Palo Alto council approves updates to El Camino Real focus area, with changes and recusal votes

PALO ALTO — The Palo Alto City Council on Tuesday approved revisions to the El Camino Real housing focus-area zoning that raise maximum allowable density and change several development standards, saying the updates are designed to speed housing production near transit.

The council voted 5–0 (Council members Venker and Lowing recused) to adopt staff recommendations with several amendments, including direction to staff to study and reduce a 50-foot special setback on Hansen Way to about 20 feet, allowance for certain below-grade parking encroachments subject to environmental and utility constraints, and language directing staff to return with provisions to allow hotel development in the focus area at heights comparable to housing. "The proposal is to expand the focus area, to make some changes to development regulations, and then update the affordable housing requirements based on some changes in state law," said Jean Isberg, Lexington Planning consultant, while presenting the draft ordinance to council.

Why it matters: The focus-area rules were created to steer higher-density housing to El Camino Real, a major transit corridor. Staff described the changes as intended to encourage lot consolidation, make projects more feasible and align city rules with recent state housing laws. The housing element program that created the focus area anticipated later refinements; council action Tuesday folded several of those refinements into the municipal code.

What the ordinance does: Under the draft ordinance, qualifying sites can seek higher floor-area ratios (up to four FAR) and increased height (up to 85 feet) in exchange for on-site affordability and objective design standards that speed technical review. The ordinance also standardizes how upper-story massing and the daylight plane are measured, and exempts certain lower-income units from development impact fees when projects provide at least 20% lower-income units on site.

Debate and changes: The Planning and Transportation Commission had split on one key design control: a daylight plane standard. "The PTC had a split motion, recommending either a 45-degree plane or a steeper 30-degree plane," Isberg told council. Staff recommended a 45-degree standard when the focus-area project borders single-family zones; several council members agreed that 30 degrees would be too restrictive for the corridor and could reduce housing yield.

Council members also directed staff to: - Propose reducing the special Hansen Way setback to about 20 feet and return with transportation analysis and proposed ordinance language; - Allow below-grade parking to encroach into interior setbacks in limited circumstances, subject to utility and environmental constraints; and - Return with recommended code language to permit hotel uses in the focus area at comparable heights to residential projects, and to clarify FAR for mixed-use projects.

Public input: Developers and housing advocates spoke in support of the ordinance. "These updates strike an important balance, offering developers the clarity and flexibility required to build feasible projects," said Mark Johnson of Acclaim, which is planning a large project on El Camino. Several neighborhood speakers urged caution on specific sites and urged protections for small businesses and walkable commercial blocks.

Process and timing: Staff said the ordinance is intended to implement Housing Element Program 3.4.e and to fold several pre‑screened parcels into the focus area. Council directed staff to include three additional tier‑2 parcels fronting El Camino Real in the ordinance map and to return with any needed refinements for parcels that abut single-family zoning. Passage of the ordinance as revised requires a four‑vote majority; the council approved the measure 5–0 with two members recused.

What's next: Staff will prepare final ordinance language, study the Hansen Way setback reduction with the Office of Transportation, and draft the code text to allow hotels within the focus-area rules. The ordinance will return for the second reading with the amendments included, and staff said they would bring back details on creek/open-space crediting and the mechanics of below-grade encroachments.

Ending: Supporters said the changes could unlock hundreds of infill housing units along El Camino Real, while critics urged careful attention to neighborhood transitions and to ensuring small, walkable commercial districts are preserved where appropriate.