Palo Alto commissioners continue debate on "shrink‑wrap" downtown zoning change to align with housing plan

The Planning & Transportation Commission on Oct. 8 took initial testimony and discussion on a proposed zoning text amendment that would modify or repeal parts of Palo Alto’s so‑called “shrink‑wrap” rule, which currently prevents property owners from replacing nonconforming above‑grade floor area if doing so would alter the building’s three‑dimensional envelope.

Applicant Ken Hayes (Hayes Group Architects) told the commission that the 2016/2017 amendments have 'mummified' downtown investment, arguing that owners are reluctant to demolish and rebuild if they must preserve an older building’s exact 3‑D shape. Hayes said removing the constraining language would enable reinvestment that yields modernized retail and office space, improved accessibility, energy efficiency, and potential housing without increasing total nonconforming floor area.

Staff and commissioners asked for time to reconcile the applicant’s draft with concurrent city work, including the downtown housing plan, retail revitalization priorities and potentially imminent state changes under Senate Bill 79 that could alter allowable heights and FAR in the downtown. Staff recommended continuing the item to a date uncertain to assess historic‑resource implications, to quantify parcels affected, and to avoid conflict with pending state policy.

Motion and next steps: Vice Chair Chang moved to continue the zoning text amendment to a date uncertain and the motion passed 5‑0. Staff will return with revised code language, analysis of the applicant and staff alternatives (Attachment A and Attachment B in the packet), an estimate of affected parcels, and considerations about interplay with the downtown housing plan and SB 79. The PTC solicited feedback favoring either the applicant’s simpler repeal (Attachment A) or a staff‑limited approach (Attachment B) that would incentivize retail and residential reconfiguration but limit broader changes.