After receiving feedback from the state in October on how to improve the town's plan for housing, Atherton officials are adding and subtracting units from key sites in the plan following new information from property owners.

One California Water Service property in Atherton, the Bear Gulch Reservoir, is completely off the table after the water service sent a Dec. 14 letter to the town and said it doesn't plan to build the four units in the town's original proposal, but the town was considering designating up to 40 to 60 units on two sites on the property. The town must zone for 348 additional units of housing, spread across different income levels, that could reasonably be built between 2023 to 2031.

"While they have a need for two to four caretaker housing units, the reality of that occurring, given there are other priorities, is more of an idea than a potential," Town Manager George Rodericks said to the council during a Dec. 15 study session.

"We want to be a good partner to the town, as we have been for 86 years, but in the end our primary, overriding concern must always be to maintain an adequate supply of safe water and delivering that water reliably and affordably to our customers, Cal Water District Manager Dawn Smithson wrote. "... To say that we 'plan' to put two to four employee/caretaker housing units on the property is a bit overstated."

The town should be able to add more units at Menlo College, a four-year private college at 1000 El Camino Real, which would more than compensate for the loss. The town met with Menlo College officials recently and they could build up to 60 units. This is an increase from the 18 to 40 already considered in the housing element, but would include not just faculty and staff but also students.

Menlo College President Steve Weiner said he wants to wait until he actually has some potential funding for the site, and Mayor Rick DeGolia believes a letter on the college's housing plans could come in January.

The town has until Jan. 31 to have a compliant housing element approved by the state or it could face penalties and lawsuits, and could potentially lose local control of its housing approval process.

Public calls to self-certify

During a public comment period, residents asked the council to stick with the mission of the town and keep it a single-family residential community. Others, like Rod Shepard, asked the town to self-certify its element, but this could open the town up to litigation and other consequences.

"That does expose us to a little bit of risk down path, or the town is at risk for fiscal penalty," said Rodericks. "It could be a developer free-for-all opportunity and on the extreme. The courts actually have the ability to revoke the town's ability to conduct land use decisions in their entirety. Would any of these things really happen? I don't know. But there are known risks of the town's failure to obtain an approved housing element."

Calls to consider building at the Gilmore House site

Council member Diana Hawkins-Manuelian suggested developing six to 10 units of housing at the town-owned Gilmore House, but other council members weren't supportive of the plan.

The three-bedroom Gilmore House, currently home to Atherton Police Chief Steve McCulley, is located near the exit of Holbrook-Palmer Park along Watkins Avenue on a .8-acre site. Beginning in 2014, police department employees slept between shifts in the then-unused home in the park before McCulley moved into the residence in 2018 when he had trouble finding an affordable rental in town himself.

It's the one of the only places in town where affordable housing could be built because it's town-owned and could be developed with the help of a nonprofit, Hawkins-Manuelian pointed out. Council members have previously said it's impossible to build affordable housing in town given that land costs about $8 million per acre.

"If you don't want that (more housing where the Gilmore House is located) then where are you getting your low-income housing units?" Hawkins-Manuelian asked. Other council members have suggested the town can meet low-income units with accessory dwelling units (or ADUs), but the state has asked cities to not rely on these units to meet housing needs.

Town Planner Lisa Costa Sanders said she thought it was a great idea and Council member Bob Polito said it was worth exploring.

To be considered affordable, the housing would have to be zoned at 20 units per acre, which would mean up to 16 units could be built on the site.

DeGolia opposed the idea.

Council member Elizabeth Lewis said the site hasn't been vetted at all and it would "really change the character" of the park.

"It's very difficult to design 16 units on .8 acres," she said. "I think it would be a disaster. ... We should just keep thinking about other opportunities."

Polito, who is ending his term on the council this week, said that ultimately the council is going to have to place multi-family housing somewhere in town if it wants to meet its state-mandated housing goals.

"Somebody's going to be upset," he said. "It doesn't matter where you do it (designate housing), at some point, Elizabeth, you're going to have to make a tough decision."

Watch a video of the meeting here: