Cupertino planning commission recommends approval of two Dividend Homes townhome projects with privacy, landscaping conditions

The Cupertino Planning Commission voted Dec. 9 to recommend City Council approval of two Dividend Homes townhome communities on Stevens Creek Boulevard, subject to amendments aimed at reducing impacts on adjacent single-family homes. The two related applications would replace existing office buildings with 57 townhomes (11 below-market-rate units) on the western parcel and 32 townhomes (six BMR units) on the adjacent parcel; staff processed both projects under SB 330 and state density bonus law.

Neighbors told the commission the proposals, as drawn, would place 44–45 foot buildings as close as 13 feet to rear property lines, harming privacy and compatibility. "You can't claim that a building that's ... 45 feet tall is compatible with adjacent single family homes," resident Whitney McNair said during public comment. Several speakers asked the commission to require larger rear setbacks, a double row of evergreen screening, an upgraded sound wall and opaque rear windows.

Staff and the applicant emphasized the projects qualify for a statutory CEQA exemption under Assembly Bill 130 and for relief under state density bonus law. Senior planner John Martier described the proposals and the waivers the developer requested for setbacks, lot coverage and parking standards; PlaceWorks prepared the notice of exemption attached to the staff report. Dividend Homes' vice president Josh Vrozos described unit sizes, rooftop decks and a planned contribution of about $125,000 to Stevens Creek bike-lane improvements.

Dividend Homes agreed during the hearing to step down the end units that abut single-family rear yards on both parcels. "We're happy and supportive of doing that to be a good neighbor," the applicant said when asked about two‑story transitions. The developer later stated on the record that six end units across the two phases would be reduced to two stories and that the HOA would be required to maintain planting outside private yards; the developer offered to explore hedges or trellises and to consider limited trellising atop the existing 6‑foot fence.

Land use attorney Brian Winter, speaking for Dividend Homes, urged the commission to consider the legal framework: the Housing Accountability Act and density bonus law set a high threshold for denying waivers or concessions. "The finding has to be ... significant, direct, quantifiable and unavoidable," Winter said, describing the standard the city would need to meet to lawfully deny a qualifying housing incentive.

Commissioners also probed parking and circulation. Staff and the applicant said the projects provide more parking than the base requirement when accounting for density bonus parking reductions (the 57‑unit site was presented as providing 126 spaces versus a calculated requirement of 103 under the base standard) and that tandem garages make meeting density and parking objectives feasible. The applicant said the projects will be all-electric, that garages will be wired for EV charging, and that rooftop areas will include solar panels though system sizing and battery plans will be finalized with construction documents.

After discussion, Vice Chair Kassel Schurant moved to approve the staff recommendation for the 57‑unit proposal with modifications to require two‑story end units abutting Wheaton Drive and to direct staff and the developer to explore hedges and trellising for rear screening; the motion carried with Commissioner Scharf voting no. Chair Rau subsequently moved the staff recommendation on the 32‑unit project with the same amendments; that motion carried unanimously.

Both planning commission recommendations will be forwarded to the City Council for final action on January 21. The developer and staff said they will continue to meet with neighbors and refine landscaping and privacy treatments before the council hearing.