Planning Commission to Repeal Downtown Development Cap


The fate of the 75 apartments in the Hotel President building may be impacted this Wednesday evening at 6 pm when Palo Alto’s Planning and Transportation Commission discusses whether to end the Downtown Development Cap, a 32-year old law limiting new hotels, offices, and other nonresidential growth downtown.

Back in 1986, the City worried that traffic and parking problems might arise if commercial activity increased Downtown.  To provide a chance to evaluate and potentially stop detrimental commercial growth, they enacted the Downtown Development Cap, which halts for a year new Downtown nonresidential space once 350,000 square feet has been authorized.  The conversion of the Hotel President Apartments into a hotel is one such project the Cap would halt, as a hotel is a new nonresidential use.  The one-year moratorium gives the public and City government time to craft new policies, such as a permanent limit on new commercial Downtown space.

City records show we are close to or have perhaps reached the 350,000 square foot limit, thanks to a recent surge in Downtown office construction.  The City’s running total has not added in parking and common areas of many new buildings, even though the Cap does not say to exclude those.  If such areas are included, the 350,000 square foot limit has been reached.

In January of 2017, a slim majority of Council members acted to eliminate the Downtown Development Cap and its protections, with “slower growth” Councilmembers DuBois, Filseth, Holman, and Kou voting to retain it.    The majority claimed that Downtown would still be protected by the city’s 50,000 square foot annual limit on new office buildings, but that limit has loopholes and allows Downtown offices to grow far faster than they have on average over the last 32 years, leading to even worse traffic and parking problems.  The annual office limit also allows apartments to convert to hotel and offices, unlike the moratorium imposed by the Downtown Development Cap.

The 2017 Council vote affected only the City’s Comprehensive Plan, which is a policy document, but left the actual Downtown Development Cap in effect.  Just this month, after the proposed Hotel President conversion was announced, City staff began a push to eliminate the Cap by removing it from the Municipal Code.

We urge you to come to Wednesday’s Planning Commission meeting at City Hall to support retaining the Downtown Development Cap.  Here are three important reasons to keep and strengthen it:

First, it is an important protection for Downtown residents whose buildings might otherwise be converted to commercial space.  This includes not only the Hotel President Apartments but also the Laning Chateau at 664 Gilman.  Although city “grandfathering” rules that govern oversized buildings should also prevent these conversions, the new owners of the Hotel President Apartments claimed just this week those laws do not apply.

Second, the concerns back in 1986 about Downtown growth’s impact on traffic and parking have unfortunately proven prescient.  Rush hour traffic is creating enormous problems for nearby neighborhoods.  Parking has become a nightmare, thanks to numerous exemptions from parking laws granted to developers and to more workers being packed into existing buildings.  The City is issuing up to 1,200 permits to Downtown employees so they can park all day in front of residential homes many blocks away.   These problems are far worse than in 1986 and the City has not even studied how eliminating the Cap could further worsen traffic and parking.

Third, vastly more office space has been built than housing, increasing commute times, rents, greenhouse gases, and the jobs/housing imbalance.  Every new square foot of Downtown offices takes away the opportunity to utilize that same square footage for housing there instead.  Making the Downtown Development Cap permanent would benefit housing enormously by prioritizing residential development.

If you can’t attend this Wednesday’s meeting, please email the Planning Commission at Planning.Commission@CityofPaloAlto.org a message in your own words.

More information:

P&TC meeting agenda for July 25, 2018

P&TC staff report for July 25, 2018

P&TC public comments for July 25, 2018

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