Business and Economics Element

The Business and Economics Element is not required by State law, but it is just as important as the mandated elements in shaping the future of Palo Alto. Renowned globally for innovation in research and technology, Palo Alto also has regional commercial districts and neighborhood shopping centers that play a major role in local quality of life. The Element offers policies that emphasize diversity, growth, and flexibility of businesses, as well as compatibility with adjacent and nearby land uses, including residential neighborhoods.

The Current Plan: A Solid Foundation

The City has long acknowledged that revenue generation and other positive effects of business growth have the potential to be offset by impacts on the community, especially concerning traffic and parking but also including loss of community character if not properly addressed. Accordingly, the Element calls for modest economic growth in balance with preservation of residential neighborhoods.

In addition to growth limits, the City uses zoning, development review, environmental review, coordinated area plans, and other planning tools to maintain compatibility between residential and nonresidential areas. The Business and Economics Element has helped lead to successful efforts to attract and retain commercial activities that fit with—and are prized by—our community. The majority of its policy directions are proposed to appear in Our Palo Alto 2030, including:

  • Maintaining distinct business districts as a means of retaining local services and diversifying the City’s economic base.
  • Ensuring that neighborhood shopping areas, including California Avenue, are attractive, accessible, and convenient to nearby residents.
  • Promoting public/private partnerships as a means of revitalizing selected areas and providing community benefits and services.
  • Supporting advanced communications infrastructure and other improvements that facilitate the growth of emerging industries.
  • Encouraging pedestrian-oriented neighborhood retail along El Camino Real.

The Element also recognizes the important role that Stanford University plays in our local economy as the largest employer in Palo Alto and as an incubator of new technologies that have helped make Palo Alto a global leader in innovation. The policy framework in the Element supports Stanford Research Park as a thriving employment district and seeks to sustain Stanford Shopping Center as a major regional commercial attraction.

Our Palo Alto 2030

The Plan update will assess growth management strategies, including potential alternatives to the citywide development cap in the current Comprehensive Plan. Policies will ensure that economic prosperity does not result in unconstrained growth and unacceptable impacts on Palo Alto neighborhoods. Other policy guidance proposed for inclusion in the Business and Economics Element in Our Palo Alto 2030 includes:

  • Encouraging entrepreneurship and innovation.
  • Enhancing and diversifying the retail mix through business retention and attraction.
  • Developing positive parking solutions for businesses in California Avenue and Downtown.
  • Support for creation of business registry.
  • Enhancing Palo Alto’s appeal to visitors and tourists.
  • Replacing the cap on non-residential development in the City and in Downtown with an updated or alternative growth management strategy.

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Vision Statement

Palo Alto supports a culture of innovation and entrepreneurship that welcomes innovators, entrepreneurs, business professionals, the University, visitors and the community. The City’s business policies, balanced economic goals, vibrant downtown, and diverse local and regional-serving businesses combine to stimulate and support viable business opportunities.


Click here to view the current Business and Economics Element.