Atherton’s Housing Crisis: Where Does SHP Fit In?

Atherton’s city council is struggling to operate amid changing state requirements for affordable housing. The Regional Housing Needs Allocation (RHNA) is a state-run process that sets a quota for new, low-income housing for each town on a case-by-case basis. The process repeats every eight years, and for the 2023-31 cycle, Atherton’s quota is 348 new housing units. This is a stark contrast to the 93 assigned to the town by RHNA in the previous 8-year cycle.
The town of Atherton was established on September 12, 1932. According to the town’s website, the original residents “maintained their community as a strictly residential area.” This has carried through until today, with the majority of the town being single-family homes on large plots of land. The Circus Club, SHP, Menlo College, and Menlo High School are all privately-owned institutions that sit on some of the largest plots of land in the town.
According to the Mayor of Atherton, Diana Hawkins-Manuelian, the state has worked to make the process of building these new low-income homes easier for towns by allowing them to “convert old strip malls and commercial buildings into housing, but [Atherton doesn’t] have any commercial real estate.” Moreover, according to real estate broker Mara McCain, who has specialized in the Atherton housing market for over two decades, the median price of an acre in Atherton runs from $6-12 million. Thus, it is impossible for the town to buy and convert this land into multifamily housing. Hawkins-Manuelian added that Atherton “would never be granted any state funding because it would be too competitive with other places where you can get the land much cheaper.” One of the greatest challenges Atherton faces in meeting its housing quota is building multifamily housing open to everyone. For instance, the town permitted Menlo College to build multifamily units on campus, but only people with connections to the school were permitted to reside in them.
Because of these difficulties, Atherton has failed to comply with state regulations, resulting in penalties. One such penalty is the builders’ remedy, which allows any builder to build low-income housing or a multiplex regardless of the rules of the town. Although the builder’s remedy has yet to be invoked in Atherton, the neighboring town of Menlo Park is mulling over a proposal to build a dense, towering, multi-building development set to include 160 affordable units on 80 Willow Road. Other potential penalties Atherton faces include the revocation of state funding and Atherton’s ability to issue permits, which in Hawkins-Manuelian’s words, “freezes all development.” She added gravely, “If we don’t meet our requirements, the whole town will suffer.”
So, what is Atherton’s plan to meet new requirements? The plan is based on the construction and rental of Accessory Dwelling Units (ADUs), which are small buildings people can construct either attached or detached from residents’ main houses on their own property. Although ADUs are set to cover most of the housing quota, it’s really up to the residents to build and rent out ADUs. Other areas are being “zoned,” or considered as areas on which multifamily and low-income housing can be built. Such areas include 23 Oakwood Boulevard, the Menlo Circus Club, local private school campuses including SHP, and other primarily residential areas. Hawkins-Manuelian was especially excited about the redevelopment of Gilmore House, the residence of the chief of police. She said that “originally, it was a place that police could stay during the week because a lot of them live very far away.” It is also easier for the town to develop the Gilmore House because it is located in Holbrook-Palmer Park, which is owned by the town. “I think that’s a nice option to make real low-income housing that’s affordable for everybody.”
Although ADUs are the basis on which Atherton’s plan was made, “very, very few residents actually rent them out,” said McCain. Hawkins-Manuelian acknowledged this and said that Atherton is working to make ADU rental more common. She said the town is working to encourage “elderly residents to consider moving into their ADUs and having families move into the main house,” which would still “foster community” among residents. She also said that “renting an ADU could be to your own kids, your grandparents, your au pair,” and others who play an integral part in one’s family. McCain mentioned that the town of Atherton allows people to “build slightly more square footage if you have an ADU.”
The town of Atherton is also in partnership with HIP Housing, which finds “graduate students, senior citizens, [and others] and screens and recommends them as people you could put in your ADU,” says Hawkins-Manuelian.
However, despite Atherton’s efforts, a San Mateo county Civil Grand Jury says the county should stop using ADUs until they propose an “effective monitoring system that verifies how newly developed ADUs will be used.” A county press release also critiqued the rental of ADUs to family and friends, saying this can “exacerbate patterns of segregation and exclusion.”
Meanwhile, the majority of Atherton residents have been resistant to the changes the town is undergoing, particularly regarding the zoning of different areas as potential places for multifamily housing. Famously, Steph and Ayesha Curry wrote a letter to the Atherton City Council in 2023, after the council voted to zone 23 Oakwood Boulevard. The couple, as well as other residents, stressed that they moved to Atherton because of the promise of privacy. Demands for higher fences arose and protests at town council meetings broke out.
To this point, Hawkins-Manuelian responded by saying that “people move to Atherton to build their dream house on a big private lot. And now we’re saying your neighbor can build an ADU four feet from your fence… and I imagine a lot of people can be very upset when that happens.” So Atherton developed screening rules for ADUs, including screening for “line of sight,” or testing to see if residents of low-income housing would be able to see into the homes of single-family residents.
Hawkins-Manuelian noted sadly that “all these years we’ve managed to maintain the nature of our town… so it’s really heartbreaking to be on the city council at this time.”
But what does this mean for SHP? Dr. James Everitt, former Director of Mission and Culture at the Prep, says that Atherton’s high-income population “certainly helps the school in that private independent schools rely heavily on philanthropy, and wealthier parents are willing to donate above and beyond tuition.” He cited the football field, renovation of the aquatic center, lower and middle school campus, and Campbell and Homer buildings at the Prep as examples of improvements made solely by donations.
However, Dr. Everitt also mentioned that the school would have to “rethink our distribution of aid” should more middle-class families move to the area and require moderate amounts of financial aid. “This means we either have to raise a lot more money or prioritize those who need more financial aid.”
During his time at the school, Dr. Everitt worked a lot in retention (e.g., keeping teachers from leaving and students from transferring out). He said that the high prices from Marin County all the way to South San Jose for renting as well as buying “absolutely impacts the ability to hire people. You don’t want to commute two hours to school, and the train is not ideal because of its location in the city.” Dr. Everitt said SHP leadership has explored things like “a survey to see how many residents would rent out an [ADU] to faculty members” to reduce teachers’ commutes. He also mentioned that the school has discussed and even built houses for faculty, but those houses were never used in that way. He said on-campus faculty housing just “becomes too complicated to manage. How do you decide who gets to live there? For how long? What if they get fired?” Ultimately, the school opted into a capital campaign to raise $40 million that will go to faculty retention efforts, mainly to teachers’ salaries. This campaign is still active.
But Sacred Heart isn’t a normal school—it is a Catholic school. “At the very heart of what it means to be a Catholic institution… is an effort to make sure that the weakest or most vulnerable are cared for, and that’s really the message of the Gospel,” said Dr. Everitt. “You can, I think, make an argument that a Catholic institution’s identity is in jeopardy when there isn’t a deep concern for socioeconomic issues.”
Stepping back from Sacred Heart and looking again at the broader town, what really is the greatest obstacle Atherton faces when working to meet state requirements? McCain answered immediately, “We need to reframe our thinking on who would live in ADUs, and how they would contribute to the well-being of everyone in Atherton.”
People living in ADUs should not be dismissed because they cannot afford a multi-million dollar acre of land. Affordable housing should be treated as a means of diversifying and bringing a new meaning to the name “Atherton,” not just as an invasion of privacy and another reason to build taller fences. It is possible to maintain the rural character and nature of privacy in Atherton while inviting new people into the town. Instead of asking ourselves how we’re going to meet state requirements, we should ask ourselves why we must meet them. Why even make these quotas in the first place? The answer is simple: Atherton needs to change, and hard-working teachers, wage-earners, and families need homes. This is truly what the building of community as a Christian value means. It means that Atherton needs to be more than just a town with expensive lots and sprawling single-family homes—it needs to be a vibrant, diverse community of people from different socioeconomic backgrounds.
But what can we, as SHP students, do about this? The honest answer is, not much. We can’t develop land, own property, or rent out our own ADUs. But what we can do is make sure we are educated on local issues. We can understand what a tremendous effort Mr. Dioli and Sacred Heart have made to prioritize faculty. We can understand that state requirements might not be arbitrary. And more than that, we can help others understand, too. Spread the word about services like HIP Housing. Encourage people to rent out their ADUs. Tell Atherton residents to support the construction of multifamily housing.
Dr. Everitt concluded that this is “a problem that’s going to take a generation of leadership.” We are that generation. We are Sacred Heart students, called to have a social awareness that impels to action. Our generation of leadership begins now.