Housing Policies & Projects

Housing is one of the most pressing and complicated issues facing the Palo Alto community and region today. Some of the City's policies and programs aim to increase the total production of housing in Palo Alto, while others are designed to increase housing affordability. Learn more about housing policies, programs, and projects below.

Affordable Housing

Since 2017, the City has contributed or pledged nearly $52 million in funding or land value to affordable housing. This investment has created critical housing for the community and supported several affordable housing projects, including:

1237 San Antonio Road (Project Homekey): This project will provide 88 rooms serving over 200 individuals annually and is made possible through the joint investment of Santa Clara County, $26 million from the State Homekey fund; $5 million donated by Sobrato Philanthropies; $7 million from LifeMoves toward operations; and $11 million from the City of Palo Alto in land and operational expenses.
525 East Charleston Road (Mitchell Park Place): 50 affordable housing units serving residents with intellectual or developmental disabilities with on-site services for residents. The City contributed $3 million to the project.
231 Grant Avenue (Educator Workforce Housing): 110 affordable housing units intended to serve teachers and classified staff from schools in Santa Clara County and southern San Mateo County. The City contributed $3 million toward the project.
3705 El Camino Real (Wilton Court): 59 affordable housing units, including 21 restricted to adults with intellectual or developmental disabilities. The City contributed $20.5 million toward the project.
3980 El Camino Real (Buena Vista Mobile Home Park): The City contributed $14.5 million in addition to support from Santa Clara County and Santa Clara County Housing Authority to preserve the mobile home park. As part of the agreement, the 117 units became deed restricted to ensure continued affordability.
2500 El Camino Real (Mayfield Place): 70 affordable housing units constructed as part of a Development Agreement between the City and Stanford University.
The City offers safe parking for unhoused community members, both in Palo Alto at Geng Road, and in partnership with Palo Alto Churches, who have the ability to apply for this program to offer secure parking.

Find Affordable Housing

Rental Housing

For renters, which make up about 40.5% of the City's resident population, the City offers tenant/landlord mediation services and has enacted tenant relocation benefits for qualified tenants. City Council recently enacted a security deposit limit for unfurnished rental units, as well as a local ordinance that establishes just cause eviction protections for renters in Palo Alto. City Council also directed the development of a registry of rental units in Palo Alto, referred to as a Rental Registry Program (RRP). Learn more about the City's past rental unit policy development activities here.

Find Tenant & Landlord Resources

Housing Production

From a production standpoint, the City continues to meet its regional share of market-rate housing units. The City has issued permits for over 763 market-rate units since 2015, exceeding the goal of 587 units through 2022. Another 312 units were permitted during the same time period, nearly 30% of all total 1,075 units permitted.

Looking ahead, the City has already entitled or is reviewing applications for another 532 housing units. Over 30% of those units would be deed restricted for affordable housing, if built. There are also several projects that have not yet been filed, and anticipated changes to the City's zoning regulations are expected to spur many additional applications.

Comprehensive Plan

The Comprehensive Plan is the primary tool for guiding preservation and development in Palo Alto, and fulfills the State requirement that the City adopt a General Plan to serve as a guiding document, noting the community’s priorities regarding land use, circulation, conservation, housing, open space, noise, and safety. The Plan provides a foundation for the City’s development regulations, capital improvements program, and day-to-day decisions. The Comprehensive Plan was adopted in November 2017, and addresses changes to the demographic, economic and environmental conditions in Palo Alto that are anticipated to occur through 2030. Through a separate process, the City’s Housing Element was updated to provide a framework for growth through 2023. A new Housing Element is being developed and more on this effort can be found below.

Eight themes of the plan include:

Building Community And Neighborhoods
Maintaining And Enhancing Community Character
Reducing Reliance On The Automobile
Meeting Housing Supply Challenges
Protecting And Sustaining The Natural Environment
Keeping Palo Alto Prepared
Meeting Residential And Commercial Needs
Providing Responsive Governance And Regional Leadership

For resources and the full Comprehensive Plan, go here.

Housing Element

The Housing Element is one of seven State-mandated components of the City’s Comprehensive Plan and sets forth the guiding policies and programs to address the housing needs of all households in the city. It offers a comprehensive strategy for the City to provide enough sites for safe, decent, and affordable housing in the community. The Housing Element has two main purposes: to provide an assessment of current and future housing needs and to provide a strategy that establishes housing goals, policies, and programs. State law requires the Housing Element to be updated every eight years. The current (sixth cycle) Housing Element for the planning period 2023-2031 was adopted by the City Council on April 15, 2024. Learn more about the Housing Element Update Process here. The Housing Element was certified by the California Department of Housing and Community Development (HCD) on August 20, 2024.

Included in the Housing Element is the Regional Housing Needs Assessment (RHNA) which represents future housing needs for all income levels in Palo Alto. Palo Alto’s RHNA for meeting regional housing needs is defined by the Association of Bay Area Governments (ABAG) and the California State Department of Housing and Community Development. The table below shows Palo Alto’s allocation of housing units by income group for the upcoming housing cycle. In total, about 6,100 housing units are needed to accommodate 2023-2031 growth for all income groups as estimated through the RHNA process.

Very Low Income

(<50% of Area Median Income)

Low Income

(50-80% of Area Median Income)

Moderate Income

(80-120% of Area Median Income)

Above Moderate Income

(>120% of Area Median Income)

Total

1,556

896

1,013

2,621

6,086

The RHNA allows communities to anticipate and plan for growth in a smart and sustainable way that enhances quality of life and access to resources. Palo Alto must demonstrate adequate housing programs with the capacity to meet the City's RHNA allocation through the updated Housing Element.

2023-2031 Housing Element Implementation

The City’s Housing Element aims to achieve several housing goals including: accommodating projected housing need, as mandated by the State, increasing housing production to meet this need, improving housing affordability, preserving existing affordable housing, improving the safety, quality and condition of existing housing, facilitating the development of housing for all income levels and household types, including special needs populations.

Implementation of the programs included in the 2023-2031 Housing Element is currently underway. Details of these programs are included in Chapter 5 of the Housing Element. The implementation status of programs is reported annually.

For questions about Housing Element program implementation, please contact Coleman Frick, Long Range Planning Manager, at coleman.frick@paloalto.gov.

City of Palo Alto 2023-2031 Housing Element (Certified)(PDF, 18MB)

Appendix A - Past Accomplishments

Appendix B - Public Outreach(PDF, 66MB)

Appendix C -Assessment of Fair Housing(PDF, 7MB)

Appendix D 2023-2031 Housing Element Site Inventory(PDF, 2MB)

Palo Alto Housing Element Update CEQA Addendum (November 2023)(PDF, 12MB)

Site Inventory Map

Annual Element Progress Report

Each year the City of Palo Alto submits an element progress report to the Department of Housing and Community Development and the Governor’s Office of Planning and Research (OPR) in Sacramento. Here are some of our most recent reports.

Additional Housing Element Resources

Affordable Housing Policies

Several policies guide affordable housing stock and development in Palo Alto, including the Affordable Housing Fund and the Below Market Rate Housing Purchase Program. The Affordable Housing Fund is a local housing trust fund established by City Council to provide financial assistance for the development of housing affordable to very low, low, and moderate-income households that live or work in Palo Alto. The Local Housing Trust Fund Program Grant was awarded to the City of Palo Alto in October 2022. Palo Alto will target these funds toward permanent financing loans for qualifying new affordable multi-family residential rental housing projects, such as Eden Housing.

The Below Market Rate Housing Purchase Program is a part of the Palo Alto Comprehensive Plan and is intended to create and retain a stock of affordable housing in Palo Alto for people of low and moderate income.

Downtown Housing Plan

As part of the 2024 City Council Priority "Housing for Social & Economic Balance," Council adopted an objective to develop and identify housing opportunity sites in downtown Palo Alto. The Downtown Housing Plan will support accelerating housing production and furthering fair housing through development of infill sites downtown by establishing policies, development and design standards, and public infrastructure improvements.

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Community Development Block Grant

According to the U.S. Census Bureau on April 1, 2020, the City's total resident population is 68,572. In Silicon Valley, Palo Alto is considered a central economic focal point and is home to over 9,483 businesses. The CDBG Action Plan provides a summary of how the City will utilize its CDBG allocation to the meet the needs of the City’s lower income population. According to the U.S. census data, 6.1% of all residents within the City had incomes below the federal poverty level. Additionally, according to the 2023 Point in Time Homeless Census, there are 187 unsheltered homeless individuals living within the Palo Alto.

CDBG funding allocations fall within several categories such as public services, planning and administration, economic development, public facilities and improvements, and housing rehabilitation. Funds can be used for the creation and preservation of affordable rental units, improvements in lower income neighborhoods, and public services that benefit low income and special needs households. The City awards CDBG funding to projects and programs that will primarily benefit low-income, homeless, and special needs households. The City operates on a two-year grant funding cycle for CDBG public service grants and a one-year cycle for CDBG capital housing rehabilitation and public facilities and improvement projects.

Please review the City's Community Development Block Grant Program webpage for more information.

Housing Impact and In-Lieu Fees

In certain cases, new development has the option to pay a fee instead of planning for community impacts as part of the development project. These fees are considered housing impact and in-lieu fees.

An in-lieu fee is the option to pay a fee instead of creating affordable units. In-lieu fees are typically a one-time payment for new development and are intended to encourage, foster, and preserve diverse housing opportunities in Palo Alto. Fees would be paid to specific funds such as the Residential Housing Fund, Commercial Housing Fund, and Below Market Rate (BMR) Emergency Fund.

The City also requires development impact fees depending on the size and type of development. These are collected prior to issuing any building permit or at a time otherwise specified by City Council ordinance or resolution. This fee offsets the financial impact that new development has on public infrastructure - such as the increased use of parks and community centers, libraries, and public safety resources.

Development Impact Fees: Non-Residential

Commercial/Industrial

Office/Institutional

General Government Facilities

Commercial: $892.00 per 1,000 sq. ft. or fraction thereof

Industrial: $300.00 per 1,000 sq. ft. or fraction thereof

$1,192.00 per 1,000 sq. ft. or fraction thereof

Public Safety Facilities

Commercial: $709.00 per 1,000 sq. ft. or fraction thereof

Industrial: $237.00 per 1,000 sq. ft. or fraction thereof

$946.00 per 1,000 sq. ft or fraction therof

	Commercial/Industrial	Hotel/Motel
Community Center Impact Fee	$1,410.00 per net new 1000 sq. ft.	$240.00 per net new 1000 sq. ft
Library Impact Fee	$840.00 per net new 1000 sq. ft	$140.00 per net new 1000 sq. ft.
Park Impact Fee	$18,190.00 per net new 1000 sq. ft.	$3,100.00 per net new 1000 sq. ft.

	Office/ R&D	Hotel/Retail/Other
Housing Impact Fee: Non-Residential	$42.90 per sq. ft Office/R&D	$24.97 per sq. ft. Hotel, Retail, Other Non-Residential

Development Impact Fees: Residential

	Single Family	Multi-Family
Community Center Impact Fee*	$4,795.06 per unit	$3,547.13 per unit
General Government Facilities*	$1,600.00 per unit	$1,279.00 per unit
Housing Impact Fee: Residential**	$24.52 per sq. ft. apartments (rentals)	$24.52 per sq. ft. apartments (rentals)
Library Impact Fee*	$2,857.80 per unit	$2,113.37 per unit
Park Impact Fee*	$62,039.67 per unit	$45,884.72 per unit
Public Safety Facilities*	$1,269.00 per unit	$1,015.00 per unit

*ADUs under 750 sq. ft exempt

**Residential Housing Impact Fees apply to all residential rental development and mixed use projects with one or two residential ownership units.

In-Lieu Fees

	Single Family	Multi-Family
Housing In-Lieu Fee: Residential*	$91.92 per sq. ft. Single family detached; $61.28 per sq. ft. single family attached	$61.29 per sq. ft. condos
Parking In-Lieu Fee for Downtown Assessment District	$124,275.00 each parking space
Parkland Dedication Fee: In-Lieu Fee	$75,076.89 per unit	$51,747.91 per unit
Parkland Dedication Fee: Land	531 sq. ft. per unit	366 sq. ft. per unit
Public Art In-Lieu Fee**	1 percent of first $120.25 million construction valuation and 0.9 percent of construction valuation for valuation in excess of $120.25 million

*In-lieu fees for single family attached, single family detached, and condos apply to fractional units and in cases where the Council agrees to accept payment of fees in lieu of building affordable units on site. ADUs under 750 sq ft exempt.

**Applies to new commercial buildings including new construction, remodels, additions, and reconstruction that have a floor area of 10,000 sq. ft. or more and a construction value of $200,000.00 or more, and new residential projects of five units or more, with some exclusions.

Traffic Impact Fees

Charleston Arastradero - Commercial	$0.46 per square foot
Charleston Arastradero - Residential	$1,599.00 per unit
Citywide Transportation Impact Fee*	$9,266.00 each

*Per net new PM peak hour trip.

Housing Projects

The following housing projects reflect multiple types (including mixed-use and affordable) and are in various stages of development.

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Planning & Development Resources

Planning & Development Services provides the City Council and community with creative guidance and effective implementation of land use development, planning, housing and environmental policies and programs in order to maintain and enhance the City’s safety, vitality, and attractiveness.

Development Services is a resource for homeowners, businesses, designers and contractors to build safe, healthy and sustainable buildings that comply with applicable codes and regulations.
The Current Planning Division of Planning & Development Services is your go-to for project guidance and advice. They can assist with anything from simple home renovations to complex projects involving new building construction.
The Long Range Planning division guides and develops visioning and implementation programs for the City's housing, land use and community development policies and programs. They are responsible for defining the parameters of what our community should look like and supporting buildings, parkland, businesses, and other tangible features.