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And yet, Palo Alto officials agree that the city needs more housing. The Association of Bay Area Governments, a regional planning organization that sets “fair share” housing requirements for cities in the nine Bay Area counties, released a recommended planning scenario in February that calls on Palo Alto to plan for 12,000 units of new housing over the next 25 years — a mandate that city officials see as ridiculously excessive. But as the citys population continues to grow and increased traffic congestion becomes inevitable, few disagree that some new housing will need to be provided to reduce the swell of commuters.

The broad discussion includes one colossal wildcard — Caltrain. The agency, which draws its funding from three Bay Area transit agencies, is facing a $30 million deficit on a $100 million budget because of reduced contributions from the agencies. Caltrain has been considering a series of drastic service reductions, including halting of weekend service and station closures. On Thursday, Caltrain officials weighed a staff proposal to axe weekend services at California Avenue in Palo Alto, San Antonio in Mountain View and 10 other stations. The Caltrain board decided to postpone the decision until April 21.

Caltrains struggles have created anxieties all along the San Francisco-to-San Jose corridor, where commuters depend on the transit service. But these anxieties are particularly acute for those communities whose land-use plans were drawn up around Caltrain. Officials from cities along the corridor attended the Thursday meeting and stressed the crucial role Caltrain plays in their transit-oriented-development plans. They included Palo Alto Deputy City Manager Steve Emslie, who urged Caltrain officials not to curtail weekend service for the California Avenue station. He stressed Caltrains importance to the citys long-term land-use plans for the business district.

via Palo Alto Online : Palo Alto officials bet citys growth on a thriving Caltrain.