CITY COUNCIL
Staff Report
From: City Manager
Report Type: ACTION ITEMS
Lead Department: Planning and Development Services
Meeting Date: September 9, 2026
Report #: 2607-6531
TITLE
PUBLIC HEARING / QUASI-JUDICIAL. 470 Olive Avenue [25PLN-00228]: Recommend City Council Adopt an Ordinance Amending the Zoning Map to Change the Zoning District for 470 Olive Avenue from NV-R1 (Single-Family Residential) to NV-MXM (Medium Density Mixed Use) and Adopt a Resolution Changing the North Ventura Coordinated Area Plan (NVCAP) Land Use Designation from Low Density Residential to Medium Density Mixed Use to Align it With the NVMXM Zoning of the Adjacent and Connected Parcel at 2951 El Camino Real. This Action Supports a Staff Determination to Add 470 Olive Avenue as a Housing Inventory Site to Address No Net Loss Requirements. CEQA Status: Statutorily Exempt per Public Resources Code Section 21080.085.
RECOMMENDATION
Staff recommend the Council:
1. Adopt the Resolution in Attachment B amending the Comprehensive Plan Land Use Designation from NVCAP Low Density Residential to NVCAP Medium Density Mixed Use; and
2. Adopt the Ordinance in Attachment C amending the Zoning Map to rezone the subject parcel from NV-R1 to NV-MXM consistent with previous City Council direction.
EXECUTIVE SUMMARY
The Draft Resolution (Attachment B) amends the Comprehensive Plan Land Use Designation Map to change the land use designation of the subject property from NVCAP Low Density Residential to NVCAP Medium Density Mixed Use. The Draft Ordinance (Attachment C) amends the zoning map to change the zoning designation of the site from North Ventura Single- Family Residential District (NV-R1) to North Ventura Medium Density Mixed Use (NV-MXM).
These actions are consistent with the City Council motion on May 27, 2025, “Direct staff to return to Council with a proposal for Rezoning the property behind 2999 [El Camino Real] from R1 to an appropriate transition for housing.” The NV-MXM development standards include
provisions to facilitate a transition between medium density mixed use and abutting single- family. These actions also support a staff determination to add 470 Olive Avenue (APN 132-37- 029) as a Housing Inventory Site to Address No Net Loss Requirements, as detailed further in this report.
BACKGROUND
Property Information
The 5,983-square-foot property is located near the corner of Olive Avenue and El Camino Real.
It is zoned NV-R1 and has a Comprehensive Plan land use designation of NVCAP Low Density Residential. The existing improvements include a one-story commercial building that is contiguous with the adjacent parcel, 2195 El Camino Real. The property is adjacent to single- family houses on two sides, and across Olive Avenue from the 3001 El Camino Real 100% affordable housing project.
Prior City Reviews & Action
The owners of both 470 Olive Avenue and 2951 El Camino Real have expressed interest in development of 470 Olive Avenue, and 2905, 2951, and 2999 El Camino Real for several years.
The City Council has considered prescreenings for rezoning from R-1 to CS (prior to approval of the NVCAP), and for a non-conforming use exception for the existing commercial property on the R-1 zoned lot. These applications did not move forward, particularly as the NVCAP continued to be developed. In 2020 and 2021 the City Council was presented with two prescreenings, one for a Planned Community project and one for a Planned Home Zoning (PHZ) project after Council had provided guidance on PHZs. No formal application was submitted following the prescreenings.
On May 27, 2025, Council approved expansion of the El Camino Real Focus Area to additional parcels, including the adjacent 2951 El Camino Real. Although the subject property was not included in the El Camino Real Focus Area, because of the existing zoning and concerns with how the Focus Area daylight plane would affect adjacent single-family residential use, Council’s motion included direction to staff to bring forth a proposal to rezone 470 Olive Avenue from NV-R1 to an appropriate transition for housing.1
Hearings for previous applications as well as the current application have included:
City Council: May 27, 20252: Discussion on El Camino Real Focus Area 1 City Council Action Minutes from May 27, 2025 (Item 7, on Page 4):
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=43272&dbid=0&repo=PaloAlto 2 Link to the May 27, 2026 City Council Staff Report:
https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=83418&dbid=0&repo=PaloAlto.
January 19, 20215: Prescreening for Planned Home Zoning project October 5, 20206: Prescreening for Planned Community project October 2, 20177: Prescreening for Zone Change from R-1 to CS PTC: July 8, 20268,9: Recommendation on Zone Change from NV-R1 to NV-MXM December 17, 202410: Discussion on El Camino Real Focus Area October 30, 201911: Consideration of non-conforming use exception HRB: None
ARB: December 19, 202412: Discussion on El Camino Real Focus Area July 8, 2026 PTC Hearing
On July 8th, the PTC made a motion to move the project forward for Council consideration with a split recommendation after the commission was unable to reach a majority recommendation to approve or deny the rezoning request. Two of the Commissioners who voted against the rezoning specified they would be willing to reconsider the proposal if it was concurrent with a proposal for a housing project. A majority of the Commissioners agreed that they were concerned about how the NV-MXM development standards could be exceeded utilizing State laws such as State Density Bonus Law. For example, it was discussed that the property would be subject to the R-1 daylight plane as it is adjacent to NV-R1 zoned properties, but a proposed development utilizing State Density Bonus could request a waiver from the daylight plane requirement. One Commissioner also noted this rezoning should have been requested at the time the NVCAP was being drafted.
5 Link to the January 19, 2021 Council Staff Report:
https://cityofpaloalto.primegov.com/Public/CompiledDocument?meetingTemplateId=3577&compileOutputType= 1 6 Link to the October 5, 2020 Council Staff Report:
https://cityofpaloalto.primegov.com/Public/CompiledDocument?meetingTemplateId=2947&compileOutputType= 1 7 Link to the October 2, 2017 Council Staff Report:
https://cityofpaloalto.primegov.com/Public/CompiledDocument?meetingTemplateId=1939&compileOutputType= 1 8 Link to the July 8, 2026 PTC Staff Report and Supplemental Report:
https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=20326 9 Link to the July 8, 2026 PTC Summary Minutes (Item 2, on Page 1):
https://cityofpaloalto.primegov.com/Public/CompiledDocument?meetingTemplateId=20330&compileOutputType =1
10 Link to the December 17, 2024 PTC Staff Report:
https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=16861 11 Link to the October 30, 2019 PTC Staff Report:
https://cityofpaloalto.primegov.com/Public/CompiledDocument?meetingTemplateId=5776&compileOutputType= 1 12 Link to the December 19, 2024 ARB Staff Report:
https://cityofpaloalto.primegov.com/Portal/Meeting?meetingTemplateId=13947 Commissioners who did support the rezoning cited this as a good location for a potential housing project, that Council supported a rezoning, that a new building would have a greater setback from the adjacent single-family homes than the existing building, and expressed concern that if redevelopment along El Camino Real did not include this parcel it may be forgotten and left between housing developments.
The property owners have expressed interest in applying for a new application for a code- compliant housing development project for the site after the rezoning is complete, noting that potential development partners are waiting for the outcome of this process. This rezoning effort gives more certainty to the owners and potential investors compared to applying to rezone the property concurrent with a housing application. In particular, it allows for the potential to submit a Streamlined Housing Application, which cannot be granted to projects which are inconsistent with the property’s zoning designation.
Since the application was first filed, and since the PTC hearing was held, SB 79 has gone into effect, as well as the City’s local implementing ordinance. The City’s ordinance applied the Transit Oriented Development (TOD) overlay to the site, slightly reducing setbacks and daylight plane, and increasing allowable FAR to 1.75. This is reflected in Attachment D.
PROJECT DESCRIPTION
The property owner filed an application for the subject property at 470 Olive Avenue on September 15, 2025, to change the zoning district designation at 470 Olive Avenue from NV-R1 to NV-MXM, consistent with the City Council’s direction on May 27, 2025.9 The property owner further detailed the request in a letter (Attachment E). It was determined in staff’s review that a Comprehensive Plan land use map amendment is also required to align the proposed zoning with the underlying Comprehensive Plan land use designations. No formal development application has been submitted at this time, however this rezoning facilitates opportunities for future development at this and the adjacent parcel under same ownership.
Requested Entitlements, Findings, and Purview:
The following discretionary applications are being requested:
Comprehensive Plan Land Use Map Amendment: The steps for processing a request for a Comprehensive Plan amendment are set forth in Palo Alto Municipal Code (PAMC) Chapter 19.04. The PTC considers the amendment and forwards its recommendation to the City Council for final action. This may be done in in parallel with the Zoning Map Amendment. The Draft Resolution Amending the Comprehensive Plan Land Use Map is included in Attachment B.
Zoning Map Amendment: The process for evaluating this type of application is set forth in PAMC Chapter 18.80. The application will be considered by the PTC, who will make a recommendation to City Council for adoption of an Ordinance to modify the Zoning Map and must find that the proposed zoning is appropriate for the site. The Draft Ordinance Amending the Zoning Map is included in Attachment C.
Staff also intends to add the site to the Housing Element Site Inventory as a site suitable for moderate income housing units, if rezoned. The City‘s Housing Element Site Inventory currently faces a deficit in sites for moderate income units as a result of approvals at 2100-2400 Geng Road and 3606 El Camino Real, both of which were proposed and entitled with fewer moderate-income units than had been projected in the Site Inventory. Under Housing Element no-net-loss law (Government Code section 65863), the City must, within 180 days, identify and make available additional adequate sites to accommodate the remaining RHNA at the moderate-income level. If this property does not get rezoned, it will not be added to the inventory.
ANALYSIS
The proposal has been analyzed in accordance with relevant State and local regulations and found to comply with all applicable requirements, as detailed further in this analysis.
Comprehensive Plan Consistency
The existing land use designation of the parcel is NVCAP low-density residential, defined as follows: “The low-density residential designation is calibrated to both facilitate new housing development while also being sensitive to the existing single-family neighborhood fabric located along Pepper Avenue and Olive Avenue. This area of existing single-family homes has been designated as an area of stability and will not experience a significant degree of change.” In order to align the underlying land use of the site with the proposed zoning, a Comprehensive Plan Amendment would be required. The project therefore includes a proposed resolution amending the NVCAP Land Use Map to NVCAP Medium-Density Mixed Use, which is intended to support four- to five-story mid-rise apartment buildings. This designation requires active uses for ground floor frontages with retail requirements at specific nodes along El Camino Real, to support its role as a regional commercial corridor. The designation requires that upper stories be residential. With adoption of the Resolution (Attachment B), the proposed ordinance for the rezoning would be consistent with the Comprehensive Plan land use designation.
Zoning Compliance
The existing zoning of the parcel is North Ventura Single Family Residential (NV-R1). This zoning allows for primarily single-family and two-family uses. The draft ordinance in Attachment C would amend the zoning map, changing the zoning designation of the site to North Ventura Mixed Use Residential (NV-MXM). Council directed staff to bring forth a proposal to rezone the property from R1 to zoning with an appropriate transition for housing. Staff believes that the proposed zoning designation of NV-MXM is the most appropriate zoning designation. It addresses an existing non-conformance by aligning the zoning with the existing use, it is the same zoning as the abutting properties fronting El Camino Real, and it will facilitate the desired future redevelopment of the site with housing.
Development Standards
As noted previously in the report, Council had previously not included the site in the El Camino Real Focus Area for several reasons, one of which included concerns about how the daylight plane under those development standards would affect single-family residential uses.
Attachment D compares development standards for the NV-R1 zoning district, including the currently applicable SB 79 (TOD) Overlay, the proposed NV-MXM zoning district with the SB 79 (TOD), and the El Camino Real Focus Area. As modified by the (TOD) Overlay, the NV-R1(TOD) daylight plane is measured from 16 feet and 45 degrees at the property line. The base NV-R1 daylight plane is measured from 10 feet and 45 degrees measured at the property line for the interior side(s), and 16 feet and 60 degrees measured at the rear setback for the rear. The (TOD) Overlay also allows for multi-family development. The NV-MXM, however, still permits a slightly higher FAR of 2.0, compared to the 1.75 permitted in the NV-R1(TOD). Therefore, the proposed zoning remains an appropriate transition between the neighboring multi-family properties in the El Camino Real Focus area (with NV-MXM as an underlying zoning) and neighboring NV-R1 properties.
However, as it was discussed at the PTC hearing, the exact daylight plane used by a project will be subject to a number of factors including State laws and/or use of waivers, incentives, and concessions. It may also depend on the combination of additional sites and whether those lots are merged, which may affect whether a property line is considered a side or rear for the purpose of setbacks, stepbacks, and/or daylight planes.
FISCAL/RESOURCE IMPACT
The implementation of the proposed change in zoning map is not anticipated to have any direct fiscal impact on the City budget. Any future development proposal will require payment of both development impact fees and other necessary entitlement and permit fees.
STAKEHOLDER ENGAGEMENT
The Palo Alto Municipal Code requires the publication of a notice of this public hearing in a local paper at least ten days in advance of the meeting. Notice of the Council public hearing was published in the Daily Post on August 29, 2026, which is 12 days prior to the meeting. Public comments received at the time of publication of this staff report are included in Attachment F.
In summary, neighbors are concerned about the combined impacts of a potential development at this site, with other nearby entitled and under construction projects such as at 3001 El Camino Real (former Mike’s Bikes location), 3150 El Camino Real (former Fish Market), and the former Fry’s site, particularly as it relates to traffic at the intersections of El Camino Real and Olive Avenue, and El Camino Real and Page Mill Road.
ENVIRONMENTAL REVIEW
The City has reviewed the proposed ordinance in accordance with that authority and criteria set forth in the California Environmental Quality Act (CEQA). The City, as the lead agency, anticipates that this ordinance will be exempt from CEQA in accordance with Public Resources Code Section 21080.085. This exemption applies to rezoning of sites to address No Net Loss Law (Gov Code Section 65863). The City, in approving the 2100-2300 Geng Road project on March 16, 2026, as well as in approving the 3606 El Camino Real Project on April 13, 2026 made findings identifying the need to add sites to the housing inventory in order to provide an adequate number of sites planned for moderate income units (RLUA 2026-01) to address No Net Loss Law. If Council supports the rezoning of this property, staff intends to place 470 Olive Avenue on the City’s housing inventory along with adjacent sites along El Camino Real, to address the shortfall of moderate income units within 180 days. Rezoning of this site is necessary for the site to accommodate moderate income units.
The City sent notification letters in accordance with SB 18 (California Government Code § 65352.3), inviting California Native American tribes to participate in consultation regarding the project. The City received one request for consultation from the Tamien Nation. Following consultation, the Tribe agreed that the existing tribal cultural resource mitigation measures adopted for future development on this site as part of the NVCAP environmental review were sufficient. Tribal consultation was completed on April 2, 2026.
ATTACHMENTS
Attachment A: Location Map
Attachment B: Draft Resolution Amending the Comprehensive Plan Land Use Designation of 470 Olive Avenue
Attachment C: Draft Ordinance Amending the Zoning District for 470 Olive Avenue Attachment D: Zoning Comparison Table
Attachment E: Letter from the Applicant
Attachment F: Public Comments
Attachment G: COI Map 470 Olive – No Conflict
APPROVED BY:
Jonathan Lait, Planning and Development Services Director