City Council
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: City Manager
Meeting Date: August 24, 2026
Report #:2408-3340
TITLE
Authorization for the City Manager to Execute New and Amended Regulatory Agreements for the Buena Vista Mobilehome Park Redevelopment/3980 El Camino Real. CEQA Status: Exempt Pursuant to CEQA Guidelines Section 15061(b)(3).
RECOMMENDATION
Staff recommends that Council authorize the City Manager to execute the new and amended regulatory agreements and related documents to facilitate improvements to the Buena Vista Mobilehome Park.
EXECUTIVE SUMMARY
This memorandum provides an update on the status of the Buena Vista Mobilehome Park redevelopment project at 3980 El Camino Real and recommends approval of updated regulatory agreements with the Santa Clara County Housing Authority (the Housing Authority) and the County of Santa Clara (the County). The project was slated to begin earlier in the year but was moved back to respond to the State Department of Housing and Community Development (HCD), which is the agency providing the funding for infrastructure improvements on the mobilehome site (Parcel B). The project is now on course to commence construction in mid-September, with residents beginning to relocate in August or early September. This timeline is dependent on permits and HCD approval.
Staff from the City, the County of Santa Clara, and the Housing Authority worked to address HCD’s requirements and to finalize regulatory agreements for Parcels A and B. The result is two regulatory agreements, with the 2017 regulatory agreement amended to apply only Parcel A and a new agreement for Parcel B, acknowledging the parcel split approved in June 2026.1 The 1 June 8, 2026 City Council meeting, Item #12. Link:
https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=18733
amended and new regulatory agreements maintain the intent of the original regulatory agreement.
BACKGROUND
Nine years ago, the City joined with the County and the Housing Authority to preserve affordable housing in Palo Alto by purchasing the Buena Vista Mobilehome Park. This enabled long-time residents threatened with displacement to retain their homes, and children at the Park to continue to attend Palo Alto schools. In 2024, the Housing Authority proposed to redevelop Buena Vista to upgrade a portion of the property for mobilehomes and to develop a new 61-unit apartment building. This vision was paused in late 2024 due to cost, and the Housing Authority has since determined that the redevelopment project, as originally envisioned, is no longer feasible. While the original project is no longer moving forward, the Housing Authority is upgrading the Park’s dated infrastructure, increasing livability and safety for residents. The new infrastructure project continues long term home affordability, and will ensure that all current residents can stay and those who own their homes remain homeowners.
With a mix of State and federal funding, and Housing Authority investment of $5 million, the park improvement plan will include comprehensive utility upgrades (water, sewer, gas, and electric systems replacement), and new street lighting, street re-paving, and new laundry and maintenance facilities. Residents will be temporarily relocated to allow for the construction project to proceed.
On June 8, 2026, the Council approved the final map for Buena Vista which officially created Parcel A and Parcel B.3 HCD, as a condition of providing $24.5 million for the upgrade project, is requiring separate regulatory agreements for each parcel instead of the existing single regulatory agreement covering both parcels. The City will need to subordinate its 2017 loan to the new HCD loan. The new and amended tri-party regulatory agreements, however, will remain senior to the HCD loan documents ensuring that these affordability requirements will retain the highest priority among various encumbrances on the land.
ANALYSIS
Staff from the City, the County of Santa Clara, and the Housing Authority worked to draft the two regulatory agreements, with the 2017 regulatory agreement amended to apply only Parcel A and a separate newly created agreement for Parcel B.
The regulatory agreements:
-Maintain the requirement that there be no less than 100 affordable units across both parcels
3 June 8, 2026 City Council meeting, Item #12. Link:
https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=18733 -Maintain the affordability requirements for both parcels -Revise the unit count under the Tri-Party regulatory agreement for Parcel B to provide a minimum of 46 units, reflecting the number of existing units on the parcel, but acknowledging that the number of units may increase over time as new mobilehomes are added to the site following the completion of infrastructure improvements. The agreement for Parcel B is consistent with the original 2017 regulatory agreement, with the exception of the unit count minimum now proposed to be split between the two parcels.
-Establish the unit count for Parcel A, the apartment site, at 54. As with the agreement for Parcel B, the agreement for Parcel A includes the same requirements as the 2017 agreement but with a unit count and provision that acknowledges that the Housing Authority cannot currently meet a 100-unit total requirement since there is insufficient space to accommodate the 54 units on Parcel A without the development of the apartment site. To account for this, the regulatory agreement for Parcel A will state that the unit count minimum would not take effect until seven years after the effective date of the agreement. The agreement includes interim steps for engagement to provide assurances that the apartment building on Parcel A is still being actively pursued and that the 100-unit goal for both parcels remains intact.
In order to start construction, the regulatory agreements must be approved by the three parties. The County plans to obtain authority from the Board of Supervisors to execute the agreements at its August 25, 2026 meeting. The Housing Authority will bring the agreements before its Board of Commissioners for approval on September 3. Any delay in approvals can impact the total project timeline and cost and jeopardize the HCD Manufactured Opportunity and Revitalization (MORE) Program funding. The MORE loan is providing $24.5 million for the infrastructure improvements on Parcel B, is expected to close in mid-September, with construction starting thereafter. All MORE funds must be drawn down by June 30, 2027.
FISCAL/RESOURCE IMPACT
Approving the amended and new regulatory agreements do not have a fiscal impact to the City.
The funding for this project is managed by the Housing Authority.
STAKEHOLDER ENGAGEMENT
The Housing Authority has provided notification to the residents that construction will soon begin so they can prepare for temporary relocation. Housing Authority staff and relocation consultants held on-site office hours and scheduled meetings to respond to questions. On July 31 residents received 30-day notices to temporarily relocate for the duration of the Parcel B utilities upgrade project.
ENVIRONMENTAL REVIEW
The proposed action is exempt from review under the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines section 15061(b)(3) because it can be seen with certainty that there is no possibility that approval of the new and amended regulatory agreements will have a significant impact on the environment.
ATTACHMENTS
Attachment A: Parcel A, Apartments Regulatory Agreement Attachment B: Parcel B, Mobilehome Regulatory Agreement APPROVED BY:
Ed Shikada, City Manager