That number of permits is 788% more than the 150 units of above-moderate housing the city was expected to produce based on the Regional Housing Needs Allocation (RHNA), a process that involved every city within the county to determine the amount of new housing units each jurisdiction should add.
In comparison, by the end of 2021, the city was behind on housing production for households that fell within the very low, low and moderate income thresholds.
According to the city's 2015-23 Housing Element, a state-mandated planning document that outlines the city's housing production goals, these three categories are what's considered "affordable housing."
For very low-income housing — the report states that this includes the "extremely low" category as outlined in the county's 2013 household income schedule — the city issued 217 housing permits out of the 233 units the city was allocated. This represents 93.1% of the city's housing goals for this category.
From there, the city's progress in affordable housing declines. For low-income housing, which can mean a one-person household earning up to $63,350 a year, the city has met 70.5% of its goal for a total of 91 out of the 129 units it aims to produce by 2023.
Moderate-income housing fares the worst, with just 15.4% of its goal met by the end of 2021. The city issued permits for 22 units out of 143 in the 2015-21 timespan covered by the progress report.
It's a stark contrast from the number of above moderate-income housing approved in Menlo Park.
In fact, by the end of 2015, just over a year after the city adopted its housing plans for the 2015-23 period, Menlo Park surpassed its total regional housing needs allocation solely by issuing permits for above moderate-income homes.
The city that year issued 712 permits for above moderate housing. The countywide RHNA process determined that Menlo Park would need to produce a total of 655 housing units — a number that includes housing for all income levels.
In the same period, the city produced 85 units of very low-income housing, 22 of low-income housing, and zero of moderate-income housing.
By adding just the number of total affordable housing permits the city issued between 2015 and 2021, the report shows Menlo Park would have met just 50% of its regional housing needs.\
What's driving the numbers
Evelyn Stivers, executive director of Housing Leadership Council of San Mateo County, said the number of very low-income homes is, comparatively speaking, a significant improvement from previous years.
Between 1990 and 2013, the city had developed just 84 affordable homes compared to the 217 produced in the past seven years, she said. Stivers also noted that low-income housing has "drastically improved" due to Menlo Park's impact fees on new office development and more funding dedicated toward affordable housing developments.
When looking at the lack of moderate-income and the surplus of market rate housing, Stivers says there's an explanation.
The greatest need in the state is for "deeply affordable homes," Stivers said, which often means funding and policies cater more toward those needs rather than moderate-income renters or buyers.
She added that recent policies around placing second units on existing lots may help meet the needs of moderate income buyers and renters, but those homes will be difficult to track since they are not subsidized or deed restricted, which means there's no time limit for how long the homes must stay at a certain rental rate.
The city's housing commission recognized in a March 2 meeting that affordable housing production needs to be improved. The commission said that policies around affordable housing could be "enhanced to create a better balance between the production of market-rate housing and affordable housing," the annual report states.
Production of affordable housing has ramped up in the past two years from 2020 to 2021.
According to the report, the city gained 69 units of very low-income housing, 11 units of low-income housing and another 11 for moderate-income housing in 2021. In the year prior, Menlo Park approved 148 units of very low-income housing, 80 for low-income housing and 11 for moderate.
Most of the new very low-income units in 2021 can be attributed to the 140-unit 1345 Willow Road project, with 58 very low income units. The entire project will be affordable housing, the annual report states.
The rest of new building permits issued last year were for 36 accessory dwelling units (ADU). This represents a 177% increase in ADU production, likely due to the new state laws that streamlined the approval process and incentivized their development, the report states.
There are three developments that could produce up to 881 new residential units, including a Greystar development on 115 Independence Drive and 104 and 110 Constitution Drive, which will bring a total of 335 units.
However, these were not included in the count of the 2021 annual report since building permits have not yet been issued for the projects.
In addition, all of the development tips largely in favor of above-moderate housing. For example, the development on 115 Independence Drive and 104 and 110 Constitution Drive, called Menlo Portal, is proposed to have 287 above moderate-income units, 31 moderate units, 14 low income units, and three very low income units.
The city has a little less than two years to meet its affordable housing goals set in the 2015-23 Housing Element.
The annual report highlights several project proposals currently under review that could push Menlo Park closer to its affordable housing targets if they are approved.
This includes Willow Village, a development by Meta, that proposes up to 1,729 units, 320 of which could be affordable housing.
Stivers said that part of the reason why market rate housing is developed much faster than other more affordable homes is due to job development in the city which "greatly outstripped predictions that the RHNA were based on."
"For every new office building, that is additional pressure on the housing supply and rents, not only in Menlo Park but surrounding communities, and increased traffic," Stivers said. "So, the challenge is, how do we adopt additional strategies in (the 2023-231) housing element to increase very low and extremely low income housing? Do we need additional funding? Are there government constraints that are making it difficult to build new affordable homes? "
As the city comes to the end of the current housing cycle, Menlo Park is expected to produce an additional 3,380 housing units in the 2023-31 period.
A draft of the housing plan is expected to be shared in April.
This story contains 1114 words.
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