Palo Alto council pauses on sponsoring SB 457 after months of debate over "builder's remedy" projects

Palo Alto city leaders paused a decision on whether to sponsor SB 457, a proposed state bill by Sen. Josh Becker that would change how and when developers may qualify for the state's "builder's remedy" path to approval for housing projects.

The council said it needed more information and more time to coordinate with neighboring jurisdictions before committing to be a sponsor. Staff told the council the bill was added to the legislative calendar quickly and that detailed legislative analyses and stakeholder outreach remained incomplete.

SB 457 would do two primary things, according to staff summary presented at the meeting: first, it would require a developer to file a complete, formal application (rather than a preliminary application) in order to claim builder's remedy protections; second, it would shift the relevant certification date that controls which versions of the law apply from the date HCD (the state Housing and Community Development Department) certifies a housing element to the date the local governing body adopts the housing element that is later certified. In short, staff said, the bill would tighten the window for opportunistic projects and make the local adoption date the controlling milestone.

Townsend Public Affairs, the city's legislative advocate, told the council the language had been moving quickly in Sacramento and only became available to staff late in the day. "The legislative process moves extremely fast," Carly Shelby of Townsend Public Affairs said during the meeting, noting that committee scheduling and draft text changed over the prior week.

Council members said they supported the bill's aim to block out-of-scale or otherwise opportunistic projects'projects several speakers at the meeting described as "flagrant fouls"'but expressed unease with the short timetable and the absence of broader regional coordination. Council Member Lythcott Haines, who urged tighter controls on speculative filings, called out the Menlo Park proposal at 80 Willow Road as the kind of application the bill targets: "This bill is about those builder's remedy projects that I call flagrant fouls, such as 80 Willow Road in Menlo Park," she said.

Council members also debated scheduling and outreach. After discussion the council voted to postpone a final decision and asked staff to return with additional analysis and outreach results; no final sponsorship or opposition was adopted. Staff advised council that the bill could be heard in Senate committees in late April and that letters of support typically are submitted about a week before a committee hearing. Council members directed staff to continue stakeholder outreach to neighboring cities and to provide additional legislative context before the council revisits the request.

The council did not adopt a final position on SB 457 at the March 24 meeting.

What happens next: staff will (a) continue outreach to neighboring cities and regional partners; (b) track the bill text and any committee amendments; and (c) return to council with a recommendation and more complete analysis before the council takes a final position.

Ending: Because the draft bill and committee schedule moved quickly, council members said they wanted additional time to gather municipal partners and make a regional case rather than act unilaterally. The item will return to the council for further consideration; no final vote or sponsorship was recorded on March 24.