U.S. Department of Housing and Urban Development
Office of Community Planning and Development

Consolidated Plan Contact


The City of Palo Alto is a suburban California City situated on the northern border of Santa Clara County in the heart of "Silicon Valley". The City is known for its association with the world famous educational and research institution of Stanford University, a major center for medical care and research. Palo Alto is also a center of international culture, art, shopping and food.

Action Plan

The Palo Alto Consolidated Plan presents a strategy committed to pursuing all available federal, state and local resources to meet its housing and community development needs. Due to staff limitations, The City encourages and supports non-profit housing developers, homeless shelter providers and County agencies in their pursuit of funding for federal housing programs within Palo Alto whenever they are eligible applicants. The Consolidated Plan includes a One-Year Action Plan for spending $972,000 of CDBG and CDBG program income funds in 1995. These funds will primarily be spent on housing and community livability activities. The City has also applied for 1 million dollars in HOME funds for the purpose of subsidizing the construction costs of an SRO project.

Citizen Participation

Palo Alto's Consolidated Plan includes a detailed Citizen Participation Plan adopted in 1993. The Plan established a CDBG Advisory Committee (CAC) to provide a vehicle for active citizen involvement in all phases of the CDBG process. The Department of Planning and Community Environment is responsible for the actual administration of the CDBG Program and for the completion of the Consolidated Plan. The development process for the preparation was initiated with a public hearing on affordable housing and community development needs and was held at 7:00 p.m. on October 24, 1994, in an accessible location. Notice of the public hearing was published as a display ad in the Palo Alto Weekly on October 12, 1994, and mailed to an extensive list of individual citizens and organizations representing a broad spectrum of the city population. Comments from the hearing were recorded and summarized. The draft Plan was available from March 1, 1995, to March 31, 1995, for review. Notice of the availability of the draft document and the planned public hearing dates were published in the Palo Alto Weekly on March 1, 1995. The Plan was reviewed by the Planning Commission and the Human Relations Commission at their March meetings. Both commissions recommended to the City Council that the Plan be approved. The Plan was adopted by the full City Council at a public hearing on May 1, 1995.


Palo Alto has a resident population of approximately 58,000 people. While the City's total population has increased only minimally (by 1%) over the last decade (1980-1990) the racial composition has changed. The biggest changes are in the Asian and Pacific Islander group which increased by 70% and in the Hispanic population which increased by 34%. Whites declined by 4% but are still the major population group with 85% of the total population. The citywide breakdown by race and ethnicity is as follows: White-84.9%, Asian/Pacific Islander- 10.4%, Black-2.9%, American Indian-0.3% and Other-1.5%.

Palo Alto is, overall, a very affluent community. The median family income is now over $68,000, about twice the national median income. The number of persons below the poverty level declined from 5.9% of the population in 1980 to 4.6% in 1990. Palo Alto defines an area of low income concentration as a census tract where more than 50% of all the households have incomes below the low income limit for the CDBG program (about 65% of the County wide median income which in 1990 was $34,000). All census tracts except one have median household incomes above the low income level. The one that does not is a small tract (No. 5093.02) with a population of 403 persons over half of whom live in the Palo Alto Garden Apartments, a federally subsidized, low income development of 156 units. This tract has a poverty rate of 11.2%, the highest in the City, and a median household income of $12,891, the lowest in the City. The Palo Alto Garden project has 128 senior units and 28 family units, all occupied by very low income households, most with annual incomes below $10,000.

The median income of family households in Palo Alto is consistently higher than that or non-family households. The tract with the lowest family median is Tract 5107 known as the "Olive/West Meadow/Ventura" neighborhood. Its median family income was $50,068 in 1990. In addition, six census tracts have median non-family incomes below HUD's low income limit of $34,000. Almost 30% of Palo Alto's population lives in non-family households.

There are no census tracts in the City defined as areas of racial/minority concentration (a census tract with a non-white population of over 50%). There do not appear to be any statistically significant households having a "disproportionate housing need" as defined by HUD.



Housing demand in Palo Alto is strongly influenced by the number of jobs in the City and surrounding area. There are about twice as many jobs in the City as there are residents in the labor force. About 80% of the City's work force is made up of commuters from other communities. Between 1980-1990 the employment base grew by approximately 10,000 jobs, but available data indicate that the total number of jobs has declined since 1990.

Housing costs escalated tremendously during the 1970s and 1980s. The median value of owner occupied housing units increased by 207% from 1980-1990 and median rents increased by 137%. Another important factor influencing the demand for housing in Palo Alto is the proximity of Stanford University. Faculty and staff households not provided University housing add to the demand in Palo Alto and the Mid-Peninsula area.

In summary, there is a greater demand for housing than can be met. This is because Palo Alto is a desirable place to live, there are many jobs and there is little land available for new housing development. This leads to high housing costs, low vacancy rates and a shortage of affordable housing opportunities.

Housing Needs

Two critical housing needs are identified in the Consolidated Plan; the alleviation of the high cost of housing for lower income households, especially renters, and the provision of affordable housing for the homeless and persons with special needs.

Lower income households with the most severe overpayment problems include elderly renters and single parent renters. Permanent affordable housing for homeless households and the need to provide housing with supportive services for persons with special needs such as the frail elderly, developmentally, physically and mentally disabled also continue to be important ongoing needs.

Housing Market Conditions

There is a greater demand for housing in Palo Alto than can be met, particularly for affordable housing for households with very low and low incomes. Since Palo Alto is a desirable place to live and provides more jobs than housing units, there is intense demand for available units and prices are bid upward. Further, there is very little vacant land available for new housing development; in fact, the City is essentially "built out". Developers of affordable housing projects must, therefore, compete with developers of market rate housing for the limited land still available.

Affordable Housing Needs

The 1990 U.S. Census indicates that 42% of all Palo Alto households were renter households and the remaining 58% owned their homes. Renter and owner needs can be summarized as follows:

Renter Needs

The high cost of rent is the biggest problem for Palo Alto renters. 41% of all renters of all income levels are overpaying for housing. Among very low and low income renters, overpaying is a much more serious problem. Approximately 77% of all lower income renters are cost burdened (paying more than 30% of their income for housing). 46% of all low income renters pay more than 50% of their income for housing. 55% of very low and extremely low income persons pay more than 50% of their income for housing. The extent of housing problems among the renter population indicates a need for more affordable rental units and more rental subsides such as Section 8, especially for very low income renters who pay 50% or more of their income for housing.

Owner Needs

26% of all owners have a housing problem. Only 18% of all owners have very low, low or moderate incomes. Of those that do, 35% of all very low and low and moderate income homeowners are cost burdened, 32% of very low income homeowners are cost burdened and 57% of extremely low income persons are cost burdened.

In summary there are more renter households than owner households who are cost burdened. Especially cost burdened are extremely low, very low and low income renters.

Homeless Needs

There is no reliable information regarding the exact number of homeless persons either in Palo Alto or in Santa Clara County. However, based on a 1995 survey conducted by the Santa Clara County Homeless Coordinator's Office, it can be estimated that 3,724 persons are homeless in the County at any given point in time, and that 16,300 persons will experience an episode of homelessness during a given year. Since the Palo Alto sample represented 4% of the total survey population, it could be estimated that there are 156 Palo Alto homeless at any given point in time, and that 685 persons from Palo Alto will experience an episode of homelessness during a given year. Whatever the exact number of homeless adults, youth and families, it is clear that existing programs and facilities do not meet the service, shelter and housing needs of the local homeless and "at-risk" populations.

The County has approximately 682 year-round shelter beds. When the three armories are opened during the winter months, the number of emergency beds increases to approximately 1,272. The State of California plans to eliminate the use of armories as emergency shelters in 1997. The County is working on replacing 250 of the 590 beds which will be lost with the closing of the armories.

The Urban Ministry of Palo Alto operates a 15 bed rotating church shelter program in cooperation with twelve area churches. Each church is used as an emergency shelter for one month each year. The Urban Ministry also operates a local drop-in center, coordinates emergency food and meal programs, distributes bus passes and provides counseling and referral services for homeless persons. They provide a variety of services, but their efforts are hampered by the lack of a designated building with adequate space and facilities.

The Santa Clara County Collaborative on Housing and Homeless Issues was created two years ago and represents homeless shelter and service providers, housing and homeless advocates, non-profit housing developers and local government jurisdictions, including the City of Palo Alto. The Collaborative will be preparing its member agencies to respond to requests for proposals in hopes of accessing more funding for innovative programs in the region.

The Collaborative has adopted a Continuum of Care approach to help alleviate the problems of homelessness. The strategy includes prevention services, emergency shelter with outreach and assessment services, transitional housing with supportive services and permanent housing. The County in collaboration with the cities believes strengthening the Continuum of Care on a regional basis will effectively address the needs of the homeless. The region needs to build additional transitional and permanent housing with service components. The challenge is to insure these housing units and services are disbursed throughout the County, in suburban and rural areas as will as in the cities. In addition to housing and supportive services. the County needs to focus on employment and training services and prevention services fir the "at-risk" population.

Public and Assisted Housing Needs

The City of Palo Alto does not have any public housing units or developments located within the City limits. As of November, 1994, there were 58 Section 8 rental assistance contracts in Palo Alto, most found in subsidized housing developments. There were 164 households on the waiting list for assistance, 156 of these are elderly/disabled. Palo Alto has a total of 1,092 subsidized family and senior and handicapped units located in 21 subsidized rental housing developments. All of the developments are fully rented, have very low turnover rates and most have closed waiting lists.. In 1995 Palo Alto had 144 Below Market Rate (BMR) ownership units and 30 BMR rental units. These are located throughout the City in privately constructed residential developments. Generally, the BMR program serves persons with incomes above the CDBG limit to about 100% of the median income.

Service providers for special needs population indicated the following needs in addition to the primary need of affordable rental housing:

Barriers to Affordable Housing

The greatest barriers to the provision of affordable housing are the lack of available sites upon which to build new housing, the extremely high price of existing housing or available land, and lack of sufficient funding to adequately subsidize projects so they will be affordable to the low and very low income households. Other barriers are market conditions affecting housing construction, local political conditions and neighborhood perceptions affecting the acceptability of either the type or density of the project.

Fair Housing

The City contracts with Mid-Peninsula Citizens for Fair Housing (MCFH) to encourage and promote equal opportunity in housing for all people. Services include information and referral, community outreach and education, discrimination complaint checking and investigation, legal referrals and assistance in resolving complaints. As part of the FY 93-94 fair housing contract, MCFH was funded by the City to hold a fair housing workshop for landlords, property managers, owners and non-profits. The City also contracts with PAAIRS for tenant/landlord information, referral and mediation services.

As part of its 1995-96 work program, the City of Palo Alto will conduct an analysis of impediments to fair housing choice.

Lead-Based Paint

The City CDBG and Housing staff will work with the County of Santa Clara CDBG Division, County Environmental Health and other CDBG entitlement cities to develop and secure sufficient funding for a Countywide public information program to educate home owners, landlords, local building departments, tenants, contractors and architects about lead hazards, testing, construction techniques and proper abatement methods. It is hoped that funding for this program will be obtained from the State under the Childhood Lead Poisoning Prevention Act.

The City requires testing and hazard reduction in housing rehabilitation efforts funded with federal and City housing funds.

Community Development Needs

Non-housing community development needs in Palo Alto include the following:


Vision for Change - Overall Goals

The provision of affordable rental units is one of the most significant needs in Palo Alto. The City will continue to use CDBG and other available funds to pursue the creation and preservation of all types of affordable housing with an emphasis on at risk populations. Aside from housing, other goals are to improve public facilities which serve special needs populations and to provide economic development opportunities for low income groups.

Housing Priorities

Priorities for affordable housing include: 1) The creation and preservation of all types of affordable rental housing 2) Provision of home ownership opportunities to moderate income households through the City's Below Market Rate housing program 3) Continued rehabilitation of existing single family homes with an urgent need or serious health and safety problems (targeted to very low income homeowners) 4) Creation of permanent housing affordable to the homeless and to individuals moving out of shelters or transitional housing programs.

Non-Housing Community Development Priorities

Priorities for non-housing community development needs are to: 1) Expand, modernize, rehabilitate and make seismic and other safety related improvements to facilities serving special needs populations. 2) Complete accessibility improvements to public facilities, parks, streets and sidewalks. 3) Provide new facilities and rehabilitate existing facilities for service programs servicing low and special needs populations. 4) Provide more emergency shelter beds for the homeless. 5) Provide facilities for the provision of homeless services. 6) Support organizations which provide a variety of human services to low-income, at risk populations. 7) Develop programs to create and increase employment opportunities for minorities, low income persons, homeless persons and persons with disabilities.

Anti-Poverty Strategy

Since the City of Palo Alto has a low poverty rate (4.7% of all persons), the City's anti-poverty strategy is to work cooperatively with other local jurisdictions to take actions which will strengthen the economic health and competitiveness of the Silicon Valley as a whole. The City participates in the seven city consortium which sponsors the North Valley Private Industry Council (NOVA PIC) job training and placement program.

Housing and Community Development Resources

The primary federal resources in Palo Alto include CDBG, Section 8, Shelter Plus Care Supportive Housing and Moderate Rehab SRO. The City also applies for federal HOME funds through the State administered HOME program. State resources include the Multi-Family Bond Program and Low Income Housing Tax Credit Program. Local resources include the Housing Reserve Fund, Palo Alto General Fund Human Service Allocation Process. Private resources include local lending institutions, affordable housing programs and a wide range of non-profit programs.

Coordination of a Strategic Plan

As part of the development process of the Consolidated Plan, the staffs of the CDBG entitlement cities of Palo Alto, Sunnyvale, Mountain View, Santa Clara, San Jose, Gilroy and the Urban County of Santa Clara met three times to discuss data resources and to coordinate requests for information to both public and private Countywide agencies. These meetings have helped the cities' housing staffs better understand the County and non-profit social service structure.

Over the last several years, these cities have cooperated in the joint funding of a number of CDBG and housing projects of Countywide significance. Neighboring cities frequently cooperate in jointly funding housing for special needs populations. These efforts are expected to continue.

Santa Clara County Collaborative on Housing and Homelessness Issues: City staff is also participating in the Countywide effort, initially funded by a grant form the Northern California Grantmakers, to bring together cities, homeless service and shelter providers, County agencies, homeless persons and advocates and affordable housing developers to develop coordinated approaches to obtaining greater federal funding for affordable housing and homeless projects and programs and to increase cooperation and coordination among the participants in developing more effective programs to address the problem of homelessness and lack of affordable housing in Santa Clara County.


Description of Key Projects

The Palo Alto One-Year Action Plan outlines the proposed use of approximately $972,000 in Community Development Block Grant funds and program income. These funds will be spent on an array of activities including:


The City does not have specific areas targeted for housing activities but rather, attempts to distribute subsidized housing throughout the City.

Specific efforts are being coordinated in the Community Services and Police Departments to focus community development activities in the Ventura neighborhood which has a large proportion of modest rental housing, a relatively high proportion of minority and ethnic groups and where 48.46% of the households are below the CDBG income limits.

Housing Goals

Highlights of Palo Alto's housing goals for the first year include: 1) The provision of 24 affordable housing units through the New Housing Development Fund. 2) The repair of 50 housing units for low income elderly homeowners through the Senior Home Repair Program. 3) Affordable housing information and referral services for 2,000 households. 4) The provision of critically needed affordable shared and transitional housing with supportive services for 12 small households. 5) Emergency shelter and supportive services for 65 persons.


MAP 1 depicts points of interest in the jurisdiction.

MAP 2 depicts points of interest and low-moderate income areas.

MAP 3 depicts low-moderate income areas and minority concentration levels.

MAP 4 depicts low-moderate income areas and unemployment levels.

MAP 5 depicts points of interest, low-moderate income areas, unemployment levels, and proposed HUD funded projects.

To comment on Palo Alto's Consolidated Plan, please contact:

Suzanne Richards
Planning Division
Department of Planning and Community Environment
250 Hamilton Avenue
Palo Alto, CA 94301

Phone - (415) 329-2429
FAX - (415) 329-2240

Return to California's Consolidated Plans.