Menlo Park keeps approving the jobs and deferring the homes — and when the biggest deferral collapsed at the bayfront, it is counting on the downtown that serves everyone to pay the bill.
MonitorMenlo.news · Opinion · Tuesday, August 4, 2026 · Reports/Opinion
When a California city adds offices and jobs, the state requires it to plan for the housing those jobs imply — whether the new workers ever relocate to fill them. Menlo Park has been unusually good at the first half of that bargain, adding the jobs, and unusually patient about the back half, adding the homes.
The result, in the City’s own numbers, is a widening gap between the market-rate housing it builds and the affordable housing the state says it owes — and a plan that increasingly rests on a single, publicly owned fallback: handing the land beneath the city-owned downtown parking plazas to developers on a 55-year ground lease at $1 a year, to entice them to build the affordable housing the City would subsidize there in its effort to play catch-up ball.
The state assigned Menlo Park 2,946 homes to permit this cycle (2023–2031), split by income. Through the end of 2025, here is where the City stands, from its own July 2026 progress report:
| Income band | Assigned (RHNA) | Permitted so far | % of goal | Still owed |
|---|---|---|---|---|
| Very-low | 740 | 137 | 18.5% | 603 |
| Low | 426 | 119 | 27.9% | 307 |
| Moderate | 496 | 134 | 27.0% | 362 |
| Above-moderate (market) | 1,284 | 763 | 59.4% | 521 |
| Total | 2,946 | 1,153 | 39.1% | 1,793 |
By its own estimates, the City is three times further along on market-rate housing than on the deepest-affordability housing — 59.4% of its above-moderate goal against 18.5% of its very-low goal. Nineteen very-low-income homes were permitted in all of 2025.
The City’s answer is that it has capacity to spare: rezoned and pipeline sites add up to 6,244 units of potential, above the requirement in every band. But narrowed to what is already built or approved, the City’s own figures show the lower-income side running behind target — and, critically, behind the highly promoted job growth. Therefore, as Menlo Park adds jobs, it falls farther behind on the treadmill that requires it to add housing.
Sources: 6th Cycle RHNA (740/426/496/1,284); production and capacity — RHNA Capacity Update, Staff Report #26-122-CC, July 14, 2026, and the 2025 Annual Progress Report.
Menlo Park’s own rules — its Below Market Rate Housing Program (Municipal Code Ch. 16.96) and the commercial-linkage-fee schedule the City Council has adopted — let developers meet their housing duties without building a single home. Under that schedule, commercial and office projects pay a commercial linkage fee of $23.26 per square foot of net new floor area for most office and R&D uses, $12.62 for lower-employment uses (effective February 2020, adjusted yearly; a “Grand Nexus Study” is now underway to revisit the rate). Residential projects owe below-market-rate (BMR) units — at least 10% for developments under 20 units — but the program expressly allows those duties to be met through in-lieu fees, among other options. The money pools into the City’s affordable-housing fund, which the City spends where it chooses — and often well after the jobs, and the housing quotas they drive, have already arrived.
None of this is improper. It is a standard, council-approved planning tool, adopted on a nexus study and used up and down the Peninsula. But it has a distributional consequence worth naming: it lets the jobs go up now, on the site that generates them, converts the matching housing duty into a payment, and leaves the actual homes to be built later, somewhere else, on land the City controls.
It is the classic case of officials who will not put down the shovel while standing in a hole: with each approval of a developer’s request to pay in lieu of building, the hole gets deeper — and the five members of the City Council and the housing and planning commissioners who recommend or approve those requests need only look in a mirror to see who is holding it.
The pattern is not even history; it is on this week’s agenda. On Wednesday, August 5, the City’s Housing Commission is scheduled to take up exactly this trade: staff recommends it endorse letting a roughly 228,000-square-foot research-and-development project at 985–1005 O’Brien Drive and 1320 Willow Road — in the bayfront’s District 1, where the jobs already cluster — meet its affordable-housing duty with a payment rather than homes.
The estimated commercial in-lieu fee is about $3.84 million (roughly $2.45 million for the O’Brien building and $1.39 million for the Willow Road building), deposited into the City’s BMR Housing Fund to be spent later, at a date and place to be determined, wherever the City Council directs. Moreover, part of the Willow Road payment may not come due until about 2034, when the current tenant’s lease ends.
Staff’s rationale in isolation may look sound: the site’s life-sciences zoning bars housing and the developer does not own other residential land, so on-site units are “not feasible.” Even so, it’s one more R&D project’s worth of jobs whose matching housing becomes another Menlo Park IOU. (The Housing Commission only recommends; the Planning Commission casts the final vote.)
Sources: Housing Element BMR program (H4.B) and Commercial Linkage Fee (H4.15, H4.C); current fee schedule ($23.26 / $12.62 per sq ft) and AB 1600 report (Jan. 13, 2026); Grand Nexus Study MOU (Oct. 21, 2025); Municipal Code Ch. 16.96; live example — Housing Commission Staff Report #26-006-HC (Aug. 5, 2026).
The engine of Menlo Park’s job growth is its bayfront: Belle Haven (District 1), home to Meta and the M-2 office district. High-wage jobs per resident worker roughly doubled in a decade — from 1.91 in 2010 to 3.59 in 2018. For years, the City’s housing plan leaned on that same district to supply the homes, chiefly through one enormous mixed-use project: Meta’s Willow Village, entitled for about 1,730 residences including 312 below-market-rate units.
The other districts tell the contrast. District 2 (the Willows, Suburban Park) and the residential west side carried far smaller shares. And the site the City Council majority placed first in line to make up the affordable gap — the eight downtown parking plazas — sits in District 4 (downtown and central Menlo Park), a district that saw little of the bayfront job windfall.
Sources: jobs-per-worker — Housing Element jobs-housing analysis; district boundaries — City redistricting map adopted 2022; Willow Village entitlement — City records; project-to-district geocoded from City project addresses.
In May 2026, Meta paused Willow Village indefinitely, citing changed market conditions. In one stroke, the City’s largest planned housing source went dark. Menlo Park’s own July 2026 review put the damage plainly: with Willow Village and two other stalled projects out of the pipeline, it is now uncertain whether 92% of the very-low-income, 23% of the low-income, and 60% of the moderate-income units the City had counted on will be built this Housing Element cycle. Nearly 2,000 pipeline units — most of them the affordable ones — are in doubt, the bulk of them Willow Village’s, in Councilmember Cecilia Taylor’s District 1: the bayfront district the City had leaned on to carry much of its housing load.
The irony is that the jobs that project was tied to are, for now, still entitled at the bayfront. The homes are not. Mayor Betsy Nash put it plainly: “There is a hole in our housing element.”
Sources: Willow Village pause and Nash quote — The Almanac, May 1, 2026 (also May 7 and May 19, 2026); pipeline-at-risk percentages — Staff Report #26-122-CC, July 14, 2026.
With the bayfront offset gone and commercial developers paying cash to avoid building the residential units required by their projects, the affordable housing the City still owes must come from somewhere. In the last four or five years the City has taken the easy path: dangling its downtown parking plazas — publicly owned acres, assembled in the mid-20th century through a downtown special assessment district and, in places, the City’s condemnation powers, and dedicated ever since to serving downtown — as the incentive that makes an affordable project pencil out. That plan to lease the land away for $1 a year is what the November 3 ballot measure would put to a public vote. Underneath that vote is the real question: how does a jobs-rich district’s deferred housing duty end up concentrated on a different district’s public parking — and why do the plazas now carry so much of the burden for Menlo Park to satisfy its IOU on affordable housing?
Sources: $1/year, 55-year ground-lease terms — Downtown Parking Plazas RFP/RFQ; acquisition history — MonitorMenlo Booklet 1 (citing 1962 Palo Alto Times; 2010 Menlo Park Historical Association).
Read together, the City’s own records describe a spiral, not a one-time miss — a pattern, not a string of disconnected misjudgments.
Menlo Park prizes its cutting-edge reputation, and it earns that standing by approving the construction that adds jobs. It revels in how employment numbers and the tax-base growth bring instant recognition.
But the state-mandated housing that is supposed to match those jobs represents the payment due for that advancement, and time and again the City defers satisfying its obligations: a fee here, a rezoning there, a big project years out. Deferral is easy, and politically it kicks the can down the road.
Heaven forbid, however, that one of those bets against the future might fail. As the cratering of the Willow Village project shows, when a wager fails City officials do not pose for pictures like they do at a ribbon cutting. Press releases don’t flood newsroom in-boxes. Even so, Willow Village stands as Exhibit A for what can go wrong: the City’s biggest housing bet, at the bayfront, collapsed — but the deferred obligation that Meta’s jobs helped create did not vanish with the shelving of the housing.
Mayor Nash’s response to the Willow Village announcement pointed in one direction. The collapse, she said, “makes it even more important that Menlo Park pursues affordable housing downtown.” In that view, the failure is one more justification to give away acreage the City can act on unilaterally: its own downtown parking plazas.
There is another way to read it. A citizen vote framed as being about parking is, underneath, about who finally pays the housing bill the City’s leaders ran up in their rush to add jobs and look progressive — the district that got the jobs but lost the promised housing, or the downtown that serves them all? It is one thing to rob Peter to pay Paul, and quite another to rob Peter and rob Paul.
This section is the publication’s opinion; the figures above are the City’s own.
Method & limits: all figures are the City’s own, taken from the reports cited and re-checked against them. Project-to-district assignments were geocoded from City project addresses. Because affordable-housing funds are pooled, this piece documents the mechanism and its direction; it does not claim any single commercial fee financed any single downtown unit. AI-assisted in gathering and verifying the figures and reviewed by the site operator before publication; see our AI use disclosure.