A developer is looking to transform a small cul-de-sac of rent-controlled apartments across the street from Castro Elementary School into four-story condos, raising familiar worries that Mountain View is at risk of displacing longtime residents who can't afford the high cost of new housing.

The proposal by the DeNardi Group calls for demolishing 29 apartments along Gamel Way and constructing a 121-unit condominium complex in its place -- a plan that hinges on the developer purchasing the street from the city. Despite the fourfold increase in housing units, city planners say the project is consistent with the zoning blueprint for the area.

If approved, the project would be the latest in a string of developments that have built new housing in Mountain View but bulldozed older apartments that are considered "naturally" affordable and subject to the city's rent control law.

As of 2019, the city was on pace to destroy 127 of these apartments each year, as developers sought to replace aging housing with for-sale row houses and condos. City officials have flagged the trend as a serious concern, and have hatched plans to prevent further displacement.

The strongest protections against displacement, however, come from a new state law. Senate Bill 330 requires that tenants ousted by the redevelopment be given the first right to return, and requires that the property owner offer those returning residents the same affordable rates.

But the city has yet to see SB 330 in action, and it won't apply to the Gamel Way redevelopment. City officials say the DeNardi Group was able to file an application prior to Jan. 1, 2020, when SB 330 took effect, meaning it won't be subject to the provisions of the state law.

Mountain View has been negotiating with the DeNardi Group since at least September 2019 over the possible sale of Gamel Way in order for the developer to build out its condominium project. Though the City Council has yet to discuss the project outside of closed session, local housing advocates began talking to residents living on Gamel Way and raising alarm bells over the potential loss of vulnerable, longtime residents of the city.

In an August 2020 letter, the Mountain View Coalition for Sustainable Planning (MVCSP) laid out what's at stake: Many of the current residents are low-income Latino residents, including working families, seniors on fixed incomes, veterans and people with special needs. At the time, the group wondered how the DeNardi Group planned to comply with SB 330, though city staff has since clarified that the project is exempt.

"MVCSP is concerned about the project due to the potential displacement impacts," the group said in a letter. "Continuing to displace Mountain View residents through the course of redevelopment will worsen our environmental crisis as former workers are forced to take on longer commutes to work jobs in Mountain View, while worsening our homelessness crisis."

Despite sliding the application in prior to SB 330's requirements taking effect, the DeNardi Group is still offering benefits to those currently living on the property. The project will have 29 affordable units, and tenants who lived in the apartments will still get the first right of refusal for the newly constructed units at an affordable price -- a cost that's based on the tenants' income.

Regardless of whether they return, displaced tenants will also receive 42 months of rent subsidies covering the difference between future rent and the current rate they're paying. These benefits are largely restricted to those making up to 120% of the area's median income.

The project may not be subject to SB 330, but it still must meet a whole host of other requirements under California's State Density Bonus Law, which allows developers to boost density in exchange for providing affordable housing. The law requires the replacement of affordable units and housing subject to price controls -- specifically rent-controlled units -- meaning the developer has to pony up at least 29 affordable units, Community Development Director Aarti Shrivastava said in an email Monday.

Though the redevelopment project has been quietly kicking around for years, it's finally coming before the council for approval next month. As a procedural step, the City Council is expected on Tuesday, Aug. 24, to approve a notice of intent to vacate Gamel Way. If approved next month, the city would be selling off the street in exchange for $4.8 million, which will be paid once all the existing buildings are demolished. The city has yet to determine how to spend the money.