City Council - October 22, 2025

Council leans toward SB 79 review before deciding the downtown plan’s future

The City Council took no formal vote, but its discussion generally favored analyzing an SB 79 transit-oriented development alternative before deciding whether to continue, pause or end Palo Alto’s Downtown Housing Plan. Members also generally supported a limited-term ad hoc committee, and the mayor said one would be created to help evaluate the options.

SB 79 takes effect July 1, 2026. Staff said the law allows by-right residential heights of 65 to 95 feet, densities of 100 to 160 units per acre and floor-area ratios of 3.0 to 4.5 within a half-mile of qualifying stations. A locally prepared alternative could redistribute development potential, but it could not reduce an individual site’s capacity by more than 50% or increase another lot beyond 200% of the state-law allowance.

Staff presented three broad paths: continue the Downtown Housing Plan while applying SB 79, pause the plan to prepare an alternative or stop the plan. The vice mayor leaned toward a pause, while another member questioned whether the alternative’s limited flexibility would justify its cost and effort. Other members wanted to retain selected housing-production tools, including office-floor-area transfers and consideration of additional housing sites. Staff said the plan’s tested development prototypes are not currently financially feasible, although conditions could improve, and noted that the 2024 Housing Element identifies baseline capacity for 334 homes across 32 downtown opportunity sites.

The discussion generally supported focusing first on the downtown station area, considering California Avenue afterward and allowing the San Antonio Area Plan to continue. Staff still must examine costs, environmental review, development feasibility, state requirements and potential buildout scenarios. Staff hoped an alternative-plan effort could be completed by the end of 2026, while councilmembers were asked to send the city clerk their preferences for the ad hoc committee.

Council informally favors the 72-unit Lot T design

Councilmembers offered informal support for a six-story, 72-unit design for the proposed 100% affordable-housing project on city-owned Lot T. No formal action was requested or taken, but members generally preferred Option 2 because it includes larger family-oriented homes, no studios, favorable light and air and what they viewed as a comparatively manageable funding gap.

Option 2 has an estimated total development cost of $78.3 million and assumes a $5.5 million city contribution. The alternatives were a five-story, 54-unit project costing $57.9 million with a $4.1 million city contribution and a six-story, 68-unit project costing $74 million with a $5.2 million contribution. The city funding was estimated at about $76,000 per home and would likely take the form of a low-interest, long-term loan.

The development team reported a financing gap of slightly more than $2 million that might be filled with county or other funding. Different figures were presented for available city money: the agenda packet listed about $7 million in affordable-housing funds, while staff said during the meeting that approximately $9.7 million was available across several city sources. Councilmembers asked the team to keep seeking funds while preserving deeper affordability, raising concern that one potential mixed-income program could permit rents as high as 120% of area median income.

Members also raised concerns about the building’s massing along Kipling Street and discussed whether additional Architectural Review Board involvement could improve the design without delaying construction. Parking discussions focused on replacing Lot T’s 52 spaces and the proposed Lot D garage, which was described as having 274 public spaces compared with 88 currently at that lot. The garage’s final configuration remains unresolved. Three public commenters supported advancing the housing proposal, while another urged the city to balance replacement parking, design quality, financial feasibility and streamlined review.

Alta Housing is expected to hold a community meeting by the end of 2025 and submit a final application in early 2026. Architectural Review Board proceedings are anticipated in February or March, followed by the project and development agreement returning to the council in spring 2026.

Council seeks tighter oversight of consultant services

In a study session with no motion or vote, councilmembers generally supported a citywide review of consultant practices and called for clearer outsourcing criteria, stronger staff oversight, better quality control and more consistent performance evaluations. The council approved consultant services totaling $27,073,412 in 2024.

Staff said the city does not currently have a standardized way to evaluate consultants during or after an engagement. Members suggested measuring budget and schedule performance, deliverable quality and responsiveness, while establishing escalation procedures when work falls short. They also asked the city to consider whether recurring functions should be brought in-house and how local expertise could be used without compromising independence.

Staff is developing a guide covering decisions to outsource, consultant selection, project management, community engagement and closeout. The city also plans to ask consultants whether the proposed expectations are workable. Staff expects to return after the start of 2026 with conclusions, next steps and a summary of 2025 consultant data.

Second-round ballots produce two commission appointments

The council appointed one candidate to the Parks and Recreation Commission and one to the Public Art Commission during second-round balloting. Four votes were required for appointment; the Parks and Recreation result was 4-3, and the Public Art result was 5-2.

The fall recruitment covered three vacancies each on the Human Relations, Parks and Recreation, and Public Art commissions. The available meeting excerpts do not identify the candidates, show the first-round results or establish the complete appointment roster, including any Human Relations Commission selections.

Primary sources

Watch the meeting on YouTube · Read the official meeting packet