Palo Alto's seven-year-long quest to build a dense, affordable-housing complex in a transit-friendly downtown location surged forward Monday night: The City Council approved the Eden Housing development at 801 Alma St. despite heavy opposition from a neighboring development.

The council voted 7-2 to approve a four-story development on Alma Street that features 50 units for very-low-income families.

In doing so, the council rejected a flurry of criticism about the proposed project from residents of 800 High St., a condominium complex that survived its own publicity firestorm and referendum before earning the city's approval.

The new complex, a collaboration by the city and nonprofit groups Eden Housing and the Community Housing Alliance, would be located at 801 and 849 Alma, former sites of Ole's auto-repair shop and a city electrical substation.

Councilmen Larry Klein and Pat Burt were the only council members who dissented, but on a technical point. They argued that the project should be reviewed by the Planning and Transportation Commission before coming back to the council for final approval.

But the majority of the council sided with more than a dozen housing advocates who argued that the project has already had enough scrutiny during its seven-year crawl through the city-approval process.

"It's a fabulous architectural piece," said Councilman John Barton, an architect, who proposed approving the project. "It's going to be a stunning piece at Alma Street.

"It's exactly the kind of project we need."

But residents of 800 High argued that the project's density is too high for the downtown area and that its parking is insufficient. The project's opponents, who formed a group called Neighbors for a Livable SOFA 2, have made similar arguments at previous public hearings on the project. Their criticism prompted the applicants to scale down the project, which originally featured 96 units of senior- and low-income-family housing, commercial space and a rebuilt Palo Alto Hardware store.

Joop Verbaken, an 800 High resident who co-chairs the group, was one of many condominium owners demanding further revisions. Verbaken said the condominium owners would like to welcome the affordable-housing project into the neighborhood, but not in its present form. He called for better traffic mitigation and a lower density.

"When the process is cut short, projects go wrong," Verbaken said, pointing to the much maligned Arbor Real development and the tree removal project at California Avenue as examples.

Klein and Burt both argued that steering the project through another review would only strengthen it. But Don Barr, president of the Community Housing Alliance, told the council that delays could undermine the project's financial viability.

The two nonprofits are eligible for a $1 million state grant provided the project is completed by October 2011. A three- or four-month delay could jeopardize that grant and potentially sink the project, Barr said.

"Without that $1 million, the viability becomes much more questionable," Barr said.

Supporters of the project, including former Mayor Dena Mossar, argued Monday that 800 High's opposition is ironic if not hypocritical. The dense condominium project had to survive a referendum in 2003 before construction could begin. City officials approved it with the understanding that the condominium complex would be sharing its underground parking garage with a future affordable-housing development -- although only the city's electrical substation was envisioned for such a project at the time.

Sally Probst, a housing advocate who supported 800 High St. during the referendum, denounced the condominium residents' opposition to the new complex.

"It seems ironic that the people who benefited from our work to get 800 High approved in the face of extensive community opposition are now opposing affordable housing in their neighborhood," Probst told the council. "It's a NIMBY manner that makes me very unhappy"

In September, the city's Architectural Review Board unanimously approved the project, which features a design that includes a large garden, lightwells, a bench-lined sidewalk, a courtyard and a community room. On Monday night, board Vice Chair Alexander Lew and his two board colleagues, Judith Wasserman and former member David Solnick, all spoke in glowing terms about the project's design.

Vice Mayor Jack Morton agreed and said he wished the project's architect, Robert Quigley, had designed the 800 High St. project.

"These people are getting something pleasant, attractive and green to look at," Morton said. "They're getting something with lightwells -- they're getting a project that's just amazing."