Council selects Alta Housing for 100% affordable Lot T project; directs resident-only parking scenario and asks for up-to-seven-story plan

The Palo Alto City Council on Jan. 21 selected Alta Housing as the city's preferred nonprofit development partner to create a 100% affordable housing project on city-owned Lot T at Kipling and Lytton avenues, and gave staff preliminary direction on parking, height and unit mix.

Staff presented two refined proposals received in October 2024 from Alta Housing and MidPen Housing. The site is roughly 20,000 square feet (about a half acre) and currently provides 52 public surface parking spaces; staff said peak occupancy in recent counts was about 40–45 percent. Each developer submitted conceptual plans under three parking scenarios: (A) resident-only on-site parking (no public replacement on-site), (B) partial on-site public parking replacement plus resident parking, and (C) little or no on-site parking. Alta's proposals required a smaller city funding gap in staff's analysis; MidPen proposed higher unit counts in some scenarios and a larger initial city gap but argued economies of scale could lower per-unit costs.

Julia Knight, principal planner, told council staff recommended negotiating exclusively with Alta Housing based on Alta's lower requested gap funding across the scenarios, experience in Palo Alto and a design approach staff judged feasible at neighborhood scale. Knight asked council to provide preliminary direction on three points: the parking scenario, an approximate target unit count/mix, and an allowable building height.

After extensive questioning from council and applicants, Council Member Stone moved and Council Member Lythcott Haines seconded a motion to: (1) direct staff to enter an exclusive negotiating agreement with Alta Housing for Lot T; (2) proceed under parking Scenario A (on-site resident-only parking); (3) request Alta return with conceptual designs up to seven stories that maximize total affordable units while preserving a strong share of family-sized units; and (4) require a robust transportation demand management (TDM) program to reduce resident parking demand and avoid overflow into nearby neighborhoods. Council discussed the need to replace any lost public parking elsewhere in the downtown (staff had flagged Lot D as a candidate for replacement parking infrastructure) and emphasized early neighborhood engagement, unit size balance, and resident services.

The council voted unanimously on the motion to select Alta and provide the direction above. Council asked both respondents to continue refining financial assumptions (including state and county voucher and tax-credit programs) and for staff to return with next steps for an exclusive negotiating agreement and an anticipated schedule for entitlements.

Ending

Staff will begin exclusive negotiations with Alta Housing on Lot T and will return to council with a formal exclusive-negotiation agreement, the developer's technical designs (including a plan up to seven stories), and recommended next steps for entitlements and any off-site parking replacement plan. The council also asked staff to ensure the project includes aggressive TDM measures, family-sized units and early community engagement.