To avoid having to meet below-market-rate housing requirements, the developer for a Sunnyvale housing project has turned over a parcel of land to the city.
Valley Oaks Partners, a San Jose-based developer, originally planned to turn the vacant Orchard Supply Hardware site, located at 777 Sunnyvale Saratoga Road, into a combination of townhomes and below-market-rate apartments. However, a change to the plans left the city with a net gain of below-market-rate housing.
At the most recent Sunnyvale City Council meeting June 17, city employees presented the council with an alternative to the originally proposed design. The developer offered to turn over 1.46 acres of the 5.24-acre development to the city to develop below-market-rate housing.
The iteration of the development that recently passed the planning commission hosts 242 units — 80 for-sale townhomes and 162 rentals. City code would have required Valley Oak Partners to make 15% of the townhouses below-market rate and another 15% of the rentals below-market-rate — 10% at low-income and 5% at very-low income.
That would have meant the city would get 36 below-market-rate units, but Ernie DeFrenchi, affordable housing manager, said the city had an opportunity to increase its below-market-rate housing.
“The applicant’s proposal to dedicate a parcel with an entitled 162-unit development results in 124 more units than what would have been required under the standard inclusionary requirement, which is roughly a 340% increase,” he said. “Often, these alternatives result in deeper income targets of the units, serving very low- or even extremely-low-income households.”
Largely due to the entitlements on the land, the parcel is valued at $14 million. Because it is already designed and entitled, the city would just need to secure a below-market-rate nonprofit to build the development.
Valley Oaks Partners also offered to turn over a parcel that contains the joint driveway between the development’s three-story townhouses and seven-story below-market-rate apartments. DeFrenchi said the city has yet to study that offer to determine whether it is in the city’s best interest.
Doug Rich, with Valley Oak Partners, said his company is “trying to do something different,” adding that his team thought they would “dare to dream” of a scenario that would allow the city to add more below-market-rate housing.
Mayor Larry Klein said Valley Oak Partners is using waivers for many things that are standard multi-family requirements, things such as making a “layer cake” of setbacks to “reduce boxy-ness” or providing a community room and landscaping.
“If we are building this on our own, I am hoping we will further evaluate what concessions and waivers that are being requested,” he said.
While the city searches for a developer, Valley Oak Partners will use the site as a staging area for the construction of the townhouses, mitigating impacts to the surrounding area.
Overall, though, the council favored the proposition.
Council Member Richard Mehlinger said it is “very much in the public interest.”
Council Member Alysa Cisneros called it “creative” adding that it is a “great use of space along an important corridor.”
“There are going to be many, many people who will benefit from living here that otherwise would not be able to in any sense,” Cisneros said.
The council unanimously approved Valley Oak Partners’ proposal. The next step is for the city to put out a request for proposal seeking a partner to build the development.
Contact David Alexander at d.todd.alexander@gmail.com
Previous Sunnyvale City Council Meetings:
Sunnyvale Changes Zoning To Accommodate Housing Amid State Red Tape
Sunnyvale Hikes Utility Rates
Sunnyvale Protects HUD Programs Amid Potential Federal Cuts
