Los Gatos council approves North 40 Phase 2, clearing way for 450 homes including 77 deed‑restricted units

The Los Gatos Town Council voted 3–2 Wednesday evening to approve entitlements for North 40 Phase 2, a 450‑unit mixed‑use development on the town’s last large undeveloped parcel, clearing the way for a mix of market‑rate townhomes and apartment units and a 100% affordable building to be developed by Eden Housing.

The council’s decision adopted planning staff’s recommendation and a set of conditions of approval, after more than five hours of staff briefings, lawyerly explanations of state housing law and CEQA rules, an applicant presentation and hours of public comment for and against the project. The approval allows construction under Senate Bill 330 rules and uses CEQA Guidelines section 15183 to tier from the town’s certified 2040 general plan EIR.

Why it mattered: The project — proposed on roughly 15.65 acres of the North 40 specific plan area — includes a mixed‑use building, a five‑story 100% affordable building with 67 restricted apartments plus one manager unit, 127 townhomes, roughly 7,800 square feet of ground‑floor commercial space and a centralized 3.5‑acre open space known as the “meadow.” The application seeks concessions and waivers allowed by state density bonus law. Supporters told the council the development would deliver 77 deed‑restricted homes the town otherwise would not realize, including about 16 units specifically reserved for adults with intellectual and developmental disabilities (ID/DD). Opponents urged more deeply affordable units and raised concerns about traffic, narrow internal streets and the timing trigger that controls when later market‑rate construction can proceed.

What the council approved: The council adopted findings and approved the architecture, site and subdivision applications and a vesting tentative map subject to a suite of conditions that the council refined during the meeting. Key modifications adopted during the hearing require a public‑access easement and protections for the meadow, truck‑hauling limits on nearby streets, and clarified timing rules for the affordable component: if the multifamily market building (E1) proceeds before the affordable building (G1), the E1 building must include the required below‑market units unless the earlier of (a) building permits for G1 have been issued or (b) the affordable building has obtained full financing (including acceptance of tax credits), conditions intended to lock in delivery of the restricted units while accommodating developer needs for financing timelines.

Legal and procedural context: Town staff and the town attorney reported that the project vested under SB 330 and that the Housing Accountability Act provides special protections; the town’s legal counsel explained that, under recent case law, cities cannot apply development standards that would “physically preclude” the construction of a project built at the density and with the concessions allowed by state law. Staff concluded the project’s environmental impacts were within the scope of the town’s certified 2040 general plan EIR and that no additional project‑level EIR was required under CEQA Guidelines §15183; the town’s environmental consultant and an outside land‑use attorney participated in the hearing by Zoom and described the analysis.

Contentious issues: Most public testimony fell into two camps. Disability advocates, affordable‑housing providers and families urged approval, saying Eden Housing is a reliable affordable housing developer and that the ID/DD set‑aside meets an urgent local need. Several nearby residents and civic groups objected to reductions in the number of affordable units compared with earlier planning assumptions, raised traffic and emergency‑access issues for narrow dead‑end streets, and questioned whether the timing triggers in proposed conditions sufficiently guaranteed delivery of the deeply affordable building. The council debated whether to continue the hearing to review late‑arriving HCD correspondence; that continuance motion failed 2–3. The final vote adopted staff recommendations with edits designed to strengthen public access and tighten some timing and implementation protections.

What happens next: The project is approved subject to the conditions of approval and the town will record the approved map and memorialize the public‑access easement for the meadow. The applicant and Eden Housing must now proceed with the permit and financing steps required to start construction; the adopted conditions tie certain later market‑rate building permits to either the issuance of G1 building permits or the affordable building’s obtaining financing (including a tax credit award), whichever occurs first. The council’s action is expected to face close attention given the state housing laws that constrain local authority; opponents flagged the possibility of legal challenges during public comment. For now, the council’s action authorizes the project to move into the implementation stages laid out in the conditions of approval.

Attribution and sources: Quotes and specific policy references come from staff presentations, the town attorney’s legal overview and public testimony during the Jan. 13 council hearing. Key on‑record speakers during the hearing included Mayor Moore; Vice Mayor Risto; Council Members Renie, Hudis and Badami; Town Attorney Gabrielle Wen; applicant representatives Steve Okonnell and Eric Phillips; Eden Housing representatives; and multiple public commenters representing disability service organizations, neighborhood groups and other residents.

What to watch: Whether the affordable building secures financing and tax credits in the near term, whether detailed engineering for street widths and fire access addresses resident concerns, and whether any legal challenges arise under state housing statutes or CEQA. The town’s conditions require follow‑through steps (dedicated easements, CC&Rs and implementation monitoring) before final occupancy for later phases.