COMMUNITY DEVELOPMENT DEPARTMENT
CITY HALL
10300 TORRE AVENUE • CUPERTINO, CA 95014-3255
TELEPHONE: (408) 777-3308
CUPERTINO.GOV
CITY COUNCIL STAFF REPORT
Date: October 6, 2026
Subject
Consider a Use Permit, Tentative Map, Architectural and Site Approval, and Tree Removal Permit for the construction of a 35-unit townhome development to replace an existing strip mall (Coach House). The project utilizes Senate Bill 330 (SB 330) and provisions of State Density Bonus law. (Application No(s): U-2025-005, ASA-2025-014, TM-2025-006, TR-2025-030; Applicant:
Joshua Vrotsos, Dividend Homes; Location: 1655 S. De Anza Boulevard and 7357 Prospect Road; APNs: 366 10 061 and 366 10 126)
Recommended Action
1. Find the project statutorily exempt from the California Environmental Quality Act (CEQA); and
2. Make the required findings of No Net Loss (SB 166); and
3. Approve the project by:
a. Adopting Resolution No. 26-XXX approving Use Permit (U-2025-005) (Attachment A); b. Adopting Resolution No. 26-XXX approving Architectural & Site Approval Permit (ASA2025-014) (Attachment B); c. Adopting Resolution No. 26-XXX approving Vesting Tentative Map (TM-2025-006) (Attachment C); and
d. Adopting Resolution No. 26-XXX approving Tree Removal Permit (TR-2025-030) (Attachment D).
Executive Summary
This report outlines a project proposed by Dividend Homes for a 35-unit housing development on an existing commercial parcel. The report covers the applicable State laws, including the Housing Accountability Act, Housing Crisis Act, and Density Bonus law, and local standards applicable to the project. The report also includes a summary of the Planning Commission hearing on September 8, 2026, including public comment, and the Planning Commission’s discussion. Finally, the report summarizes the findings necessary for the Council to act on the project.
2 Discussion
Project Data
General Plan Land Use
Designation
South De Anza Special Area
Commercial/Office/Residential
Special Planning Area South Saratoga-Sunnyvale Road Conceptual Zoning Plan Zoning Designation P (CG, RES 5-15)
Lot Area 2 Acres (Gross) | 1.67 Acres (Net)
Allowed/Required Proposed
Maximum Density Up to 15 units per acre 26.5 units per acre (density bonus)
Height of Structures 30' (General Plan) 44’-9” (waiver) Slope Line 1:1 waiver
Setbacks
Front
(S. De Anza Blvd) 35’ from face of curb
Bldgs. 2 & 4 (waiver)
1st: 27’-5”
2nd: 29’-5”
3rd: 29’-5”
South Property Line
(Prospect Rd.) 20’ from property line Bldg. 5 (waiver): 7’ -6” Interior Side 6’ from property line
Bldgs. 5
1 st: 18’-0”
2 nd: 16’-6”
3 rd: 16’-6”
Bldgs. 1-4
1 st: 13’-0”
2 nd: 11’-6”
3 rd: 11’-6”
West Property Line
1 st Story: 15-20’
2 nd Story: 30’
3 rd Story: 50’
Bldg. 5
1 st: 36’-0”
2 nd: 34’-0"
3 rd: 34’-0”
(waiver)
Bldgs. 1 & 3
1 st: 46’-6”
2 nd: 48’-6”
3 rd: 48'-6”
(waiver)
Landscape Strip(s)
Landscape Setback (from
curb line at S. De Anza) 35-50’ 27'-5” (waiver)
Landscape Parkway
(between curb & sidewalk
along S. De Anza)
10-15’ 8’ (waiver)
Landscape setback (from
curb line at Prospect Rd.) 25’ 20.6’ (waiver)
Landscape Buffer
(Between New Development
& Existing Residential
Uses)
15-20’ Varying between 5-9’ (waiver)
3 Background
The 1.67 net-acre project site is
comprised of two parcels (1655 S. De
Anza Boulevard and 7357 Prospect
Road) that form an “L” shape that
abuts two streets, S. De Anza
Boulevard and Prospect Road. The
project site is bounded by the city of
San José to the east and the city of
Saratoga to the south.
The site shares a property line with
Cupertino Corporate Center to the
north3. A Valero Gas Station and the
ICAN Intervention Center for Autism Needs are situated adjacent to the site‘s L-shape on the 1 The applicable General Plan can be found online at: https://www.cupertino.gov/YourCity/Departments/Community-Development/Planning/General-Plan/General-Plan-CommunityVision 2 The applicable version of the South Saratoga-Sunnyvale Road Conceptual Zoning Plan can be found online at: https://www.cupertino.gov/files/assets/city/v/1/departments/documents/communitydevelopment/planning/land-use-plans/south-sartogasunnyvale-conceptual-zoning-plan.pdf 3 A separate housing development project is proposed on this site and is under review by the City.
Usable Open Space
Private 60 square feet per unit and no
dimension less than 6 feet
316 – 515 square feet per unit on
roof decks with no dimensions
less than 6’
Project Consistency with:
General Plan1
Consistent under SB 330 and state Density Bonus law. Density Bonus law is utilized to allow for additional units over the base density. A Density Bonus waiver is requested for building height.
A Density Bonus concession is requested to not include any nonresidential uses.
Special Area Plan2
Consistent under state Density Bonus law. Density bonus waivers are requested for South Saratoga-Sunnyvale Road Conceptual Zoning Plan standards related to landscape setbacks, building height, and public improvements.
Zoning
Consistent under SB 330 and state Density Bonus law. Density Bonus waivers are requested for lot coverage, floor area ratio, building height, setbacks, and design requirements.
*The project utilizes the provisions of SB 330 (as discussed later in the report), and therefore only those development standards, regulations, and fees in place at the time of the SB 330 Preliminary Application submittal may be applied to the project.
Figure 1: Project site outlined in red.
PR
R1-6
R3/TH)
P(CG,
RES, 5-15)
P(CG
R3, TH)
Site
Prospect Rd.
City of
San José
S. De Anza Blvd
N
City of
Saratoga
4 northwest corner of Prospect and De Anza, and a mix of commercial uses are located across both Prospect Road and De Anza Boulevard, respectively, in the cities of Saratoga and San José. Singlefamily residential uses are located immediately to the west of the site (see Figure 1).
The property is currently developed with a 13,500-square-foot, single-story commercial building with a surface parking lot and ornamental landscaping. The building is divided into four tenant spaces, two of which are vacant, and two that are currently occupied by KML Pharmacy and Four Seasons Seafood (market). In June 2023, the City approved a mixed-use development (TM-2021- 003, ASA-2021-004, DP-2021-002, U-2021-001, and TR-2022-006) consisting of 34 residential units (a mix of 23 condominiums and 11 townhomes) and 7,482 square feet of commercial space on the property. Despite the approval, the applicant for that project did not proceed with development.
On September 12, 2025, the City received an SB 330 Preliminary Application from the current applicant, Dividend Homes, to redevelop the site. The applicant subsequently submitted a formal project application on September 29, 2025, within 180 days of the submission of the SB-330 Preliminary Application, which granted it certain vesting privileges under State law. This includes vesting of the development standards of the General Plan, South Saratoga-Sunnyvale Road Conceptual Zoning Plan Area, and Planned Development “P” zoning designation, as they were in September of 2025.
The proposed project consists of 35 townhome-style condominiums dispersed into five, sevenplex structures. As a 100% residential project, review is limited by several applicable State laws, including the Housing Accountability Act, the Housing Crisis Act (SB330), and Density Bonus Law (see Attachment E).
While the first two State laws apply because the project meets the definition of a “housing development project,” State density bonus law (SDBL) applies because the project includes qualifying amounts of affordable housing. Twenty percent4 of the base density residential units, will be affordable to either very low and moderate/median-income households, consistent with the City’s Below Market Rate (BMR) requirements, making the project eligible for all applicable benefits of SDBL. Furthermore, because the applicant is providing three very-low income BMR units, the project is eligible for a thirty-five percent density increase over the base density, allowing the applicant to construct up to ten additional units on site, for a total of 36 units. An applicant may also elect to utilize waivers, concessions, or the reduced parking standards allowed under SDBL. This project includes a request for 11 waivers and one concession from applicable standards of the General Plan, South Saratoga-Sunnyvale Road Conceptual Zoning Plan, and Zoning Code. These requests are discussed later in this report.
Project Proposal
The 35-unit townhome-condominium development consists of five, three-story 7-plex buildings.
Each unit will include fourth-floor access to rooftop decks. The units, inclusive of garage space, 4 The project is required to include 5.2 BMR units (20% of 26 units). In accordance with the City’s BMR program, 5 units will be provided on site, and the remaining 0.2 units will be addressed through payment of an in-lieu fee.
5 vary in size, with townhomes ranging between 2,137 square feet and 2,704 square feet. The proposal includes five affordable units, the details of which, including affordability levels and locations, are discussed later in the staff report.
Based on the scope of project, the following entitlements are required: a Use Permit, Architectural and Site Approval, a Tree Removal Permit, and a Vesting Tentative Map.
Architecture and Site Design
As shown in Figure 2, the site is accessed
by two driveways – one off S. De Anza
Boulevard and one off Prospect Road. Two
buildings front S. De Anza Boulevard, on
either side of the main entryway, with two
additional buildings located behind them.
Each of these four structures is oriented
perpendicular to S. De Anza Boulevard.
The fifth building, with a north-south
orientation, fronts Prospect Road (see
Attachment F: Site Plan and Renderings5).
Each of the proposed buildings offer the
same mixture of unit types, ranging from
three- to four-bedroom homes with twocar garages, and additional parking provided on-site. The garages are accessed via driveways, minimizing their visual impact from public streets. Larger open space areas are provided between Buildings 1 and 2 and between Buildings 3 and 4.
The architectural design is consistent across all buildings. The buildings reflect a contemporary modern design, with flat roofs and rectangular shapes. The buildings incorporate a stacked second and third story cantilever, approximately two feet over the width of the building’s first floor, while the length of the first floor extends two feet past the second and third stories above.
The buildings feature two different material and color schedules to enhance the visual interest of the site – Styles A and B. Style A incorporates vertical panels, light stone masonry veneer, black fiber cement panels and smooth stamped stucco. Style B incorporates vertical and horizontal panels, with a brick masonry veneer and black fiber cement panels. The materials and colors are intended to accentuate changes in building planes and add visual interest the façades. 5 Due to limitations of Government Code § 65103.5, the distribution of copyrighted material associated with the review of development projects is limited. Plans have been emailed under separate cover to allow the Commissioners to review the proposed plans. Commissioners and Councilmembers cannot share plans with outside parties, including community members. The public is able to make an appointment with the Planning Division to view these plans at City Hall.
Median /Moderate
BMR Units
Very Low Income
BMR Units
Figure 2: Site Plan
6 Buildings 1, 3 and 5 have facades that face the western property line that is shared with existing single-family residences. The second and third floors of Building 5 are setback 34 feet from the western property line. The first floors of Buildings 1 and 3 are set back 46.5 feet, with an increased step back on the second and third floors of 2 feet from the western property line.
Each unit includes a roof deck to provide private outdoor space, with some units also offering second-floor balconies. To reduce privacy impacts, the existing mature landscaping that extends the length of the western property line will be retained and protected in place. Additional privacy planting is proposed to fill gaps that currently exist. All rooftop decks on Building 5 are proposed along the eastern side of the roof footprint, with the western side of the roof reserved for future solar panel use. Only two units located in Buildings 1 and 3 (Units 1 and 15) will have westernfacing views from the roof decks. However, second and third floors of both of these buildings are setback 48.5 feet from the western property line and will have the existing and proposed landscaping to help obscure off-sight views. None of the proposed second-story balconies are located on the western façades that face adjacent single-family residences.
The trees proposed for the interior of the site are a mixture of evergreen and deciduous species, providing both year-round flowers and greenery. The primary water classification for new trees and landscape on the site fall within low to medium water usage. Shrubs will be utilized to screen all above ground utilities, to the extent permitted by PG&E. The interior pedestrian concrete walkways will have a decorative stone stamped design in warm earthtone colors. The common areas will be landscaped and planted with shade trees, with ornamental arbors and bollard lighting along the paseos along the perimeter.
An eight-foot-tall sound wall will be constructed between the new townhomes and commercial businesses located south and south-east of the project. In addition, a new seven foot “good neighbor” fence will be provided along the north property line and the existing fence and retaining wall will remain in place along the west property line, buffering the single-family residences. Retaining this western fence will help preserve the existing densely-planted Italian cypress trees on the project site and the redwood trees and private landscaping located on the adjacent residential lots.
The public art location is proposed at the north-east corner of the site, within the proposed 14’-5” front setback. A 10-foot by 10-foot public access easement has been dedicated on the tentative map for the future public art piece location. The project also includes proposed improvements to the public right-of-way with 5-foot-wide detached sidewalks and a landscape buffer along both South De Anza Boulevard and Prospect Road.
7 Analysis
General Plan Compliance
The proposed project is a residential development, consistent with the site’s General Plan Land Use Designation of Commercial/Office/Residential6. The General Plan designation allows a maximum residential density of 15 dwelling units per acre, which equates to 26 units for the 1.67- acre site. The applicant, however, is using State Density Bonus Law by providing very-low income units on site to increase the permitted density to 26.5 units per acre, allowing for a total of 35 townhome units. This density bonus is discussed in further detail later in this staff report.
The City’s General Plan Land Use Element Strategies LU-1.3.1 (1) and LU-22.2 require all mixeduse areas with commercial zoning to provide retail as a substantial component of a project. Since the proposed project consists entirely of residential development, the applicant is requesting the use of a Density Bonus concession to eliminate the requirement that retail be a substantial component of the project. The applicant is also requesting a Density Bonus waiver from the General Plan’s maximum building height requirements. The requests for the Density Bonus concession and waivers are discussed in further detail in the Density Bonus section below.
South De Anza Special Area — Non-Residential Development Allocation The proposed housing development would replace the commercial uses on site. Upon the demolition of any structure, if it is a category with a specified Development Allocation in the General Plan, the square footage of the building is added to the available Development Allocation in the applicable Special Area. Therefore, upon demolition, the commercial building’s square footage will be returned to the S. De Anza Special Area, Commercial Development Allocation.
The General Plan Land Use Element, Table LU-1: Citywide Non-Residential Development Allocation for 2014-2040, indicates that the S. De Anza Special Area is currently built out to the maximum allowed commercial square footage of 352,283 square feet. Therefore, while there is currently no commercial development allocation in this Special Area, 13,485 square feet, the area of the existing commercial building, would become available for future development in this area when the building is demolished.
Staff has evaluated the project’s consistency with the General Plan and concludes that, based on the conformance with the General Plan Land Use designation for the site, the general alignment of design with applicable General Plan requirements, notwithstanding the limitations of State law, and the absence of environmental impacts as analyzed in the Notice of Exemption memo (see Environmental Review section below), the proposed project supports several of the City’s General Plan goals, as outlined below.
6 While the General Plan requires the development of the property using the Commercial Centers and Mixed-use Village concept, when a residential development is proposed, state law, under SB330 prohibits the City from applying any non-objective standards. The General Plan language describing the Mixed-use Village concept is subjective and therefore, cannot be applied to the project. In addition, since this project utilizes the provision of Density Bonus, the developer would have the option to invoke unlimited waivers to propose the 100% residential project, as designed.
8 • Policy LU-1.1: Land Use and Transportation. Focus higher land use intensities and densities within a half-mile of public transit service, and along major corridors. • Policy LU-2.2: Pedestrian-Oriented Public Spaces. Require developments to incorporate pedestrian-scaled elements along the street and within the development such as parks, plazas, active uses along the street, active uses, entries, outdoor dining and public art. • Strategy LU-7.1.2: Gateways. Promote placement of visible artwork in gateways to the city.
• Strategy LU-3.3.10: Buildings Taller Than 30 Feet in Neighborhoods. Allow construction of buildings taller than 30 feet in Neighborhoods only if the buildings abut an arterial or major collector or if allowed by State law.
• Policy LU-22.3: Parcel Assembly. Highly encourage assembly of parcels to resolve the fragmented and narrow lot pattern and encourage high-quality development with adequate buffers for neighborhoods.
• Policy LU-22.4: Streetscape and Connectivity. South De Anza is envisioned as a walkable, bikeable boulevard with sidewalks, street trees and roadway improvements for bike lanes and pedestrian crossings. Side streets are also envisioned with pedestrian and bicycle improvements to ensure walkable connections from adjacent neighborhoods. • Policy LU-22.5: Shared Access. Since South De Anza is a heavily traveled route, properties in the same block should be connected with auto and pedestrian access through shared access easements to reduce impacts on the corridor.
• Policy LU-22.8: Neighborhood Buffer. Provide building transitions, setbacks and/or landscaping to buffer development from adjoining single- family residential uses. • Policy LU-27.8: Protection. Protect residential neighborhoods from noise, traffic, light, glare, odors and visually intrusive effects from more intense development with landscape buffers, site and building design, setbacks and other appropriate measures. • Policy INF 2.4.2 Development. Require undergrounding of all utility lines in new developments and highly encourage undergrounding in remodels or redevelopment of major projects.
• Strategy HE-2.3.7: Density Bonus Ordinance. The City will encourage use of density bonuses and incentives, as applicable, for housing developments which include:
o Five percent of the total units of a housing development, for rental or sale to very low income households, as defined in Section 50105 of the Health and Safety Code.
Conceptual Zoning Plan and Municipal Code compliance
The project site is in the South Saratoga-Sunnyvale Road Conceptual Zoning Plan7 area. The City’s Conceptual Plan establishes building heights, setbacks, and other development requirements for projects within this area. The project incorporates some site design requirements, which are 7 See the South Sunnyvale-Saratoga Conceptual Zoning Plan. 9 consistent with the remaining applicable requirements of the South Saratoga-Sunnyvale Road Conceptual Zoning plan, such as requirements for first floor building heights, first and second story step backs, vehicular circulation, tree protection, and sidewalk improvements.
The site is zoned P (CG, RES 5-15) – Planned Development with General Commercial and Residential uses at a density between 5-15 units per acre. The “P” zoning designation is described in Cupertino Municipal Code, Chapter 19.80, Planned Development Zones. The “P” zoning designation is intended to provide a means of guiding land development within the city that is uniquely suited for planned coordination of use and development. Where townhome style residential development is proposed in the “P” zoning district, and where the Specific Plan is silent, development must adhere to Townhome (TH) zoning regulations.
Parking
The City’s Municipal Code (Chapter 19.124) requires townhome projects to provide at least one parking space per unit. As with most new townhome proposals, the project includes two-car garages for each unit, providing a total of 70 garage parking spaces, where only 35 spaces are required onsite. Additionally, the project includes seven uncovered guest spaces, for a total of 77 parking spaces on site.
Tree Removal and Replacement
The arborist surveyed a total of 79 trees located on and directly adjacent to the project site. The project site contains 51 on-site trees and 28 off-site trees. The 28 off-site trees consist of one London Plane City street tree and 27 trees of various species located along shared property lines to the north, south, and west. The proposal includes the removal of 15 on-site development trees and 1 City street tree. The on-site tree removals include five Italian Cypress, one Chinese Photinia, and nine Hollywood Junipers.
An arborist report was prepared for the applicant by Davey Resource Group, Inc. and was peer reviewed by the City’s consultant, FocalPoint Arboriculture Consulting (Attachment G). The report and peer review concluded that 10 of the trees proposed for removal would be within the new driveway and drive aisle, four would be impacted by the location of the new five-foot-wide detached public sidewalk off Prospect Road, and two would be impacted by the new sound wall proposed between the commercial uses and new housing development and cannot be preserved or otherwise adequately protected during construction. The remaining 36 on-site development trees and 27 off-site trees are proposed to remain and will be protected in place during the project’s construction.
The applicant proposes to replace 15 development trees with 22 new on-site trees of various species. The existing street tree proposed to be removed will be replaced with two new street trees located in the new landscape parkstrip along Prospect Road. All replacement trees will be either 24 or 36-inch box in size, consistent with Municipal Code tree replacement requirements.
The City’s requirements for tree replacement for Protected Trees, consistent with Cupertino Municipal Code Section 14.18.160 (A), are as follows:
10 Protected Tree Replacement Table
Tree
ID # Common Name DBH (inches)
Tree Replacement
CMC 14.18.160 Proposed Tree Replacement
293 Italian Cypress 7.7" 1- 24" box (1) 24"-box Eastern Redbud 294 Italian Cypress 11.1" 1- 24" box (1) 24"-box Eastern Redbud 295 Italian Cypress 14.9" Two 24" box trees
or One 36" box tree (2) 24"-box Flaxleaf Paperbark
296 Italian Cypress 18.4" Two 24" box trees
or One 36" box tree (2) 24"-box Flaxleaf Paperbark
301 Italian Cypress 17" Two 24" box trees
or One 36" box tree (2) 24"-box Flaxleaf Paperbark
302 Chinese Photinia 5,6,4,4" Two 24" box trees
or One 36" box tree (2) 24"-box Flaxleaf Paperbark
303 Hollywood Juniper 31.4" Two 24" box trees
or One 36" box tree
(1) 36" box tree Arbutus
Marina
304 Hollywood Juniper 14.3" Two 24" box trees
or One 36" box tree (2) 24"-box Flaxleaf Paperbark
305 Hollywood Juniper 12.6" Two 24" box trees
or One 36" box tree (2) 24"-box Flaxleaf Paperbark
306 Hollywood Juniper 16.8" Two 24" box trees
or One 36" box tree
(1) 36" box tree Arbutus
Marina
307 Hollywood Juniper 13.5" Two 24" box trees
or One 36" box tree (2) 24"-box Flaxleaf Paperbark
308 Hollywood Juniper 18" Two 24" box trees
or One 36" box tree
(1) 36" box tree Arbutus
Marina
309 Hollywood Juniper 20.5" Two 24" box trees
or One 36" box tree
(1) 36" box tree Arbutus
Marina
310 Hollywood Juniper 20.4" Two 24" box trees
or One 36" box tree
(1) 36" box tree Arbutus
Marina
311 Hollywood Juniper 23.1" Two 24" box trees
or One 36" box tree
(1) 36" box tree Arbutus
Marina
Total:
(28) 24" box trees or
(13) 36" box trees & (2) 24" box trees
or any combination thereof
(6) 36" box tree &
(16) 24" box trees
Vesting Tentative Map
The application for the Vesting Tentative Map includes the condominium subdivision of the two existing lots to create 35 condominium parcels for the proposed townhome units. The map also includes additional roadway and future reciprocal access easements between the subject site and the property located directly to the north (APN 366-10-133) to support vehicular and pedestrian ingress, egress, and emergency access between the two developments. The approval of a vesting tentative map confers a vested right to proceed with development in substantial compliance with 11 the City's ordinances, policies, and standards in effect at the date the application was deemed complete.
Conditional Use Permit
The South Sunnyvale-Saratoga Conceptual Zoning Plan requires a Conditional Use Permit for new construction, redevelopment, or changes in the existing land use. Since the applicant proposes to demolish the existing commercial building to construct a new residential townhome development a Conditional Use Permit is included in this review to address the requirement.
Park Land Dedication
Under Cupertino Municipal Code Section 13.08.060(A), proposed developments containing 50 or fewer units shall pay an in-lieu fee for the required park land dedication based on Municipal Code Chapter 13.08 requirements. Per the applicable fee schedule8, the applicant is subject to pay $54,000 per unit, totaling $1,620,000, based on 30 new market-rate units. Consistent with the City’s Housing Element and Below Market Rate Mitigation Manual, the five proposed affordable units are exempt from paying parkland dedication fees.
Below Market Rate (BMR) Housing Program
The project includes five BMR units, or 20% of the 26 base density units. The project provides the required number of units, including those at deeper affordability levels. New owner-occupied developments, such as townhomes, are required to provide 20% of their BMR units at moderateand median-income levels. However, the proposed project provides three very-low-income units at a “deeper” level of affordability. As such, the applicant has met the requirements of the BMR Housing Mitigation Manual. The following table indicates the affordable unit count by affordability level:
Area Median Income (AMI) Range Provided Required
<50 % (Very-low income) 3 0
Between 50 and 80% (Low-income) 0 0
Between 80 and 100% (Median income) 1 3
Between 80-120 (Moderate income) 1 2
Total 5 5
A condition of approval has been included to ensure the recordation of a regulatory agreement with the City, prior to occupancy. This agreement will require that the designated BMR units be for sale to households at the specified income levels for a 99-year term.
Compliance with BMR Unit Comparability & Dispersion Requirement The BMR Manual requires that the BMR units be designed as follows:
• The units shall be comparable to market-rate units in terms of unit type, number of bedrooms per unit, quality of exterior appearance and overall quality of construction. 8 Due to the SB330 nature of the project, the payable Park Fees are those in effect as of September 2025. 12 • The unit size should be generally representative of the unit sizes within the market-rate portion of residential project.
• Interior features and finishes in affordable units shall be durable, of good quality and consistent with contemporary standards for new housing.
The following table demonstrates the proposed units within the development buildings by income level, type, and size:
# of Units # of Bedrooms # of Bathrooms Average Unit Size BMR Units
2 3 3.5 2,704 square feet
3 3 3.5 2,137 square feet
Market-Rate
Units
13 3 3.5 2,137 square feet
5 3 2.5 2,449 square feet
2 4 3.5 2,704 square feet
5 4 3.5 2,645 square feet
5 4 3.5 2,638 square feet
The project has been determined to be consistent with the BMR Manual section 2.3.4. The affordable units will be dispersed throughout project, with only one building not having any BMR units, and will be comparable to the market rate units in both unit type and size.
Additionally, there is no indication on the plans that the exterior finishes of the BMR units will be any different from the market rate units. As such, it is expected that they will be of the same quality; however, as allowed in the BMR manual, the affordable units may have different interior finishes.
Density Bonus
The applicant proposes to increase the permitted density on site from the maximum 15 dwelling units per acre to 26.5 dwelling units per acre by utilizing State Density Bonus Law (SDBL). By providing three very low-income units on site the applicant is eligible to construct up to 35% over the base density permitted under the General Plan. The three very low-income units make up approximately 11% of the 26-base density units, making the project eligible for a 35% density bonus. This equates to 10 bonus9 units on site, allowing the applicant to construct up to 36 units in total. In this housing development application, the applicant has proposed to construct 35 townhome units.
Density Bonus Waivers and Concessions
The project is eligible for Density Bonus waivers and concessions consistent with the City of Cupertino Municipal Code Chapter (CMC) 19.56 Density Bonus and SDBL. The project includes requests for 11 waivers.
9 State Density Bonus Law, Government Code § 65915 (q) Each component of any density calculation, including base density and bonus density, resulting in fractional units shall be separately rounded up to the next whole number. The Legislature finds and declares that this provision is declaratory of existing law.
13 Section 19.56.070 of the City’s Density Bonus Ordinance (“Findings") requires that, before approving an application which includes a request for a density bonus, waivers, or reduction in parking standards, the decision-making body must determine that the proposal is consistent with SDBL by making the following findings10, as applicable:
1. That the housing development is eligible for the density bonus being requested as well as any incentives or concessions, waivers or reductions in parking standards that are requested.
2. That the development standard(s) for which the waiver(s) are requested would have the effect of physically precluding the construction of the housing development with the density bonus and incentives or concessions permitted, if a waiver was not requested.
The City may not deny a waiver of a development standard that would physically preclude the construction of the project as it is designed, unless it is found that the waiver or reduction would have a specific, adverse impact upon health or safety, for which there is no feasible method to satisfactorily mitigate or avoid the specific adverse impact, or would have an adverse impact on any real property that is listed in the California Register of Historical Resources.
Waivers Requested
As a density bonus project, the applicant may submit proposals for an unlimited number of waivers, or reduction of development standards, that would have the effect of physically precluding the construction of the project, as designed (Government Code Section 65915(e)). As previously noted, a city may not deny a proposed project based on the theory that another project, with a similar number of units, might be designed differently and accommodated without waivers of development standards.
The applicant has requested 11 waivers to increase floor area and building height, reduce setbacks and landscape buffers, and to modify required site and building design standards. These waivers are itemized and outlined in further detail in Attachment H.
Concession Request
As a density bonus project with at least 10% of its units reserved for sale to very-low-income households11, the applicant may submit requests for up to two concessions. Concessions allow an applicant to deviate from development regulations when such regulations have the potential to make the project economically infeasible to build. The applicant has requested one concession, as follows:
1. General Plan Land Use Element Strategies LU-1.3.1 (1) and LU-22.2 Land Use Element Strategy LU-1.3.1 (1) states that “all mixed-use areas with commercial zoning will require retail as a substantial component.” Strategy LU-22.2 states that 10 Government Code § 65915 (d)(4): The city, county, or city and county shall bear the burden of proof for the denial of a requested concession or incentive.
11 The applicant proposes that 11% of the base units be deed restricted to households at very-low-income levels. State law specifies that developments which provide at least 10 percent of the base units for very low-income households are eligible for up to two incentives or concessions (Government Code § 65915(d)(2)(B)).
14 “[South De Anza Special Area will remain predominantly] General commercial and retail uses, with limited commercial office, office and residential uses.” As the project site is located in the South De Anza Special Area, in a mixed-use zoning district (i.e.
P(CG, Res 5 - 15)), it is required to provide retail as a substantial component of the project. Therefore, to accommodate the proposed 100% residential development the applicant is requesting that this standard not be applied through the use of a Density Bonus concession. The applicant noted that “providing commercial uses [on site] would negatively impact the financial viability of the project. Based on the current commercial real estate market, commercial [use] is not a viable alternative. Furthermore, the introduction of commercial uses on the site and its associated parking would reduce the amount of land left for the development of the residential portion of the site.” Therefore, eliminating the dedicated retail, office or other commercial space would result in identifiable and actual cost reductions to provide affordable housing costs.
No Net Loss Discussion (SB166)
California Government Code Section 65863 (No Net Loss Law) requires cities to ensure development opportunities remain available to accommodate the City’s regional housing need allocation (RHNA), especially for lower- and moderate- income households by maintaining adequate sites to accommodate the unmet RHNA for each income category. Through the 6th Cycle Housing Element’s adoption in May 2024, the City’s projected net new housing units on this site in Table B4-2: Pending Projects (also referred to as “pipeline projects”). Proposed under a previous application, the project consisted of a mixed-use development of 34 residential units and 7,482 square feet of commercial space. The City included in the RHNA the number of units, by income category, that were expected to be developed on the site at that time. While the site is not limited to the commercial square footage and housing density proposed under the previous application, the City is nonetheless required to evaluate the project’s impact on expected housing production under Government Code Section 65863.
Under No Net Loss Law, at the time of a project’s approval, the decision-making body must make the following findings:
1. That the remaining sites identified in the Housing Element are adequate to meet the jurisdiction’s remaining RHNA for the planning period, by income category.
2. A quantification of the remaining unmet need for the jurisdiction’s RHNA at each income level and the remaining capacity of sites identified in the Housing Element, to accommodate that need by income level.
In the event the City is unable to make the findings of No Net Loss, the City must either concurrently with, or within 180 days of approval of a housing development project at a lower density or different mix of housing affordability, identify another Priority Housing Site(s) or increase the density of an existing Priority Housing Site(s) to ensure that adequate sites are available to accommodate its RHNA.
The City is able to make the findings of No Net Loss with the approval of this project. The Housing Table B4-2: Pending Project Table estimated under the previous application, a total of 15 thirty-four new housing units, inclusive of one moderate12 unit and three lower income units, would be developed on this site. The new development application proposes a total of thirty-five net new units, and provides one additional moderate income level unit, for a total of two Moderate units and three very-low income units. The new project meets the requirements of the City’s BMR Housing Mitigation Manual and allows the project to utilize SDBL.
Other Department/Agency Review
The City’s Building Division, Public Works Department, Environmental Services Division, Transportation Division, VTA, Cupertino Sanitary District, and the Santa Clara County Fire Department have reviewed and conditioned the project.
Environmental Review
California Environmental Quality Act (CEQA)
The applicant requested that the development be reviewed in accordance with Assembly Bill (AB) 130, signed into law and effective on June 30, 2025, and codified in Public Resources Code (PRC) Section 21080.66. This law exempts qualifying infill housing development from CEQA review, creating a new statutory exemption. This exemption applies to any required permits, entitlements, or other discretionary approvals for a broad range of housing types. The attached CEQA Exemption Memorandum (Attachment I) demonstrates that the proposed project meets the requirements of PRC Section 21080.66 and is organized as follows:
• Infill Criteria. The project’s consistency with the allowed housing development type defined in PRC Section 21080.66(a), subdivisions (1) through (5) and (8). • Environmental Criteria. The project’s consistency with the individual environmental requirements pursuant to PRC Section 21080.66(a), subdivisions (6) and (7). • Tribal Cultural Resources. The project’s consistency with the tribal notification and outreach requirements pursuant to PRC Section 21080.66(b). • Hazardous Materials. The project’s consistency with the requirements for the identification and treatment of hazardous materials pursuant to PRC Section 21080.66(c). • Other Requirements. The project’s consistency with the Labor Code requirements and eligibility of a housing development project for a density bonus, incentives or concessions, waivers or reductions of development standards, and reduced parking ratios pursuant to PRC Sections 21080.66(d) and (e), respectively.
As analyzed in Section 3.2 of the attached CEQA Exemption Memorandum, Public Resources Code Section 21080.66, the proposed project meets the criteria for statutory exemption, including providing a Phase I Environmental Site Assessment (see Attachment J). Accordingly, this document finds that a Notice of Exemption is appropriate for the proposed project pursuant to CEQA Guidelines Section 15062.
City Standard Environmental Requirements
In October 2019, the City adopted Chapter 17.08 of the Municipal Code which outlines standard environmental requirements to address the potential impacts of construction projects on areas of 12 “Moderate” designation, for purposes of state law, includes both Moderate- and Median-income units. 16 environmental concern, including air quality, hazardous materials, biological resources, cultural resources, water quality, noise, paleontological resources and availability of utilities. Chapter
17.08 also requires the City to conduct a third-party peer review of any applicant- provided reports, with the applicant bearing all associated costs. For this project, the applicant provided a Phase I and Phase II Environmental Site Assessment (ESA), in accordance with Chapter 17.08.
The resultant third-party peer review of Phase I and Phase II ESA reports concluded that there were no hazardous materials that require remediation (see Attachment J). In addition to the requirement for an ESA, Chapter 17.08 requires that the applicant comply with standard conditions of approval related to Biological Resources, Cultural Resources, Noise, Air Quality, which have been incorporated into the draft resolutions.
Public Outreach and Noticing
The following table is a summary of the noticing done for this project:
Notice of Public Hearing, Site Notice & Legal Ad Agenda ▪ Site Signage (14 days prior to hearing)
▪ Legal ad placed in newspaper (at least 10 days prior to the hearing)
▪ Public hearing notices were mailed to property owners within 500 feet of the project site (10 days prior to hearing) ▪ Posted on the City’s official
notice bulletin board (five
days prior to hearing)
▪ Posted on the City’s website
(five days prior to hearing)
The applicant completed community outreach to residents and property owners on June 11, 2026.
The two existing tenants are on month-to-month leases and were notified of the property owner’s intent to redevelop the site through the previous mixed-use development application submitted to the City in 2021.
In addition, City staff has conducted business outreach to the existing tenants and is engaged in assisting with relocation assistance by identifying and sharing information on available retail spaces for lease within the city.
Public Comment
Prior to this staff report being drafted, staff received two comments related to the project, which are attached as Attachment K. One of the comments was written in support of the project and the other comment requested information about the project’s status.
Planning Commission Review
On September 8, 2026, the Planning Commission conducted a public hearing regarding the proposed project. The Commissioners asked questions, which staff and the applicant responded to, about several topics, including project noticing, impacts to traffic, the proposed connection to the property to the north, standards and requirements within the Conceptual Plan, Phase I ESA report and conclusions, landscaping and screening requirements, and concerns about the loss of retail on the site. Staff and the applicant provided additional information related to the proposed connection to the property to the north, noting that the connection would be made only once the northern property is developed and that the proposed connection is aligned with the City’s 17 General Plan policies for inter-block connectivity and increased pedestrian access. Based on feedback from the Commission, the project’s transportation analysis has been included as Attachment L.
After discussion, the Planning Commission, with a 5-0 vote, adopted resolutions recommending that the City Council approve the project without modification.
Reasons for Recommendation and Available Options
Staff and the Planning Commission recommend approval of the project, as proposed, because the project and its conditions of approval support the findings for approval of the proposed project, consistent with the General Plan, South Sunnyvale-Saratoga Conceptual Zoning Plan, and Chapters 14.18, 18.16, 19.36, 19.40, 19.56, and 19.168 of the Cupertino Municipal Code.
Sustainability Impact
The project was reviewed by the Sustainability Division and the applicant completed the required Climate Action Plan Consistency Checklist. The project has been found to be exempt from CEQA through a statutory exemption and, therefore, it is expected that there will be no sustainability impact.
Fiscal Impact
A Fiscal Impact Analysis was provided by the applicant and peer reviewed by the City’s thirdparty consultant. The peer review of the Fiscal Impact Analysis concluded that the overall fiscal benefit is net positive. The net impact on the General Fund would be positive, resulting in $4,348 to $16,770 per year.
City Work Program (CWP) Item/Description
Not applicable.
Council Goal
Housing.
California Environmental Quality Act
As discussed in the Environmental Review section of this report (see above), the project is statutorily exempt from the California Environmental Quality Act (CEQA). _____________________________________
Prepared by: Emi Sugiyama, Senior Planner
Reviewed by: Luke Connolly, Assistant Director of Community Development Benjamin Fu, Director of Community Development
Floy Andrews, Interim City Attorney
Approved for Submission by: Tina Kapoor, City Manager
Attachments:
A. Draft Resolution for U-2025-005
18 B. Draft Resolution for ASA-2025-014
C. Draft Resolution for TM-2025-006
D. Draft Resolution for TR-2025-030
E. Summary of Relevant State Law
F. Project Site Plan and Renderings
G. Arborist Report and Peer Review
H. Summary of Requested Density Bonus Waiver
I. CEQA Exemption Memorandum
J. Phase I Environmental Site Assessment
K. Public Comments
L. Transportation Analysis