By Ben Christopher, CalMatters
In January 2023, the town council of Los Altos Hills, a mansion-studded bedroom community perched above Silicon Valley, reluctantly voted to legalize some apartment buildings.
It was a historic vote. Incorporated in 1956 by well-to-do hill dwellers trying to keep out the encroaching urbanity of nearby cities, the town’s “country residence zoning” rules only permit the construction of one type of building: Single-family homes, and no more than one per acre.
But town officials felt they had no choice. Bowing to state mandates to plan for more residential development, they zeroed in on three sites with apartment potential. The most promising of the three was Twin Oaks Court, a cluster of lots on a dead-end street sprouting from a frontage road along the I-280 freeway. State housing regulators signed off on the plan that spring.
Now, with a project proposed at Twin Oaks that would include the town’s first-ever affordable housing units, Los Altos Hills is having second thoughts.
Earlier this summer, the town council voted to amend its state-mandated development plan, cutting the number of new homes that could be legally crammed onto the site by nearly two-thirds.
Town officials and many local residents say the proposed changes to the municipal land-use blueprint, known as a housing element, still meet the letter of the state’s planning requirements while capping would-be development at a scale better suited to the town’s rural character and consistent with the intent of the original plan.
Packing hundreds of new residences along a narrow access road out of town is “totally inappropriate,” said Michael Grady, a retired lawyer who lives near the Twin Oaks site and who created an online petition calling on the town to revise its original plan. He said development at the densities initially permitted would snarl emergency access to and from the area, turbocharge traffic and disrupt local wildlife.
Pro-development activists are characterizing the proposed change as a bait-and-switch by an affluent community trying to evade state housing law and their obligations to make space for new residents, including those with lower incomes. The typical price of a home in the town currently tops $5.5 million, according to Zillow.
“Local agencies should not be allowed to amend their housing elements the moment that they are confronted with a real housing development project,” the California Housing Defense Fund, a legal advocacy group that regularly sues cities for violating state housing laws, wrote in a letter to the California Department of Housing and Community Development last month.
As far back as 2018, state housing department regulators, newly emboldened by a raft of California laws, have been sparring with municipalities over their state-mandated plans to make way for more houses and apartments. These battles have taken the form of lawsuits, threats of funding cuts and, in some cases, cities losing authority over local development entirely. Now, years into the process, most of California’s cities and towns have housing elements in place with the state’s certification.
The local tussle over Twin Oaks Court shows that getting the housing department’s seal of approval isn’t the end of the fight, but possibly the beginning of a new one.
California housing regulators are slated to respond to the town’s proposed changes later this week.
‘Testing the waters’
Cities across the state have reason to watch and see how things play out.
After receiving housing department certification for its housing plan in 2024, Carmel, a picturesque beach town in Monterey County, almost immediately got to work trying to change it. The main goal: remove city-owned parking lots from the city’s list of potential affordable housing sites and replace them with less politically controversial alternatives.
The town has yet to submit an amended version of its plan with the state, but has formed a working group composed of town staff and a group of local activists opposed to development on the lots.
South Pasadena has likewise submitted its own amendment to reduce the number of new homes allowed, citing a calculation error that led to the original plan providing far more capacity than is required by law.
Other affluent towns have sought out similar changes in the past — with mixed results.
Earlier this summer, Rancho Palos Verdes in south Los Angeles County considered removing a handful of parcels from its state-approved list of developable properties. The town argued that its original plan included more development capacity than was strictly required under state law, so trimming the sites — including one with a proposed cluster of townhomes — was perfectly legal. The town eventually backed down in the face of threatened litigation.
In May, Sausalito, a well-heeled suburb overlooking the San Francisco Bay, succeeded where Rancho Palos Verdes failed. The town amended its state-approved housing plan, reducing the amount that can be built at the site of a controversial condo project. The housing department approved the changes.
“We’re in the ‘testing the waters’ phase,” said Matt Gelfand, an attorney with Californians for Homeownership, which sues cities in Southern California for failing to plan or zone for enough housing. “If some smaller cities can get away with it, it’s going to be something that is employed by more cities.”
In evaluating each city’s proposed changes, the state housing department is tasked with distinguishing proposed amendments that fix legitimate flubs or that make reasonable alterations to existing plans from those made in bad faith in order to delay or quash proposed developments.
The developers behind the Twin Oaks Court site clearly see Los Altos Hills’ new plan as the latter.
“I don’t think that is what the housing element amendment process is supposed to be for,” said Brian O’Neill, a lawyer representing the group of developers operating under the business name Twin Oaks Court LLC. “It is supposed to be for looking at and strengthening your housing policies, not as a method to kill housing projects.”
“The Town chose to pursue an amendment to its certified Housing Element to better align planned development with our commitments to the state, the region, and our community,” Jay Bradford, the town’s Community Development Director, said in an email. “There were concerns raised by nearby residents and the community regarding potential development densities that could be accommodated at the site.”
How much is enough?
Local governments across California are on the hook under state law to plan for more than 2.5 million new homes before the end of the decade. Los Altos Hills’ share is 489.
In trying to hit that target, the town leaned heavily on Twin Oaks. The site had a “realistic capacity” of 92 units, the plan noted. But the town’s specific proposal to rezone the parcels allowed for considerably denser development: Upwards of 250.
Meanwhile, the other two sites identified as possible multifamily developments — campuses of the Saint Nicholas Catholic School and Foothill College — never looked especially promising.
The Diocese of San José, owner of the catholic school site, has “no intention of developing or selling” any part of the school, said spokesperson Cynthia Shaw. “Legal counsel clearly conveyed the Diocese’s opposition to the Town’s submission of the housing plan in 2022.”
The Foothill College district initially expressed interest in building on-site housing for faculty and staff, but recently opted to purchase an apartment complex in nearby Mountain View instead.
Earlier this year, Twin Oaks Court LLC took the town up on its state-certified plan. The group filed a preliminary development application that maxed out the capacity of the site — and then some. Making use of a series of state laws that let developers pack in more units if a certain share are for lower-income tenants, the project proposed building 598 homes.
Density-averse town residents panicked.
“This is exactly what we’ve been asking you to protect us from,” local resident Martha Bowden said, excoriating the town council after details of the proposal emerged in February. “This would be a disaster.”
“This is illustrative of exactly why I’ve been saying for over a year and a half that the housing element as drafted is a time bomb,” said Grady, the petition organizer.
Not every spectator agreed.
“After the housing element was accepted, residents and the council were wailing, ‘but it’s steep at Twin Oaks,’” said Anne Paulson, who has attended town hall meetings as a member of the Los Altos Affordable Housing Alliance. “They nevertheless chose those sites, instead of flatter sites down the hill. They shouldn’t get to weasel out of what they promised on the basis that they just noticed steep land is steep.”
The Twin Oaks developers have since reined in their plans. Their latest proposal includes a cluster of 334 single-family modular homes, including 56 set aside for lower-income residents. But that proposal is still bigger and denser than what would be allowed under the town’s amended housing plan, which cuts the number of allowable units to 92, the “realistic capacity” figure included in the original housing plan.
That makes the new plan squarely consistent with state law, said Bradford. The remaining housing capacity needed to hit the state’s target of 489 can still be met through a combination of the two school sites and less clustered development, like accessory dwelling units.
The proposed changes to the housing element “continue to affirm the projected unit yield of 92 units. It does not serve to reduce the site’s development capacity,” Bradford said. “The Town is also committed to its other multifamily sites, though these institutional properties remain subject to the decisions of their respective stakeholders. Priorities may change over time, and while development may not occur immediately, the Town continues to create opportunities for future housing through rezoning efforts.”
Pro-development advocates disagree. Housing regulators signed off on the town’s housing plan two years ago. Since then, the two proposed school sites have not been developed and more evidence has emerged to suggest that they won’t be anytime soon.
Cities are “going to have to demonstrate, with substantial evidence, that these sites are likely to be developed…(despite) years of history demonstrating that there hasn’t been very much development,” said Gelfand with Californians for Homeownership. Municipal governments are “fantasizing” that they “can just take some sites off of our sites inventory and then just assume that the remaining sites are still valid just as they were a couple years ago. But that’s not how it works.”
Whether that is or isn’t how it works will ultimately depend on what state housing regulators decide.