Palo Alto City Council advanced updates to the Housing Incentive Program (HIP) and Affordable Housing Incentive Program (AHIP), aiming to encourage multifamily and affordable housing development. While these changes are a step forward, SV@Home urges further improvements to ensure the programs offer strong enough incentives to entice utilization.
On March 3rd, the Palo Alto City Council took an important step toward incentivizing local housing production by advancing updates to the Housing Incentive Program (HIP) and Affordable Housing Incentive Program (AHIP). These programs aim to encourage multifamily and affordable housing development by offering density increases, parking reductions, and other benefits. In a unanimous 6-0 vote, the Council approved key amendments, including broader eligibility and adjusted development standards. The ordinance will return for a second reading in the coming weeks, marking an ongoing effort to refine Palo Alto’s approach to housing growth.
HIP and AHIP were designed as local alternatives to the State Density Bonus program, which allows developers to exceed zoning limits in exchange for affordable housing. For these programs to be truly effective, they must offer incentives strong enough to entice developers to pursue these alternatives to state law. Without improvements—such as increased floor area ratios, greater height allowances, and streamlined approvals—developers will bypass the local program in favor of state incentives. Strengthening HIP/AHIP is crucial to ensuring these tools deliver actual additional paths to housing production.
We are grateful for the leadership of Palo Alto Forward in advocating for meaningful reforms and appreciate the City Council’s thoughtful deliberations. SV@Home will continue tracking this ordinance as it moves forward, recognizing its potential to unlock much-needed affordable housing in Palo Alto. There’s still work to be done, and we remain committed to ensuring these programs become the effective, pro-housing tools our community needs. Stay tuned!