Comprehensive Plan Update
POPULATION, HOUSING, AND EMPLOYMENT Draft Existing Conditions Report - City of Palo Alto - August 29, 2014
PALO ALTO COM PREHENSIVE PLAN UPDATE DRAFT EXISTING CONDITIONS REPORTS
POPULATION, HOUSING, AND EMPLOYMENT
TABLE OF CONTENTS 10.
POPULATION, HOUSING, AND EMPLOYMENT .............................................................. 10-1 10.1 ENVIRONMENTAL SETTING ......................................................................................................10-1
10.1.1 Regulatory Framework....................................................................................10-1 Local Regulations .......................................................................................................10-3
10.1.2 Existing Conditions ...........................................................................................10-4 Population ...................................................................................................................10-4 Housing .........................................................................................................................10-8 Employment ............................................................................................................. 10-15
PLACEWORKS
10-i
PALO ALTO COM PREHENSIVE PLAN UPDATE DRAFT EXISTING CONDITIONS REPORTS
POPULATION, HOUSING, AND EMPLOYMENT
TABLES Table 10-1
Population and Household Trends ...................................................................... 10-5
Table 10-2
Average Household Size .......................................................................................10-5
Table 10-3
Key Age and Household Characteristics ........................................................... 10-6
Table 10-4
Median Age ...........................................................................................................10-6
Table 10-5
Key Ethnicity Characteristics 2000 vs. 2010......................................................... 10-7
Table 10-6
Median Household Income..................................................................................10-7
Table 10-7
Persons Living in Poverty .......................................................................................10-7
Table 10-8
Housing Types .........................................................................................................10-8
Table 10-9
Rent vs. Own...........................................................................................................10-8
Table 10-10
Household Size .......................................................................................................10-9
Table 10-11
Home Construction by Decade .......................................................................... 10-9
Table 10-12
Rental Housing Rates, 2014................................................................................. 10-10
Table 10-13
Fair Market Rents in Santa Clara County, 2014................................................ 10-10
Table 10-14
Maximum Affordable Rental Housing Costs, Santa Clara County, 2014 .......................................................................................................................10-11
Table 10-15
Annual Median Home Prices, 2012 and 2013 .................................................. 10-12
Table 10-16
Maximum Affordable Ownership Housing Costs, Santa Clara County, 2014 .......................................................................................................................10-13
Table 10-17
Housing Cost Burden by Tenure and Income in Palo Alto, 2010 ................... 10-14
Table 10-18
Proportion of Lower-Income Families ................................................................ 10-15
Table 10-19
Job Trends and Forecast ....................................................................................10-16
Table 10-20
Jobs per Employed Resident.............................................................................. 10-16
Table 10-21
Major Employers of Palo Alto Residents ............................................................ 10-17
10-ii
AUGUST 29, 2014
PALO ALTO COM PREHENSIVE PLAN UPDATE DRAFT EXISTING CONDITIONS REPORTS
POPULATION, HOUSING, AND EMPLOYMENT
10.
POPULATION, HOUSING, AND EMPLOYMENT
An understanding of population, housing, and employment trends is essential to informing community planning. Issues related to population, housing, and employment significantly influence the goals, policies, and programs in the Comprehensive Plan. Resident and employee activity is directly tied not only to housing conditions, but also to land use and transportation demands. Changes in population and employment drive decisions about infrastructure, investment, and the location and amount of residential, commercial, and even open space uses in the community. Changes in the composition of the population also affect the type of services the City can offer and the ways they are delivered. This report discusses the regulatory framework and existing conditions related to population, housing, and employment in Palo Alto in order to provide context for the Comprehensive Plan Update and a baseline for evaluating impacts in the Environmental Impact Report (EIR). Relevant data are available from a variety of sources, including the US Census, the California Department of Finance, the Association of Bay Area Governments, and the City of Palo Alto.
10.1 ENVIRONMENTAL SETTING 10.1.1 REGULATORY FRAMEWORK There are no federal, State, or regional regulations governing population or employment levels, although federal, State, and regional agencies continually update data about population, housing, and employment growth. However, the State of California has enacted complex regulations governing housing policy, and the State requires local jurisdictions to update the Housing Element of their general plans (the Comprehensive Plan in Palo Alto) on a periodic schedule.
The City is currently working on an update to the Housing Element for the period 2015-2023, and is required to complete that update and secure certification by the California Department of Housing and Community Development by the end of January 2015. As a result, the City’s Housing Element update is proceeding on a separate schedule from the rest of the Comprehensive Plan Update.
Association of Bay Area Governments Projections 2013 The Association of Bay Area Governments (ABAG) is the comprehensive regional planning agency for the San Francisco Bay Area region, which is composed of the nine counties of Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo, Santa Clara, Solano, and Sonoma, which together contain 101 cities. ABAG produces growth forecasts on four-year cycles so that other regional agencies, including the Metropolitan Transportation Commission (MTC) and the Bay Area Air Quality Management District (BAAQMD) can use the forecasts to inform project funding and regulatory decisions. The most recent set of growth forecasts was published by ABAG in July 2013. ABAG projections have practical consequences that shape growth and affect environmental quality. The projections are the basis for the MTC Regional Transportation Plan (RTP) and the Bay Area Air Quality Management District Regional Ozone Attainment Plan. Meanwhile, local general plans, zoning regulations and growth management programs inform the ABAG
PLACEWORKS
10-1
PALO ALTO COM PREHENSIVE PLAN UPDATE DRAFT EXISTING CONDITIONS REPORTS
POPULATION, HOUSING, AND EMPLOYMENT
projections. The ABAG projections are also intended to support policies and incentives that influence development patterns to preserve open space, reduce single-occupant automobile trips, and increase transit use, bicycling, and walking.
Regional Housing Needs Allocation California law requires each local jurisdiction to accommodate the provision of a share of the region’s projected housing needs for each Housing Element cycle. This share is called the Regional Housing Needs Allocation (RHNA). State law mandates that each jurisdiction provide sufficient zoning to accommodate a variety of housing opportunities for all economic segments of the community to meet or exceed its RHNA. The State provides ABAG, as the comprehensive regional planning agency, with an overall RHNA for the region, and ABAG then calculates the RHNA for individual jurisdictions. Palo Alto’s RHNA for the 2015-2023 Housing Element cycle is 1,988 housing units, of which 1,123 units (56.4 percent) are designated for lower-income households (earning less than 80 percent of the median family income in Santa Clara County, as determined by the US Department of Housing and Urban Development (HUD)).
Sustainable Communities Strategy ABAG and MTC, in coordination with the BAAQMD and the San Francisco Bay Conservation and Development Commission (BCDC), share joint responsibility for creating the Sustainable Communities Strategy (SCS) required for the nine-county Bay Area region to implement the statewide emission-reduction directives of Assembly Bill 32 (the California Global Warming Solutions Act of 2006) and Senate Bill 375 (the Sustainable Communities and Climate Protection Act of 2008). Each of the agencies involved in the SCS has a different role in regional governance. ABAG primarily deals with regional land use, housing, environmental quality, and economic development issues, while MTC is tasked with regional transportation planning, coordinating, and financing. BAAQMD is responsible for regional air pollution regulation. BCDC is focused on preserving, enhancing, and ensuring the responsible use of the San Francisco Bay. These agencies jointly created the SCS for the Bay Area, entitled Plan Bay Area. The SCS forecasts a land use pattern, which when integrated with the transportation system, would reduce greenhouse gas (GHG) emissions from automobiles and light trucks, and is measured against a regional GHG emissions reduction target established by the California Air Resources Board (CARB). The SCS is a land use strategy required to be included as part of the Bay Area’s 25-year RTP. By federal law, the RTP must be internally consistent. Therefore, the more than $200 billion dollars of transportation investment typically included in the RTP must align with and support the SCS land use pattern. State law also requires that the updated eight-year RHNA prepared by ABAG be consistent with the SCS. The SCS and RTP were adopted simultaneously in July 2013. The goals of the SCS are to:
Recognize and support compact walkable places where residents and workers have access to services and amenities to meet their day-to-day needs.
Reduce long commutes, increase energy independence, and decrease the region’s carbon consumption.
Support complete communities that remain livable and affordable for all segments of the population, maintaining the Bay Area as an attractive place to reside, start, or continue a business, and create jobs.
Support a sustainable transportation system and reduce the need for expensive highway and transit expansions, freeing up resources for other more productive public investments.
10-2
AUGUST 29, 2014
PALO ALTO COM PREHENSIVE PLAN UPDATE DRAFT EXISTING CONDITIONS REPORTS
POPULATION, HOUSING, AND EMPLOYMENT
Provide increased accessibility and affordability to the Bay Area’s most vulnerable populations.
Conserve water and decrease the Bay Area’s dependence on imported food stocks and their high transport costs.
While the SCS does not directly govern land uses within Palo Alto, there are a number of benefits available to the City for being consistent with this plan, including streamlining of California Environmental Quality Act review pursuant to Senate Bill 375 for eligible transit priority and residential or mixed-use projects, as well as high eligibility for transportation funding, provided that policies and land use patterns in the Comprehensive Plan align with the goals of the SCS. The SCS includes a preferred land use scenario titled the “Jobs-Housing Connection Strategy,” which identifies Priority Development Areas (PDAs) and Priority Conservation Areas (PCAs) throughout the Bay Area. PDAs are areas considered to be appropriate for new development because they are located in proximity to transit. PDAs are nominated by local jurisdictions, and the local municipality maintains land use control over PDAs within its jurisdiction. The Jobs-Housing Connection Scenario identifies one PDA in Palo Alto: the California Avenue Pedestrian Transit Oriented Development Combining District. In addition, El Camino Real is identified throughout Santa Clara County by the Santa Clara Valley Transportation Authority as a “PDA-Serving Corridor,” reflecting the Grand Boulevard Initiative concept for San Mateo and Santa Clara Counties.
Local Regulations City of Palo Alto Housing Element Housing Elements in California are required by State Law, but their implementation is the responsibility of the individual jurisdiction. The City of Palo Alto has a State-certified 2007-2014 Housing Element and is in the process of drafting the 2015-2023 Housing Element. Consistent with State requirements, the City aims to have the updated Housing Element adopted by the City Council by November 2014 and certified as compliant with State law by the State Department of Housing and Community Development (HCD) by January 2015. (The Comprehensive Plan Update could consider additional adjustments to its Housing Element, which would require additional review by HCD). The Housing Element summarizes Palo Alto’s population trends, housing characteristics, employment trends, housing inventory, possible sites available for affordable housing. It includes analysis of the city’s housing needs in relation to RHNA, potential funding sources, sustainability programs, and potential constraints to housing development (including governmental, environmental and costs). The Housing Element also evaluates the development review process, and the implementation progress of the previous housing element goals and policies. Current goals call for the City to ensure the preservation of the unique character of the city’s residential neighborhoods; support the construction of housing near schools, transit, parks shopping, employment and cultural institutions; meet underserved housing needs; provide community resources to support neighborhoods; promote an environment free of discrimination and the barriers that prevent choice in housing; and reduce the environmental impact of new and existing housing. Frequent updates regarding the status of the 2015-2023 Housing Element Update are available via the City of Palo Alto website.
PLACEWORKS
10-3
PALO ALTO COM PREHENSIVE PLAN UPDATE DRAFT EXISTING CONDITIONS REPORTS
POPULATION, HOUSING, AND EMPLOYMENT
Below Market Rate Ordinance The City has a Below Market Rate (BMR) program that requires developers of residential projects with five or more dwelling units to make 15 to 20 percent of those units affordable to moderate- and lower-income households. The units in the program carry resale and affordability controls for 59 years, and these covenants renew each time the property title is transferred. This provision is intended to reduce the risk of affordable units converting to market rate. In-lieu fees can be substituted in some cases for direct provision of affordable units. BMR buyers cannot have assets in excess of 50 percent of the sale price of a unit where the applicant is less than 62 or 200 percent of the sale price for households where the applicant is 62 or older. Gifts or loans from family or friends are counted as assets and may not exceed 10 percent of the dwelling unit sale price.
Development Impact Fee The City currently collects $19.31 per square foot of nonresidential development at the time of building permit issuance. The funds are used to assist in the development of new affordable housing units. Since 2005, the City has used $10,124,000 in BMR in-lieu fees and $13,488,577 in Development Impact Fees to fund construction of 289 dwelling units in Palo Alto for lower income households, including seniors and previously homeless persons.
Density Bonus Ordinance The City has a Density Bonus Ordinance to encourage the development of affordable housing. The Density Bonus Ordinance allows up to a 35 percent increase in the number of market-rate residential dwelling units depending on the percentage of affordable units provided, and it allows up to three development concessions to facilitate the inclusion of affordable units in residential developments. Concessions may include variances from height limit, floor-area ratio, setback, massing, or open space requirements.
10.1.2 EXISTING CONDITIONS Population Planning for the future of Palo Alto requires an understanding of who comprises the community and how the population might change over the next decades.
Population and Household Trends As shown in Table 10-1, Palo Alto experienced relatively stable and slow population growth from 1970 to 2000 but has been growing significantly faster since 2000, a trend that is projected to continue. The slow growth in Palo Alto prior to 2000 sharply contrasted simultaneous rapid growth in the County and the Bay Area. The number of households in the city, however, has been growing relatively steadily since 1970, but still at a relatively low rate compared to the surrounding region. The Palo Alto household growth rate is projected to decrease slightly over the
10-4
AUGUST 29, 2014
PALO ALTO COM PREHENSIVE PLAN UPDATE DRAFT EXISTING CONDITIONS REPORTS
POPULATION, HOUSING, AND EMPLOYMENT
next two decades. The regional household growth rate will also decrease, but is likely to remain higher than Palo Alto’s household growth rate.
TABLE 10-1
POPULATION AND HOUSEHOLD TRENDS 1970
1980
1990
2000
% Change 1970-2000
2010
2020 Forecast
2030 Forecast
% Forecast 2000-2030
68,994
73,320
25.1%
Population Palo Alto
55,966
55,225
55,900
58,598
4.7%
64,403
Santa Clara County
1,064,714 1,295,071 1,497,577 1,682,585
58.0%
1,781,642 1,977,900 2,188,500
30.1%
Bay Area
4,628,199 5,179,784 6,023,577 6,783,760
46.6%
7,150,739 7,786,800 8,496,800
25.3%
Households Palo Alto Santa Clara County Bay Area
20,546
23,102
24,700
25,216
22.7%
26,493
28,478
30,108
16.3%
322,870
458,914
522,040
565,863
75.3%
604,204
675,670
747,070
32.0%
1,552,801 1,973,880 2,250,975 2,466,020
58.8%
2,608,023 2,837,680 3,072,920
24.6%
Sources: 1970-2010 population – US Census; 2020 and 2030 forecasts – ABAG, Data for Bay Area Housing Elements, 2014, and City of Palo Alto 2014.
As shown in Table 10-2, average household size in Palo Alto has been lower than in Santa Clara County and the Bay Area since 1970. Average household size in Palo Alto has been increasing since 1990, as has also been the case in the County and the Bay Area.
TABLE 10-2
AVERAGE HOUSEHOLD SIZE 1970
1980
1990
2000
2010
2014
Palo Alto
2.67
2.33
2.23
2.30
2.41
2.48
Santa Clara County
3.23
2.76
2.81
2.92
2.90
2.98
Bay Area
N/A
2.56
2.61
2.69
2.69
2.75
Population
Sources: US Census, except 2014 and Bay Area 2010 – California Dept. of Finance, Population and Housing Estimates, 2014.
Key Age and Household Characteristics Palo Alto has an above average share of residents 65 and older compared to Santa Clara County, the Bay Area, and most neighboring communities. In the other categories shown in Table 10-3 that are among the most informative regarding population and housing trends, Palo Alto is close to County and Bay Area averages. This includes the fact that more than two-thirds of Palo Alto households do not include school-age children, and many homes in the city are not single-family houses with yards. According to the Palo Alto-based Center for Continuing Study of the California Economy, the share of
PLACEWORKS
10-5
PALO ALTO COM PREHENSIVE PLAN UPDATE DRAFT EXISTING CONDITIONS REPORTS
POPULATION, HOUSING, AND EMPLOYMENT
single-family detached homes in Palo Alto is expected to continue to decline: more than 70 percent of all new residential permits in San Mateo and Santa Clara counties in 2012 and 2013 were for dwelling units in multi-family structures.
TABLE 10-3
KEY AGE AND HOUSEHOLD CHARACTERISTICS Persons Under 18
Persons 65 & Older
Renters
Homes with Kids
Detached Single-Family
Palo Alto
23.4%
17.1%
44.3%
31.6%
57.4%
Santa Clara County
24.1%
11.1%
42.4%
34.8%
53.8%
Bay Area
22.3%
12.3%
43.8%
30.1%
53.4%
Sources: 2010 US Census, except SF Detached – California Department of Finance, Population and Housing Estimates, 2014.
The Center for Continuing Study of the California Economy forecasts that between 2014 and 2030, the number and share of residents aged 65 and above in Palo Alto will increase and the average age of these residents will increase, with most above age 75 after 2020. Still, at the same time that the population of the city is generally aging, the proportion of children also is increasing. Overall, the median age in Palo Alto has increased steadily since 1970, as shown in Table 10-4. Although the same is true for Santa Clara County and the Bay Area, the median age in Palo Alto has remained consistently high relative to the region.
TABLE 10-4
MEDIAN AGE 1970
1980
1990
2000
2010
Palo Alto
31.6
35.2
38.4
40.2
41.9
Santa Clara County
25.7
29.2
32.0
34.0
36.2
Bay Area
N/A
31.3
33.7
36.6
N/A
Note: N/A = Not available. Source: US Census.
Ethnicity The most pronounced recent trend in the ethnic makeup of Palo Alto is the decrease in persons identifying themselves as “white,” combined with an increase in the proportion of people who categorize themselves as “Asian.” As shown in Table 10-5, this trend mirrors, but has been more pronounced in Palo Alto, the County or the overall Bay Area. The increase in the Hispanic population of Palo Alto is more aligned with the regional trend. The Center for Continuing Study of the California Economy reports that immigration, largely Asian in the Bay Area, will be an important source of growth in population and employees and, as a result, the Asian population share of residents throughout the region will continue to increase.
10-6
AUGUST 29, 2014
PALO ALTO COM PREHENSIVE PLAN UPDATE DRAFT EXISTING CONDITIONS REPORTS
POPULATION, HOUSING, AND EMPLOYMENT
TABLE 10-5
KEY ETHNICITY CHARACTERISTICS 2000 VS. 2010 White 2000
White 2010
Asian 2000
Asian 2010
Hispanic 2000
Hispanic 2010
Palo Alto
72.8%
60.6%
17.2%
27.0%
4.6%
6.2%
Santa Clara County
44.2%
35.2%
25.4%
31.7%
24.0%
26.9%
Bay Area
50.0%
42.4%
18.8%
23.0%
19.4%
23.5%
Source: US Census.
Income As shown in Table 10-6, median income in Palo Alto continues to be significantly higher than for Santa Clara County as a whole.
TABLE 10-6
MEDIAN HOUSEHOLD INCOME 1990
2000
2010
2012
Palo Alto
$68,737
$90,377
$120,670
$122,482
Santa Clara County
$53,670
$74,335
$86,850
$90,747
Source: US Census, including American Community Survey – 2008-2012. Information is not compiled for the overall Bay Area.
As shown in Table 10-7, the reported percentage of Palo Alto residents living in poverty declined in 2012 for the first time since the 1980s, while the proportion of households below the poverty level in Santa Clara County continued to rise. The poverty level set by the US Census Bureau for 2012 for a family of four was an annual household income of less than $23,492.
TABLE 10-7
PERSONS LIVING IN POVERTY 1990
2000
2010
2012
Palo Alto
4.6%
4.8%
5.7%
4.9%
Santa Clara County
8.6%
7.5%
8.9%
9.7%
Source: US Census, including American Community Survey – 2012. Information is not compiled for the overall Bay Area.
It should be noted that the $23,492 nationwide annual income threshold may not accurately reflect what constitutes poverty locally. In 2012, the US Department of Housing and Urban Development considered a family of four earning $52,500 or less or a single person earning $36,750 or less and living in Santa Clara County to be “very low-income” households.
PLACEWORKS
10-7
PALO ALTO COM PREHENSIVE PLAN UPDATE DRAFT EXISTING CONDITIONS REPORTS
POPULATION, HOUSING, AND EMPLOYMENT
Housing The current and future condition and affordability of the housing stock in Palo Alto play important roles in determining whether and how the housing needs of the community may be met.
Housing Types More than half of dwelling units in Palo Alto are detached single-family homes, and more than one-third are attached multi-family residences, as shown in Table 10-8. Palo Alto has proportionally more of these types of homes than either Santa Clara County or the Bay Area. There are fewer single-family attached homes in Palo Alto by percent of total than in the County and the Bay Area. Single-family homes historically have comprised more than half of the city’s housing inventory.
TABLE 10-8
HOUSING TYPES Single-Family Detached
Percent of Total
Single-Family Attached
Percent of Total
Multi-Family
Percent of Total
Palo Alto
16,408
57.5%
1,229
4.3%
10,810
37.9%
Santa Clara County
347,100
53.8%
62,420
9.7%
216,117
33.5%
1,509,538
53.5%
259,353
9.2%
993,690
35.2%
Bay Area
Source: California Department of Finance, Population and Housing Estimates, 2014.
Household Tenure and Size The ratio of homeowner to renter households is typically influenced by factors such as housing cost, housing availability, and job availability. As shown in Table 10-9, the ratio of renter to owner households in Palo Alto has remained relatively stable since 2000 and continues to reflect Countywide and overall Bay Area trends. In general, units available for rent in Palo Alto tend to be smaller than ownership units.
TABLE 10-9
RENT VS. OWN Rent 2000
Own 2000
Rent 2010
Own 2010
Rent 2012
Own 2012
Palo Alto
42.8%
57.2%
44.3%
55.7%
42.5%
57.5%
Santa Clara County
40.2%
59.8%
42.4%
57.6%
41.9%
58.1%
Bay Area
42.3%
57.7%
43.8%
56.2%
N/A
N/A
Source: US Census, including American Community Survey – 2012.
As shown in Table 10-10, Palo Alto has a higher proportion of one- and two-person households than does the County as a whole, especially for renter households. The renter population in Palo Alto includes a portion of the Stanford University student population, which is generally prone to larger household occupancies and more frequent turnover.
10-8
AUGUST 29, 2014
PALO ALTO COM PREHENSIVE PLAN UPDATE DRAFT EXISTING CONDITIONS REPORTS
POPULATION, HOUSING, AND EMPLOYMENT
TABLE 10-10
HOUSEHOLD SIZE 1 Person
2 People
3 People
4 or More
Palo Alto Owner
22.0%
34.3%
17.2%
26.5%
Palo Alto Renter
39.1%
30.0%
16.0%
14.9%
Santa Clara County Owner
17.8%
31.2%
18.6%
32.4%
Santa Clara County Renter
28.1%
26.7%
18.1%
27.1%
Source: American Community Survey, 2012. Information is not compiled for the overall Bay Area.
Housing Age and Condition Rates of home construction in Palo Alto have varied significantly from those in the surrounding region. As shown in Table 10-11, more than half of the current homes in Palo Alto were constructed prior to 1960, with almost 30 percent of the total current inventory built during the post-war boom of the 1950s. The median construction year for Palo Alto housing is 1955, but the city’s rental stock is more recent, with an estimated median construction year of 1967. According to current City estimates, more than 55 percent of occupied rental units were built after 1960. Overall housing production in Palo Alto has increased from an average of less than 100 units per year in the 1990s to more than 170 units per year since 2000.
TABLE 10-11
HOME CONSTRUCTION BY DECADE Pre-1960
1960s-70s
1980s-90s
2000 >
Palo Alto
52%
26%
13%
9%
Santa Clara County
26%
41%
23%
10%
Bay Area
37%
33%
21%
9%
Source: ABAG, Data for Bay Area Housing Elements, 2014.
Concern over the condition of rental housing has led to the City periodically using its bonding authority and federal funds to assist with rehabilitation efforts. In the 1990s, the City provided financial assistance to rehabilitate 315 rental units in downtown and South Palo Alto. In 2013, the City committed $1 million for rehabilitation of the 120-unit Stevenson House senior apartments on East Charleston Road, and the City has stated its intent to assist the Palo Alto Housing Corporation with funds to help rehabilitate the 60-unit Colorado Park low-income rental property in east Midtown.
Housing Costs and Affordability Housing is generally the greatest expense for any household, but the impact of housing cost falls disproportionately on lower-income households, especially renters. While some higher-income households may choose to spend more of their income for housing, the cost burden for lower-income renters tends to reflect a lack of housing affordable to them. According to research done for the 2015-2023 Palo Alto Housing Element update, the 2012 median household income for owner households in Palo Alto was $157,421, compared to $80,708 for renter households. In Santa Clara County, the 2012 median owner household income was $111,040, compared to $58,472 for renters.
PLACEWORKS
10-9
PALO ALTO COM PREHENSIVE PLAN UPDATE DRAFT EXISTING CONDITIONS REPORTS
POPULATION, HOUSING, AND EMPLOYMENT
Households that spend more than 30 percent of their income on housing costs are generally considered to be overpaying for housing, and those with lower incomes are more likely to overpay. According to the 2008-2012 US Census American Community Survey, approximately 36 percent of Palo Alto homeowners were overpaying for housing, including 41 percent of renters. This represents a jump from 2010, when the Census reported that about 28 percent of Palo Alto households overpaid for housing. A survey of rental housing listings in Palo Alto conducted in 2014 for the Housing Element update indicated that the majority of units available were one- and two-bedroom apartments. Rental units with three or more bedrooms were primarily limited to single-family homes. As shown in Table 10-12, monthly rents ranged from $1,895 for a studio to $8,580 for a four-bedroom home, with the average rent for all units surveyed at $4,096. The survey indicates that rents in Palo Alto do not fall within the range of the fair market rents for Santa Clara County, as determined by HUD. As shown in Table 10-13, fair market rents range from $1,105 for a studio to $2,636 for a four-bedroom unit. The rental survey shows that the average 1-bedroom unit in Palo Alto rent for the equivalent of a 2-bedroom fair market rent in Santa Clara County. As shown in Table 10-14, the average 2-bedroom unit in Palo Alto rents for approximately 1.8 times the affordable rental price for a low-income family of four in Santa Clara County.
TABLE 10-12
RENTAL HOUSING RATES, 2014
Unit Size
Rental Range
Average
Studio/Efficiency
$1,895 - $2,810
$2,151
1 Bedroom
$1,995 - $3,695
$2,590
2 Bedroom
$2,350 - $4,600
$3,332
3 Bedroom
$3,500 - $6,300
$5,100
4 Bedroom
$6,475 - $8,580
$7,387
Sources: Craigslist.com, apartments.com, apartmentlist.com. Search performed on April 27, 2014.
TABLE 10-13
FAIR MARKET RENTS IN SANTA CLARA COUNTY, 2014
Unit Size
Fair Market Rent
Studio/Efficiency
$1,105
1 Bedroom
$1,293
2 Bedroom
$1,649
3 Bedroom
$2,325
4 Bedroom
$2,636
Sources: HUD User 2014.
10-10
AUGUST 29, 2014
PALO ALTO COM PREHENSIVE PLAN UPDATE DRAFT EXISTING CONDITIONS REPORTS
POPULATION, HOUSING, AND EMPLOYMENT
TABLE 10-14
MAXIMUM AFFORDABLE RENTAL HOUSING COSTS, SANTA CLARA COUNTY, 2014
Annual Income Limit
Affordable Rental Housing Cost
Utilities
Affordable Rental Price
Extremely Low Income (0-30% AMI) 1 Person
$22,300
$558
$137
$421
2 Person
$25,500
$638
$160
$478
3 Person
$28,650
$716
$182
$534
4 Person
$31,850
$796
$242
$554
5 Person
$34,400
$860
$290
$570
Very Low Income (31-50% AMI) 1 Person
$37,150
$929
$137
$792
2 Person
$42,450
$1,061
$160
$901
3 Person
$47,750
$1,194
$182
$1,012
4 Person
$53,050
$1,326
$242
$1,084
5 Person
$57,300
$1,433
$290
$1,143
Low Income (51-80% AMI) 1 Person
$59,400
$1,485
$137
$1,348
2 Person
$67,900
$1,698
$160
$1,538
3 Person
$76,400
$1,910
$182
$1,728
4 Person
$84,900
$2,123
$242
$1,881
5 Person
$91,650
$2,291
$290
$2,001
Median Income (81-100% AMI) 1 Person
$73,850
$2,154
$137
$1,709
2 Person
$84,400
$2,462
$160
$1,950
3 Person
$94,950
$2,769
$182
$2,192
4 Person
$105,500
$3,077
$242
$2,396
5 Person
$113,950
$3,324
$290
$2,559
PLACEWORKS
10-11
PALO ALTO COM PREHENSIVE PLAN UPDATE DRAFT EXISTING CONDITIONS REPORTS
POPULATION, HOUSING, AND EMPLOYMENT
TABLE 10-14
MAXIMUM AFFORDABLE RENTAL HOUSING COSTS, SANTA CLARA COUNTY, 2014
Annual Income Limit
Affordable Rental Housing Cost
Utilities
Affordable Rental Price
Moderate Income (101-120% AMI) 1 Person
$88,600
$2,215
$137
$2,078
2 Person
$101,300
$2,533
$160
$2,373
3 Person
$113,950
$2,849
$182
$2,667
4 Person
$126,600
$3,165
$242
$2,923
5 Person
$136,750
$3,419
$290
$3,129
Notes: AMI = Area Median Income Assumptions: 2014 HCD income limits; 30.0% gross household income as affordable housing cost. Utilities based on Housing Authority of Salta Clara 2013 County Utility Allowance. Sources: California Department of Housing and Community Development, 2014; Housing Authority of the County of Santa Clara, 2013.
Sale prices for homes in Palo Alto have increased substantially since 2010. As shown in Table 10-15, home sales analysis and reporting company DataQuick reported that the median home price for single-family residences and condominiums in Palo Alto increased 15 percent from 2012 to 2013, from $1,495,000 to $1,720,000. Although median home prices in Santa Clara County as a whole are also on the rise, the 2013 median home sales price in Palo Alto was more than 2.5 times that of the County median price of $645,000. As shown in Table 10-16, the average home in Palo Alto sold in 2013 for approximately 5.2 times the affordable sales price for a low-income family of four in Santa Clara County.
TABLE 10-15
ANNUAL MEDIAN HOME PRICES, 2012 AND 2013 2012
2013
% Change 2012-2013
Campbell
$625,000
$701,000
12.2%
Cupertino
$1,045,750
$1,200,000
14.8%
$769,250
$800,000
4.0%
$1,495,000
$1,720,000
15.1%
$540,000
$635,000
17.6%
Saratoga
$1,527,500
$1,600,000
4.7%
Sunnyvale
$645,000
$767,500
19.0%
Santa Clara County
$525,000
$645,000
22.9%
Jurisdiction
Mountain View Palo Alto Santa Clara
Sources: DataQuick California Home Sale Activity by City, Home Sales Recorded in the Year 2013.
10-12
AUGUST 29, 2014
PALO ALTO COM PREHENSIVE PLAN UPDATE DRAFT EXISTING CONDITIONS REPORTS
POPULATION, HOUSING, AND EMPLOYMENT
TABLE 10-16
MAXIMUM AFFORDABLE OWNERSHIP HOUSING COSTS, SANTA CLARA COUNTY, 2014
Annual Income Limit
Affordable Ownership Housing Cost
Utilities
Taxes/ Insurance
Affordable Sales Price
Extremely Low Income (0-30% AMI) 1 Person
$22,300
$558
$149
$112
$69,122
2 Person
$25,500
$638
$173
$128
$78,432
3 Person
$28,650
$716
$198
$143
$87,276
4 Person
$31,850
$796
$265
$159
$86,577
5 Person
$34,400
$860
$316
$172
$86,577
Very Low Income (31-50% AMI) 1 Person
$37,150
$558
$149
$186
$138,244
2 Person
$42,450
$638
$173
$212
$157,329
3 Person
$47,750
$716
$198
$239
$176,180
4 Person
$53,050
$796
$265
$265
$185,257
5 Person
$57,300
$860
$316
$287
$193,170
Low Income (51-80% AMI) 1 Person
$59,400
$558
$149
$297
$241,811
2 Person
$67,900
$638
$173
$340
$275,791
3 Person
$76,400
$716
$198
$382
$309,537
4 Person
$84,900
$796
$265
$425
$333,509
5 Person
$91,650
$860
$316
$458
$353,059
Median Income (81-100% AMI) 1 Person
$73,850
$558
$149
$431
$366,363
2 Person
$84,400
$638
$173
$492
$418,069
3 Person
$94,950
$716
$198
$554
$469,542
4 Person
$105,500
$796
$265
$615
$511,241
5 Person
$113,950
$860
$316
$665
$545,259
Moderate Income (101-120% AMI) 1 Person
$88,600
$558
$149
$517
$446,463
2 Person
$101,300
$638
$173
$591
$509,844
3 Person
$113,950
$716
$198
$665
$572,721
4 Person
$126,600
$796
$265
$739
$625,824
5 Person
$136,750
$860
$316
$798
$669,074
Notes: AMI = Area Median Income Assumptions: 2014 HCD income limits; 30.0% gross household income as affordable housing cost; 20.0% of monthly affordable cost for taxes and insurance; 10.0% down payment; 4.0% interest rate for a 30-year fixed-rate mortgage loan. Utilities based on Housing Authority of Salta Clara 2013 County Utility Allowance. Sources: California Department of Housing and Community Development, 2014; Housing Authority of the County of Santa Clara, 2013.
PLACEWORKS
10-13
PALO ALTO COM PREHENSIVE PLAN UPDATE DRAFT EXISTING CONDITIONS REPORTS
POPULATION, HOUSING, AND EMPLOYMENT
As shown in Table 10-17, approximately 75 percent of low-income renter households and 42 percent of owner households experience a housing cost burden of over 30 percent.
TABLE 10-17
HOUSING COST BURDEN BY TENURE AND INCOME IN PALO ALTO, 2010 Renters
Owners
Total Households
1550
830
2,380
With any housing problem
64.84%
74.70%
68.28%
With cost burden >30%
62.90%
74.70%
67.37%
With cost burden >50%
48.39%
70.48%
56.21%
865
670
1,535
With any housing problem
84.97%
42.54%
66.45%
With cost burden >30%
84.97%
34.33%
62.87%
With cost burden >50%
47.98%
26.12%
38.44%
Low Income (51-80% AMI)
870
650
1,520
With any housing problem
88.51%
41.54%
68.42%
With cost burden >30%
75.29%
41.54%
60.53%
With cost burden >50%
27.59%
28.46%
31.25%
7,430
12,625
20,055
With any housing problem
21.94%
20.71%
21.17%
With cost burden >30%
16.35%
19.64%
18.45%
With cost burden >50%
2.22%
5.19%
4.11%
Total Households
10,710
14,775
25,485
With any housing problem
52.21%
47.79%
31.12%
With cost burden >30%
33.43%
24.37%
28.17%
With cost burden >50%
14.66%
10.83%
12.44%
Income Category Extremely Low Income (0-30% AMI)
Very Low Income (31-50% AMI)
Moderate/Above Moderate Income (>80% AMI)
Notes: AMI = Area Median Income Data presented in this table are based on special tabulations from 2006-2010 American Community Survey (ACS) data. Due to the small sample size, the margins for error can be significant. Interpretations of these data should focus on the proportion of households in need of assistance rather than on precise numbers. Sources: HUD Comprehensive Housing Affordability Strategy (CHAS), based on the 2006-2010 ACS.
10-14
AUGUST 29, 2014
PALO ALTO COM PREHENSIVE PLAN UPDATE DRAFT EXISTING CONDITIONS REPORTS
POPULATION, HOUSING, AND EMPLOYMENT
Lower-Income Families HUD defines income groups based on Area Median Family Income (AMI) by County. AMI is different from (and in Santa Clara County higher than) median household income: HUD set the 2012 Santa Clara County AMI for a family of four at $105,000 (with low-income at $84,000 or below), while the median household income in the County was $90,747. The median priced home ownership unit in Palo Alto necessitates a household income of $170,000 or more. 1 Table 10-18 compares the proportion of the HUD-defined income groups in Palo Alto and Santa Clara County in 2010 (the most recent year for which estimates are available):
Extremely Low – less than 30 percent AMI Very Low – 30 to 50 percent of AMI Low – 50 to 80 percent of AMI Moderate/Above Moderate – greater than 80 percent of the Median Family Income
TABLE 10-18
PROPORTION OF LOWER-INCOME FAMILIES Extremely Low
Very Low
Low
Palo Alto
9%
6%
6%
Santa Clara County
13%
10%
9%
Sources: HUD Comprehensive Housing Affordability Strategy, 2010. Data not available for overall Bay Area.
Employment The unusually high concentration of jobs in Palo Alto is in large part attributable to the city’s location at the heart of Silicon Valley adjacent to Stanford University. Employment has been growing in the city and more recently the region across almost all commercial and industrial sectors. Renewed loans to small businesses, rising venture capital investment in local companies, and continuing innovation in science and engineering are contributing to a new phase of local and regional job growth.
Job Trends and Forecast As shown in Table 10-19, Palo Alto experienced an increase in employment between 2000 and 2010, even while jobs were decreasing in Santa Clara County and the Bay Area. According to ABAG projections, the rate of employment growth in the region is expected to catch up to that in Palo Alto and peak around 2020, after which job growth in the city and the region is expected to continue but at a slower pace.
1 The necessitated household income of $170,000 was determined based on the U.S. Department of Housing and Urban Development 30 percent threshold in terms of income allocated to housing.
PLACEWORKS
10-15
PALO ALTO COM PREHENSIVE PLAN UPDATE DRAFT EXISTING CONDITIONS REPORTS
POPULATION, HOUSING, AND EMPLOYMENT
TABLE 10-19
JOB TRENDS AND FORECAST 2000 Jobs
2010 Jobs
Percent Change 2000-2010
2020 Jobs Forecast
Percent Change 2010 -2020
2030 Jobs Forecast
Percent Change 2020-2030
86,960
89,690
3.1%
104,470
14.2%
111,091
5.96%
Santa Clara County
1,044,130
926,270
-11.3%
1,091,270
17.8%
1,147,020
5.1%
Bay Area
3,452,117
3,268,680
-5.3%
3,849,790
17.8%
4,052,020
5.3%
Palo Alto
Source: City of Palo Alto, ABAG Projections 2013.
According to the 2012-2013 City of Palo Alto Comprehensive Annual Financial Report, the unemployment rate in Palo Alto was 3.2 percent, compared to 6.8 percent in Santa Clara County and 8.5 percent statewide. The current unemployment level in the city represents a decrease of 1.5 percent since 2010-2011. As shown in Table 10-20, the latest available data from ABAG and the California Department of Finance indicates that in 2010-2011, Palo Alto had almost three times as many jobs per employed resident than in Santa Clara County or the Bay Area. This ratio is projected to decline slightly by 2030 as the rate of job growth slows.
TABLE 10-20
JOBS PER EMPLOYED RESIDENT
Jobs 2010
Employed Residents 2010
Ratio
Palo Alto
89,690
29,410
3.04
Santa Clara County
926,270
882,030
1.05
3,385,300
3,268,680
1.04
Bay Area Sources: ABAG Projections 2013.
The Palo Alto economy is driven by the health care sector, educational institutions, and tech and internet-based companies, among other employers. As shown in Table 10-21, the 10 largest employers in Palo Alto provided more than 40,000 jobs in 2013, almost one-third of total employment in the city. According to ABAG Projections 2013, the Silicon Valley economy consists primarily of semiconductor and computer industries, as well as electronics, aerospace, medical devices, software, social media, and other internet-related industries. Santa Clara County is home to 15 Fortune 500 companies, including Apple, Hewlett Packard, Intel, and Google. As of 2010, the top employers in the County were Cisco Systems, Santa Clara County, and Kaiser Permanente. The Manufacturing and Wholesale sectors supported the highest share of employment in Santa Clara County, accounting for 22 percent of total jobs, while the Professional and Managerial sector accounted for 19 percent. The County provides 44 percent of Bay Area jobs in the Manufacturing and Wholesale sectors, 39 percent of jobs in Information, and 30 percent in Professional and Managerial Services.
10-16
AUGUST 29, 2014
PALO ALTO COM PREHENSIVE PLAN UPDATE DRAFT EXISTING CONDITIONS REPORTS
POPULATION, HOUSING, AND EMPLOYMENT
TABLE 10-21
MAJOR EMPLOYERS OF PALO ALTO RESIDENTS Number of Employees
Percentage of Total City Employment
Stanford University
10,979
8.9%
Stanford University Medical Center/Hospital
5,545
4.5%
Lucile Packard Children’s Hospital
4,750
3.9%
Veteran’s Affairs Palo Alto Health Care System
3,850
3.1%
VMware Inc.
3,509
2.5%
Hewlett-Packard Company
2,500
2.0%
Palo Alto Medical Foundation
2,200
1.8%
SAP
2,200
1.6%
Space Systems/Loral
3,020
2.5%
Wilson Sonsini Goodrich & Rosati
1,650
1.3%
Total
40,203
32.1%
Source: City of Palo Alto, 2012-2013 Comprehensive Annual Financial Report.
PLACEWORKS
10-17
PALO ALTO COM PREHENSIVE PLAN UPDATE DRAFT EXISTING CONDITIONS REPORTS
POPULATION, HOUSING, AND EMPLOYMENT
10-18
AUGUST 29, 2014
