Palo Alto residents don't have to look far to see the potential of San Antonio Road.

The strip, which separates Palo Alto from Mountain View, perfectly embodies the recent growth trends of the two cities. On the Mountain View side, San Antonio has been one of the city's primary growth areas, with the city approving a specific plan that guided the construction of hundreds of housing units, offices, shops, restaurants and a cinema in the area around El Camino Real.

In Palo Alto, it remains an eclectic but generally low-density mix of commercial and residential uses, with recent additions including two new hotels on the east end of San Antonio, near Middlefield Road. The city also is planning to build a transitional-housing complex at a city-owned site at 1237 San Antonio Road, near the Baylands.

On Monday night, the Palo Alto City Council gave its firmest indications yet that it would like to see more residential growth in this area. In reviewing a proposed 75-condominium development at 800 San Antonio Road, council members generally agreed that the project should move ahead. It made little difference that the development would be taller and built at a greater density than the city's code typically allows.

The proposal from Yorke Lee calls for a five-story building with a height of 60 feet, exceeding the city's height limit by 10 feet. Its residential density would be 86 dwelling units per acre, well exceeding the 30 units that would have been allowed under conventional zoning.

The development is the city's latest "planned home zoning" proposal, a designation that the city introduced two years ago to encourage new housing. It allows builders to exceed zoning regulations and gives city officials wide discretion in reviewing proposals and demanding modifications. In most cases, developers had opted not to pursue their projects after receiving negative or mixed feedback from the council during nonbinding prescreening hearings. Only one project, a proposal from Smith Development for a 70-apartment complex at 660 University Ave., advanced with a formal application.

Numerous council members encouraged Lee on Monday to proceed with the project.

"The height doesn't bother me," council member Eric Filseth said. "The city is not monolithic, and if we're going to have some places in town be taller than others, I think this is one of the strongest candidates for a place where it makes sense to really focus on adding some density here."

Council member Tom DuBois was more cautious, noting that roof equipment could add another 15 feet to the project, raising the overall height to 75 feet. He suggested that the developer consider limiting the overall height to 65 feet.

DuBois also urged Lee to explore inclusion of ground-floor retail in the project. The residential complex would displace two commercial uses: Body Kneads Day Spa and Sequoia Academy, which offers tutoring and test preparatory courses.

"I know it's probably an impact to the project but doing something to activate the street and provide services for residents would be a strong benefit," DuBois said.

Even with mild reservations, DuBois said the project is "well-located and represents what we're looking for in the PHZ (Planned Home Zoning) kind of project."

For city leaders, San Antonio represents a key strategy for meeting the state mandate that requires them to plan for 6,086 new dwellings between 2023 and 2031. City planners believe that parcels along San Antonio, around East Meadow Circle and in other areas that are currently zoned for manufacturing, research and office uses, could accommodate about 1,500 housing units.

The council is scheduled to discuss the city's new Housing Element, which lays out strategies for meeting the housing mandate, on Aug. 22.

The area has already seen some change. Marriott recently constructed two five-story hotels near Middlefield Road and the council approved in 2020 a 102-apartment development at 788 San Antonio, next to the site where York is proposing to build the condominiums.

Mark Donahue of Lowney Architecture, who presented the project on behalf of Lee, argued on Monday that the proposed condominium project aligns well with the council's vision for San Antonio.

"Given the future Housing Element, we're right on the money in terms of how large the project is," Donahue said.

The council generally agreed, with council member Alison Cormack suggesting that the condominiums will create more options for young families who want to live in Palo Alto but can't afford single-family homes. The proposed height, she said, is appropriate.

"We hear regularly from young families here that that's all they'll be able to afford so the more we have of that, the more those young families have the opportunity to come here and stay here," Cormack said.

By far the biggest concern was transportation. San Antonio is decidedly car-centric, with no public transportation and poor biking conditions. Cormack said that it's important for the council to plan and implement biking improvements on San Antonio as it moves forward with housing developments. And Mayor Pat Burt, who represents the city on the Santa Clara Valley Transportation Authority, said he would like the transportation agency to introduce a bus route along San Antonio, stretching from the Baylands area to Foothill College.

He suggested having Palo Alto take the lead on advocating for the new line, which would run through Palo Alto, Mountain View, Los Altos and Los Altos Hills.

"It is the one corridor that serves all four of the north county VTA cities and it's one of the areas that is receiving the most densification for all those cities," Burt said.

He also suggested that the San Antonio corridor represents an opportunity for Palo Alto and Mountain View to work together on increasing residential density, improving transportation and adding retail.

"That development of retail straddles our community and we've got to work together to try to figure out a way to really have the services that are necessary to go along with thousands of new housing units between our cities in this area," Burt said.

John Petrilla, who lives across the street from the proposed site, was less sanguine about the San Antonio housing boom. He observed that none of the people who support the project actually live in the neighborhood. Petrilla told the council that he would like to see the city come up with a master plan for bicycle and transit infrastructure before it moves forward with housing plans.

"It sounds like a great project, provided it's not in your neighborhood," Petrilla said. "It's frustrating to hear that it's a place for good development."