Planning & Transportation Commission - Regular Meeting

Good evening, everyone. Welcome to tonight's regular meeting of the Planning and Transportation Commission for Wednesday, September 9th. Could you please call the roll?

Chair Chang?

Here.

Vice Chair Gee?

He just texted me and said that he is listening.

Okay. Commissioner Aiken? Here. Commissioner Heckman? Here. Commissioner James? Here. Commissioner Templeton?

Here.

For the record, we have quorum.

Great. Do we have any agenda changes, additions, and deletions?

None.

Great. OK, so our first order of business is in-person public comment for items not on the agenda. Are there any raised hands?

I have not received any public comment cards for general public comment in person. Great. Then we'll just do city official reports, please.

Thank you, and good evening. jump into the report share screen in a moment and give you a preview of your upcoming meetings first a reminder that next week we have the boards and commissions recognition event hope you all can join us that's on september 16th and we'll be uh at the zoo i believe this is the location it's a new location So looking forward to that. And then on September 30th, your next regularly scheduled meeting, we currently have three items. So it's going to be a packed night. We've got update to code in regards to Senate Bill 9 and single family objective standards. So we had a temporary ordinance that was put in place two years ago. So we're working on making that permanent and discuss that. And then we have two transportation projects, the South Palo Alto Bike Ped Connectivity Project and the Bryant Street Bike Boulevard and Lincoln Avenue Traffic Calming Project. So Ozzie Arce, who's usually here to present for transportation, isn't here with us tonight, but we'll be presenting that item at our next meeting, as well as his usual updates. So then council dates that are upcoming. Tonight, at the same time that we're having this meeting, the council is having their meeting, and they will later in the evening be considering the rezoning of 470 Olive Avenue. If anyone wants to stick around and listen to that, I anticipate that we should be done before that starts based on their schedule. And then on September 14th, City Council will be considering the parking garage at 375 Hamilton Avenue. While that hasn't come to Planning and Transportation Commission recently, it was something that earlier in the process did come to the Planning and Transportation Commission. And then October 5th, City Council will be reviewing the work plans, including the Planning and Transportation Commission work plan. I also wanted to include here the recruitment timeline in terms of council consideration of candidates to fill our vacant seat on the Planning and Transportation Commission. The different steps are listed there. Starting next Monday, where they select of the nine candidates received, they will select up to six to interview on the 28th, and then appointments are expected to occur on October 5th. With that, that concludes my presentation this evening. And just for clarification, since we do have the special council meeting happening in our usual room, we here, Planning and Transportation Commission, are in the conference room off the lobby.

Does anybody have questions for Assistant Director Armour? Commissioner Aiken?

Yeah, I'll just repeat. The question was whether I would need to recuse for the discussion of the Bryant Lincoln traffic calming.

And I have I have forwarded the the recusal maps to that team. So we will be prepared. I'll reach out to them again so that we can forewarn you because I my intent is to let you know before you receive the staff reports that you're not having to do the work of preparing for that item.

Thanks. Since I got a chance to look at the concept plan and I now realize that the part of the work of that project is six feet away from my property. So I am definitely in the zone.

Okay, great. Thank you.

Mr. Heckman, did you have something? I wasn't sure. Okay. Anybody else? I've got a quick question. Did Mr. Arce ever get back to you about what happened at the real committee meeting regarding grades up.

Unfortunately, I don't have an update on that, but we will at the next meeting.

Yeah, great. Okay, so we've got our first and only action item tonight. So this is a recommendation on an ordinance amending the Palo Alto Municipal Code titles 18 and 21 to address direction from City Council regarding separate sale of accessory dwelling units. And so, Assistant Director Armour, do you want to start with the staff presentation?

Yes, thank you. We actually have Principal Planner Garrett Sauls is here online to present to us this evening.

Good evening, Commissioners. Thank you for discussions that you all had a couple months ago about this item. Council had a very interesting and spirited discussion as well on this topic and so they wanted the PTC to reconsider this item tonight. Next slide. So just as a brief reminder on May 13th the PTC did discuss the draft AD ordinance and then had recommended the draft ordinance that incorporated some state level state changes for new rules that are coming into effect or are already in effect now, and separated out the separate sale component of that discussion and asked for that to come back to the BTC later, whether there's more information or more readily available data about it. Staff brought that item to the August 17th council meeting and added it as an additional attachment for the for the council to evaluate. And again, during that conversation, they had asked, they had remanded this item to come back to the separate sale item only, to come back to the PTC for a recommendation. And so that's what we're here tonight to discuss. Next slide. So just again, as a brief reminder, overall, the Planning and Transportation Commission was supportive of the idea and the policy, but ultimately wanted to see more data on other city programs before adopting their own are providing a recommendation to the council to adopt this ordinance. At the August 17th council meeting, The couple of items that were discussed in the staff report that are highlighted here were items that the council wanted the PTC to discuss further, which were to consider these units to be for only residential uses, to consider a potential minimum lot size for projects to be able to qualify for this, and as well to identify a specific project fee for this application. Next slide. What you see on the screen is a bit of a carryover from the previous time we discussed this. But just to go over at a high level, separate sales are currently allowed already under the city and state law for qualifying nonprofits. But the state, when they adopted this in 2024, provided that it could be extended voluntarily for nonprofits. qualified for non-qualifying nonprofits to also benefit from this. There were about 10 jurisdictions so far that have been early adopters, San Jose being the first. And again, since this conversation back in May, there hasn't been any updated information, unfortunately, in terms of a higher volume for any of these jurisdictions. But it is important to note that the first project that went through this separate sale process in San Jose was recently sold for about $530,000. And again, the barriers that many of these jurisdictions noted to this process themselves were primarily the requirements for a lien owner consent and then application fees in the process for people who were interested in doing this. Next slide. The city's draft ordinance tries to follow a lot of the same guidelines. premises of what Senate Bill 9 a couple of years ago enacted, which was in essence a streamlined, more ministerial process. The one thing that's important to keep in mind with SB 9 is that it's really currently only available for R1 and RE zone properties, whereas if this were something that the city voluntarily added into for ADUs, it could be something that's as expansive as a single family homes and multifamily properties, or similarly limited to how SB9 works currently. Given that it is a voluntary process, there are arguably more restrictions the city could put on in terms of where they want this to occur as it relates to specific zone districts. But I think some of the things that staff noted in the report is given the low volume of applications, many other jurisdictions who have already adopted this have perceived arguably any additional barriers will simply frustrate the process for prospective applicants. One thing to note, JDUs can't be sold separately, but as you see in item B on the screen here, it notes the number of items that could additionally be added into this separate sale process if the PTC felt it was valuable. Next slide. Just to highlight a number of the differences between SB9 and ADUs, this condo sale or separate sale opportunity. One with SB9, there's an owner occupancy requirement required for three years after the split. There's no limit under this current draft ordinance. There's no maximum size limit under SB9 for properties that are created, or for, sorry, excuse me, for units that are created. Whereas for ADUs, there currently is a maximum size of 1,200 square feet. SB9, there are impact fees that apply more blanketly to these types of properties that are being developed, whereas impact fees under ADUs are underlyingly limited by the existing language around 750 square feet or greater being the threshold for when those apply. Certain design standards apply under SB9, whereas our underlying Table 1 or Table 2 ordinance would apply certain design standards depending on if they were a Table 2 unit instead of a Table 1 unit. There are certain limits on historic structures or hazardous areas where SB 9 currently isn't allowed for. This, again, draft ordinance doesn't provide that. And as I noted before, either discretionary process or other types of districts for SB 9 are more restrictive than under ADUs. Next slide. Just to cap it off, the recommended motion and the draft ordinance is to the staff report is to recommend the draft ordinance to counsel. If there's not a recommendation for approval of the draft ordinance, provide recommendations on the policies to counsel identified during their August 17th meeting. And that concludes my presentation.

Thank you, Mr. Sauls. Does the commission have any clarifying questions for staff? Okay, I've got one quick question. Do we know what the average sale price of, say, condos is in San Jose, just to get a sense of that $530,000 and where it stacks up in all of this? I just did a quick Gemini search, but I don't know if it's right.

Mr. Sals, do you have any data on that?

No, I wouldn't have any more data than probably what you found out of ShareChain.

Okay, I don't know if it's correct. So it says right here, average sold price is 800 to 832,000. Median condo price is 650 to 800. It varies by neighborhood and inventory. So quite a wide range. All right. So then let's see if there's any public comment. Is there any public comment?

To the chair, I do have two requests to speak. Three. So our first speaker will be John Kay. And John, you can come over here.

Commissioners, thank you for having us tonight.

If we can ask that you sit and speak into the microphone, please, for the recording. So that people can hear the recording.

Thank you. Commissioners, I'd like to thank you for considering this matter tonight. I believe that this is a really, really important thing. We're trying to articulate a vision of what ADUs can bring to Palo Alto. I think they can constitute what I like to refer to as 21st century starter homes. And to build 21st century starter homes, you really need three things. ADUs need to be bigger. You've addressed that to some extent at your last meeting in your recommendation to increase the maximum size for ADUs to 1,200 square feet. They need to have their own financing. And that's what you're going to be talking about tonight, separate alienation. And the third thing is you need to get rid of the impact fees for ADUs. Those are the things that will truly unlock ADU construction. And why is that important in the overall market? Because people of my generation may be encouraged either to move into larger ADUs, thus freeing up the primary homes on the lots, or people in my generation may decide we actually need more income to be able to stay in this community as prices rise, so we have an additional source of income. And it is so, so, so much more efficient economically to build an ADU than to build ground-up construction on a new lot. You all know that. So I won't belabor the obvious. But what this really comes down to in practice is two things, time and money. So when you're considering what's available under AB 1033, I would invite you to sort of do, I think, what Mr. Salls was saying. And I want to commend him on two points. I want to commend him, first of all, on bringing to your attention the sale that's occurred in San Jose. And I don't know how that compares with, you know, condo costs in San Jose. But I'll tell you, there's a condo for sale a couple blocks from here for a little over a million dollars. So $530,000. Maybe it's not going to be that little in Palo Alto, but maybe we're not too far off the mark. And that's going to open up housing. ownership, tax credits, all sorts of things, property tax deductions for a new group of people who otherwise would be unable to stay in Palo Alto. And the second thing that Mr. Salls did, I think, was suggest to you that you should keep this recommendation to council as clean as possible. I was at the last PTC meeting when you discussed this. Frankly, I think You know, you all have a lot of great ideas. You can all think about a lot of possibilities, but I felt like it just sort of went off the rails. What we need is a simple, clean ordinance. I would encourage you not to put a minimum lot size on it. And beyond that, I think, you know, staff is moving in the right direction on this one, and it needs to get back to the council as soon as possible. Thank you very much for your time.

Thank you. Our next speaker is Jeremy L. Jeremy, you may now speak.

Good evening, planning commissioners. I'm speaking online. I hope to be in person, but I have come down with some kind of flu, so you just have to hear my voice. I wanted to just dig into Chair Chang's, I think, really thought-provoking question about how San Jose is a community. compares to new builds in San Jose, because there are some layers to that. It's not just a condo that is getting built, even though they are called condo ADUs. It's a detached structure that's brand new. And in San Jose, the median price for all for-sale homes that are new is $1.2 million. That includes condos and townhomes. The median price for a detached single-family home that's new is more than $1.5 million. So we are talking about a detached structure that if you were comparing to the median price of other detached single-family homes is something on the order of a third of that price. This is one of the most affordable housing options that can be built in Palo Alto without needing enormous public subsidy. So it's a really huge opportunity to build starter home style housing in neighborhoods that otherwise aren't. only have larger homes. I think John Kelly said very well how council had specifically in their motion sending this back to PTC requested a streamlined ordinance. The goal of ADU condoization should be to make it so that a regular homeowner who wants to downsize or a small builder who wants to use the local code rather than big state laws like Builder's Remedy can take advantage to build neighborhood-scale housing that fits with Palo Alto's goals. So I hope that the commission will move this ordinance back to council in a streamlined form, reflecting council's requests, and I look forward to the rest of the discussion tonight.

thank you our next speaker is scott oh scott you may now speak hi thank you um get well soon jeremy uh i align with the excellent excellent comments from john and jeremy when i was in fifth grade we had student body elections and one kid said he was going to put coca-cola in the drinking fountains more recently rishi kumar ran for assessor claiming he was going to end property taxes for seniors He lost, but not after a bunch of seniors turned out in force on thenextdoor.com to argue for how badly relief is needed. There seems to be some appetite for some reform that helps house-rich seniors stay in homes. This policy can be that reform. Besides the windfall from selling, what are the tax implications of ownership aid use? Well, if you sell off the ADU, you do not get a Prop 13 tax reset on the part you keep. In fact, your property tax goes down because you sold off part of the parcel. The part you sold off does get reassessed. That increases tax revenue to the city. That's a win-win. It's not coke in the drinking fountains, but it's realistic. And it can bring the relief those seniors want to many of them. What I don't understand is the main house penalty. Why does it tear down and rebuild, not count the extra ADU square footage against floor area ratio?

Excuse me, Mr. O'Neill. That part isn't up for discussion tonight. It's actually going to be discussed at city council. Our conversation here tonight is very limited to what is agendized. Never mind. Thank you for that. Do you have more, though, on condos? i'm sorry do you have more do you have more on either condominiums or adus thank you all right thank you and to the chair that uh concludes public comment all right uh so then that brings it back to the commission having heard what you've heard are there any more uh questions and otherwise we can just start discussing yeah commissioner heckman

uh so maybe i've got a little too much knowledge as a lawyer but i was having um some difficulty conceptualizing this um how the nuts and bolts work of this single condo on you know somebody's house parcel works and and while i realize we don't have a lot of examples of this opt-in to a market sale. The law has been around for a couple of years on the nonprofits, which they've been allowed to do it. And so I really just kind of wanted to understand how the how it works in practical terms. So, so for example, in a condo development, let's say it's 10 units, right? Everybody, there are 10 units built. Everybody owns the airspace inside their unit and the shell of that building and the grounds around it, the pool, whatever, those are all owned in common by all 10 of them, right? Through a, through an entity, right? And they all are one-tenth owners of that. But I don't think that's how this model works, where if I have a house and an ADU and I sell that ADU, I don't think I, as the homeowner, just own the airspace inside my house and the shell of my house, like the shell of the ADU, is in common by us. And so I'm wondering if somebody can help me understand. And the reason I'm asking is some of the ordinance... talks is key to ccnrs and tied to davis sterling and that makes me wonder about the common areas right who uses the yard right again it would be different if everybody owns it in a ccnr in a condo complex but here it's a house with this airspace and so i'd like a little primer on that to help me understand

so thank you i'll start but i expect um our staff online will have something to add as well i think it could be like that i think the way that the ordinance has been set up right now allows those who are applying for this condo map to specify how they want it to work that it could be that you've got two condos and then all the rest of the land in common. It could be that you would set up the condos with specific areas. You know, this yard area is for the exclusive use of the ADU versus the other. It really would be up to the applicant in my understanding. But as I said, I will now defer to our other staff who are online if they'd like to add.

I'll just confirm what Assistant Director Armour was saying, that it really could take a variety of different forms. But I do expect that there will likely be some common area in almost all ways that you split up the property, because most ADUs don't have their own direct access to the street, for example. And one issue that also could come up is our utilities department generally prefers to be meters or meters to be as close to the street as possible. And so it may be that you have, you know, the meter for the ADU is actually attached to the primary residence and that, you know, that exterior wall may very well be, you know, part of the common area of the HOA.

Do you have more?

Yeah, so okay, so that's a youth useful start. And so then, too. So I like I like the flexibility that was just described to let the owner who might create this product, decide basically how much of their yard they want to share. It's hard for me to imagine an owner of the property wanting to have their own condo. inside their house and and be have to agree with whoever they sell the little adu to on whether they can paint it a different color i i don't see that happening um so but then to create this um you're going to need um it's a condo map right the same as for the 10 unit condo is that right

THAT'S RIGHT. IT'S ACTUALLY, YOU KNOW, I THINK A GOOD EXAMPLE OF HOW THIS WILL PLAY OUT IN PRACTICE IS PROBABLY A LOT OF TOWN HOME CONSTRUCTION. ESPECIALLY IF YOU HAVE DETACHED TOWN HOMES. YOU KNOW, THE AIR PARCEL IS NOT GOING TO BE, YOU KNOW, JUST THE INTERIOR OF THE UNIT. IT WILL BE, YOU KNOW, MOST LIKELY INCLUDING THE LAND OUTSIDE OF THE UNIT AS WELL.

If a condo map, a subdivision condominium map is necessary, I'm just wondering, we use in the draft ordinance a couple times the reference to parcel map, which to me is maybe a different creature, but not the creature you would use to create a condo. And so I guess I would suggest to staff as this moves forward to council if it does, think about that language, which also may tie into the fee. Because there's some discussion of, you know, should we charge as a fee for this the equivalent fee to a parcel map or a final map? And it seems like if we have a fee for a subdivision map, then we should be talking about that at least. Okay, those were my those are my sort of overarching questions that I wanted to get out in front. Thanks.

Commissioner Templeton.

Thank you very much. I think I'm sharing a brain with you. I was thinking about some of the consequences of sharing a property or a portion of my property with somebody, you know, Are you going to build a fence? Do you have enough yard around which to build a fence? Is there enough space to make it safe to build a fence? But then is it insurable if you don't have some kind of entity set up for the shared space because, you know, if there's one thing I know about multi-million dollar properties is there's somebody always taking a fall on them and you want to know who's getting the suit delivered to them. So, Mr. Salas, do you have any insight on how that's being handled so we can kind of understand the implications of this?

I believe as Mr. Yang was just mentioning, you know, a lot of it will be managed through that HOA or HOA like entity that is created. So it wouldn't necessarily be something where the city is directly engaged with or connected with, but it certainly would be something that a prospective applicant would need to consider when they're looking to do this. And, you know, arguably it could be one of the many reasons why you maybe haven't seen a lot of successful applications in other jurisdictions so far too, that there's this concern about, you know, what might they be liable for or what might be the getting into that, makes it more challenging for them to make this more successful and comfortable for the owner.

And the draft code that we prepared specifically requires that they set that up for that very reason.

And so this is an excellent segue. So are we providing kind of... When you have a 10-unit or a multi-unit condo like that, there's a justification to have your own special entity set up in your own special custom way. Are we providing any kind of cookie cutter template or has everybody got to roll their own? How to build my own entity in addition to my own ADU?

I think that's an excellent suggestion for us to consider as we're preparing materials to support this, if this is something that gets implemented.

I think that would make it a lot more palatable to the community, especially if we're imagining, as some of the public commenters said, elderly folks who maybe need additional income, they're not necessarily going to splurge on getting their custom setup incorporated. So I will stop there for my questions.

Thank you. Okay. I have a question about SB 800, which is the right to repair law for condominiums. So if a homeowner allows separate sale of ADU, then are they opening themselves up to being sued for the construction quality of the ADU the same way that a condominium builder would be.

Our understanding of that is that it's looking into it a little bit more is that it's actually more specific to the contractor more than it is to the homeowner, unless somehow they were the individual contractor who built it. So I don't believe that it's necessarily the homeowner would be the person as a part of that suit. It would be the contractor, but there's specific noticing that's tied to, you know, how that goes about. Ultimately, it is still sort of a private issue that the city wouldn't be engaged with that's handled privately.

But then is the lawsuit, like, right, the law was created to protect condo owners from poor construction, but then if contractors are the ones who'd be liable for the suit, does that end up freezing or chilling the desire for contractors to build ADUs? Is there a difference in how you can sue somebody who's just building an ADU versus somebody who's building a condo? I don't think I understand enough about this law and I'm wondering what staff thinks.

Maybe Mr. Yang can speak to that, but our understanding is that there's not really a difference between those interactions, whether it's going to create more of a chilling effect to ADU builders in general. I'm not sure that there's really a nexus between those things just related to the separate sale opportunity. If it's something that people can do already as a part of state law, then it really just comes down to whether there's an issue with what the contractor built.

Okay. Maybe I'm not understanding, but I guess maybe more specifically, my question is if somebody goes through the process of separate sale of ADU, does that somehow turn their ADU into a condo and then allow the owner of the ADU to use SB 800 to sue a contractor in a way that would not be allowed if they were just, say, using SB 9?

May I ask a clarifying question? Is your concern that because the city allows this condoization of ADUs, that that then might slow down the construction of ADUs in general because they could be condoized? Exactly.

I don't even know if this is true. So I'm trying to understand, okay, the difference between what SB 9 allows versus this option. One thing that I noticed that would be different would be the definition of the ADU as a condo versus as its own home. If it were its own home, then I don't think, I'm not a lawyer, but I don't think the SB 800 right to repair law could be triggered. If it's a condo and somebody can use SB 800, then does that mean that A contractor building an ADU doesn't know if sometime in the next 10 years, this is going to become a condo and could be opening themselves up to lawsuits as a result. So that's one of the, I mean, this hasn't been around long enough to know. And I don't know if perhaps the separate sale of ADUs doesn't trigger SB 800, in which case, then it's no problem at all.

And I would defer to our attorney on that confirmation.

Yeah. So, you know, this is not an area that I'm terribly familiar with, but it doesn't appear to me that the construction defect law is limited to condominium. And, you know, SB 800 is also, it's not a right to sue. It's a right for the developer to repair defects. issues before a suit can be filed. So, you know, I'm not really sure what connection there might be. It's not apparent on its face that there's a connection.

Okay, thank you. And then again, to explore the SB 9 versus kind of what's allowed in each. It sounds like to me based on Commissioner Heckman's question that there's more flexibility with the condo in a sense, because because of the location of adus might not allow ingress easy ingress egress it might allow for meters to be placed on somebody on on the main house whereas if it were sb9 that would not be allowed is that it um or in the most extreme example there's a pool and somebody wants to allow both the main house and the ADU to use the pool, you could do that with the separate sale of ADUs, but not with SB 9.

Correct. And with SB 9, you are only allowed to subdivide a single family residential parcel once. You cannot re-subdivide it. Whereas if separate sale of ADUs was allowed, you could take a larger parcel, subdivide it into multiple parcels, and separate sale the ADUs as well. So it actually leads to, you know, it has a lot more flexibility in a number of different ways than the SB9 subdivision would allow or two-unit development.

Okay. Okay, yeah, thank you for that. Are there other questions? Commissioner Egan?

Thank you, Chair. So on packet page 12, there's some staff analysis of burden of enforcing BMR provisions. So I'm just curious as to whether separate sales change this burden in any significant way, either increase or decrease.

Here's a question. I think what we were trying to highlight is that where I think the primary project that we sort of used as some examples where we're having some discussions in the preliminary meeting was 4103 Old Trace Road, where initially they just, their project is to basically create new single family homes with attached units to them. And they were trying to identify some of them as being BMR units. It's easier to manage that BMR process when they're sort of for sale units than when they're rental units attached to single family homes. In that you'd have to expect or put the expectation on that single family homeowner to ensure that that unit is regularly meeting the requirements that Alta Housing has versus the separate sale unit sort of gets income qualified at that sale, which is a lot more of a simpler process to deal with than sort of a regular check-in with a single family homeowner on the scenario where it's just an attached unit that's not sold separately, but is instead indicated as a BMR unit. So I think what we were trying to highlight is that it would really be a decrease in terms of an administrative burden if the taking that project again as an example, the units were for sale BMRs versus just sort of rental BMRs attached to the primary units.

Great. Thank you. Are there other questions at this point? Commissioner Templeton?

Thank you for letting me go again. I just was thinking through some of these comments, and I appreciate what everybody has said, including the public comment, but I'm trying to wrestle with um what may be a gap in how it's been presented to us and so i want to just check and see has there been an analysis done of all of the kinds of laws and additional protections that will need to be implemented once this like you can't evict a neighbor who owns their property So if we have a bad actor, you know, I can think of, you know, bad uses of the land that's inside your fence. I can think of elder abuse that would be people swindling elders out of a portion of their property so they can make a buck off of building them an ADU and then selling it somehow. Like, I don't... Like, there's so that's, that's the beauty of living in an established city in a state, a great state of California is like, a lot of these things have already been dealt with. But when we change something like this is there's a lot we haven't thought about and establish. Is that something you guys have analyzed? Or would that only happen after enactment of this?

I think my initial response to that is that I think those other laws would apply the same as they would to separate properties or existing condos.

So you can swindle somebody out of their entire property, not just a portion of their property, and you can have a bad neighbor, right?

Right, and a commercial use in a residential zone where, you know, if that is reported, then code enforcement is called. to come and address that and deal penalties as appropriate. So it puts people in closer contact, but again, that's the choice of the original owner, whether they want to set that up. And our hope with requiring a homeowners association or something similar is to try and set people up for success if they do choose to proceed with this.

And what about the silly little things like fences? Like, right now, we wouldn't be allowed to do that. Is that something we'd consider changing?

They would be allowed to have a fence if that was how they set up the property, right? Don't we have a minimum distance for fencing? From what? Minimum distance from... A neighboring property?

Like... I remember, I don't know if this is even still true anymore, but I remember when we were trying to put in an air conditioner, we couldn't because you had to keep that space between the house and the property line open.

So we do need to make sure that there is the proper access for fire to get around the outside of a house. So you would have to make sure that you're maintaining access. So it depends on how the site is set up. It may be that some of those areas would need to be common areas, and that's something that would just need to be handled on a case-by-case, similar to the way an application comes in for an SB9 lot split.

We don't want to be doing all of these as one-offs, right? So you're saying all of the new laws that would be required would come in after the fact if this passes.

So, and I guess I'll defer to our attorney, but they would apply as they currently apply to individual ownership.

Yeah, unless some other... circumstance required city council to change the laws. Correct. We don't anticipate a problem at this point. We don't. Okay. Mr. Yang, do you have anything to add?

No, I think that's right. We're not anticipating that there would be any additional laws that would accompany this.

That surprises me. Okay. Thank you for answering my question.

Okay. I think that Commissioner G is with us, but I don't see him as a panelist. Yeah, he is. Oh, he is? He's a panelist. Okay. I think he has a raised hand if I'm doing this correctly. Okay. Yes. Commissioner G?

Sorry. I just want to state I have just caused to attend this meeting remotely under the Brown Act. I have attended two meetings. meetings, three meetings remotely this calendar year. I must attend remotely due to medical reasons. And I also want to state for the record that I have been following along on YouTube this whole time. So I have been following the great discussion of the commission.

Okay. And I think you have to say if anybody's in the room with you who's over 18.

So that's going to be really hard because I'm in a lobby that probably has somewhere between 20 and 40 people in the lobby.

Okay. Is that sufficient? And they are no relation to you?

No relation.

Thank you. All right. Commissioner G, did you, or Vice Chair G, did you have a question also when you, with the raised hand?

Oh, not yet. I just wanted to say that. Thank you.

okay great so so i want to drill down a little bit on the question that that commissioner aiken started regarding the the bmradu issue so first of all i want to observe that staff is bringing this to us with a neutral recommendation which is somewhat unusual for staff they usually um you know build a case in one direction or another. But my sense in reading the staff report is their hesitancy is really tied to this issue, this BMR issue. And I get that from the last sentence of that section that says, for this reason, staff has reservations about utility of authorizing separate sale for ADUs. So I may be misreading that. But what I found when I read the BMR section is I was a little bit confused. And perhaps Mr. Saul's explanation help to clarify a little bit, but I want to sort of try to focus it more. So this issue of ADUs being BMRs, is that an issue that we have to concern ourselves with where the ADU is, it's a single family residence with an ADU on the parcel? Does that BMR issue come into play here?

We have had a number of applicants request to do something like that. Again, thinking of the 4103 Old Trace Road Project, I believe that was one of the items that they had raised as a suggestion to satisfy their BMR requirements. And there are a couple of things that come to mind as a product of that. One, you know, primarily actually HCD is also somewhat hesitant to have ADUs or junior ADUs be designated rental ADUs or JDs be designated as BMR units. To sort of reemphasize the issue I spoke to earlier, it's a little bit more challenging to involve a single family homeowner in that process than it is a commercial entity who's maybe more aligned or better able to manage some of that. And then the second component of it is that our current ordinance speaks to BMR units being sort of comparable in size, comparable in amenities. And I think that's one of the things that staff were trying to highlight in the report is if there's this provision of allowing ADUs to be sold separately, we're already getting or receiving an interest in a few applications to do something like that for a for rental option by making that a possibility for sale. that might increase the likelihood that people will propose that as their BMR solutions instead, which might not ultimately align with the perspective of having comparably sized BMR units to the primary units. The existing language in our code already provides, you know, overarching language that says the city can adopt or accept sort of lesser sized units as equivalent provided they get, or what it seems to be alluding to is more BMR units in the project in essence to sort of compensate the difference. But those are some of the elements that I think in general raises some concerns that are from a policy decision, things that the planning commission and council can chew on further. Mr. Yang, did you have something you wanted to add too?

Yeah, I think I just want to clarify that we do have developers, largely kind of townhome project developers who have wanted to have an attached ADU or a detached ADU that they would designate as their BMR units. And so they'd meet their 15% onsite BMR with these ADUs. And for example, if they were selling 11 primary units they might have two ADUs and those would be the BMRs. And there have been practical hurdles to that for those developers because they can't sell those ADUs separately right now and they have to rent them. And it's unclear for them, are they going to be able to find a buyer for these two primary units when that buyer has to commit to managing this BMR rental unit? So if we eliminate that hurdle, then it's going to be much more likely that we'll have developers pursuing ADUs as PMR units since they'll be able to be sold separately, and it'll be fairly easy for them to do that.

So, okay. So I think Mr. Sauls was referring to the old trace project, which if I'm remembering, that was the acre on a restaurant arrow, where they created nine parcels, nine into nine single family homes with I think seven of those had an ADU. And then Mr. Yang was referring to a townhome development where it seemed like the same issue could arise. But but let me let me just check my memory. My impression is we've had a lot of ADUs built in Palo Alto in the last decade. And my sense is that at least 90% of those are on single family lots. Is that right? Does that seem, I mean, I don't need an exact number, but it's like nearly all of them are. Okay. And so really that's the model that I think we should be focusing on if we can, target what is the most common here and avoid these sort of unintended complications that could arise in these multifamily developments, potentially, where we've got BMR issues. And so I think I'm sort of moving from my question into thoughts now, so I'll stop there. But these answers really help me sort of more focus better on what I think could work here. Thanks.

I was thinking that we could move into comments, but you've got a question, right? Do you have a question?

I would like the mold question, the thoughts. I mean, can I sort of occupy that space? Yeah, please go ahead, Commissioner James. Right. So I think I kind of like where Commissioner Heckman's going there in the sense that even as we discuss this and we create these anecdotal examples of long-term property owner wants to get more value out of their property for a host of reasons. This is beneficial to them. It is beneficial to new homeowners. And that's the kind of, that's the narrative that we've created. And I guess I'm still kind of trying to navigate the space between SB9 and this opt-in provision of 1033. And I guess I bring to that a little bit of skepticism because the fact that it was an opt-in provision, as I understand it, is because they couldn't get enough support to do it as required. And in a large part because of the complications around CCRs, HOAs, and lending and the burden that that would put on different jurisdictions and whether they had the resources to deal with that. That's my understanding. But it's why I have, why I'm trying to wrestle with like, if in SB9, we already have a way that addresses this common narrative of a long-term property owner being able to get more value out of the property and create a new space. That seems pretty clean. I realize that there's a gap. They're not a perfect match for each other. But I'm just trying to reconcile what is left behind if we did SB9 as opposed to this opt-in 1033.

One thing that comes to mind immediately with that question is that there are certain rules for SB 9 subdivisions that have to do with how you're subdividing the lot. It needs to be a generally equal subdivision between the two. So you can't have more than a difference of 40-60 subdivisions. percent of the lot, right? It needs to be close to 50-50. And so, whereas with the ADU, it really could be a very small part of the lot, that building and access to it, you know, could potentially be the way it is set up. So, there are some elements of this that, as we said before, the ADU condoization would allow more flexibility in some ways.

Can I just ask a follow-on question? So let's say that there's a, so SB9 has some access requirements. Is that correct? Can those be addressed by easements or is SB9 stricter than that? And I haven't read the code. Thank you.

I will check in with principal. planner at SALS who's online to see if he knows the answer to that off the top of his head.

It depends on the type of SB 9 law split you're doing. It can be done through easements from what I've seen. But otherwise, it would usually be through the creation of a separate parcel like a flag lot. And that flag pole would be a part of the rear parcel. That pole could be a physical physical quote unquote poll or an easement poll in that sense.

Thank you. That's helpful. All right. So I think we've sort of dried up on questions. Oh, nope. Vice Chair.

I also wanted to mention that we have a utilities person here in case we have specific utilities questions.

Thank you. So because not everybody online can hear that, Commissioner Templeton just pointed out that we've got the head of the utilities department here in case we have utilities questions. Vice Chair Gee has his hand raised, so I assume he has a question.

Yeah. Yeah. So I actually thought that Commissioner James's questions are in the same line of thought that I had. And I was wondering, for some of these peer jurisdictions, Mr. Soles, do you know how many urban SB9 lot splits there have been done for similar efforts? So, for example, did San Jose feel a lot of pressure for having many of these or trying to do an action that the SB9 lot split could not do that encouraged them to do this EDU split?

I do not have that data, no.

Okay, no worries. I just happened to look on the San Jose website, and I did see that they've recorded 60 SB9 urban lot splits, just for the record. Thank you.

OK, and then I did have one more question regarding other jurisdictions. So for the other jurisdictions, the 10 or so that have done this, did they make any modifications? Or do we know if they've made any modifications? you know things like as suggested in this top of page packet page 11 in the staff report considering that the units are only used for residential purposes a minimum lot size or anything else because if we're going to do this and somebody else in their great wisdom has studied it and came up with some modifications maybe we should think about that too for the few that i have been able to get in contact with i haven't seen that they had included additional restrictions

Um, and for those who are now adopting like the city of San Diego or more recently Berkeley, I haven't seen them try to add in those types of restrictions. Um, but they didn't give any specifics as to, oh, we checked San Jose and they also told us, you know, they only had two or four and we realized the same issue, right? If we add more rules or strict restrictions on it, less people are going to do it. So I haven't heard that specifically from those groups, but I also haven't seen in their ordinances, those specific limitations.

Okay, and I wanted to ask staff a question kind of alluding to what commissioner Heckman had talked about where, if the concern is for these larger. You know, if there's this edge case where there's. On larger parcels that are going to be divided up and sort of that developer interest and the concern about. developers using the ADUs as BMR units. Is there a clean way for us to carve that out that staff has thought about?

I think probably the cleanest way would be to say that this allowance for separate sale of ADUs would only be available for individual single family lots, which would mean that if a developer is doing a subdivision. It might be available to those property owners in the future, but it wouldn't be as part of that subdivision. That's my initial answer, but I of course would open up to my colleagues online.

Okay, and then final question before we go to comments. How could this potentially interact with state density bonus law? which is our big bugaboo all the time.

Thank you. Yeah, that's a good question. I think with state density bonus law, one thing to keep in mind is that it needs to have a project that's at least five residential units to be able to take advantage of that. So I think as Commissioner Heckman was highlighting, the majority of ADUs that we've seen have really been in existing single family homes. So it wouldn't be something where someone proposes an ADU, you know, builds a new home, proposes an ADU, and then says, well, I want to do SB, a state density bonus law, they wouldn't be able to benefit from that. The examples that Mr. Yang and myself were highlighting are more likely to be those types of projects where they're building already multiple units, and then they're incorporating ADUs to sort of maybe up their unit count to arguably sort of achieve some greater density bonus provisions. Um, but with providing for separate sale in these examples for ADUs, um, there may be a scenario where, um, they could use a waiver or a concession to say, you know, they're justified to do this and don't have to designate one of the one of these BMR units so they can instead use these ADUs solely for that purpose. They'd need to provide some supporting evidence for, you know, that waiver or concession to demonstrate, you know, how it makes the project more, for a concession at least, financially feasible. But, you know, however we'll be able to get all of that information or not, obviously, is just routinely challenging.

Okay.

Let's do Commissioner Tomlinson. Oh, I was just going to go first.

Again, we're going to do comments.

Here we go. All right. So first of all, I just want to say thank you to the public commenters that we heard here tonight, but also we got some emails. Thank you. I also had a lot of questions and I'm really glad we had a chance to come back and hear this after contemplating it with a little bit more detail. I appreciate especially staff outlining their reservations. What I'm hearing in general from the public is that they would be interested in exploring this opportunity. Not only we hear it from the public, but we also heard that direction directly from council. So in that approach of being open to this idea and how do we make it work, I'm thinking about the considerations that were mentioned. I do like the idea of restricting it to be useful for residential purposes, except where prohibited. I think that's one I'm excited about because I think that's the most likely to be exploited. If somebody doesn't want to do that, they can build an ADU and not split it out as a condo, right? Like there are options for that property owner as well. So it's not like we're taking away something. But in a sale, that makes sense to me. Minimum lot size, I don't know. I mean, lot size in this scenario already is a bit concerning for me because um of the many areas that are jurisdictions where this has been implemented a lot of them have larger lot sizes anyway we typically have smaller ones here of course there are some exceptions but um i'm not exactly sure how restrictive we want to be with that um and then the the project fee you know i i would love to hear some discussion on this i The people that I've talked to that have built or contemplated building ADUs, this is always a bugaboo for them. And so if our interest as a city is encouraging these to be built, I'm not sure that that's where we need to go. But definitely the residential purpose use is something I'm interested in. I'd love to hear from the rest of you. Thank you.

If I may, through the chair, we do have a member of the public who was misinformed that this was the closed session for city council and so did not join us earlier. Through the chair, it is up to your discretion as to whether you'd allow them to speak now to reopen the public comment for that or not. But since it is closed, that's not required. I wanted to give the opportunity for you to make that choice.

I don't think that we're going to take the public comment at this time.

Okay, great. For the public's information, this recommendation will be going to council, and so written comment and public comment at that meeting will be additional opportunities. Thank you. Okay.

Commissioner Huffman. Yeah, I'm ready.

All right. Thank you, Chair. So Big picture, I'm supportive of this concept. I agree with our public commenters that this has the potential to be a starter home situation. And in fact, the ADUs are a little larger than the starter home my wife and I first bought. And so I can see that. Whether it will actually happen In a condo ADU, it's sort of hard for me to imagine it because of the complexity of going through the condo process with a CCNR. The expense to develop a set of CCNRs is not much more for a hundred-unit complex than the ten-unit complex. The bones all have to be there, and I think it's going to be true even for this one-unit complex. I know if I were doing this on my lot, what I would want is you're going to own your airspace, I'm going to give you the exclusive right to control the building around it as your private common area and a patio, whatever, your private common area open space and some kind of easement to get out to the street. And everything else is mine. And I wouldn't want to share that or have to consult with the owner. And it sounds like the way staff has written the ordinance, the flexibility to do that is there or something different if that's what the owner wants. And so I really like that aspect of what staff has done here. I would caution us from thinking that We really maybe don't need this because we've got SB 9 because I probably don't need to remind the commission. We have heard from our citizens more fear than pleasure about the potential use of SB 9. You know, if I've got a 10,000 square foot lot and all my neighbors have 10,000 square foot lot, I can split that into two fives. And a lot of the neighbors aren't comfortable with that. But I could do that if my house is off to one side. I could do a 60-40 as a way to cash out on my property. So it might be in my financial interest. One of the things I like about this ADU prospect is it gives our homeowners an alternative to that if they're looking to... sell an interest in their property, they don't have to split it so that it becomes unlike other parcels in their neighborhood. And again, I don't know how often it'll be used, but it'll be an option for people to weigh. So I really like that. I agree. with the staff suggestion and Commissioner Templeton that this should be limited to residential purposes to the extent permissible by law. I agree with Commissioner Templeton that I don't think we want to impose a minimum lot size. I do think at least initially, to avoid this BMR problem, we want to limit it. And I was concerned about the language to single family lots, because when I was thinking about the old Trankos project, that old trace, that created nine single family lots. And so what I was wondering is, would it work if we tethered it to zoning? Because I think that was a PD zone. Yeah, RE, but not like R1, right? And I'm wondering if we want to Name R1 and any other appropriate zoning designations where this for sale product could occur. And, you know, staff could help identify what those proper zonings are. Let's see, the fee. You know, in the staff report, there was a suggestion that it would be the same fee as SB9, which it says, and that's why we wrote the ordinance that way. But actually, when I look at the draft ordinance on packet page 19, it didn't say that. It said instead the fee currently established for the preliminary parcel map or parcel map. But I didn't understand why. I mean, we have a fee for ADUs. And I was sort of having a hard time understanding, well, why wouldn't that fee be the fee? I mean, why would it matter if, well, if we're going to have a different fee for for sale ADUs, then is that something you have to declare when you're building it? That you want to do that, and that would entitle you to what is presumably a lower fee to, again, encourage this creation of a for sale product that could create a home ownership for somebody. And so I wasn't really clear on that, but I'm open on the concept of fee. I like the concept that we could use a reduced fee as an incentive to get a homeowner to make a for sale ADU condo. And I think those were Yeah, I think those were my comments and thoughts on a recommendation to council that is somewhat streamlined in its requirements because, as I've outlined, there are enough hurdles that are unavoidable in going through this process without us creating some more obstacles.

Commissioner Aiken?

I do just want to jump in and clarify something for the Commission, the supplemental report corrected, I think that issue mission was just talking about. In the initial published report it did incorporate that partial report or preliminary passport or whichever is lower. The actual ordinance we plan to put forward would be that it specifies that it's for that it would be the fee would be the SB nine application fee, which is the least expensive fee of the subdivision fees we application fees we have currently And those application fees would be post-recovery simply just for staff time processing these applications. I think just one thing to note is we certainly don't have a fee right now just for this type of process because we don't yet know how many. We don't know how many there will be, how much time it will actually take. That would be built out in theory if we get more and can have more data to sort of put that forward with planning commission and council in the future.

Thank you for that clarification, Mr. Salts. Commissioner Aiken?

Thank you, Chair. So it's interesting to see the issues that we have brought up tonight, many of which were concerns that I had the last time this came before us, because there are an awful lot of details that need to be worked out. And ideally, well, I think the prudent thing to do would be not to proceed until we have a better handle on some of these issues. So I'm going to argue the opposite position. We have SB 9. It's a streamlined ministerial lot split. Already provides a good way for people in R1 and R2. to build and sell ADUs. One thing we haven't talked about is that it provides some constraints that separate sale doesn't. That includes parking requirements where those are applicable. It includes the requirement for owner occupancy to avoid misuse of the split for commercial reasons. And the ADUs are subject to design standards, which in a lot of the R1 cases that we're talking about may be significant in getting buy-in from neighbors. That doesn't apply in the separate sale case. We can completely eliminate all the complexity of the CC&Rs, the HOA, None of that has to be dealt with. I feel like staff and PTC and council really spend a good bit of time working on our local implementation of SB 9. And for the time being, I'm inclined to rely on that. Now, we can always go back and revisit, but for the moment, that seems like the prudent approach to me. For subdivisions like the old trace development, there's an entirely different set of tradeoffs to be dealt with, including, as you remember, state density bonus law, which we don't have to worry about in the SB9 R1 case, or RE, because you can't create enough units to allow a state density bonus to be applied. Separately, if separate sale encourages those subdivision developers to increase the segregation of low-income households into the small units, then I think that's an equity issue. So I would be inclined to discourage that in whatever way seems appropriate. We can't eliminate it entirely. But if we do elect to proceed with separate sale, then I would also be inclined to restrict it to at least R1, perhaps R1 and RE. So just to sum it all up, I don't see a huge win in creating an entirely new mechanism with comparatively few advantages over SB9. some disadvantages compared to SB 9 and probably greater risk of unintended consequences. So my lead is towards recommending that Council doesn't adopt this. Should we go ahead and recommend adoption, I'll have a few comments about the three questions that we were posed. I think the restriction to residential purposes makes sense. I like the way it's written currently. I don't have anything to add to that. I would also recommend no minimum lot size. I don't see any compelling argument for establishing one. And finally, the fees, I think we've discussed that. I feel comfortable with what's proposed, but I also would be flexible with other approaches should that be desirable. Getting rid of fee cliffs is a particularly good thing to do. So as long as that's covered, I can be happy with a number of different approaches there. I think that's it for me on this round. Thank you. Commissioner James?

So, I mean, my feeling is coming into this is that I was sort of leaning towards recommending that we not opt in for similar reasons. I felt like there's not a real demonstrated demand from other jurisdictions. We do have a couple of jurisdictions kind of in our region that have decided to go forward on that, and I thought we could potentially learn from them. I was sort of thinking, you know, if we chose not to opt in and sort of revisit, we certainly could opt in at a later date. And I think to have a few years of history from other regions about the successes and mistakes. And I also felt like SB9 can sort of maybe unlock some of the value that residents, to solve the problems we've talked about, creating value for current residents, creating new housing, all the things we understand. And I felt like we could see if SB9 you know we could just see what the track record is on that versus jurisdictions where they went ahead and opted in you know like do we is that sort of taking care of demand in a simpler way not a perfect uh match um commissioner heckman's uh um thoughts about being able to divide lots into not even splits i thought is the most compelling argument for me for for moving forward i think that does create some some opportunities that sb9 would you know would probably eliminate certain properties um i'm still sort of cautious about this and I go back to the fact that this was the simple fact that it was an opt-in I think suggests that there was some concern in Sacramento and they don't show a lot I think maybe when they do, you know, we should pay attention. I think there's a lot of complexity. Now, maybe, you know, maybe that complexity is just a drag on this and it doesn't sort of develop. I can certainly see that. I think there's probably a space where, you know, we start to limit things down to whatever the language we decide on, but essentially individual limiting it if we do move forward to individual things. single family to limit some of the problems we've talked about. I'm sort of, I would certainly lean hard that direction if we do decide to move forward. But I'm certainly not opposed, I would say sort of leaning towards just seeing how SB9 sort of deals with the unrealized value if that can take care of it.

Thank you. Vice Chair Gee?

I had a quick question for staff. Do you have a sense of how many SB9 lots we've done so far in the city?

I believe the staff report noted there were around 30 or so-odd applications that we had received so far.

And generally... Did we see closer to that 60-40 or more closely to even or do we have a sense of what that looks like? I guess I'm kind of curious here about Commissioner James's comments about, I think the main loss of not continuing with SD9 is with the uneven lot split. So I'm curious if the SD9 applications we've seen are a little bit more towards the more uneven side of things or people are trying to go towards that direction.

I don't have that information if it's more 60-40 or 50-50. I don't know, Ms. Armour, if you have any more sense of that.

I don't. And really, if it's 60-40, those are pretty even. Right.

Yeah. I was just curious if we could potentially read something from the tea leaves. But I think... Going into this, my general position has been pretty eloquently summarized by Commissioner Aiken. I would try not to repeat many of the great points that he's already made. I do think that the biggest component of which the PTC can provide feedback is if we decide to move forward with this, which things are of particular consideration, or if we decide to no longer move forward with this, but council still indicates some kind of interest, we want to be able to provide input. And so the PTC provided input on the following things as concerns and these potential areas as potential guardrails that we might want to implement. And also these are some benefits. So for me, I want to echo Commissioner James's comment about the unequal lot split sizes as a particular area of interest to me because that is something that is physically we're unable to do right now with SD9. I want to also echo the comment about residential purposes. I think that's really important and the whole point as to why we're implementing this to begin with. I do know that there's been quite a bit of ADU implementation in the city where people have built ADUs, but it's really more like a exercise room or like a study or something like that. And so I think limiting it to residential uses is important. And I think from the lot size perspective, because I'm interested in unequal lot sizes, I'm not particularly interested in considering a minimum lot size. And from an overall simplicity perspective, I do think that we should continue with the SB9, continue with SB9 as well on that perspective. And finally, I think holistically, I'm interested in the idea of having these starter homes, but I do think that SB9 also provides some of the guardrails, for example, with state density bonus. And I think a lot about that old Trace Road project. And I think Commissioner Aitken said it pretty elegantly about we don't want to encourage potential inequity by having these smaller units be the ones that are considered the BMR units. So at this time, I'm leaning towards not recommending it, but making sure that the motion captures these potential pros and cons that the commissioners weighed.

Vice Chair G, you can't see our facial expressions here, and so there are some frowns of confusion when you were talking about SB9 and like a streamlined process or could you clarify what you were saying there?

Sorry, I apologize. The time zone got me a little bit not as coherent as I'd like to be. So what I really meant is that SB9 is already a ministerial process and that I think that it's I'm not as interested in creating a whole new set of processes that we don't have as much understanding of yet. And I really support Commissioner Aiken's comments about how SB 9 provides certain guardrails. And I'm not really interested in creating a whole set of processes where we don't know what the unintended consequences are yet.

Thank you. All right, I will go last here then. So I wanted to start with a question for staff about in this world where if we allow separate sale of ADUs and we have a very unequal lot split, does that then change? The parcel itself remains one parcel. So it doesn't change the number of ADUs that there could be in the way that it would with SP9. Is that correct? Correct. Okay. So I'm not sure if everybody understands is following what I'm thinking about, which is if somebody uses SB9 and does an approximately equal lot split, then each of those parcels becomes a separate parcel and they can each have their own ADUs. In this situation, that would not be allowed because the parcel remains one parcel. So the same number of ADUs would be allowed. So I'm just I just wanted to clarify that from my own understanding. So I think I'm kind of, I think I'm leaning the way Commissioner Aiken is, but let me explain my biggest reservations for separate sale of ADUs. I'm really most concerned about the residential estate and open space areas where I think we have this larger issue of a loophole in our laws that is allowing development to occur at a density that we really didn't think appropriate in those areas. And so allowing separate sale of ADUs in combination with that loophole just creates further incentive to do what I really don't think is safe, honestly, because of fire risk and also not environmentally responsible because of the Baylands. So um i kind of regardless of what we do i really want to emphasize that to city council that i think we have consensus here on the commission that we don't think that this should be done for anything other than sort of the standard palo alto lot size not these acres large or acre or larger lot sizes that we see in re and os And my concern with calling out specific zones always is that maybe I've missed something because we have all these little one-off exceptions. And so regardless of what we do, if we are trying to say either carve out or allow this only in certain areas, I would want to make sure that we phrase our motion so that staff is doing that additional investigation between the time it moves from here to council. I concur with my colleagues about having units used only for residential purposes and the regarding impact fees. It's not up for discussion right now because the staff, I think what we're looking at is really only a fee schedule to allow the separate sale. We're not talking about the fee schedule for the ADUs themselves. And so I say that to clarify to the public as well, because the the topic of what the fees should be isn't what we're discussing tonight the fees for adus in general so this is it would be additional fees correct which would presumably be a lot smaller um okay so then i'm not going to repeat oh and then similarly um the aside from the safety and environmental concerns I'm much more concerned about commercial abuse for the larger lots. And so again, that would be another reason to either carve those out or be very careful about what zones we include. But overall, I just don't, I'm, you know, kind of neutral and leaning towards no on this because I don't, it's edge cases, I think, that where this would be beneficial. It's pretty difficult as it is for, as compared to SB9, that is, it's pretty difficult compared to SB9 for an owner to do this. So I'm not sure we want to create a separate process, but if we were to, I also don't see that there would necessarily be a huge impact. There's enough about it that is new and that we don't know about that makes me wonder why we would do it if we don't think that there's going to be much benefit. Commissioner Tomlinson. Yeah, Commissioner Tomlinson.

Great. Thank you. I think at this point we have to get some clarity from staff. Did council direct us to implement something like this or is it a legitimate possibility for us to go back and go, no, we still don't want to do it. You may make a recommendation for the ordinance or against the ordinance.

What council was requesting was to have some discussion and input from the PTC on some of the components that might go into an ordinance

if they chose to proceed with it but we had this this general feedback we gave them last time was there's not enough information for us to warrant discussing this and so they sent it back and said no you need to discuss it anyway what we're hearing is no there's not enough information and this reminds me of last time we were in this room do you remember this with the bird safe glass ordinance and we had sent it to them to council and said actually we don't think that this is feasible and they're like no come on do it and the case that some people on the commission made was no okay let's do it because they told us to and so i'm trying to distinguish because that's reversed in this situation. So I'm just trying to figure out, do we actually, what do you understand council's asking us to do?

What I understood from watching the council's discussion is that they have an interest in considering the separate sale of ADUs. And that they wanted to have the Planning and Transportation Commission's input in advance of making a decision of what that might look like.

A different input because the input we gave them was we don't actually think there's enough information to warrant us recommending this.

There were additional topics that were specifically discussed and looking for input, for example, on the lot size or whether there should be exclusions. for example based on different zoning designations so there were some specific topics that were brought up where they were asking for input from the planning and transportation commission i'm trying to distinguish between did the planning department accurately present

our feedback at that time, and they said, no, no, go back? Or was this a scenario in which they thought we didn't talk about it and wanted us to go dive deeper?

It was pretty opaque. There were all sorts of speculations on council about what they thought we... I think it's okay for staff to answer this question.

I'm sure you were there. I would love to hear your input as well, but I definitely want to... This is something that's come up multiple times with staff, so I'm... Sure, go ahead. I just want to make sure that we can clear the air because some people may misunderstand this situation. So what is your take on this?

I assume it was not you. We did work to present what we had heard from the Planning and Transportation Commission, both in the written staff report and in the presentation. Clearly, there is more content in a full meeting and discussion than can be conveyed. In summary minutes.

In a staff report that contains a lot of additional information. It's okay. It's worth talking about because these are conversations people in the community are having behind the scenes. So I'm just trying to be open about it.

Right. And staff does work to accurately reflect both the motion and the things that were considered in the discussion, the concerns that were expressed and the interests. I would invite the chair, if you would, since you were also there at that meeting, if you had additional thoughts on whether they had the full information.

So, if I were to summarize, what we had all discussed was we had a discussion that was briefer than today's, not as in-depth, not with less information than we have today. And we said, well, we would just like more information. And this council was there was a bit of a debate on council about whether we were actively deciding no we are not interested in condos versus we just wanted more information and staff's point was we just wanted more information um and so now council's coming back to saying we are definitely interested in this so we want you guys to think about this in more depth. I think that that's they had specific areas that they wanted us to explore our staffs tried to address some of those in this staff report. And so we are having the deeper conversation.

Yeah, I thank you for that. And I appreciate you sharing what what you saw there. I guess what I'm, I'm trying to distinguish between, we don't actually have more of the information we said we didn't have at the time. we have other different information, but, um, and what I'm hearing from others, you know, is still don't like it. And that's fine. I mean, I, I'm fine with going forward that I've asked the questions. Staff, uh, has given some, uh, some responses that, you know, we'll work it out. This is not a problem we have to solve in advance, which, okay. I mean, that's, that's, that's, that's on you, right? That's going to have to be the work that the, um, the team does, but, Yeah, I'm just trying to explore this in more depth. So what I'm hearing from some of my colleagues is let's just send it back and say no, still no. Is that what people are saying?

I think at this situation, it's less important. This is my personal opinion. Our go ahead or don't go ahead with condoization discussion is less important than the issues that we think should be addressed if council decides. to allow separate sale of ADAs.

I agree. So I do hope that the motion that we make will include that because I think we have consensus on that. So, you know, I, anyway, I think it's been also a good discussion. I'm not satisfied with the lack of information, but that's what happens sometimes when you're innovative early adopters, which we don't often get to do. So, you know, I'm excited about the potential and I see, you know, very clearly the need for something beyond what SB nine offers. So that is, uh, we can phrase our analysis is let, um, you know, On the one hand, there's maybe not unanimous opinions about how to, whether or not to move forward. But if you do, here's what we think. So yeah, anyway, thank you for indulging that discussion and conversation. I think, you know, we here on PTC have a really good relationship with staff and we're very happy about it. And sometimes the message gets lost in transmission over to council. So it's worth, always worth discussing that. Thank you.

Commissioner Rankin. Just a quick add-on about the information flow in the other direction from council to us. Watching that meeting, it was very clear that council members are not of one mind. We had a motion and a substitute motion. As we see in our staff report, We have our alternative actions on back at page 13. And I think staff captured correctly what the intent of the substitute motion was. But it's just up to us to also be aware that other council, that some council members had other intents as well. But I have no quarrel with the way it's been expressed to us tonight.

Thank you for that clarification as well. It's, I mean, it's obvious to state, but we are all human beings and we all have our different perspectives on this. So it's good to take that into consideration from the communication from council as well.

You know, I think staff did a really good job actually conveying what we said to council, but because councils have different minds, certain council members wanted to say that we were, you know, we had made a certain decision, whereas in fact, we were just asking for more information. So, okay. Are we ready for a motion? Can I nominate Commissioner Aitken to make a motion?

Gosh, okay. So I had sketched something out that I was going to email, but given the discussion, I don't think all of it is appropriate any longer. So let's see if we can... come up with something on the fly that will work. As the motion maker, I will impart my bias to this. The PTC recommends that council not approve the draft ordinance for separate sale of accessory dwelling units. The PTC further recommends, hold it before I continue with that, Do we want to have a rationale at the end of this, or AD Armor, have you captured enough that you can express our rationale to Council?

It is up to the Planning and Transportation Commission if you wish to have that explicitly in the motion. I do think that we have heard clearly the rationales, in particular as the maker of the motion that you've expressed, but we would welcome any details you want to make sure are included in that.

Great, thank you. So then let's hit the top three items that we were requested to respond to. So the motion should say, should we proceed with separate sale of ADUs, you should be restricted to residential purposes. There should be no minimum size specification. And applicability should be limited to, yeah, which districts do we name? I did look at these when I was trying to figure this out earlier, and it looked to me like probably the right answer is just R1.

it doesn't seem like the other low density residential districts would be appropriate for this so my my suggestion for the motion is that applicability be limited to r1 can i just suggest that we might want to add um and you know there's ventura has its own r1 equivalent um so maybe there's a way that we could word it such that it's

and equivalent districts in areas with coordinated area plans, which should cover San Antonio as well when it's relevant.

And SOFA, if there are single-family there.

Great. Oh, yes, it was, and I missed that. Thank you, Commissioner Heckman. And as I said before, I'm completely open to other alternatives here. But I think the motion should simply say the fee proposal in the draft ordinance as written.

I second that. We have discussion or amendments. Anything that we missed?

Yeah. Yeah. Do you mind? Go ahead. Go ahead. You are getting called on.

Go ahead, Vice Chair Gene.

So I was wondering if the commission would be interested or the maker and the seconder would be interested in also including additional elements of discussion that came up saying so with the commission also just something like the commission also discussed some of the guardrails, for example, that Commissioner Aitken mentioned. Or, for example, to me, it was really interesting to hear from Commissioner Heckman about how complex some of the condoization efforts could be. So, for example, that's something that I found particularly interesting that I would be interested in adding as some of the other considerations that Council might want to make in terms of their discussions.

as the maker, I did have some ideas for what could be included in rationale, which touches on that. I don't know whether I want to make them part of the motion, but Chair, should we consider that?

I'm okay leaving it out because I think that our discussion was robust, but if the rest of the Commission would like to, in terms of what I heard was the biggest advantage of allowing separate sale of ADUs relative to SB9 is the lot sizes. And then the biggest concerns about going forward with separate sale of ADUs is that we think that we have a more streamlined path already with better guardrails in SB9.

Yeah, that's essentially, I had two points in the rationale. The main benefits, not all, can be achieved with the existing streamlined SB9 process with less management burden and greater protection against negative impacts. That's rationale number one. And rationale number two was may be obsolete if we're restricting to R1, separate sale seems likely to increase segregation of lower income households into the smallest units. So I would include that anyway in case council considers extending beyond R1. So if you wanted to include rationale, those are the two items I had on my list.

I'm fine with it if we want to. I don't have a particular opinion one way or the other.

I don't know. Yeah, this is tricky because I don't know that we have consensus on these things. Why don't we just leave it out then to make it easier for us and leave the motion as is? That was really my inclination.

Is there a possibility where maybe we could make the primary motion and then is there any interest in me making a secondary motion with the rationale afterwards?

If I may, we could. However, the summaries that we've just received verbally here just now has made it very clear what we should be laying out and including in the staff report. So as we discuss this motion, if there are other things that the commission would like to have included in our summary and presentation to council, this has been very helpful.

I guess maybe I'll add one more thing, which is I think For me, one of the things that I was thinking about was allowing only individual residents to be able to do the split. So for example, when talking about Old Trace Road, like saying that developers cannot do the split at development time, but allow single family owners at a later date be able to do the split. That's something that I want to also add, at least for me personally, was of interest, but I'll just lay that out now

Yeah, Commissioner G, Vice Chair G, I'm not sure I understood that. Could you rephrase?

I think that one of my concerns about the split I think that we had talked about was having developers use the separate sale of ADU at development time. And so potentially we could allow it only for the single family at a later point to do the separate sale of ADU. I think I heard that during the discussion. Is that not what I heard?

You did hear that, but I think it's not really that relevant given that The applicability has now been limited to R1.

Oh, yes, I forgot about that. Okay, yeah, I forgot about that. Okay, my bad. Okay, thank you.

Okay, Mr. Salls?

Your hand is up, so I want to make sure that you... Yeah, I just wanted to make sure I got some clarification on the last item about the fee. The language was free proposal and the draft ordinance is written. I'm assuming that means the language in the supplemental report

That's what I intended. That's also what I understood.

So it would be because it would be using the same process that we currently have established for subdivisions under SB 9, we would be using the same processing fee, application fee. Correct. Thank you.

Okay. Is there further discussion? I don't see anybody who wants to speak. So, Mr. Tavera, could you please take the vote?

Commissioner Heckman? No. Commissioner Templeton?

That did not get for the record. That was a vote of no for Commissioner Heckman.

My light was only half on.

No. Commissioner Templeton? No. Commissioner Aiken? Yes. Commissioner James?

Yes.

Vice Chair Gee? Yes. Chair Chang? Yes. Motion carries 4-2.

Would the two of you like to speak to your no votes? Who's going to go first? Okay.

So I agree with the but if they do part of the motion. I'm in lockstep with that. But I believe that our recommendation should be to approve the ordinance but limit it to property zoned R1 and I would have asked staff to look at R2 on the way to council because R2 can have a separate house, but it's got to retain a single family feel. It's in the ordinance. So I think it probably... would have fit. I think 10 cities have already adopted this. And according to the staff report, more are poised to. But they aren't going to do exactly what we might do. For example, I don't know that any of those have limited them to their equivalent of R1. And so I don't know how much information we're going to get going forward. And while I heard unintended potential consequences in the RE, and another multifamily, I didn't hear anybody able to identify something that might actually happen on an R1 that could be bad. And so to me, that's sort of this reactive non-planning that we're afraid that something might happen that we haven't anticipated. And my thought is, let's take a chance. that because just as we could maybe adopt this ordinance after we watch everybody else do it for a while, we could adopt it now. And And if there is some unintended consequence in the R1 or R2, we can amend. We have that power or get rid of it. And then, you know, some small number of people will have gotten to take advantage of a limited time law that turned out to not work. But that's the approach I would have taken. But I thought we had an excellent dialogue. And I'm happy that other than the ultimate question, we all agreed on the guardrails that we want staff to convey to the council.

commissioner thank you um yeah i similar but not the same i my my concerns here are that we didn't do what council asked us to do although we do have a clause in there that says if you're really serious here's what we really think that's great um but more more to that point um I really feel like we've lost an opportunity and I had a lot of reservations coming in and staff answered them very adequately to my satisfaction of all my what ifs. And we do a lot of what ifing in this commission. And this was very reassuring for me to hear that we have a way to go forward and this was an opportunity for us to be a little more innovative about housing. Our same old same old is not producing the housing and we're having all of these consequences laid on us from Sacramento and I'm so concerned about that and the best part of this proposal from my perspective was it's a way to integrate these new families into Palo Alto in the way that we already enjoy our community instead of something separate off to the side down by San Antonio Road. And so I just felt the hope of welcoming people. You know, I just sent my daughter off to college last time and last week and can she ever come back? Like what's going to happen in Palo Alto? And so I had a moment of hope when council sent us this and asked us to say, hey, how can we make this work? And so that was the hope I was holding out for. And so my no vote is a reflection of that. Thank you.

Thank you. All right. Thank you for the good discussion, everyone. Our next agenda item is the approval of minutes for August 12th, 2026.

And to the chair, everyone was present. So no one will need to abstain. Okay, great.

Thank you. Any discussion? Or actually, any public comment, first of all?

The chair have not received any public comment on this item.

Okay, then any discussion? Are we ready for a motion?

Move approval as revised.

Second.

Any discussion?

Can we please call the vote?

Commissioner James? Yes. Commissioner Heckman? Yes. Commissioner Templeton? Yes. Commissioner Aiken? Yes. Vice Chair Gee? That was a yes. Chair Chang? Yes. Motion carries 6-0.

All right. Thank you. On to Commissioner questions, comments, announcements, or future meetings and agendas. I've got one if nobody else has. So there was a public comment about a project in Los Altos Hills, which has potentially some transportation impacts in Palo Alto. a lot many many truckloads of dirt coming through and a request about whether city of palo alto could coordinate with los altos hills to encourage a different route for the many many many many trucks of dirt coming through um and i thought that that was just worth bringing up what's the right path for something like that who would take that on because it seemed to me that

it's in our city's interests to encourage um a different a different route i can look into that um as to you know thank you for calling attention to that public comment i can look into you know who that might we might coordinate with we may have limitations on what we actually can do, given that I'm guessing the truck route that's going to be proposed for that would be San Antonio Road, which is A truck route.

I think it was down Charleston. It was down Charleston. It was down Charleston.

So I will definitely check in with our transportation and other departments on that particular question.

Yeah, I think it was a couple hundred loads of dirt because a three-story is being dug out for this house. Okay, and then I think that's it. I thought I had made some notes about something else I wanted to ask Steph, but I don't see it.

okay um so at this time does anybody else have anything first uh i did to the chair it looks like uh vice chair g has his hand up sorry thank you thank you um one thing that came out of the discussion with chairs and vice chairs with the mayor and vice mayor is potentially getting a ptc liaison from council and so that's something that i'm going to email Mickey about and follow up with. So hopefully we'll have an update for the commission at some point.

And if we don't have an update, I will also bring it up when I present the work plan to city council. Anything else? Okay, so then right now we've got time for virtual public comment on items not on the agenda. Are there any raised hands?

There's no raised hands. If there's any members of public that would like to speak, please raise your hand.

I'm not seeing anything. Yeah. So with that, this meeting is adjourned. Thank you.