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Affordable Housing In City-Owned Downtown Parking Lots Feasibility Study.
On August 27, 2024, the Menlo Park City Council (MPPC) held a study session to discuss the feasibility of building affordable housing in each of its eight downtown public parking lots. The City has included the parking lots as sites targeted for new housing in the Housing Element. (See Chapter 7) of its General Plan. City staff presented key findings from its Affordable Housing In Downtown Parking Lots Feasibility Study (“Feasibility Study”) along with several recommendations. While I support the IDEA of adding a reasonable amount of affordable housing downtown, the City’s planning effort is at a very early stage, and the MPCC must first successfully overcome many big challenges and build strong support from the entire Menlo Park community.
The study session focused primarily on (a) identifying the lots most suitable for affordable housing (b) reviewing applicable City zoning laws and the special zoning allowances offered by the State of California (“State”) for qualifying affordable housing projects, and (c) discussing the legal options for the City to allow its land to be used for affordable housing.
- Housing. City staff proposed that 345 units of affordable housing be built on Public Parking Plazas 1, 2 and 3.
- Income Requirements. All housing would only be available to very low-income households that earn 30% to 50% of the average monthly income (AMI) in San Mateo County. Examples: at 50% of AMI, $78,350 for a two-person household and $97,900 for a family of four. (Note: the State of California only requires Menlo Park to build affordable housing for households earning less 60% of AMI and does not require 100% of housing units be affordable.)
. - Zoning. Staff believes the City can take advantage of the maximum development potential of both its Specific Plan and public benefit zoning bonuses. Together these would allow buildings up to 6 to 7 stories (81-85 feet). (Note: there are special State zoning incentives for 100% affordable housing built within one-half of a mile of a major transit stop. These include NO housing density limit, NO minimum parking requirements and building height can be increased by an additional three stories or 33 feet above what Menlo Park zoning would normally allow.)
. - Parking Displacement. The three existing plazas have a total of 556 public parking spaces – 46% of the 1200 total spaces that exist in ALL eight city-owned public parking lots.
. - City Land Disposition. To incent a developer to build 100% affordable housing, i.e., no market rate rents, the City would either sell or lease its land at a below “market rates”. The City would declare that it finds the parking lots “no longer necessary for the City’s use” at a public meeting and then apply for a surplus land exemption with the State.
. - Parking Structure(s). Staff acknowledges that a standalone parking structure will likely be needed and estimates that “In the Bay Area (cost) estimates from 2012 to 2022 have ranged from $30,000 to over $50,000 per space, and (might) be higher in current dollars”. Re: potential funding, staff stated that “standalone parking structures could be funded through an assessment district, parking fees or other sources”.
Current Staff Planning Priorities
- A public parking need assessment will be completed over the next 18 months. Early data and recommendations will be available in fall 2024.
. - Determine developer interest in building the affordable housing IF the city were to lease the city-owned parking lots at below market rates. Develop an initial specification that communicates the City’s primary concerns and requirements for developing housing on the three parking lots.
. - Start the process of applying for a Surplus Land Exemption disposition with the State of California. This application requires that 80% of the space in any housing development be residential housing, with 60% of the units affordable and 20% of the units at market rates.
Major Housing Project Planning Issues
- Community Engagement. Approval of a large housing development(s) that will transform Downtown Menlo Park should require HUGE support from our entire community. But instead, few residents and local business owners even know about either the City’s Housing Element plans or the current MPCC efforts to replace so much downtown public parking. The City has failed to educate our entire community about what it is doing and explain how its decisions will benefit rather than harm our downtown and entire Menlo Park community. The risk that the loss of public parking and protracted construction will irreversibly harm our central business district is very high. Yet the City has paid little attention to understanding and avoiding it? The MPCC needs to conduct public hearings and involve downtown business owners. If the Council fails to fully engage our entire community in its project planning, a future ballot measure might be the only viable option.
. - City Parking Plaza Redevelopment Vision. The City has included all eight downtown parking lots as targeted sites for affordable housing in its Housing Element, the plan submitted to the State of California that shows how the City intends to meet its obligation to add housing during the 2023-2031 planning period. (Note: Chapter 7 describes the potential sites). The City describes the parking lots as “opportunities for Menlo Park to leverage the value of City-owned land in the downtown core, providing affordable housing as well as increasing the vibrancy of downtown. It implies that housing will benefit downtown but does not acknowledge the need to preserve and expand downtown public parking. A large parking structure will be required BEFORE housing is built, and a parking structure will greatly reduce the number of possible housing units. The Housing Element refers to the Villages in Burlingame as a model for building affordable housing in a downtown, but it does NOT acknowledge that Burlingame provides 14 conveniently located parking lots near Burlingame Avenue.
. - Harming Downtown. Menlo Park’s main retail district is already struggling with poor economic and physical conditions. The evidence is undeniable. Store closings exceed openings. Numerous long-term vacancies mar Santa Cruz Avenue. Streets and parking lots are poorly maintained, and sidewalks and crosswalks are stained and dirty. The City has largely ignored these problems. (Note: like other cities, Menlo Park did invest in restaurant outdoor dining areas but this was a defensive response to the COVID epidemic, not a proactive one.) A vulnerable Downtown simply cannot withstand the loss of sufficient convenient public parking for local businesses, and owners – most not Menlo Park residents – are already expressing disbelief that the City would ignore their interests and concerns.
. - Housing-Public Parking Trade-off. Building a 345-unit housing development that spans three large tracts in Downtown Menlo Park is an extremely ambitious endeavor with large potential negative impacts on existing residents, new households, local businesses owners, employees, office workers and visitors due to the potential significant loss of public parking. Creating a plan that fairly balances the needs and preferences of each group will be difficult. Therefore, the City needs a clear set of priorities.
Example – Public Parking
- Downtown businesses (including employees)
- Downtown office workers
- Menlo Park residents
- Affordable housing tenants
- Parking Structure. If a parking structure is required, it should be completed before the construction of any housing so public parking is not eliminated in two existing parking lots at the same time. In December 2020, Palo Alto completed a 636-space parking structure (Sherman Avenue) that cost $50.2M. That cost was $79,000 per space. (Note: In 2017 Palo had originally estimated its construction cost to be $34.2M.) That history implies that a Menlo Park parking structure with the capacity to replace ALL public parking in Plazas 1, 2 & 3 would have cost an estimated $44M if completed in 2020. Construction costs are much higher now and will continue to increase faster that the consumer price index (CPI) until the time Menlo Park actually starts to build one. How will the City justify paying for it?. Potential funding sources?
. - Affordable Housing Parking. It is not clear what amount of private parking is included in the estimates for maximum affordable housing included in the Feasibility Study. If included, what ratio of parking to units was used? Is the assumption reasonable?
. - City-Land Disposition. The City cannot transfer its land ownership rights to a developer IF it needs City land to provide future public parking lots, parking structures and public amenities. So, this land cannot be declared as “not needed by the City”, i.e., surplus. How can the City identify surplus land before it has a final master development plan for the three parking lots?
. - Traffic Impacts. New housing with 345 households will clearly impact the amount of traffic and its circulation on downtown streets, adjacent neighborhoods and El Camino, especially during commute times. The City needs to develop credible projections and mitigation measures.
. - Construction Impacts. Construction of the affordable housing, and potentially a parking structure, will disrupt vehicle traffic in downtown and neighboring areas, e.g., street closures, detours, altered traffic patterns, and congestions and have environmental effects. The City needs to anticipate these occurrences and plan suitable mitigation measures. Otherwise, traffic problems and poor air quality will further harm downtown businesses.
. - City Costs. While there are potential sources of funding for affordable housing developments, the City will likely be responsible for both a portion of the cost of the housing plus any civic infrastructure, e.g. utilities, parking structure, public amenities, and repairing streets damaged by housing construction. Potential funding sources? Likely amount of funding? Timing?
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Downtown Impact Studies
- The City needs to perform a comprehensive, parking feasibility study that provides credible projections for the future demand for downtown public parking and an evaluation of options for providing a sufficient supply.
. - The City needs to assess the impacts of housing, lost public parking and multi-year, development construction on the physical condition, traffic patterns and economic health of downtown.
Next Blog Post
My next post will examine some of the challenges of supplying enough downtown public parking.
Comments
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Thank you for this important focus on the parking requirements for a successful and vibrant downtown.
Another important topic is consideration of what is required for successful low-income housing projects, such as availability of appropriate support services for low-income residents who may include elders on low fixed-income, teachers and retail workers, those who are trying to get back on their feet while recovering from serious health, mental health, addiction disorders. What population segment is the city targeting? Where and how would needed services be available?
Yet another topic is how would existing small businesses be supported in the transition and afterwards?
Appreciate this information. It is astonishing that the city would do this to our downtown businesses, who are already struggling.
So, who gets to decide which lot(s) get chosen? Also, once chosen, how much lead time will the most impacted businesses be given, so that they can end their leases in time? Or is this just paperwork to show the state that MP tried to meet their houses commitments.
Also, agree with the assessment of the quality of maintenance and cleanliness of downtown. Only word to describe it is “sad”. Wish council cared. (cared = clean it and improve it for existing and future businesses).
I have a close friend who, a few years ago, landed in the Tenderloin Housing Clinic. I was appalled at the everyday EXPENSES that went into Security, Medical Care, and monitoring for maybe just 100 people! I don’t think Menlo Park realizes what it’s signing up for … Drugs, Alcohol, and Mental Health problems ain’t cheap to fix… 🙁
Charles Reilly is spot on. This type of housing ends up after a number of years being a huge problem. I’m ex law enforcement and I’ve seen it happen and had to police the results. Put this into our downtown and not only will you be killing businesses that are already struggling, you will make it so we will have even more empty storefronts than we currently do. Between this project and greedy landlords jacking up rents, downtown will end up a ghost town. This is being done by progressives that never see the downside to anything. They never think of the unintended consequences of things. We all end up paying for their lack of foresight. This is not the place for a project like this.
Actually, we are currently paying for the lack of foresight in not building more housing as we added jobs over the last decade plus. The resulting scarcity caused outrageous housing costs. Now, it’s so much harder for young families to move here that the school districts are seeing a noticeable shift in new enrollees. Of course, we should be thoughtful about where we add housing and how we do it. The assumption that all these people earning little enough to qualify are all going to have drug/treatment problems is really quite a take.
Another reason for declining downtown is the business can’t find help to run the business because cost of living is too high. Since the current path is not working, time to try something different in a measure and thoughtful way but the State mandated housing element needs more thought to how it is being implemented.
Where is the plan for thoughtful development on Middlefield and Bay Rds and eventually on the lots on Buchanan? No feasibility studies. No study sessions. No mitigation plans. Just decisions to build higher.