Planning commission backs 55-unit affordable housing at 3265 El Camino Real, 3-2

The Planning and Transportation Commission voted 3-2 on Jan. 15 to recommend that the City Council rezone 3265 El Camino Real from Commercial Service to a Planned Community zone to allow a 55-unit, 100% affordable rental development prioritized for Palo Alto Unified School District educators.

Gareth Halls, the city project planner, told commissioners the application now proposes 55 units with on-site parking and expanded tenant amenities and that staff's recommendation was "to recommend approval of the project and the record of land use action to the City Council." The commission's recommendation sends the project forward to council for final consideration.

The proposal calls for 55 apartments, with the applicant committing about 25% of units as low-income units (restricted at 70% of Area Median Income) and the remainder at a moderate-income level (110% AMI). The application package and staff materials describe on-site parking of about 32 spaces (staff) with stacked/lift stalls and 55 long-term bike lockers, four short-term bike spaces at the frontage and five shared electric bikes in the bike room. The applicant and staff face questions about how on-site circulation, trash staging and curbside operations will work given recent Caltrans re-striping along El Camino Real.

The project team said it revised the design after prior hearings to add an upper floor, increase the rooftop open space, enlarge the parking provision compared with the earlier proposal and strengthen its transportation demand management package. Applicant Jason Matloff said the revisions were intended to increase affordability and unit count. "We decided to try to bring a project forward that would address affordable housing, specifically for teachers," Matloff said during the hearing.

What proponents told the commission

The hearing drew about 13 public commenters and multiple statements of support from the Palo Alto Educators Association, the local chapter of the California School Employees Association and community groups. Meb Steiner, president of CSEA Chapter 301, said the development would help classified employees and other school staff who now commute long distances: "I cannot say thank you enough to Mr. Matloff and his company to have someone from the community recognize the need and to step up with a model that can be sustainable," Steiner said. Terry Baldwin, president of the Palo Alto Educators Association, called the project "a game changer" for teacher recruitment and retention.

Key project features and staff notes

- Units: 55 total (applicant now proposes 25% low-income at 70% AMI; moderate units at 110% AMI). Staff materials show anticipated rents that account for a utility allowance used in income/rent calculations. - Parking and circulation: Staff and the city's environmental consultant analyzed vehicle maneuvers into stacked lift stalls; conditions proposed in staff materials would restrict two of the stalls (stalls 7 and 8) to midsize vehicles only. The application includes on-site assigned parking, and parking is proposed to be unbundled from unit rents; the applicant stated a planned parking lease rate of about $150 per month. - Bikes and transit: The applicant and staff expanded the TDM program and agreed to provide free VTA transit passes for all tenants. The project includes 55 bike lockers, four short-term spaces and five shared electric bikes. - Trash and loading: Because El Camino Real curb space was reconfigured by Caltrans, staff and the applicant described a curbside staging plan on Lambert Avenue for trash pickup; bins would be staged early on pickup days after being moved from an internal garage storage area. - Trees and open space: The site contains a valley oak that staff said impacts buildable area; urban forestry recommended removal with replacement plantings and/or in-lieu fees. The applicant enlarged the rooftop open space and added additional canopy and tenant amenity area.

Contested issues at the hearing

Commission debate and public comments focused on several recurring issues: the length of affordability restrictions, the practical affordability of units at the proposed AMI levels, and neighborhood parking impacts.

- Deed-restriction term: Commissioners pressed staff and the applicant on how long the affordable units would be deed-restricted. Staff said the city's zoning code references both a typical 55-year period and a 99-year period in different contexts and that the exact term is commonly addressed in the regulatory agreement negotiated after council approval. The applicant said the regulatory agreement negotiations would determine the final term and that the project team expected to hold the property as affordable for the long term.

- Affordability and subsidy: Some commissioners and public commenters applauded the project's 70% AMI low-income commitment. Other commissioners, however, questioned whether units marketed at 110% AMI are effectively market-rate in Palo Alto's current housing market and noted that 100% affordable projects receive fee waivers; one commissioner estimated waived impact fees in the multiple millions and said that raised questions about the city's subsidy levels for units priced at higher AMI tiers. Commissioner Summa voted no and said she could not make the planning finding that the public benefit justified the entitlements given the level of subsidy for higher-AMI units.

- Parking and neighborhood impacts: Commissioners and speakers also debated whether the project is under-parked for the site and how parking behavior might affect nearby streets. Vice Chair Aiken proposed a condition (adopted as part of the commission's recommendation) requiring leases and tenant materials to inform residents that they "shall" be made aware that future residential preferential parking programs may not permit permits for tenants of the project if the program boundaries are drawn that way, and that the applicant will provide an annual report (aligned with the TDM reporting schedule) showing how many Palo Alto Unified School District employees live in the building and which unit types they occupy.

Commission decision and votes at a glance

- Planning and Transportation Commission recommendation on 3265 El Camino Real (land use/planned community rezoning): Motion to recommend approval and forward to City Council passed 3-2. Vote record (as read into the record): Vice Chair Aiken ' Yes; Chair Chang ' No; Commissioner Heckman ' Yes; Commissioner Summa ' No; Commissioner Templeton ' Yes. Outcome: Recommend approval to City Council. Notes: Several conditions were added or clarified in the commission motion including tenant notice regarding residential parking permit eligibility and an annual reporting condition for PAUSD tenant occupancy.

- Vice chair election (administrative): The commission elected Commissioner Aiken as vice chair earlier in the same meeting. Mover: Commissioner Heckman; Second: Commissioner Summa. Vote: 5-0 (Aiken elected vice chair).

What happens next

Staff told the commission the record and recommendation will go to City Council; the project is tentatively scheduled for a council hearing on Feb. 10. Council will consider the rezoning and the regulatory agreement that will set final terms for deed restrictions, monitoring and enforcement. If council approves the Planned Community rezoning, the regulatory agreement and record of land use action will be completed before building permits are issued.

Why it matters

The project is one of several higher-density, transit-oriented proposals along the El Camino Real corridor and is being positioned by the applicant and local unions as a targeted response to teacher and school-staff housing shortages. The commission's split vote and the public record show continuing tension in Palo Alto's policy debates over how deeply to restrict affordability, how to measure public subsidy and how to manage neighborhood impacts from compact, transit-oriented infill developments.