Atherton is eyeing additional properties, including that of an exclusive social club, for potential new multifamily and workforce dwellings to help meet a state requirement for cities to plan for future housing.

Menlo Circus Club leaders expressed dismay that their property at 190 Park Lane has come up for consideration in an environmental study that’s part of the town’s ongoing effort to craft a Housing Element conforming to what the state wants.

“We were surprised to learn” that Atherton would view the club’s grounds as a site for possible housing, the organization’s leaders said in a July 26 letter to the City Council. “As we are sure you are all aware, the Menlo Circus Club is a private, member-owned, family social club.”

During its meeting Wednesday night, Sept. 20, the council heard other objections to sites being studied for residential development as the town continues to grapple with how to comply with its state Regional Housing Needs Allocation (RHNA) for the current 2023-31 cycle.

In their letter, Menlo Circus Club leaders contended that their property can’t be developed for new housing for various reasons.

The club doesn’t “have the ability to build additional structures as we can no longer add impermeable surfaces due to maximum hardscape limits within our existing footprint,” they said. “With nearly 450 member-owners, it is also safe to say that there would never be a consensus to agree to subdivide any portion of our property for a potential sale to a developer, even in the unlikely event that a developer would be prepared to pay fair market value for the property.”

Like the town itself, the club is celebrating its centennial this year. The organization “is proud to be regarded as an iconic Atherton institution,” club leaders also said.

Other than the Menlo Circus Club property, a town staff report listed 175 Ravenswood Ave., 185 Ravenswood Ave., 197 Ravenswood Ave., Bear Gulch Reservoir, and the Gilmore House and Knox Playschool sites at Holbrook-Palmer Park as areas to explore for housing developments of up to 20 units per acre.

The council, however, decided to have staff reduce the density threshold at those sites to 10 units per acre, citing height and other concerns.

The council also favored taking Knox Playschool off the list while the Gilmore House has previously been in and out of deliberation as a housing option.

Previously, the council agreed to consider 999 Ringwood Ave., 352 Bay Road, 318 Bay Road and 296 Bay Road as places where new units could go. At the meeting, the council instructed staff to lower the density of the Bay Road properties from 20 to 10 units per acre as well.

“I’m not going to support anything more than 10 units an acre on this Bay Road and Ravenswood property,” Councilmember Rick DeGolia said.

Mayor Bill Widmer said he agreed.

Town Manager George Rodericks later told The Almanac that the Menlo Circus Club and Bear Gulch sites could be potential spots for new workforce housing. But staff told the council that the club and CalWater, which runs the reservoir, expressed no interest at this point in building any new housing on their properties.

The Ravenswood and Bay properties could have market-rate development with affordable units, Rodericks said. The Gilmore House site could be home to senior or workforce housing, or market-rate development with affordable units.

The lower density that the council wanted went against the advice of staff. Going with 10 units per acre “might make it more challenging” for the town’s housing element to ultimately garner approval from the state, Rodericks said.

He noted that the state puts San Mateo County’s density threshold for affordable housing at 20 units an acre.

However, the town would argue that it’s hard to develop affordable housing in Atherton because of the high land values, he said.

In order for a project to pencil out, he said, the threshold would need to go up to 40 or 50 units per acre. “But that changes the total character of the town,” he said.

Raising such concerns, residents told the council that they didn’t want any new housing near where they live.

“It's going to damage the character of our neighborhood and the safety for pedestrians,” said Pamela Riddle, whose Fredrick Avenue residence is surrounded by the Ringwood Avenue and Bay Road properties being studied for increased density.

Development would also hurt bicycle traffic and bring “noise that's going to be from so many families living right behind me,” she said.

Gary George, who lives on Rebecca Lane, lambasted the state for forcing Atherton to change its very nature.

“The one house per acre residential housing has contributed to making this community one of the most sought-after in America,” George said. “I mean, it is just fantastic, and we love it.”

For the state to impinge on what residents have grown used to, he said, “I find that objectionable.”

DeGolia echoed similar sentiments but said Atherton has to figure out a way to comply with the state or face dire consequences.

“I mean, it is outrageous that we are being told by the state how to change our land use without any consideration for the impacts of traffic and a whole assortment of different issues that we have a responsibility to consider,” DeGolia said. “The risk is that if we don't find a solution where we get qualified by the state, theoretically the state could take over our zoning, and they could change things that we wouldn't have any control over.”

He was referring to the so-called builder’s-remedy, a state provision that allows affordable-housing builders to go around local land-use regulations.

Cities with noncompliant housing plans could also face financial penalties and legal action from the state.

The state in April sent back Atherton’s second attempt at a compliant housing element, after rejecting the first iteration in October 2022. The town has until Jan. 31 to submit a revision.

Atherton must plan for building 348 new housing units for the current cycle – a significant increase from the 93 dwellings its RHNA allotment called for during the previous eight-year period.

The state is pushing cities to plan for increased numbers of units as a way to combat California’s long-running housing crisis.