The Shame of Palo Alto: an Interview with Kate Downing on Affordable Housing

In the past three years, the median home value in Palo Alto has more than doubled from $1.25 million to over $2.5 million, part of a Bay Area-wide surge in home values brought about by a surging technology industry and restrictive zoning law that makes increasing the supply of housing almost impossible.

On August 10, Kate Vershov Downing, an attorney and member of the Palo Alto Transportation and Planning Commission, posted a letter of resignation online, arguing that the Palo Alto City Council has repeatedly “ignored” its residents’ pleas and the Commission’s recommendations to expand the city’s housing stock. And not only was Downing resigning, but she was moving away to Santa Cruz. Downing and her husband, an attorney and programmer, respectively, say they simply could not afford to pay almost $150,000 per year for housing alone while starting a family in Palo Alto.

Downing’s story — that even a couple whose income easily puts them in the upper echelons of America could no longer afford to stay in the heart of Silicon Valley — immediately caught fire with local and national media.

SPJ contacted Downing for an interview, and she graciously agreed. Downing expressed great surprise that her story has gone viral, pointing out that teachers, police officers, and other working and middle class people have already given extensive testimony to the Palo Alto City Council about the sheer impossibility of affording to live in the area. In the transcript below, lightly edited for clarity, Downing discusses the imperative of creating new housing, spurious objections to increasing density, and Stanford’s role and obligations in the current situation.

***

Andrew Granato: Do you think it’s possible for Palo Alto to go back to a time when it was a picturesque small town/suburb?

Kate Downing: No, I don’t think that’s possible. We made the decision to not go in that direction a long time ago. In fact, we created the Stanford Research Park in 1951. We made room for tons of companies to come and be here and be next to Stanford in our community; we created the environment that we’re in now, where the population doubles during the day because there are so many people coming here to work. So I don’t think there’s any going back. By all accounts, if your population doubles during the day, and more people are commuting in than out, you are in fact a city. It’s hard to claim you’re a suburb at that point.

AG: Objections have been raised that increasing the housing density in Palo Alto and across the Bay Area will just lead to more congestion and reduce the quality of life. Do you think that those are valid objections to increasing density or is that a distraction from the major issue at hand?

KD: I don’t think there’s truth in that. I think that most of the traffic that we’re seeing is because people are commuting from their homes to work and they are living far away from where they work. That’s the traffic that we’re seeing, and there would actually be far less traffic if people were able to live in the same community where they work. If you look at the people who actually live and work in Palo Alto, a substantial number of them are walking or biking to work, so they’re not part of the traffic. So no, I don’t think adding housing is going to cause more congestion; I think it’s actually going to relieve a lot of the congestion that we’re seeing.

I would also add that housing and transportation are two things that have to go hand in hand, and we have to be building up our public transportation infrastructure, and there’s a lot that we can do in that direction. But when you ask me about whether it’s a deflection, I would say it is, because in my experience the people who say, ‘well, we can’t have housing because that will create transportation issues,’ they’re the very same people who show up to protest public transportation.

AG: Given that this is a Bay Area-wide problem, is it possible for Palo Alto, Mountain View, Menlo Park, etc., on their own to resolve this situation, or do we need to go larger, up to the state level?

KD: Cities are definitely capable of changing their direction. They’re definitely capable of allowing more housing in their cities. You’re seeing Redwood City, you’re seeing Mountain View adding thousands of units of housing. But most cities on the peninsula are not doing that [for a Bay Area city-by-city breakdown of 2007–2014 housing goals and actual housing construction, see here]. And even to the extent that places like Redwood City are doing it, they cannot fix the housing shortage. It really is an effort that has to be taken by all parts of the Bay Area. And unfortunately, for individual cities the incentives are not well aligned to build housing. Individual cities are mostly controlled by wealthy homeowners who don’t need more housing; they already live in a house and they are not interested in having newcomers come to their cities. They’re not interested in any impacts that might happen with that, and in general they’re not interested in their city growing.

And there are also fiscal reasons for why this happens. Given the way that property taxes are set up in California [for a more detailed explanation of California property tax law, see this explanation of Proposition 13], it is a financial burden for cities to go out and build the infrastructure necessary for housing. There’s much greater incentive to build out office space or hotels or things like that that actually get you tax revenue. All the incentives are aligned against cities building more housing, so I think that if you really want an impact in California, you need to take on a greater role to create the right incentives for cities to do the right thing for the region as a whole. I think at least some of that has to be tying things like transportation funds, school funds, and other monies that states give out to cities to whether or not those cities are actually meeting their stated housing goals.

AG: Stanford has been a crucial part of Silicon Valley’s culture and talent pipeline for decades. What do you see as Stanford’s role in housing politics, and do you think it can or should do anything?

KD: I think Stanford is in a tough position because I think Stanford has always tried very hard to be a good neighbor to Palo Alto. They’ve tried to be very friendly and supportive. I think it’s very hard, given the current environment. I get that, but at the same time, Stanford has been relatively quiet about what’s going on in Palo Alto and the Bay Area in general with respect to housing. I know that Stanford itself is trying to add a certain amount of housing for its employees or students or faculty, and that’s great; we definitely need that, but there’s also something to be said for trying to hear about what Palo Alto is doing, because if it continues this way, eventually we really are going to drive businesses and young people away. I mean, it’s driving me away, right?

And at that point, the locus of organization and development is going to shift; it’s going to go somewhere else. And I think that will be an extraordinarily painful thing for Stanford. It means less opportunities for its students, it means less collaboration between businesses and professors. I don’t think Stanford wants to be in a place that used to be the innovation capital of the world, but that’s kind of where we’re headed.

AG: Do you have any final comment that you want to make, one that is particularly relevant to undergraduates, many of whom will live and work in the Bay Area after graduating?

KD: I would say that when you look around at the city and you see that it’s not what you want it to be, that the housing isn’t affordable, that things aren’t walkable, that things aren’t bikeable, that the place is littered with strip malls: the answer is that all of those decisions are made at the local city government level. I know a lot of people are paying attention to national politics and the presidential election, but in reality the most things that most affect people’s lives, that affect their housing, that affect what’s around them, where they can go and where they can hang out, all those decisions are made at the local level, and so I urge them to pay attention to their local politics and I urge them very strongly to vote. Even if you’re a renter or you’re not sure how long you’re going to be there somewhere, register to vote and vote, because otherwise your interests will never be taken into account.

***

SPJ thanks Mrs. Downing for her time. Aside from her positions as Senior Corporate Counsel at ServiceNow and (former) Palo Alto Housing and Transportation Commissioner, she is also the co-founder of community group Palo Alto Forward, an organization dedicated to “address[ing]Palo Alto’s housing shortage.”

SPJ has also contacted the Palo Alto City Council and the candidates running to represent Palo Alto in the California State Assembly (District 24), the California State Senate (District 13), the U.S. House of Representatives (California District 18), for reactions to Downing’s letter and her policy proposals. A follow-up article will include their perspectives.


Update: Here is the follow-up.


Andrew Granato, a rising senior studying economics, is a staff writer at Stanford Political Journal.

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