Palo Alto California Ave PTOD (Pedestrian Transit Oriented Development) Traffic Reducing Housing 

DETAILS: PTOD-TRH, 6/22/06 version

PTOD-TRH Policy Implementation Details

PTOD is a new zone in the Palo Alto General Plan Update.  To minimize traffic, council should adopt the following: 

• Council should pass a resolution making a finding of legitimate business purpose to: a) minimize parking demand created by the new PTOD residential development, b) minimize any resultant inconvenience caused to neighbors, c) reduce real-estate development costs to ensure that PTOD real-estate developers make a good profit and are sufficiently enthusiastic about their experience to promote such state-of-the-art transit village development to their real-estate peers, d) minimize added traffic congestion at severely congested local intersections (Level of Service "D" and below), especially around peak commuting hours, e) minimize greenhouse gas emissions, f) achieve these worthy goals as new residents move in and as these residents change job locations over months, years and decades.  The Council should draw the obvious conclusion that PTOD, as the name suggests, is for pedestrian/transit maximization and automobile minimization.  New residents intending to incur substantial automobile mileage have many other more suitable  housing options within Palo Alto .  PTOD is a "low-mileage" place, and high-mileage residents should not be allowed to crowd out low-mileage residents. The resolution could adopt a stronger version of recent Pleasanton and Pasadena TRH resolutions (see http://www.cities21.org/workerHsngCases.htm#Pleasanton )

• Council should pass a resolution to give priority to new PTOD residents with fewer cars who will drive less.  See #2, "TRH Resident Selection Program Priority Tiers" below.  The traffic reduction strategy should cover apartments, condos, and affordable housing units.  

• A maximum of 1.4 parking spaces per new PTOD home should be allowed.  

• All PTOD residential parking shall be "unbundled," meaning residents should be charged at least $50 per month per residential parking space.

• A monthly commute assessment of $50 for market rate apartments and $100 for market rate condos/townhomes should be required to help achieve the legitimate business purpose in ensuing months, years, and decades.  Long single-occupancy vehicle commutes create a "negative economic externality," a negative regional traffic impact.  The commute assessment "internalizes" this cost.  See #3 and #4 below.  

• The City should facilitate the sharing of "complimentary use" adjacent parking spaces (at Agilent and Caltrain) with the new residential developments.  See #6 below. 

The approval of major new residential PTOD projects should be contingent on meeting these adopted policies.  

Further PTOD-TRH details are provided below: 

1. The following general actions will be required to implement PTOD-TRH:

• The City Attorney will undertake a fair housing legal analysis of TRH, possibly utilizing a law firm with specific expertise in this area.    
• A non-profit, such as an affordable housing provider, will administer PTOD-TRH. It is expected that about 98% of Resident Selection scenarios will be covered. The non-profit will develop program clarifications as exceptions arise.    
• New PTOD residents should be assisted in reducing their auto mileage.  At a minimum, a supportive on-line community (via an online discussion board such as Yahoo Groups) should be created to share expertise, with a few minutes of expert support time (volunteer and government staff) provided each day.  Other TDM (transportation demand management) assistance could come from CommuteSmart or via a Stanford Research Park Transportation Management Association. 
• Developers will be responsible for administration and marketing of PTOD-TRH until all for-sale housing units have been sold, at which point the administrative responsibility shifts to The City (using the non-profit for administration). The City will always administer PTOD-TRH for rental properties. 

2. TRH Resident Selection Program Priority Tiers:

• First priority: incoming households that do not own a car and agree not to own one during their occupancy.
• Second priority: Households that have no adult members who commute
• Third priority: Incoming households where all employed adults agree to commute to work via commute alternatives 80% of the time. Commute alternatives include transit, carpool/vanpool, telecommuting, biking, and walking. Members of this tier will be required to provide progress reports and evidence of their commute.  Further, members may be asked to provide "action" photos of their commute, which may be used for marketing purposes.  
• Fourth priority: Incoming households where one employed adult agrees to commute to work via commute alternatives 80% of the time.
• Fifth priority: Incoming households with one adult member with a 3.5 mile or shorter commute (based on Yahoo Maps driving directions distance).  This commute distance encompasses all Stanford Research Park job sites. 
• Because of past TRH success at Stanford West, Stanford employees will be excluded from the Resident Selection Program. 

In the event that there is no waiting list of priority persons, then the housing may be offered to the general public (with some assurances that vigorous efforts have been made to attract priority households.)  All TRH programs to date are fully occupied with long waiting lists, thus insufficient demand is not expected.  

Energetic efforts should be made to accommodate the needs of disabled people.

3. TRH Market Rate Apartments

• 100% of market rate apartments should be covered by the Resident Selection Program. Palo Alto jobs and apartments offer a good match between employment duration and residential duration. Apartments have an average residential duration of from 2 to 4 years (different research studies draw conflicting conclusions), and apartment dwellers will be more inclined to move out of a PTOD apartment when they switch to a job with a lengthy automobile commute.
• For each household, implement a $50 per month household commute assessment for residents who switch job locations and fall out of the TRH Resident Selection Tiers 1-5.  We expect that workers will often be able to re-qualify under a different priority tier when they change jobs.  For those workers who cannot re-qualify, a grace period of six months should be allowed before the commute assessment is collected. This assessment will be collected by the non-profit and used for non-profit purposes. Incoming residents will sign leases agreeing to the commute assessment process. Residential status will be assessed quarterly, requiring an e-mail from the resident's human resources department and a copy of a pay stub. Non-payment of commute assessment may subject rental residents to eviction.
• Subletting will not be permitted on rental units.

4. TRH Market Rate Condos and Townhomes

• Because negotiations for buying/selling residential real-estate are more complex than for rental real-estate, the Resident Selection Program used for apartments will NOT be used to select new condo/townhome residents. For-sale housing will be offered to the general public, with the commute assessment serving as the mechanism to motivate traffic reduction.
• Thus, for each applicable condo or townhome, implement a $100 per month household commute assessment for residents who are not covered by the Resident Selection Tiers 1-5 listed above. This assessment will be implemented immediately, with no extended grace period. This assessment will be collected by the non-profit and used for non-profit purposes. Incoming residents will sign contracts agreeing to the commute assessment process. Residential status will be assessed quarterly.  Non-payment of commute assessment may subject for-sale residents to foreclosure.
• For sale housing units will be deed restricted to require re-sale and subletting via the PTOD-TRH program.
• 100% of market rate for-sale units should be covered by the PTOD-TRH.

5. TRH Affordable Housing (both for-sale and apartments)

• Approximately 20% of PTOD-TRH homes will be affordable. Two-thirds of these homes should be covered by the Resident Selection Program.  Affordable housing is so scarce that one third of these homes should not be restricted by the Resident Selection criteria, because the difficulty of finding both an acceptable job and affordable housing may preclude the ability to reduce traffic. 
• Unchecked, PTOD-TRH could improve the lives of many knowledge workers, but leave low income households farther behind.  In recognition of the social justice issues faced in Palo Alto , an additional one percent of PTOD homes shall be made affordable. 
• The $50 commute assessment will NOT be applied to affordable homes.  However, the $2,500/year TRH auto cost savings will motivate ongoing traffic reduction.  
• For-sale affordable housing units will be deed restricted to require re-sale and subletting via the Affordable Housing Program. Subletting will not be permitted on rental units.

6. TRH Parking

• For 2785 Park Blvd and 195 Page Mill, impose a parking maximum of 1.4 parking spaces per unit.  Of those, 20 should be on-street parallel spaces, and 40+ should be Caltrain lot spaces.  In addition, eight 20-minute on-street drop-off spaces should be provided.  The opportunity for shared parking with Caltrain is very high as the Caltrain lot lies fallow on weekends and on weekdays from 6PM to 8AM .  Parking should be unbundled at a cost of $50+ per month per space.   New PTOD residents will increase Caltrain ridership with no additional cost to Caltrain, therefore Caltrain should jump at the opportunity to share parking.  Caltrain should collect $50+ per month per space for off-hour use.  Additional compensation may be available to Caltrain: a priority resident selection tier may be added for Caltrain workers.
• For Fry’s, impose the same parking maximum of 1.4 parking spaces per unit.  Share parking with Agilent’s huge parking lot, that also lies fallow during non-working hours.  Agilent should collect $50+ per month per space for off-hour use and use the money to cover their parking operations costs.  Additional compensation may be available to Agilent: a priority resident selection tier may be added for Agilent workers.  
• It is estimated that these parking innovations will reduce PTOD residential developers' cost by a total of $11.2 million.  (see calcs at bottom of: wrkfrc_PA_VMT.xls)  
• A PTOD parking permit program should be implemented to distinguish between "new residents" of 195, 2785, and Fry's versus "existing residents" on Olive Avenue.  The permit program will ensure that these two groups only park where they should.  
• From the experience of Casa de Las Fuentes in Santa Barbara, PTOD-TRH parking space demand may be less than 1.4 parking spaces per home, thus it is better to build something on the order of 1.0 parking spaces per home underneath new PTOD homes and fill out the rest of the demand via shared parking.  That way, if actual demand is 1.0 parking spaces per home, there are no resultant wasted parking spaces on PTOD property.  

Complimentary nature of Office and Residential Parking Accumulation, from ULI's Shared Parking

Additional Details

• For TRH, it may be beneficial for Palo Alto to hold a forum on the policy with local policy leaders.  It is also possible to solicit comments from state and national leaders on this incremental improvement to previous TRH programs.   
• MS Excel spreadsheet with annual VMT savings calculations and parking construction cost reductions: wrkfrc_PA_VMT.xls  
• The TDM program should consider how to get residents to California Avenue retail without car: shuttle buses, electric scooters, pedestrian assistance crossing Park Blvd by Fry's, additional bike parking, etc.   

TRH has huge benefits. TRH creates "win/win/win/win/win" outcomes for cities, residents/workers, employers, neighbors, and developers: 

• decrease commute times, particulate/greenhouse emissions, vehicle miles traveled, and gasoline consumption.
• allow workers to walk and bike to work.
• reduce the cost of living for TRH worker/residents, by reducing auto ownership costs by $2,500 per year.
• reduce regional pressure to grow outside the greenbelt.
• increase the profitability of real-estate development by reducing mitigation fees, reducing parking construction/operation costs, and creating unique, high-demand communities.  In addition, PTOD designation provides a 25% land appreciation windfall to landowners.  (For South Bay residential land near shops and Caltrain stations, values increase by 25% - See "Transit's Value-Added: Effects of Light and Commuter Rail Services on Commercial Land Values", Robert Cervero and Michael Duncan, prepared for ULI, July 2001: http://www.rtd-denver.com/Projects/TOD/Rail_Transits_Added_Value.pdf.)
• enable land-constrained cities to meet state mandated "fair share" housing element goals.
• reduce employee turnover by providing better quality of life because of more free time caused by shorter commutes.
• improve areas afflicted with jobs/housing imbalance.

Legal Fine Print

• City Attorneys cannot take the adoption of TRH policies lightly.  Significant legal analysis is required and careful language must be adopted.  Knowledge of Fair Housing Act and California Fair Employment and Housing Act law is required, including "disparate impact" and "legitimate business purpose."   
• The imposition of PTOD-TRH by the city is much stronger legally (from a fair housing standpoint) than voluntary adoption of TRH by developers.  The courts defer to cities that adopt policies supporting a legitimate business purpose.  A real-estate developer is not responsible for the well-being of a city, so may only argue for narrow business purposes related to operation of the business.  
• Although PTOD-TRH will be highly effective at reducing traffic, the TRH Resident Selection Priorities were chosen to be stronger legally (from a disparate impact demographic analysis standpoint) than previous resident selection programs.  For “fair housing disparate impact analysis,” the first four TRH Resident Selection priority tiers do NOT have a local preference area, as residents may commute to any location in the larger market area. 
• It is possible to prefer Palo Alto residents over non-Palo Alto residents within Resident Selection Tiers 1-5. However, such local resident preference adds more legal risk to the fair housing disparate impact analysis. 
• Some existing TRH programs evict residents who fall out of Resident Selection criteria.  For PTOD-TRH, the commute assessment is the preferred ongoing motivation to reduce traffic when residents switch job locations.    

See also these two research documents for further details: