Portola Valley on the Brink of Insolvency
A Housing Dispute Gone Wrong
On a Sunday afternoon a few years ago, about a dozen neighbors held a meeting with Craig Hughes, who was then the mayor of Portola Valley. The backyard gathering in the small, wealthy Silicon Valley enclave was civil, Hughes said, but his constituents left an unmistakable message. If Hughes and other town leaders produced a state-mandated affordable housing plan that wasn’t to the residents’ liking, they should expect a battery of litigation that could lead to Portola Valley’s bankruptcy. In a sign of their seriousness, one couple already had hired an attorney well-versed in California politics, the former mayor of San Jose.
The Consequences
Now, after years of housing disputes, Portola Valley finds itself on the brink of insolvency. The town of 4,400 people has spent more than $1 million on consultants, 150 hours in public meetings and still hasn’t produced an affordable housing blueprint that’s passed muster with the state. More than 70% of town staff have left in the meantime, with remaining employees, according to Portola Valley’s recently departed town manager, “literally just keeping the lights on.” Last month, the town cut its $10-million budget by 25%, slashing road repairs and eliminating vacant positions. It still faces future deficits. Some in Portola Valley have raised the prospect of merging with a neighboring town.
The Controversy
The contours of Portola Valley’s development debates would seem familiar in many communities across California. Tensions over existing residents’ concerns about parking, crowding and ambiance conflict with the pressure for new housing. But Portola Valley, Hughes said, is one of the few places where town residents’ bank accounts far outstrip the town treasury, giving individuals outsized power to shape their surroundings and pressure their leaders.
The State Mandate
Recent state laws beefed up requirements for all California communities to zone for more housing. Portola Valley saw its allocation from the previous planning period quadruple to 253 new homes. The figure, which exacerbated Portola Valley’s housing squabbles when it was finalized in late 2021, provided an unrealistic standard for denser development given the town’s safety issues and lack of infrastructure, said Rebecca Flynn, a newly elected council member.
The Projects
Under construction now is Portola Valley’s first affordable housing project, 16 apartments laid out in a series of small buildings next to a grocery store. A resident and venture capitalist acquired the land to develop it for adults with developmental disabilities after finding a lack of housing options for his daughter who has Down syndrome. To secure approval, the project took advantage of state laws that limited the town’s ability to intervene. Less certain is a proposal on religious property at the edge of town. The Ladera Community Church has linked up with Habitat for Humanity to develop a half-dozen homes that would be sold to low-income residents.
The Road Ahead
The town continues its scramble to get its housing plan reapproved before any financial or other penalties kick in. At a recent meeting, the town’s interim planning director recommended that the council rezone a park site for low-income housing to appease the state. He acknowledged that many in Portola Valley didn’t want to see the park developed and that another volunteer committee had been meeting to find alternatives. But even if the property was rezoned, the planning director emphasized, the town remained its owner.
Conclusion
Portola Valley’s housing disputes have led to a precarious financial situation, with the town on the brink of insolvency. The town’s residents, many of whom are wealthy and influential, have used their power to resist change and delay the development of affordable housing. The state has imposed a mandate for more housing, but the town has struggled to comply. As the town continues to navigate this crisis, it is clear that the consequences of its housing disputes will be far-reaching and complex.
FAQs
Q: What is the main issue in Portola Valley?
A: The main issue in Portola Valley is the town’s housing disputes, which have led to a precarious financial situation and a lack of affordable housing.
Q: What is the state mandate for housing in California?
A: The state mandate for housing in California requires all communities to zone for more housing, with a specific allocation for each town or city.
Q: What is the current situation in Portola Valley?
A: The town is on the brink of insolvency, with a budget deficit and a lack of staff. The town is also struggling to comply with the state’s housing mandate.
Q: What are the consequences of the housing disputes in Portola Valley?
A: The consequences of the housing disputes in Portola Valley include a lack of affordable housing, a precarious financial situation, and a lack of trust between the town and its residents.
