Palo Alto Auditor Found Issues in Affordable Housing Program
A new city audit reports that supply shortages and hidden fees are hindering access to the Below Market Rate Housing Purchase Program.
Updated on Oct. 14, 2026 in Residential
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The Palo Alto City Auditor's Office has identified significant supply shortages and hidden HOA fees within the Below Market Rate Housing Purchase Program. The city currently oversees 247 active ownership units, a program that serves as a key component of affordable housing in the area.
Why it matters
These audit findings reveal that prospective buyers are facing unexpected costs and limited inventory, which places affordable housing options further out of reach. The situation is complicated by a long-term construction lull that occurred throughout the 2010s.
Palo Alto currently manages 247 active Below Market Rate ownership units, with only 15 units built since 2020. The program, which covers 10% of existing affordable units in the city, currently lacks a formal tracking system for buyer complaints.
The players
Palo Alto City Auditor's Office
This municipal office is responsible for providing oversight and performance audits of city programs and services.
Alta Housing
This nonprofit organization manages affordable housing waitlists and assists with buyer outreach in the region.
The details
The program relies on the Planning and Development director to set initial sale prices, while the nonprofit Alta Housing manages the waitlist and buyer solicitation. Hidden HOA fees often impact total affordability, and the city holds a right of first refusal to purchase properties. Because no new units were built in the 2010s, supply remains tight, and some units constructed in the 1970s face potential expiration from the program by 2033.
Timeline
1970s: The earliest units in the Below Market Rate program were built.
2010s: No new affordable ownership units were constructed.
2025: A total of 15 new units were constructed during the current decade.
2033: Some of the earliest program units may begin to expire.
The Home Front
The audit findings highlight the ongoing struggle to expand inventory in a market defined by the aftermath of the 2013 Maybell Avenue project rejection. This long-term supply shortage continues to influence the stability of the local affordable housing stock.
Potential buyers should carefully verify all associated HOA fees before entering an agreement, as these costs can significantly impact the affordability of a unit. If you are on the waitlist, contact Alta Housing to confirm your status and inquire about any updates to the program's requirements.
The takeaway
The audit serves as a reminder to conduct thorough due diligence regarding hidden costs when considering a Below Market Rate home purchase. Buyers should keep the 2033 expiration date in mind when evaluating the long-term status of older units built in the 1970s.
What happens next
The full City Council is expected to review and discuss potential policy changes regarding the housing program next year.
Further reading
For more information on local housing inventory and market trends, visit Residential.
Source note: This article includes information reported by Palo Alto Online.
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