Local Preference Frequently Asked Questions (FAQs)
Frequently Asked Questions (FAQs)
1. What is Local Preference?
“Local Preference” is a policy municipalities can voluntarily adopt to give priority for affordable housing to certain people.
East Palo Alto’s Local Preference Policy gives priority to people who:
- Live in East Palo Alto, or
- Work in East Palo Alto, or
- Have been involuntarily displaced from East Palo Alto
Applicants either receive “Local Preference” status or “Not Local Preference” status. Applicants do not receive a higher preference for meeting more than one of the preference criteria.
2. When did the City adopt Local Preference?
The City updated its Local Preference policy in January 2025. Prior to that, the City had a local preference policy with a tiered point system (e.g. people who Lived AND Worked in the City received more points) that made the policy difficult to administer and defend in terms of fair housing laws. Learn more about fair housing laws below.
3. How many local preference units are there in each development?
Local Preference can only be applied to City-funded, 100% affordable housing developments. The preference policy seeks to ensure that 50% of the units are first offered to people who live or work in East Palo Alto or were displaced from the City.
However, the percentage of local preference units is determined by multiple factors, including: the City’s 50% minimum goal; the percentage of funding coming from the City; local, county-wide and regional demographics; and fair housing laws.
What does this mean in practice?
Scenario 1: If the City only funds 15% of a project, the City’s Local Preference might be applied to fewer than 50% of the housing units if there are competing funding sources (e.g. County funds) that have their own preference requirements.
Scenario 2: If the City funds 90% of a project, it can be unlikely that the City gets 90% of units as Local Preference given fair housing laws. Fair housing laws do not allow overly favoring one demographic (i.e. protected classes such as race/ethnicity, age, etc.). The City may make a case for maximizing local preference units by performing a “disparate impact study” that demonstrates statistically that such discrimination is unlikely. Learn more about fair housing laws below.
4. How is local preference implemented once the number of local preference units is determined?
Local Preference increases a household’s chance relative to others, it does not guarantee placement.
To fill the local preference units, only households with a local preference status are considered. Their applications are considered in order of their lottery number. Once the local preference units have been leased up, all remaining households are considered for the remaining units in order of their lottery number whether they have local preference status or not.
5. What is the lottery and tenant selection process like for local preference units?
1. Each time there is a new affordable housing development with City funding, the Local Preference Policy is applied to a certain percentage of the units.
2. For each development there is an application period. This is based on an approved marketing plan that informs the public of the formal application submission period and eligibility guidelines, based on specific project programs.
3. When applicants submit an application, a random system-generated lottery number is assigned to the application automatically. The application includes basic information including household size and income, and whether they qualify for Local Preference. They qualify for Local Preference if they live or work in East Palo Alto or have been involuntarily displaced from East Palo Alto.
4. After all applications are received, they are reviewed for completeness and to remove duplicates.
5. Applicants are called up for intake interviews in order of their lottery number. Applicants who stated they qualify for Local Preference are asked to provide formal documentation for proof of meeting the preference to be considered in the process for a Local Preference unit. Those who formally qualify are considered first, until all the Local Preference units are filled. If live or work preference is not met, applicant(s) will remain in the general waitlist for eligibility opportunity on a non-live/work preference unit.
6. Some units, such as Project Based Voucher units, are leased up through a separate County-run process through the County’s approved Marketing Plans.
6. What are Fair Housing Laws?
Fair housing laws are the reason affordable housing developments generally cannot be limited solely to East Palo Alto residents, especially because most developments are financed and regulated in partnership with the State, County, and federal funding programs. Those funding sources and programs require that the tenant selection process remain open to all eligible households who meet the basic program rules (like income and household size), not only people who live in the city.
East Palo Alto can still apply a Local Preference based on state law, but it must be structured as a preference or priority system (think: a way to order applicants), not a barrier that excludes everyone else. That’s also why the City cannot “overly favor” East Palo Alto residents compared to the general applicant pool. In practice, the Local Preference Policy is typically applied only to a limited number or percentage of units (often aligned with the City’s funding contribution), and it is supported by a disparate impact analysis to confirm the policy is consistent with fair housing requirements and that the City is affirmatively furthering fair housing, rather than creating an unfair or disproportionate impact on other demographic groups.
7. How do these multi-jurisdictional requirements balance Local Preference with broader obligations?
State Law (SB 649 — Tenant Preference Policies)
California’s SB 649 authorizes local jurisdictions to adopt local preferences to address displacement risk, but explicitly requires those preferences be implemented in a way that complies with state and federal fair housing and nondiscrimination laws. It must be posted publicly, and jurisdictions must notify the California Department of Housing and Community Development.
Project Funding Constraints
If a project receives County or other partner funding that does not allow local preference, those units must be counted in the pool of units where preference does not apply. In other words: the City’s preference policy only applies to the extent other funding permits.
Compatibility with Other Preferences/Set-Asides
Affordable housing projects may also have other set-asides (e.g., for veterans, homeless households, special needs populations). The City’s policy must be structured so these other priorities and legal obligations are respected. The City’s policy is therefore designed to minimize fair housing concerns by limiting the scope and not imposing rigid or exclusionary requirements (e.g., no duration residency requirement).
FAQs - Colibri Commons & Local Preference
The below FAQs provide an overview of how local preference was applied to Colibri Commons, the City’s most recently funded affordable housing development. For an overview of all affordable rental housing opportunities in the City, visit:
https://www.cityofepa.org/housing/page/applying-affordable-rental-housing.
1. How was local preference applied to Colibri Commons?
For Colibri Commons, the Local Preference percentage arrived at 60%. Of the total 136 units, 1 was a manager’s unit, 15 had Project Based Vouchers (with State/Federal funding), 60% of the remaining 120 (72 units) were Local Preference and 40% (48 units) were open pool. The remaining units went through the regular lottery process, applying San Mateo County preference (since County funding was involved), and other preferences.
60% is an unusually high preference percentage. It was achievable in part because the value of the City-owned site was taken into account. A technical consultant performed a disparate impact study and the statistical analysis determined that the 60% Local Preference was unlikely to be discriminatory.
2. What were the results of the City of East Palo Alto’s local preference policy on Colibri Commons?
Actual Numbers - updated as of 1/31/26
