Encouraged by the Palo Alto City Council's newfound appetite for approving more housing on San Antonio Road, a local developer is moving ahead with a proposal to build 102 condominiums on a site that currently includes a martial arts studio and a contractor's office.
The application by Yurong Han calls for demolishing two buildings at 788 San Antonio Road, south of East Charleston Road, and constructing a four-story building with retail on the ground floor and an underground garage. Sixteen of the building's 102 units would be offered below market rate, consistent with the city's affordable-housing requirement.
If Han gains the city's approval, the new building would be the largest residential project to win over the council this year. Despite its goal of generating about 300 housing units annually, this would be only the second major project to advance and the first since the council approved in January a 59-unit residential complex on El Camino Real and Wilton Avenue. Both projects are relying on the city's new "Housing Incentive Program," which grants density bonuses to residential developers.
The San Antonio Road project seeks to not only take advantage of the program; it also looks to expand its reach. When the council approved the Housing Incentive Program last year, the program only applied to downtown, California Avenue and El Camino Real. But during a study session in May, council members largely supported a request from Han's representative, Ted O'Hanlon, who made the case for stretching the program to San Antonio, thereby enabling the condominium project.
The zone change isn't the only hurdle facing the developer. On Thursday, the project will undergo its first hearing before the city's Architectural Review Board, which is charged with vetting the development's compatibility with the surrounding neighborhood. The board is expected to defer its vote on the proposal to a future date.
The area around the site is already in the midst of a significant transformation. Palo Alto had approved in 2017 the construction of two Marriott hotels with a total of 294 rooms at 744 and 748 San Antonio Road. In Mountain View, city leaders have been even more enthusiastic about San Antonio's development potential, having recently approved hundreds of housing units along the prominent commuter corridor that separates the two cities.
The list of new housing developments in Mountain View includes the 623-unit apartment complex being developed by Greystar at San Antonio and California Street, which the council approved last year; and the 583-unit apartment project from Prometheus Real Estate at 400 San Antonio Road that the council approved in 2016.
While Palo Alto's plans for San Antonio are far more modest, the council's early feedback on the proposal for 788 San Antonio Road suggests an evolution in thinking. In years past, council members leaned almost exclusively on downtown, California Avenue and El Camino Real as potential housing areas, with little to show for their efforts. In May, however, most council members favored granting the developer zoning bonuses that would enable a "floor area ratio" of 2.0, similar to what the city allows in other commercial areas. The project, which once consisted of 47 condominiums, now proposes more than twice as many.
Councilwoman Alison Cormack acknowledged during the May discussion that the project would be "pushing the boundaries of what ... the community would be comfortable with" but said the discussion is well worth having. Vice Mayor Adrian Fine and Councilwoman Liz Kniss both were less ambivalent and supported the project as presented.
"This meets lots of requirements," Kniss said. "I still know it will get lots of pushback. I hope in the end we will end up accepting this and get on a pathway with 300 (housing units) a year."
Others on the council were less enthusiastic. Councilman Tom DuBois noted that the council had previously deemed San Antonio Road as a poor site for housing, owing to its relatively scant transportation options. He called the project site a "car area" and pointed to the council's prior decision to shift some of its planned housing units from San Antonio to the downtown area.
"We chose the locations that we did because of where they are — near functioning transit," DuBois said.
Councilwoman Lydia Kou argued that the project doesn't include enough community amenities or affordable-housing units. She suggested that the project could worsen the neighborhood's parking situation and criticized the proposed zone change as "spot zoning."
"There should be an effort to have consistency and predictability," Kou said. "This is just piecemeal zoning."
Mayor Eric Filseth agreed that the project will likely be a "car-centric" one, though he also said that he sees no reason not to extend the zoning program to San Antonio.
The project that the board will consider Thursday includes 32 studios, 63 one-bedroom apartments and seven two-bedroom apartments, as well as 1,779 square feet of retail space (likely a coffee shop or a salon, according to the applicant) on the ground floor.
Because the amount of retail (or "retail-like") space in the project plans falls well short of what is there today (the existing tenant, Studio Kicks, comprises 5,897 square feet of space), the proposal runs afoul of the city's retail-protection law. As such, Han will need the council to grant it an exception from the city's retail-protection ordinance before the project gets the final green light.
In a July 9 letter to the city, O'Hanlon, who represents the property owner, made the case for approving the project and applying the Housing Incentive Program more broadly. The program, O'Hanlon wrote, encourages housing and, when compared with the state's density-bonus laws, "retains more local control to the City in approving housing developments."
"The Housing Incentive Program (HIP) has been called an important step to address the jobs-housing imbalance at a time where the City needs to aggressively adopt pro-housing policies," O'Hanlon wrote. "To avoid falling short of the City's adopted goal of generating 300 housing units this year (and it is currently anticipated that the City will fall short), the City is considering (and has shown preliminary support for) a zoning text amendment to apply the HIP more broadly.
"Doing so will allow projects like this one to maximize the production of residential units on the Property to help the City meet its housing unit goals."