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Palo Alto historic board discusses transferring subterranean development rights to residential historic properties
Summary
Board members discussed a proposal to allow qualifying category 1 and 2 historic residential properties to obtain or sell subterranean development rights (basement expansion beyond existing footprints) as an incentive to accept historic listing and preservation covenants.
Board members discussed a proposal to add a transferable subterranean development-rights incentive for qualifying category 1 and 2 historic residential properties, a policy the Historic Resources Board framed as an analogue to downtown commercial floor‑area transfer programs.
Board member Pease introduced the concept as part of the board's work plan goal 4, saying the proposal would permit property owners who agree to list qualified historic homes on the local register to construct basements beyond their building footprints or to sell those additional subterranean development rights as transferable development rights (TDRs) to other residential property owners. Pease presented a case study for a house in Professorville (440 Melville) that showed how the proposed benefit could increase developable floor area significantly compared with existing code limits.
Why it matters: The plan is intended as an incentive for owners of qualifying but unlisted historic homes to accept listing and preservation covenants by offering substantial development value in return. Proponents said the approach could lead to more rehabilitations without altering the visible historic character of homes because added space would be below grade.
Details and concerns: In the case study presented, the existing house (~3,900 sq ft) could expand under current code to about 6,500 sq ft; under the proposed approach, subterranean expansion could increase total developable area to about 10,400 sq ft and create roughly 3,800 sq ft in transferable rights. The presenters said such expansion allows more parking and utilities below grade and could convert detached garages to accessory dwelling units (ADUs).
Staff cautioned that implementing such a policy would require zoning and specific‑plan text changes, and it could raise hydrology, groundwater pumping and floodplain management issues. One staff member noted FEMA limits on new basements in some flood areas; the board acknowledged additional technical and regulatory analysis would be necessary. Members discussed potential receiver sites for purchased development rights and noted residential neighborhoods vary in lot size and suitability for subterranean development.
Next steps: Board members said they had briefed the mayor and vice mayor on the idea and expressed interest in preparing a concrete proposal should the city council wish to consider a code change. Staff said a city‑sponsored code change would need council buy‑in and departmental resources or, alternatively, could proceed as a privately initiated text amendment subject to fees and staff review.
No formal action was taken; the discussion focused on whether and how to further refine the proposal for council consideration.
