If cities don’t meet state housing requirements, they face the ‘builder’s remedy’ penalty

The 11-story Channing House at 850 Webster St. is one of four buildings in Palo Alto exceeding 10 stories. The others are the 101 Alma St. condos (14 stories); the 525 University Ave. offices (15 stories), and Forest Towers at 501 Forest (13 stories). All four were built before 1974, the year City Council imposed a 50-foot limit on future buildings. Google photo.

This story was originally printed on Nov. 21 in the Post. If you want to get the scoop on local news, pick up the Post in the mornings at 1,000 Mid-Peninsula locations.

Daily Post Staff Writer

Palo Alto City Council may be forced to approve undesirable developments if the city doesn’t get its eight-year housing plan approved by the state before Feb. 1, City Manager Ed Shikada said.

That’s because there’s a provision in state law called the “builder’s remedy,” which says that cities that don’t have a housing plan aren’t allowed to deny housing projects, as long as 20% of the units are set aside for low-income households.

That means the city’s restrictions on height and density couldn’t be enforced on these partially affordable developments.

“The builder’s remedy may require a city to approve a housing development that varies significantly from local code requirements,” Shikada said in a memo to council.

Several developers have filed applications using the builder’s remedy in Sacramento and Southern California, where cities have an earlier deadline to turn in their housing plans, Shikada said.

Palo Alto’s deadline is Feb. 1. The city is planning to submit its first draft for review by end of the year, but the state has 90 days to provide comments.

Council will discuss the housing plan again on Nov. 28.

The housing plan required by the state is called the Housing Element. It’s a document that lists properties where housing can reasonably get built over the next eight years, as well as programs for making it easier to build. 

Each city is given a number of housing units for which it has found locations, and Palo Alto’s allocation for the next eight years is 6,086 units. A lot of the new housing must be for low-income residents too.

Law becomes tougher

The Housing Element in the past has largely been a planning exercise with no real teeth. But for the 2023-2031 planning cycle, penalties for non-compliance include fines, loss of local control and the builder’s remedy. 

At the same time, Palo Alto’s allocation is three times higher than it was in the last planning cycle.

The city has permitted 1,062 homes since 2015, planner Tim Wong told the Planning and Transportation Commission on Wednesday.

The city has had no trouble building housing for people with an above moderate income, permitting 750 of these units, including 114 this year.

But the city has permitted only 283 units for low and very low income residents since 2015, and none this year.


  1. A citizens committee has prepared a Housing Element, anticipating that it will be submitted to the State. (https://paloaltohousingelement.com/wp-content/uploads/2022/11/Palo-Alto-Housing-Element-Final.pdf) The public comment period for the Housing Element ends December 7. In the council campaign, it seemed some of the candidates — including those who claimed they were “passionate” about housing — weren’t aware that the Housing Element was done and would undergo public review.

  2. Palo Alto is deservedly facing the “builder’s remedy” due to gross inaction by the NIMBY faction of our city council past and present, our planning and transportation commission, planning department and others. I for one hope the “builder’s remedy” becomes a reality in Palo Alto. And thanks to our bold state legislators who have pushed progressive state housing legislation, like SB 9, down the throats of the NINBY crowd here in Palo Alto and in other recalcitrant wealthy communities in the state.

    • Regarding SB9 from Bloomberg news:

      “Consider the example of Minneapolis, which voted to effectively eliminate single-family zoning citywide in 2019, …

      The policy was lauded by scholars, policymakers and the press, who pointed to the rule change as a key mechanism to increase housing construction, reduce costs of living and ease residential segregation.

      Unfortunately, evidence thus far points to little progress in achieving any of those goals — at least as a result of this policy. Between 2018 and 2021, according to city data, permits for small apartment buildings doubled, but only to 81 total housing units in those types of structures — a tiny figure in the context of the city’s 180,000 households. At the same time, prices for single-family homes on lots affected by the zoning change increased, though outcomes varied by neighborhood.”

      Another study showed that Minneapolis SB9 upzoning helped cause the increase in prices for single family homes.

      SB9 was a gift to homeowners.

      One day I hope to see the following New Yorker cartoon: Front street view of two suburban single family homes separated by a hedge. Near the front on the left of the hedge, a woman, sunhat, gloves, trowel on her knees planting flowers in the bed. On the other side of the short hedge, leaning over is her neighbor. The dialogue, starting with the neighbor goes like this.

      “Beautiful Morning Karen! Are you planting Lobelia!?
      “No. I’m fortifying the exclusionary zoning of our R-1 neighborhood to increase my property values and hoard opportunity to deny access to minorities, the poor, and millennials.”

      Aram, if you believe that everyone on earth is entitled to live in Palo Alto, and that the neighbors have been actively plotting to exclude you for the last 50 years, then I have an SB9 duplex to sell you in Atherton for only $6.5M, or a 300sf live-work coffin to rent you for $3500/mo.

      The problem with Progressive housing policy is that Progressives have misdiagnosed the problem. Garbage in, garbage out. Progressive legislators and housing policy have been captured by for-profit developers whose products maximize ….. profits. Surprise! They increase gentrification, income segregation, and displacement of low-income families.

      Your legislators are feckless. They’re telling you they can write zoning laws to integrate expensive neighborhoods so that teachers, retail workers, and VC’s can live side by side, kumbaya. But what they produce are expensive luxury coffin apartments for tech software engineers whose starting salaries are $140k and higher.

      Marc Berman was never Palo Alto’s sharpest blade, and Josh Becker never made a land-use approval in his life before becoming a Senator. For those of us who rose through the ranks of Planning Commissions and City councils and tried to act as regulatory land-use bodies for what quickly became the priciest land on earth, they haven’t a prayer or a clue.

      No-one knows Palo Alto better than Palo Alto. Zoning that might work in one micro-market of Palo Alto won’t even work across town in another micro-market.

      There’s no cavalry coming to save you. Only unintended consequences from unplanned development zoned by State legislation.

      The NIMBY’s you hate did more for affordable housing by limiting office than any supply-side policy will ever achieve in creating housing, and you will never see it or understand why.

  3. I’m sorry the Governor disagrees, but this is NOT downtown Los Angeles. Many of us have worked our whole lives to live here. If we wished to live in a giant Housing Project, we could have moved to one long ago …

  4. Twenty years from now kids won’t believe that Palo Alto used to be one of the nicest cities in the U.S. and everyone wanted to live here. City Mgr Shikada fails to mention that “Low income housing” in Palo Alto is $1.7 million buckerooskis and it won’t put even one homeless person or single mom under a roof. What it will do is allow a lot of rich developer/donors (just check our local supe candidates donors for a good list) to make a lot of money by building housing for Google and Apple employees. Maybe a few Facebook employees that got out before it tanked.

    The state is trying to force all communities into a one-size-fits-all model. Roll back the mandates and restore local control!

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