New housing law’s clout on display with OK of huge Cupertino project

A huge housing/multi-use project proposed for Silicon Valley faced strong opposition. Nearby residents hated it and blocked smaller versions of the project that were on the 2016 ballot. The mayor called it out of place and sniped at outsiders who criticized his city’s history in adding housing stock. The building trades unions which sometimes come to the rescue of major developments because of the good-paying jobs they create seemed content to stay on the sidelines.

But despite these obstacles, the Vallco Town Center project has obtained a crucial go-ahead from the city of Cupertino – providing perhaps the most telling example yet of the power and scope of Senate Bill 35, the measure by state Sen. Scott Wiener, D-San Francisco, that was enacted last year with the goal of spurring new housing construction.

The developer Sand Hill Property Co. plans to build 2,400 residential units, 400,000 square feet of retail space and 1.8 million square feet of office space at the mostly vacant 58-acre Vallco Mall property (pictured), which the company acquired in 2014. Half the residential units would fall in the affordable category.

SB35 requires cities that have lagged in meeting guidelines for new housing construction to approve properly zoned projects that have at least 10 percent affordable housing units, that pay union-scale wages to construction workers, and that meet other obligations. Cupertino is one of the nearly 98 percent of state cities that have not complied with housing construction obligations and are thus subject to SB35 fast-tracking, state officials said earlier this year.

On June 22, city planners notified Sand Hill that at the end of the initial 90-day review of the project provided for under SB35, it had been found “eligible for streamlined, ministerial review.” The developer must provide additional information during a second 90-day review process, but this is considered pro forma, and Sand Hill plans to begin construction in September.

Project may spur wave of makeovers of empty malls

The project may be a harbinger of more than just SB35’s usefulness in speeding up housing approvals. It could also signal a wave of makeovers of large shopping malls in California that were the centers of local commerce and social activities for decades but which have been hollowed out by the huge growth in online retailing.

The Vallco mall, which opened in 1976, long had nearly 200 tenants. Now only a few remain, including two restaurants, a bowling alley, skating rink and fitness center. Like many other declining malls in California, it is easily adaptable to housing and multi-use conversions because it has adequate parking and already-built infrastructure linking it to roads and mass transit. The mall is next to Interstate 280, on the other side of the freeway from Apple’s immense “spaceship” headquarters.

Even by Silicon Valley standards, Cupertino is among the most expensive cities for housing. Zillow’s latest data put its average home price at $2.36 million. Average apartment rents in May were $3,398, according to Rent Jungle.

Wiener told the San Francisco Chronicle he was “thrilled” to see the Cupertino project advance. It is likely to at least triple the number of housing units considered “affordable” in the 13-square-mile city of 64,000 residents.

Nevertheless, Cupertino Mayor Darcy Paul mostly stuck to his critical views of the project in a recent interview with the San Jose Mercury-News. He defended his comment in his February State of the City address that the housing crisis was exaggerated as being “technically” correct, lamented any reduction in local control of planning and said that his opposition was in sync with his constituents.

On a related front, Paul and other City Council members have expressed interest in imposing unique per-employee taxes on Apple to help cover the costs borne by the city because of the company’s massive long-term growth. Cupertino residents may be asked to vote on the tax next year.

A similar plan made national headlines in Seattle in May when the City Council voted unanimously to impose unique taxes on large employers like Amazon and Microsoft. Council members backed off last month after a backlash from both the business community and local residents.