Chapter 18.14 — HOUSING INCENTIVES

This chapter implements the regional housing needs strategy (RHNA) of the City's Comprehensive Plan Housing Element to rezone opportunity sites; facilitates housing production; affirmatively furthers fair housing; and provides incentives for housing development, especially below-market rate housing.

(Ord. 5608 § 2 (part), 2024)

This section implements the rezoning required to meet the RHNA in the 2023-2031 Housing Element, pursuant to Appendix D. Regulations identified in Table 1 and Table 2 modify and replace development standards provided in base zoning district and applicable combining district regulations. This section additionally provides regulations for Housing Focus Areas in portions of El Camino Real and in the GM/ROLM districts that further the goals of the Housing Element.

(a) Applicability: This subsection applies to Housing Development Projects, as defined in Cal. Gov’t Code § 65589.5, on Housing Element opportunity sites listed in Appendix D and on sites within the GM/ROLM and El Camino Real Focus Areas depicted in Figure 1 and Figure 3.

(b) Permitted Uses: Refer to the base zoning district and applicable combining districts for allowed uses, except:

  (i)  Exclusively residential uses are permitted on all Housing Element opportunity sites.

  (ii)  Combining district use regulations shall not apply to exclusively residential projects on housing opportunity sites designated in Appendix D

of the Housing Element to accommodate lower income households.

  (iii)  Sites zoned to allow mixed use development and are identified in Appendix D of the Housing Element as suitable for lower income

households, must be developed with a minimum of two-thirds residential floor area.

(c) Development Standards: Refer to base zoning district and applicable combining districts for development standards except:

  (i)  Residential uses on R-1 zoned sites (faith-based institutions) shall be subject to the development standards for the RM-30 zoning district,

pursuant to Chapter 18.13.040, except that Maximum FAR shall be 1.25 and minimum density shall be 20 units per acre.

  (ii)  RM-20, RM-30, RM-40, CN, CS, CC, CC(2), CD-C, and CD-N zoned sites as modified by Table 1.

  (iii) GM, ROLM, and RP zoned sites as modified by Table 2.

 (iv) PF zoned sites shall meet the following development standards:

  (A) Downtown sites: CD-C standards, pursuant to Table 1 below.

  (B)  California Avenue sites: CC(2) standards, pursuant to Table 1 below.

(v)  Specific Stanford University-owned sites and El Camino Real Focus Area sites may, as an alternative to State Density Bonus Law, meet

base district regulations as modified by Table 3. Housing Development Projects that utilize State Density Bonus Law shall be subject to base district standards or standards provided in Tables 1 and 2, as applicable. Additionally, El Camino Real Focus Area sites shall:

  (A)  Complete Major Architectural Review pursuant to Section 18.77.020 or Streamlined Housing Development Project Review pursuant to

Section 18.77.073, as applicable.

  (B)  Except as provided in paragraph (C) below, provide at least 20% of total units as on-site below-market rate housing affordable to

households earning up to 80% of AMI. This requirement shall apply in place of the basic requirements set forth in Sections 16.65.030 and

The below-market rate units affordable to lower income households and/or their square footage shall be exempt from payment of

development impact fees.

 (C)  Projects proposed on a site for which the Director determines a valid, pending application meets the definition of a “builder’s remedy

project” may provide on-site below-market rate housing consistent with “housing for very low, low-, or moderate-income households,” as those terms are defined in Government Code Section 65589.5. This requirement shall apply in place of the enhanced requirements set forth in subdivision (c)(v) (B) above and shall be credited toward fulfillment of the basic requirements set forth in Sections 16.65.030 and 16.65.040. The below-market rate units provided pursuant to this paragraph (C) shall be subject to payment of development impact fees as set forth in Title 16 of this code.

 (vi)  Combining district design and development standards shall not apply to exclusively residential projects on housing opportunity sites

designated in Appendix D of the Housing Element to accommodate lower income households.

Table 1

Housing Element Opportunity Site Development Standards

(Residential and Commercial Mixed Use Districts)

                     Maximum Far(1)           Minimum                Residential Density (du/ac)(4)

Base Zoning District Landscape Other Development Standards Residential Total Coverage Minimum Maximum Maximum Far(1) Minimum Residential Density (du/ac)(4) Base Zoning District Landscape Other Development Standards Residential Total Coverage Minimum Maximum CC(2) 1.5 2.0 (3) 20 CC 1.25 1.25 (3) 20 See base district regulations:

Real) See base district regulations: CS (Other 1.25 1.25 (3) 20 See HE Appendix D 18.16.060 CN (El Camino See base district regulations:

See base district regulations: RP 1.25 1.25 (3) 25 None; 40 du/ac anticipated

RM-30 1.25 1.25 (3) 20 See base district regulations: See HE Appendix D

RM-20 1.25 1.25 20

NV-R3 minimum density shall be 25 du/ac.

Notes:

(1) Nothing in this table increases the non-residential floor area permitted in any district.

(2) FAR may be increased with transfer of development rights; see Chapter 18.18 for details.

(3) Landscape coverage may be provided above the ground-floor. If standard is not specified, refer to base district regulations.

(4) Where no maximum density is provided in terms of du/ac, maximum density shall be determined by estimating the realistic development capacity of the site based on the objective development standards applicable to the project. Where noted, refer to Housing Element Appendix D: Sites Inventory for specified densities.

Table 2

GM/ROLM Focus Area Development Standards for Housing Development Projects Only

                                                                                  Residential Density
                        Max. FAR          Min. Land-                                                            Max. Lot               (du/ac)(2)                           Min. Resi- dential    Other Develop-

Base Zoning District scape Covera Max. Height Residential Total ge Covera ge Min. Max. Parking Ratios ment Standards (3)

                                                                                                            1 space per studio/

                                                                                                                               1-bed; GM (Focus Area, Figure                                                                None; 90 du/ac

1.                       2.5           2.5      20%(1)       70%           40            antici- pated     60                                                                                                                                      1.5 spaces per
   
                                                                                                                 2-bed+
   
                                                                                 None; see HE
   

GM (Other Opportun ity Appendi x D Sites) 1.5 1.5 30%(1) 70% 25 for antici- pated See 18.20.040 No change See base district densities regulatio ns:

1-bed; ROLM (Focus Area, None;90 du/ac Figure 1) 2.5 2.5 20%(1) 70% 40 antici- pated 60 1.5 spaces per

                                                                                                                  2-bed+

ROLM (Other Opportun 1.5 1.5 (1) 70% 25 None; 50 du/ac 45 No change ity Sites) antici- pated

Notes:

(1) Landscape coverage may be provided above the ground-floor. If standard is not specified, refer to base district regulations.

(2) These sites do not provide a maximum density in terms of du/ac; however, anticipated densities have been determined by estimating the realistic development capacity of the site based on the objective development standards applicable to the project. Where referenced, the densities specified in Housing Element Appendix D: Sites Inventory represent anticipated densities based on realistic development capacities.

(3) Nothing in this table increases the non-residential floor area permitted in any district.

Figure 1: GM/ROLM Housing Element Focus Area

Table 3

Site-Specific Development Standards (Stanford-Owned Sites & El Camino Real Focus Area)

                                                                                 (1)(3)                                                   (1)                                       Pasteur Dr. & 1100 Welch Rd.                      El Camino Real Focus Area
          Location
                                                   (Figure 2)                                      (Figure 3)

                                                                                 (1)(3)                                                   (1)                                       Pasteur Dr. & 1100 Welch Rd.                      El Camino Real Focus Area
          Location
                                                   (Figure 2)                                      (Figure 3)

Minimum Setbacks (feet) Setback lines imposed by a special setback map pursuant to Chapter 20.08 of this code may apply. (7) 15 feet 15 feet 0' - 10' to create a 12' effective sidewalk width Front Abutting low density residential (RE, R2, NV-R2, RMD), R1, or NV-R1 zone district: 20’ (8) Abutting other residential zone district: 10’ Rear and Interior Side See base district regulations: 18.13.040 Abutting non-residential zone district: 10’ for residential use; none for non-residential use (7) 5' Street Side Lot size => 10,000 sq. ft.: 4.0 (Total) Maximum FAR (Total) 3.5 (Total) Lot size < 10,000 sq. ft.: 3.0 (Total) See base district regulations, except: 1. An additional 5,000 square feet of retail and retail-like uses may be permitted, subject to Total FAR limits. Maximum FAR (Non-Residential) See base district regulations: 18.13.040 2. Hotel uses may exceed the base district non- residential FAR provided the project is a Housing Development Project and subject to Total FAR limits. Minimum Landscape/Open Space (2) (2) See base district regulations See base district regulations Coverage Lot size => 10,000 sq. ft.: 80% Maximum Lot Coverage 60% Lot size < 10,000 sq. ft.: 70% Maximum Density (du/ac) None None (6) Maximum Height (feet) for residential Lot size => 10,000 sq. ft.: 85 85 Lot size < 10,000 sq. ft.: 65 portion

Lot size < 10,000 sq. ft.: 70% Maximum Density (du/ac) None None (6) Maximum Height (feet) for residential Lot size => 10,000 sq. ft.: 85 85 Lot size < 10,000 sq. ft.: 65 portion

                (6) Maximum Height    (feet) for non-                                    50                                       50, except Hotel uses may reach 85 feet

residential portion

For lot lines abutting an R1 or NV-R1 zoning district: Sand Hill Rd. frontage only: initial height Initial height: 16 feet, measured at the property line Daylight Plane 60 feet above grade at the Sand Hill Rd. Slope: 45 degrees setback line and a 45-degree angle Other locations: See base district regulations El Camino Real frontage above 55 feet in height: minimum 10 foot step-back from lower facade, for a minimum 70% Upper Story Step Back None of the facade length. See Figure 4. 100 sq. ft./unit (any combination of 100 sq. ft./unit (any combination of common and/or Minimum Usable Open Space common and/or private) private) (2) 1 space/unit Minimum Residential Parking(5) 0.5 spaces/unit (Per AB2097: 0 space/unit within ½ mile of Caltrain) Other Development Standards See base district regulations: 18.13.040 See base district regulations Streamlined Housing Development Project Review and compliance with Objective Design Standards pursuant to Compliance with Objective Design Design Criteria/Standards Chapter 18.24 or Architectural Review and compliance Standards pursuant to 18.24(4) with Context-Based Design Criteria pursuant to base district regulations(4).

Notes:

(1) Site locations as defined in the 2023-2031 Housing Element.

(2) Landscape/open space may be provided above the ground-floor. For sites containing a naturalized creek, up to 50% of the landscape/open space and minimum usable open space requirements may be satisfied by open space within the creek area (as defined by the top of bank).

(3) Housing may be developed in phases and individual phases may not meet all standards. However, upon completion the project as a whole must conform to these standards. Individual parcels shall be deed restricted to address standards that are met in aggregate, but not on a parcel-by-parcel basis. In addition, for each phase, the applicant shall demonstrate, to the satisfaction of the Director, that the overall site is capable of meeting all standards upon completion of the project as a whole.

(4) Except, the following objective design standards shall be modified to meet the realistic capacity identified in the Housing Element:

(a)  18.24.050(b)(5): Diversity of Housing Types shall not apply.

(b)  18.24.060(b)(7): Parking/Loading/Utilities, shall be replaced with the following standard: Above grade structured parking levels facing a public right-of-way or publicly

accessible open space/path with the exception of vehicular alleys, shall compose no more than 50% of any public frontage. Garage facades fronting on public right-of-way shall be screened with decorative architectural screening (e.g. perforated metal panels, murals), lined with habitable uses, or screened with landscaping (e.g., green wall, climbing vines).

(c)  18.24.050(b)(1): Upper Floor Step Backs & Daylight Planes shall not apply.

(5) Projects providing fewer than 50% of the parking spaces that would be required under Section 18.52.040 shall develop and implement a transportation demand management plan containing, at a minimum: free transit passes for residents; and provision of outlets appropriate spaced for e-bike charging at 20% of bicycle parking spaces.

(6) Railings and parapets shall be excluded from height calculations in this Table 3 only to the extent they are required for health and safety standards in Titles 15 and 16 of this code.

(7) For the purposes of this development standards table, the following definitions apply:

“Abutting” refers to parcels that share a property line, exclusive of parcels with intersecting corners, parcels separated by a street, or parcels under common ownership.

“Lot Size” refers to the total lot area of a proposed project, which may be composed of one or more parcels, generally under common ownership, which may include parcels

developed in phases over time.

“Front Setback” for properties on El Camino Real means the setback from El Camino Real.

“Street Side Setback” for properties on El Camino Real means the setback from a street that intersects El Camino Real.

(8) Below-grade encroachment into rear and interior side setbacks is permitted for the site at 3300 El Camino Real.

Figure 2: Pasteur Drive Focus Area

Figure 3: El Camino Real Focus Area

Figure 4: Upper Story Step Back (El Camino Real Focus Area)

(Ord. 5657 § 2, 2025: Ord. 5634 § 3, 2024: Ord. 5608 § 2 (part), 2024)

(a) Purpose

The housing incentive program modifies base zoning district standards and streamlines review to encourage higher-density multi-family housing production. The program is a local alternative to State Density Bonus Law.

(b) Applicability

The housing incentive program shall apply to the following zoning districts or locations:

(1) Chapter 18.13: RM-20, RM-30, RM-40

(2) Section 18.14.020: GM/ROLM Focus Area (see Figure 1)

(3) Chapter 18.16: CC(2), except the sites at 156-164 California Avenue; CN or CS-zoned sites on El Camino Real, except sites in the Automobile Dealership (AD) Combining District; CS sites on San Antonio Road between Middlefield Road and East Charleston Road

(4) Chapter 18.18: CD(C)

(5) Chapter 18.29: NV-R3, NV-R4, NV-MXL, NV-MXM, NV-MXH, NV-PF

(c) Procedures

The regulations established by this section provide increases in development standards for eligible projects electing to take advantage of the Housing Incentive Program. A property owner may elect to use the site consistent with the underlying zoning district.

The Housing Incentive Program provides flexibility in development standards that allow for a density increase that would in most cases exceed density bonuses under state density bonus law (Government Code Section 65915). Therefore, a project applicant may utilize the provisions of this section as an alternative to use of the state density bonus law implemented through Chapter 18.15 (Density Bonus) of this Title, but may not utilize both this section and state density bonus law. If an applicant utilizes state density bonus law, the provisions of this section shall not apply.

(d) Permitted Uses

The following uses shall be permitted to use the housing incentive program:

(1) Multiple-Family Residential.

(2) In conjunction with a Multiple-Family Residential use, any uses permitted in the underlying district, provided the uses are limited to the ground floor.

(e) Development Standards

For all eligible zoning districts, the housing incentive program shall modify underlying zoning district standards as shown in Table 5. Floor area ratio (FAR) and building height standards are specified in Table 6; unlike the standards in Table 5, these standards vary by zoning district and whether or not a site is classified as an opportunity site listed in Appendix D of the Housing Element.

Table 5

Housing Incentive Program Development Standards

Minimum Site Specifications Standards for All Eligible Zoning Districts Subject to regulations in:

   Minimum Site Specifications          Standards for All Eligible Zoning Districts           Subject to regulations in:

Minimum Setbacks Same as underlying district or 10 ft. (whichever Front Yard (ft) is less) Rear Yard (ft) Same as underlying district Setback lines imposed by a special setback Rear Yard abutting residential zoning district Same as underlying district map pursuant to Chapter 20.08 of this code or (ft) imposed to create required effective sidewalk Interior Side Yard if abutting residential Same as underlying district widths apply. zoning district (ft) Same as underlying district or 8 ft. (whichever Street Side Yard (ft) is less) 100% (commercial districts and GM/ROLM Maximum Site Coverage Focus Area) 70% (residential districts) See 18.14.020 for modified standards Minimum Landscape/Open Space Coverage Same as underlying district applicable to Housing Element Opportunity Sites Minimum Usable Open Space Same as underlying district Maximum Height (ft) See Table 6 for standards, by zoning district Portions of a site within 50 ft of a low density residential district (RE, R1, NV-R1, R2, NV-R2, 35 ft(1) RMD) Unless the underlying zoning district standard is more permissive, the daylight plane shall be Daylight Plane for lot lines abutting a low as follows: density residential district (RE, R1, NV-R1, R2, Initial height: 16 feet, measured at the property NV-R2, RMD) line Slope: 45 degrees RM-20 Zone (Non-Housing Element Opportunity Site): 40 du/ac All other RM Zones: 60 du/ac, except no Maximum Residential Density (net) density limit if at least 10% of units are 3+ bedrooms All other zones: None. Minimum Commercial FAR Same as underlying district See Section 18.40.180 (retail preservation) Maximum Total FAR See Table 6 for standards, by zoning district Additional adjustments to the required ratios 1 space per studio/1-bed Minimum Vehicle Parking may be considered per Chapter 18.52

(a) Purpose

The affordable housing incentive program is intended to promote the development of 100% affordable rental housing projects by providing flexible development standards, modifying allowed uses, and streamlining the project review process.

(b) Applicability

The affordable housing incentive program shall apply to 100% affordable housing projects in the following zoning districts or locations:

(1) Housing Element Opportunity Sites listed in Appendix D of the Housing Element; or

(2) Properties located within one-half mile of a major transit stop or one-quarter mile of a high-quality transit corridor and zoned CD, CN, CS, and CC, set forth in Chapters 18.16 and 18.18 of this Title, in accord with Chapter 18.08 and Chapter 18.80, but excluding the Town and Country Village Shopping Center, Midtown Shopping Center, and Charleston Shopping Center (unless otherwise allowed by subsection (i)).

(3) Sites eligible for the Housing Incentive Program pursuant to Section18.14.030(b).

The regulations established by this chapter shall apply for 100% affordable housing projects in lieu of the uses allowed and development standards and procedures applied in the underlying district. A property owner may elect to use the site consistent with the underlying zoning district.

The affordable housing incentive program provides flexibility in development standards that allow for a density increase that would in most cases exceed density bonuses under state density bonus law (Government Code Section 65915). Therefore, a project applicant may utilize the affordable housing incentive program and the provisions of this section as an alternative to use of the state density bonus law implemented through Chapter

(a) Multi-family residential projects on housing opportunity sites shall be a “use by right,” subject to all of the following requirements:

(i) The site is designated in Appendix D of the Housing Element to accommodate lower income households and it is either:

(A) A nonvacant site included in one prior housing element; or

(B) A vacant site that has been included in two or more consecutive, prior housing elements;

(ii) The site was not previously approved to develop a portion of the city’s regional housing need allocation;

(iii) The project restricts at least twenty percent of the units to rents or sales prices affordable to lower income households; and

(iv) The site has sufficient water, sewer, and other dry utilities available and accessible.

(b) “Use by right” shall have the same meaning as provided in Government Code section 65583.2, subdivision (i).

(c) “Lower income households” shall have the same meaning as provided in Health and Safety Code section 50079.5.

(d) Qualifying projects shall be reviewed pursuant to Section 18.77.074.

(Ord. 5615 § 2, 2024: Ord. 5613 § 2, 2024)

(a) Affordable Housing on Higher Education and Religious Lands

(1) Notwithstanding any conflicting provision of this Title 18 or the Comprehensive Plan, a qualifying housing development project under California Government Code Section 65913.16 shall be a use by right.

(2) Housing development projects utilizing this section in the R-1 Single-Family Residential District and the Low-Density Residential Districts shall be subject to the development standards for the RM-30 zoning district, except that the maximum floor area ratio (FAR) shall be 1.25.

(3) All housing development projects utilizing this section shall comply with Chapter 18.24 (Contextual Design Criteria and Objective Design Standards).

(b) Supportive Housing in Multi-family and Mixed-use Zones.

(1) Supportive housing shall be a use by-right in zones where multi-family and mixed uses are permitted, including nonresidential zones permitting multi-family uses, if the proposed housing development satisfies all of the requirements of California Government Code Sections 65650- 65656.

(2) All housing development projects utilizing this section shall comply with Chapter 18.24 (Contextual Design Criteria and Objective Design Standards).

(c) Provided they comply with the city's objective standards, by-right projects under this section shall not be subject to any discretionary review nor environmental review under the California Environmental Quality Act. By-right projects under this section shall be processed in accordance with

(Ord. 5651 § 5, 2025: Ord. 5646 § 5, 2025)

(a) Purpose.

(b) Applicability. The TOD Combining District shall apply to all sites within a TOD zone, except: (1) sites owned by the City of Palo Alto; and (2) sites excluded by ordinance from the effect of Government Code section 65912.157 because they were designated as local historic resources on the Palo Alto Historic Resources Inventory as of January 1, 2025. It is the intention of the City Council that the TOD Combining District permit development in accordance with the development standards set forth herein. Therefore, to the extent standards contained elsewhere in this Title 18 necessarily preclude development of the densities and residential floor areas required for a site within the TOD Combining District to qualify under Government Code section 65912.161, subd. (b)(1)(A), such standards shall be applied to allow for development on that site of the densities and residential floor areas set forth in subdivision (c).

(c) Development Standards. Transit-oriented housing development projects may elect to utilize the following development standards in-lieu of the standards set forth in the underlying district. Except as provided herein, the standards in the underlying district shall apply:

(1) For sites within 1/4 mile of a TOD stop, unless the underlying district is more permissive:

Maximum Residential Floor Area Ratio 1.75:1 Minimum setbacks (feet) Front and rear 10 Side 4 Daylight Plane for lot lines abutting a low Initial height: 16 feet, measured at the property density residential district (RE, R1, NV-R1, R2, line NV-R2, RMD) Slope: 45 degrees Maximum density None Minimum density Greater of: 30 du/ac or 5 units Maximum site coverage 70%

(2) For sites further than 1/4 mile but within 1/2 mile of a TOD stop, unless the underlying district is more permissive:

Maximum Residential Floor Area Ratio 1.5:1

Minimum setbacks (feet) Front and rear 10 Side 4 Daylight Plane for lot lines abutting a low Initial height: 16 feet, measured at the property density residential district (RE, R1, NV-R1, R2, line NV-R2, RMD) Slope: 45 degrees Maximum density None Minimum density Greater of: 30 du/ac or 5 units Maximum site coverage 70%

(3) For sites adjacent to a TOD stop, Maximum Residential Floor Area Ratio shall be the greater of 2.25 or the FAR provided in the underlying zone.

(Ord. 5703 § 2, 2026)