase.
Having an approved housing plan avoids these penalties, helps maintain local control over land use decisions, and makes Palo Alto eligible for state grants to help fund infrastructure improvements.
What is the Regional Housing Needs Allocation and what is the City of Palo Alto’s RHNA?
A major component of the Housing Element update is the Regional Housing Needs Allocation. The RHNA is a representation of future housing need for all income levels in a region. Palo Alto’s RHNA for meeting regional housing needs is defined by the Association of Bay Area Governments (ABAG) and State Department of HCD. More details about RHNA are available in the ABAG Regional Housing Needs Allocation Draft Methodology.
Providing housing to meet the needs of all income levels is critical to the social and economic health of a city. Palo Alto is required to plan for its income-based housing allocation to address its share of the Bay Area region’s housing needs. Income groups include: “very low income” (<50% of the Santa Clara County region’s annual median income (AMI)), “low income” (50-80% AMI), “moderate income” (80-120% AMI), and “above moderate income” (>120% AMI). The 2020 AMI for Palo Alto is $141,600 for a family of four.
The table below shows Palo Alto’s allocation of housing units by income group for the upcoming sixth housing cycle. Approximately 40% of the allocation satisfies the housing needs of very low- and low-income families. In total, about 6,100 housing units are needed to accommodate 2023 – 2031 growth for all income groups as estimated through the RHNA process.
Palo Alto Draft RHNA
Very Low Income
(<50% of Area Median Income)
(50 – 80% of Area Median Income)
(80-120% of Area Median Income)
Above Moderate Income
(>120% of Area Median Income)
The RHNA is required by California state law for every jurisdiction in the state and it is the responsibility of the City of Palo Alto to track progress towards the building of these housing units during the planning period (2023-2031). See the City’s 2019 Housing Element Annual Progress Report.
Must cities build the housing required by RHNA?
While cities do not generally build housing – that is the function of private developers – they do adopt plans, regulations and programs that provide opportunities for how and where housing development occurs. An example of an adopted plan is the Comprehensive Plan, which through its Housing Element provides housing programs and through its Land Use and Community Design Element guides where and at what densities housing can be built.
What makes a house affordable to an income group?
In a word, density. The foundation of Housing Element Law is based on the premise that density is a proxy for affordability. The idea being, the more housing units on a site (density) translates to lower construction costs per unit, which translates to lower rental/sale prices of those units (affordability). Based on this, HCD assigns minimum density figures to each income category. In Palo Alto, the highest density figure, a maximum 50 units per acre of land, is assigned to its Transit-oriented Residential land use designation.
How will housing locations be selected?
The updated housing plan must show the exact locations where future housing can be built and identify the potential number of homes that can be built at those locations. When it comes to these important decisions, the City of Palo Alto is not starting from scratch. During the beginning stages of reviewing housing locations, the City limits or eliminates sites:
- With sensitive habitat or species
- Where the topography is not conducive to building
- That are not safe because they are in a flood zone or high-fire area
- In areas deemed off limits by the airport because they are in the flight path or noise levels would be too high
Areas that could be designated for additional housing include:
- Vacant lots not designated as open space
- Underutilized sites, such as lots with uses that are no longer needed or need rehabilitation
- Locations where housing could be become denser than it is today
- Locations near public transit and essential services like libraries and neighborhood serving retail centers
- Areas where housing could be added near commercial buildings or in business parks, creating “live-work” neighborhoods
- Sites where infrastructure, such as water and sewer service, can support more housing
City regulations ensure housing is not located where sensitive habitats or other constraints occur. They work together with City policies, such as those in the Comprehensive Plan, to identify suitable housing sites.
Sites that are proposed to be included in the Sites Inventory can be viewed in this interactive map
What about other important topics, like housing the homeless or the high cost of housing? Are those addressed too?
Yes. A housing element discusses issues, trends, and solutions for additional topics relevant to housing, including homelessness and high housing costs. The City’s current Housing Element is a great resource as it shows exactly what information housing elements must contain, ranging from age of residents to supportive and transitional housing, and from building permit fees to new home prices.
How to Get Involved
We want your input! Community engagement is vital to the Housing Element update process.
The Housing Element update is a community-based process that will include a variety of public engagement opportunities. Check this page and other City resources for up-to-date information on events and opportunities to engage or join our mailing list below.
The City will continue to take measures to protect the health and safety its residents and business owners during the COVID-19 pandemic. Community outreach will be facilitated in a manner that prioritizes safety as it continues to make opportunities for the community involved.
Join our email list to receive the latest updates
There are no community surveys at this time.
Working Group Meetings
Housing Element Working Group Meeting #15 – May 5, 2022
Housing Element Working Group Meeting #14 – April 7, 2022
Adhoc Committee Meetings
Housing Element Community Workshops
Rotary Club of Palo Alto Presentation – June 6, 2022
Housing Element Community Workshop – May 15th, 2021
Planning and Transportation Commission Meetings
Housing Element Update Schedule
The most complex task of the Housing Element (HE) will be the site selection therefore it will be the first and primary focus for the City. Upon completion of the site selection, the City will do its environmental review of the sites concurrent with the preparation of a draft HE. Both draft HE and the environmental document will be reviewed by the public and ultimately reviewed by the City Council.
Regional Housing Needs Assessment
RHNA is a process driven by the State that quantifies the housing need for each jurisdiction. The State determines each planning region’s housing needs based on demographic information and anticipated growth in the area. The regional planning body, known as a “council of governments” or COG, then allocates the housing need amongst all the jurisdictions within its region. The assessment is updated periodically, and the COG for the San Francisco Bay Area, the Association of Bay Area Governments (ABAG), is in the process of finalizing the sixth cycle RHNA allocation plan, to be adopted in late 2021.
The RHNA allows communities to anticipate and plan for growth in a smart and sustainable way that enhances quality of life and access to resources. The allocation made in the sixth cycle RHNA for Palo Alto must be included in the additional housing planned for in this update of the Housing Element.
The Housing Element update must demonstrate adequate housing programs with the capacity to meet the City’s RHNA allocation, along with any other current or projected housing needs identified in the community needs assessment. In consultation with HCD, ABAG developed the Draft RHNA Methodology and Final RHNA Subregional Shares, which details the City’s allocation, separated into four income categories: Very Low Income, Low Income, Moderate Income, and Above Moderate Income.
Palo Alto Draft RHNA
Many new State housing laws relevant to this cycle’s update have been enacted since the City of Palo Alto’s last Housing Element update was adopted and certified in 2017. The draft 2021 Housing Element update will incorporate and address pertinent housing law changes through analysis, new policies, or new programs. The relevant laws include:
- Affordable Housing Streamlined Approval Process: Senate Bill (SB) 35 (2017), Assembly Bill (AB) 168, and AB 831 – These bills support a streamlined, ministerial review process for qualifying multifamily, urban infill projects in jurisdictions that have not approved housing projects sufficient to meet their state‐mandated RHNA.
- Additional Housing Element Sites Analysis Requirements: AB 879 (2017) and AB 1397 (2017) – These bills require additional analysis and justification of the sites included in the sites inventory of the City’s Housing Element.
- Affirmatively Furthering Fair Housing: AB 686 (2017) – AB 686 requires the City to administer its housing programs and activities in a manner to affirmatively further fair housing and not take any action that is inconsistent with this obligation.
- No-Net-Loss Zoning: SB 166 (2017) – SB 166 amended the No‐Net‐Loss rule to require that the land inventory and site identification programs in the Housing Element include sufficient sites to accommodate the unmet RHNA. The Project sites inventory far exceeds the City’s RHNA, allowing for additional sites to be used for additional housing units as needed.
- Accessory Dwelling Units (ADU): AB 2299 (2016), SB 1069 (2016), AB 494 (2017), SB 229 (2017), AB 68 (2019), AB 881 (2019), AB 587 (2019), SB 13 (2019), AB 670 (2019), AB 671 (2019), and AB 3182 (2020) – The 2016 and 2017 updates to state law included changes pertaining to the allowed size of ADUs, permitting ADUs by right in at least some areas of a jurisdiction, and limits on parking requirements related to ADUs. More recent bills reduce the time to review and approve ADU applications to 60 days, remove lot size requirements and replacement parking space requirements and require local jurisdictions to permit junior ADUs.
- Density Bonus: AB 1763 (2019) and AB 2345 (2020) – AB 1763 amended California’s density bonus law to authorize significant development incentives to encourage 100 percent affordable housing projects, allowing developments with 100 percent affordable housing units to receive an 80 percent density bonus from the otherwise maximum allowable density on the site. AB 2345 created additional density bonus incentives for affordable housing units provided in a housing development project. It also requires that the annual report include information regarding density bonuses that were granted.
- Housing Crisis Act of 2019: SB 330 – SB 330 enacts changes to local development policies, permitting, and processes that will be in effect through January 1, 2025.