Council hears staff constraints, funding shortfall as Palo Alto advances housing strategies

PALO ALTO, Calif. — City planning staff and councilmembers traded questions and concerns about how to deliver a wide set of housing strategies while carrying out an intensive, state-mandated housing element program.

Director Jonathan Lait (Planning and Development Services) told the council that several large projects — including the downtown housing plan and San Antonio Road area plan — are “big initiatives that are going to require a lot of our time and resources,” and that some lower-priority objectives were deferred because staff capacity is focused on mandated housing-element work.

Why it matters: The council and staff agreed there is a large gap between Palo Alto’s affordable-housing goals and the dollars available to realize them. Council members said staff vacancies, competing mandates and limited affordable housing funds threaten the city’s ability to produce and preserve income-restricted homes.

Key points from the discussion

- Staff capacity: Council Member Lythcott Haims noted the planning department’s vacancy rate and asked how the department will produce on both the housing element and other strategic objectives. Director Lait confirmed vacancies in long-range planning and said some work could be staggered later in the year; several councilmembers urged departmental hires or outside resources for critical tasks.

- Funding shortfall: Council Member Stone and others pointed to depleted affordable-housing reserves. Director Lait said the council had authorized $5 million recently for an affordable project on El Camino, leaving an estimated $1.5–2.5 million in the city’s affordable housing fund.

- Local revenue options: Multiple councilmembers asked staff to study local funding options. City staff and the city attorney said major revenue sources that move the needle often require voter approval (bonds or tax measures), and would necessitate a community process. Council members also urged exploration of a vacancy ("ghost") tax, locally raised bonds, or a county-level measure to generate funds for affordable units.

- Buena Vista mobilehome park: Deputy City Manager Chantelle Cotton Gaines said the Santa Clara County housing authority remains committed to maintaining affordability at Buena Vista while reassessing project scope in light of funding constraints. Council members requested an explicit milestone and suggested staff keep the council informed as the authority completes its review.

Council direction and next steps

Council members asked staff to: - Bring back a concrete workplan with measurable milestones for large-area initiatives (downtown housing plan, San Antonio area plan and development-impact-fee updates). - Develop and present options to raise additional revenue for affordable housing, including analyses of feasibility and timeline for a local ballot measure or vacancy tax. City manager and city attorney staff said such efforts would require broad interdepartmental work and public engagement.

Ending

Council members said they want immediate action on funding options and clearer milestones on major planning efforts. Staff said it would return with detailed milestones and a proposed approach to begin analyzing local revenue options.