Like many California cities, Cupertino is caught between state rules ordering construction of low- and moderate-income housing and commercial developers who prefer to build more profitable market-rate homes.<\/p>\n
The problem first emerged Dec. 16 when the City Council approved a project by developer Toll Brothers to build 55 townhomes, of which 11 will be for moderate incomes. Construction at the 2.72-acre site on Stevens Creek Boulevard would replace the defunct Idlewild Shopping Center, once anchored by the United Furniture store.<\/p>\n Cupertino\u2019s housing plan<\/a>\u00a0approved by the state in 2024 anticipated 163 homes at the site, of which 93 would be for moderate-income earners. The loss of 80 moderate-income homes put the city plan out of compliance.<\/p>\n That\u00a0shortfall is expected to grow<\/a>\u00a0on Jan. 21, when the council is expected to approve a two-phase townhome development from Divided Homes on Steven Creek Boulevard with 89 homes, of which 17 will be affordable \u2014 another project with fewer moderate-income homes than Cupertino\u2019s plan.<\/p>\n Trouble on The Rise<\/p>\n The problem will continue to expand later this month when the city finishes processing changes to The Rise, a big mixed-use residential, office and retail project on the site of the former Vallco shopping mall.<\/p>\n Sand Hill Property Company in late November notified the city it is\u00a0reducing the number of low- and moderate-income homes<\/a>\u00a0at The Rise from 890 to 356. This will likely create a significant shortage in the city\u2019s quota of low-income homes while increasing the moderate-income home deficit.<\/p>\n Under the state\u2019s \u201cno net loss\u201d\u00a0law<\/a>, cities have 180 days to identify additional housing sites to counter any losses \u2013 a clock that started ticking for Cupertino on Dec. 16 when councilmembers approved the Toll Brothers project.<\/p>\n \u201cThis is an opportunity to resolve a bunch of issues in the housing plan,\u201d Councilmember J.R. Fruen told San Jos\u00e9 Spotlight. \u201cWe should be looking to add sufficient capacity so that we don\u2019t have to reexamine this until the next housing plan is due in 2030. In many cases, cities did this to themselves because they under planned.\u201d<\/p>\n \u201cWe should be looking to add sufficient capacity so that we don\u2019t have to reexamine this until the next housing plan is due in 2030. In many cases, cities did this to themselves because they under planned.\u201d<\/p>\n Councilmember J.R. Fruen<\/p>\n The city has to add 4,588 homes \u2014 of which 1,953 are market-rate, 755 are moderate-income and 1,880 are low-income \u2014 by 2031 to meet state requirements.<\/p>\n While the city is on track to meet the goal for market-rate housing, low- and moderate-income housing are coming up short. Those goals must be fixed through three options: increase the density of sites already in the city\u2019s housing plan; add new sites to the plan through rezoning; or add new housing built on sites not included in the city\u2019s original plan.<\/p>\n Because commercial developers typically include only the minimum requirement for affordable housing \u2014 20% under state law \u2014 Cupertino likely won\u2019t be able to resolve the problem by adding projects outside the housing plan. Instead, the city will have to make significant zoning changes. This will take Cupertino further away from its roots as a suburban community of single-family homes.<\/p>\n At the whim of market forces<\/p>\n Santosh Rao, chairman of the Cupertino Planning Commission, said housing dynamics have changed.<\/p>\n \u201c(This is) not a shortfall but a reality of market conditions,\u201d he told San Jos\u00e9 Spotlight. \u201cDevelopers are building what they can finance and what they can sell.\u201d<\/p>\n Rao said the current sweet spot is a density of 20 homes per acre, typically two- to three-story townhomes, such as the Toll Brothers and Divided Homes projects. Yet the city\u2019s plan for those sites called for higher densities of about 50 homes per acre, typically achieved through five- to eight-story buildings with ground floor retail or parking.<\/p>\n \u201cThere was a lack of oversight and good governance by the city council at the time,\u201d Rao said, referring to 2022-24 when the council was dominated by a pro-growth majority that included Fruen.<\/p>\n The council last month asked the city\u2019s planning department to prepare a report, expected in late January, with recommendations on how to manage the growing shortage of homes.<\/p>\n Rafa Sonnenfeld, a land use consultant and past policy director for the\u00a0housing advocacy group YIMBY Law,<\/a>\u00a0said the problem is widespread in California.<\/p>\n \u201cMany cities planned by counting theoretical unit capacity on paper, without meaningful input from builders or economists about whether those densities were realistic,\u201d Sonnenfeld told San Jos\u00e9 Spotlight. \u201cThe jurisdictions most exposed are the ones that treated housing goals as a strategic compliance exercise rather than a durable plan grounded in how housing actually gets financed, approved and built.\u201d<\/p>\n Contact Mike Langberg at\u00a0mike@langberg.com.<\/p>\n![\"\"](\"https:\/\/www.newsbeep.com\/us-ca\/wp-content\/uploads\/2026\/01\/1769007317_254_LNM-20250616-SJSPOTLIGHTLOGO-01.jpg\")
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