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Palo Alto’s latest housing proposal on San Antonio Road in many ways epitomizes the City Council’s recent shift on residential development in the south end of the city
The eight-story building proposed for 788 San Antonio Road would have far more height and density than the city’s zoning code would normally allow. Plans show an 85-foot-tall building with parking on the lower two levels and 168 apartments on the upper six, with 25 units designated as affordable.
Yet despite these zoning excesses, the developer, Grubb Properties, has some reasons for optimism. For one, it has already secured the city’s approval for a different development at this site, one that had 102 apartments on four stories, with two levels of underground parking. Despite getting a favorable vote from the City Council, the developer concluded that the project does not pencil out and withdrew that application last April.
Megan Watson, senior director at Grubb Properties, attributed the withdrawal to three factors: the council’s decision in 2022 to raise park-impact fees for each new housing unit, a change that added $4.5 million to the project cost; escalation in construction costs and interest rates; and higher-than-expected costs for the underground garage, which had to be redesigned to accommodate groundwater conditions. The change added another $5 million to the cost of the project, Watson wrote to the city.
The new project would provide more units and less parking. It would, however, be largely consistent with the development standards that the council recently adopted for another part of the city: a stretch of El Camino Real just south of Page Mill Road. By creating a new “housing focus area” on the El Camino Real corridor, the council is hoping to attract housing projects up to 85 feet in height. The city has already received numerous applications for housing projects in the area, including the recently approved 368-apartment complex at 3150 El Camino Real, former site of The Fish Market.
The San Antonio Corridor is similarly poised for residential growth, with the City Council recently approving zoning changes to allow multi-family housing projects in industrial and commercial zones and approving a three-year contract for a new area plan that would guide growth along and around San Antonio. The city’s housing plan envisions adding 2,000 new housing units in this area by 2031.
Watson noted that the project followed the development standards for the El Camino area, “reasoning that San Antonio Road is similar in many characteristics.”
The new project, she wrote, “represents a feasible housing project in the year 2025.” This means more height, increased density and less parking, she wrote.
Located next to Leghorn Street, at the southern edge of the city, the project would include 31 two-bedroom units, 90 one-bedroom units and 47 studios, according to the application. The residential complex will also include 132 long-term bike parking spaces and 18 bike spaces for guests and short-term parking, according to the application. Unlike the prior proposal, which included retail on the ground floor, the current one would be entirely residential.
Watson noted that Grubb had elected not to lean on the “builder’s remedy” provision that other builders had cited to override local zoning restrictions. The contentious provision applies to projects that are submitted in cities without approved housing plans. The state Department of Housing and Community Development approved the city’s Housing Element last August.
“Despite Builder’s Remedy being an available avenue for us, Grubb never felt this was the appropriate pathway for our project as our intent is to move forward in partnership with Palo Alto. As you begin the process of crafting the San Antonio Road Area Plan, our intent is to work in collaboration with you for the broader vision of this area while upholding our needs as a stakeholder in its future.
“We understand that this project requires bold change from the city of Palo Alto; however, the requested changes are deeply rooted in our shared commitment to contribute meaningfully to the housing goals of this community.”
