After trying, and largely failing, to lure residential developments to its main downtown districts, Palo Alto's elected leaders are shifting their sights to a part of the city that few in the past had envisioned as the ideal housing destination: San Antonio Road.

Unlike in Mountain View, where city officials have been swiftly approving housing and commercial development on the prominent artery, Palo Alto has been largely reluctant to pursue new housing developments on San Antonio, which runs along the border between the two cities. The Housing Incentive Program, which the city approved in 2018 in hopes of stimulating more housing development, applied only to downtown, California Avenue and El Camino Real, areas that are deemed more appealing for housing because of their transit and retail options.

But as Palo Alto continues to fall well short of its goals, San Antonio is emerging as one of its most promising housing sites. On Wednesday night, the Planning and Transportation Commission voted to recommend approval of a 102-unit residential development on San Antonio and Leghorn Street. The commission also approved an environmental analysis for the broader, 18-parcel stretch of San Antonio, between Middlefield and Charleston roads, which is zoned mostly for commercial use. The approval paves the way for other residential developers to pitch similar housing projects along the city's southern edge.

If approved by the City Council, the development proposed by Ted O'Hanlon on behalf of 788 SAPA Land LLC would consist of a four-story building with a two-level underground garage at 788 San Antonio Road, near Leghorn Street. The 102 units would include 32 studios, 66 one-bedroom apartments and four two-bedroom apartments. Sixteen apartments would be provided at below-market-rate rates.

The units will initially be offered as rental units, though O'Hanlon said they may be converted to condominiums in the future. The development would also include 1,803 square feet of retail space on the ground floor.

The new proposal expands on the development that O'Hanlon had presented to the council in May 2019. At that time, the project included 64 units. The addition of 38 units reflects the willingness that the council expressed at last year's meeting for approving zone changes to loosen the density rules along San Antonio.

The Planning and Transportation Commission similarly endorsed the planned zone changes, as well as the new development. By a 6-1 vote, with Commissioner Doria Summa dissenting, the commission voted to recommend approving the 102-unit project and to support the environmental impact report for the 18-parcel segment of San Antonio.

In presenting the project, O'Hanlon highlighted the location's proximity to jobs, particularly the Google campus and other companies in the North Bayshore area of Mountain View. The project, he said, is within a mile of 10,000 jobs.

He also emphasized the project's short distance to U.S. Highway 101, as well as the fact that the site is within a mile of the Caltrain station on San Antonio Road. And while the sites are mostly zoned for "service commercial," O'Hanlon pointed to other residential communities in the vicinity the site. These include the Green House and Green House 2 condominium developments and Taube Koret Campus for Jewish Life.

O'Hanlon predicted that the project will encourage "alternative transportation use," particularly options that connect the area to Caltrain's San Antonio station. He also noted that the project makes a significant contribution toward the council's official goal of approving 300 units per year — a goal that the city has consistently failed to meet.

"For Palo Alto, it's a good project because it shows Palo Alto can implement something like the HIP (Housing Incentive Program) and create housing, rather than other projects that might come in and try to utilize the state density bonus law or other state laws to increase housing density," O'Hanlon said.

Not everyone, however, is thrilled about the new proposal. Several residents from nearby developments pointed to other recently approved projects in the area, including two hotels that Marriott is currently building.

Pamela Harter, who lives at Green House 2 and who serves on the residential community's Homeowner Association, said her neighborhood already suffers from "severe gridlock" and that the new housing development would only exacerbate the area's traffic and parking problems. She said it has taken her 20 minutes or more to travel the quarter mile from Highway 101 to her condominium.

"I'm not opposed to a development of smart growth or affordable housing," Harter said. "I am opposed to a poorly considered development when traffic and parking are not considered, when full development is not considered."

The commission agreed that the area's traffic problems warrant further analysis and recommended that the council commission a study of land use and transportation on San Antonio Road. Commissioner William Riggs suggested that the city move ahead as soon as possible with transportation improvements along Leghorn Street to encourage bicycling and other alternatives to cars.

Commissioner Ed Lauing agreed and said it's "fundamental that we make some adjustments now."

Others cautioned against imposing any conditions that would slow down the approval process for the 788 San Antonio Road project. Vice Chair Giselle Roohparvar noted that this is the first substantial housing project that the commission has seen since she joined two years ago. Commissioner Michael Alcheck disputed the notion that the stretch of San Antonio is not well suited to housing and pointed to the recent and pending construction on the Mountain View side.

Alcheck said he believes the city may have been too harsh on residential developments in imposing conditions for approval.

"When you're dying of thirst, every drop of canteen counts," Alcheck said.

As the lone dissenter, Summa said she had concerns about lumping the approval of this particular project with a program for the broader segment of San Antonio. Even so, she said she is glad to see the project at 788 San Antonio Road advance.

For Palo Alto's housing advocates, the San Antonio proposal is a rare glint of good news in what has been another disappointing year for residential projects. The new Housing Incentive Program, which granted density bonuses and other incentives to builders around downtown, California Avenue and El Camino Real, has not led to an influx of proposals, as the city had hoped. Prior proposals to add housing at Cubberley Community Center and on Portage Avenue that until recently was occupied by Fry's Electronics have been largely scrapped because of insufficient political support, in the case of the former, and the property owner's reluctance to redevelop, in the case of the latter.

At the same time, the city is preparing to see a significant increase in the number of housing units it has to plan for in the next Regional Housing Needs Allocation cycle, which will stretch from 2023 to 2031. The new mandate will almost certainly require Palo Alto to designate new areas of the city as potential housing sites.

The zoning amendment that the planning commission supported would extend the housing incentives to all the commercially zoned properties on the east side of San Antonio, between Middlefield and East Charleston roads (the incentive zone also includes one parcel west side of San Antonio, at 705 San Antonio Road). In addition to allowing greater density for residential projects along this stretch, the amendment allows these projects to use rooftop gardens to meet open-space requirements and exempt the first 1,500 square feet of retail area from parking requirements.

Alcheck strongly supported the change and lamented the fact that the city's politics make it difficult to achieve its official housing goals.

"I continue to believe our record in adding housing in the last decade is the best evidence that the baby steps approach to addressing this crisis isn't working," Alcheck said.