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Laura Melahn, a Menlo Park City Council candidate, has a detailed housing plan that she says is a cheaper, more realistic path to providing very-low-income housing units in Menlo Park. But critics of the plan, who include her opponent for the District 4 council seat, call the plan a “smoke screen” designed to block housing on the city’s downtown parking lots that doesn’t pencil out.
Melahn, who is running against Charlotte Reed for Mayor Betsy Nash’s seat, published the housing plan on her campaign website in July.
Her proposed amendment to the city’s housing element aims to address a shortfall in planned affordable housing by shifting capacity for 345 very-low-income units away from city-owned downtown parking lots to two other sites: Parkline, an approved housing development on the SRI campus, and the former U.S. Geological Survey campus, where the development application is still pending.
Melahn proposes securing deeper affordability restrictions on units planned at these two sites, which would make them affordable to lower-income households than what’s currently envisioned. To do it she would use money from the city’s Below Market Rate housing fund, in which $4 million is currently available.
Critics of Melahn’s plan say it is designed to block housing development downtown. They also argue that the BMR fund cannot be used for the buydown approach that Melahn’s plan describes.
Three of the downtown parking lots earmarked for 345 affordable units under Menlo Park’s current housing element have for years inspired fervent debate, and the city has fallen behind its self-imposed timeline for delivering the homes by 2027. Melahn argues that her plan would create a more realistic financial path by delivering the affordable units elsewhere. She also notes that the parking lots would remain zoned for housing.
“I wrote this housing plan because I see how stuck Menlo Park is right now,” Melahn told The Almanac. She added over email, “The economics have to come before the promise. This amendment prices the homes first, secures them where the agreements are actually being written, and promises the state what Menlo Park can fund.”
But critics of Melahn’s plan contest the premise of relocating affordable housing units to another site and the financial feasibility of the plan.
“My opponent’s plan in particular is out of sync with how housing is financed,” said Reed over email. “Suggesting we ‘buy down affordability’ at alternative sites, instead of developing downtown, is not maximizing the development potential of any site in an efficient way.”
Both sides agree, however, that preserving the city’s state-mandated housing element compliance is paramount — and each argues that their opponent’s policy would put compliance at risk.
In Menlo Park’s housing element, certified in March 2024, the city articulated its blueprint for 2,946 new housing units by 2031 — a number assigned by its Regional Housing Needs Allocation (RHNA). Of these, 740 units must be affordable for very-low-income households, 426 for low-income households and 496 for moderate-income households, for a total of 1,662 affordable units.
During the eight-year housing cycle, cities can face enforcement for violating state housing-element law. The state can revoke a city’s housing-element compliance finding, triggering consequences that could include ineligibility for some state funds, court-imposed financial penalties and the “builder’s remedy,” which limits a city’s ability to reject qualifying housing projects based on local zoning rules.
Menlo Park, which got its housing element certified a few months late in March 2024, already has one controversial builder’s remedy application, a controversial high-rise project at the former Sunset Magazine campus at 80 Willow Road, that is the subject of litigation with the project’s developer.
A report written by city staff in July showed that Menlo Park is indeed lagging in its production of very-low-income housing. As of the end of 2025, 137 of the 740 very-low-income units – roughly 19% – had been permitted, and an additional 130 units were in the active pipeline or in pending projects. That leaves 473 units unaccounted for in the very-low-income category.
Melahn said that her housing plan, and the housing element amendment she proposed, respond to two changes from the city’s 2024 Housing Element: Meta’s decision to shelve its massive Willow Village redevelopment project, which would have added a substantial number of market-rate homes and 306 affordable units, and delays to the downtown parking lot developments, which account for a significant share of the city’s planned affordable housing.
“We as a city have experienced a situation where basically two of our biggest swings are challenged,” Melahn told The Almanac. “What I don’t want to see happen to Menlo Park is have us once more be surprised when we fall out of compliance with the state and become subject to builder’s remedy.”
Jeremy Levine, a policy manager at the Housing Leadership Council of San Mateo County, called Melahn’s plan a “smoke screen” to cover up its goal of blocking housing.
“(It’s) a plainly illegal attempt to not comply with the city’s housing element, which was approved by HCD,” Levine said, referring to the California Department of Housing and Community Development.
HCD did not respond to a request for clarification about how housing element noncompliance is assessed.
Levine said debate over the downtown parking lots has stalled progress toward building housing there. The years-long controversy prompted Measure P, a citizen-led initiative that would require voter approval for any project that would significantly alter all eight city-owned lots and is on the Nov. 3 ballot. Though Melahn has remained neutral on the measure, her proposed housing plan would shift planned housing from the lots to other sites, aligning with Measure P supporters’ goal of maintaining surface parking in the downtown business district.
Melahn’s plan and its supporters
Melahn has a spreadsheet on her website that models her housing plan and has drafted a housing element amendment for Menlo Park that would implement the plan.
Melahn said her approach would cost the city less public money than the three proposals that have been submitted to redevelop the three downtown parking lots located between Santa Cruz and Oak Grove avenues. Those three proposals, which differ in size and other details, all say that building replacement parking garages creates a project funding gaps ranging from $19 million to $45 million associated with building replacement parking garages, according to a report commissioned by the city from the consulting firm Strategic Economics.
The City Council, faced with several unpalatable options for bridging the funding gap, discussed its options last month but hasn’t made any decisions yet.
Melahn’s plan hinges on the idea that, if the city is going to have to help fund low-income housing development by subsidizing replacement parking, it would be better off subsidizing the difference in affordable rents for units at projects that are already in the pipeline: Parkline at SRI and the former USGS campus on Willow Road, where Presidio Bay plans a mixed-use redevelopment.
Parkline, a mixed office and housing redevelopment approved by the City Council in 2025, has no very-low-income units, 244 low-income units, seven moderate-income units and 549 market-rate units in its current iteration. Melahn calls this “the one-notch problem,” saying the project “misses the category where our most critical shortfall lives by one notch” – very-low-income housing. Of the 244 low-income units, 154 are in a dedicated affordable housing building restricted to households earning up to 60% of area median income (AMI), which is currently $126,000 for a family of four in San Mateo County.
But Parkline, the former SRI International research campus at 333 Ravenswood Ave., has since submitted a revised “phase 2” proposal that would add 282 homes to the development. Melahn sees the revision as leverage to negotiate deeper affordability for the building with 154 affordable units, lowering the income limit from 60% of AMI to 50% of AMI, which qualifies as very-low-income housing.
Figures in Melahn’s plan are based on several assumptions, including market-rate and below-market-rate rents and the number of bedrooms in each apartment. Under her proposal, the city would compensate the developer for the difference between the rent a tenant pays for a more affordable apartment and the rent the developer could otherwise charge. For example, Melahn’s model estimates that the difference between rents at 60% and 50% of AMI for a two-bedroom apartment would be about $452 per month, or $5,424 per year.
The challenge is estimating that cost over the 55-year period during which a unit must remain affordable. The model assumes that the $452 monthly gap remains constant for 55 years and that the unit is never vacant.
To estimate what those future payments would be worth in today’s dollars, the model applies a 5.5% annual discount rate. That rate accounts for the time value of money: funds available today can be invested or otherwise put to use, while future payments are worth less in present-day terms. Under those assumptions, the present value of the additional subsidy would be about $93,000 per unit, Melahn’s model says. That means the city would have to spend $93,000 per unit to compensate the developer for the loss of rental income over 55 years.
Melahn estimates that the public contributions sought by developers for the three parking lot development plans proposed by Alliant, Presidio Bay and Related/Alta amount to $100,000 to $250,000 per unit. The difference between those two figures, too, rests on a range of differing assumptions, including how to value the city’s land. For example, Melahn’s lowest estimate for the Related/Alta funding gap is $100,000 in public funds per unit. But that figure drops to $74,000 if using the funding gap number – $19.2 million – provided by the city’s consultant Strategic Economics.
Melahn’s plan argues that public funds could go farther per-unit by paying the difference in rent.
Melahn added that the same buydown strategy could be used for the Presidio Bay’s USGS development, which is still under negotiation. The more units that would be subsidized by the city, the higher the cost to the city.
Melahn’s plan offers multiple scenarios that would add 345 to 452 very-low- and low-income homes at a cost of $15 million to $59 million in city cash. The lower-cost end of that range, however, assumes that 85% of the cost at USGS would be absorbed by the developer through entitlement negotiation.
Melahn concedes that the figures in her plan, including the additional per-unit public cost of the affordability buydown plan, are estimates. Her housing element amendment would require the city to commission an independent analysis which assesses the public benefit valuation of projects including USGS.
Save Downtown Menlo, the group backing Measure P, supports Melahn’s plan.
Former councilmembers Paul Collachi and Steve Schmidt, and former planning commissioners Ben Eiref, Patti Fry and Henry Riggs are listed as contributors on the housing element amendment.
What critics say about Melahn’s plan
Critics of Melahn’s plan maintain that both the premise and the financing are wrong.
Stephen Levy, an economist who serves as the director for the Center for Continuing Study of the California Economy in Palo Alto, notes that the plan doesn’t expand the number of housing units.
“Her plan costs the city money and adds no units,” said Levy, who donated to the No on Measure P campaign. “So it does nothing to assist Menlo Park in meeting their housing element goals.”
Levine of the Housing Leadership Council added that “the housing element is not like SimCity,” the video game that allows users to build a city from scratch. He cited an April 2023 letter from HCD which found that Menlo Park’s housing element needed revisions before it could be certified as substantially compliant with state law. Among the state’s concerns was that the city had not committed to developing city-owned sites that include the downtown parking lots.
Menlo Park’s final housing element that was certified in March 2024 added specific commitments for development of affordable housing on the downtown parking lots.
“There is a really strong commitment from the city and a really strong expectation from HCD that the city is going to follow through,” Levine said. “Menlo Park can’t just move around the commitments it’s made and just choose to toggle up the numbers in one place and toggle them down.”
This month, a city analyst cast doubt on whether the BMR fund can be used for Melahn’s buydown approach.
In an Oct. 9 housing commission meeting, city management analyst Adam Patterson said that Menlo Park’s funding program may not allow the city to pay a private developer to deepen affordability in existing units.
Menlo Park’s BMR fund currently contains $4 million, according to a recent notice of funding availability. Melahn’s website said the city would first draw on the city’s affordable housing fund, but does not say where additional funds for her plan would come from.
“Housing policy experts, elected officials, and all sitting members of Menlo Park’s planning commission know her plan doesn’t pencil, which is why they have endorsed me and supported my vision for our city instead,” said candidate Reed via email.
Reed’s campaign has been endorsed by two current councilmembers, Jeff Schmidt and Jennifer Wise, all seven current planning commissioners, and four of the seven current housing commissioners.
