Sunnyvale’s Housing Plan Secures State Approval

Sunnyvale has passed the checkered flag to win state certification for its housing plan, skirting the threat of builder’s remedy projects in which developers can bypass local zoning.

The state Housing and Community Development Department has approved revisions to the Silicon Valley city’s Housing Element, ruling it in “substantial compliance,” the Silicon Valley Business Journal reported.

“I cannot tell you how happy I am to see us getting over the finish line,” Councilman Richard Mehlinger said.

Before the approval, Sunnyvale was among nine cities in Santa Clara County without the required housing plan approval from the state. The state has mandated Sunnyvale plan for 11,966 homes by 2031 to address population and job growth projections.

In January, Sunnyvale blew the deadline to have its plan approved by housing regulators. It had submitted its first draft in July of last year before turning in revisions in May and October.

Failure to have the housing plan approved opened the city up to the builder’s remedy, a provision in state housing law that allows residential developers to avoid local zoning restrictions if the project includes at least 20 percent affordable housing.

Missing the deadline also opens up cities to state penalties, including the loss of millions of dollars in affordable housing funds.

In its letter to the city, state officials said they were satisfied with the city’s response to areas in need of revision. They include how low-income sites are distributed and the addition of “missing middle-housing,” or affordable-by-design projects such as duplexes, triplexes or single-family homes on smaller lots.

Before its Housing Element plan was approved, Sunnyvale had received two builder’s remedy proposals, according to Community Development Director Trudi Ryan.

Among the proposed builder’s remedy projects is the demolition of the Horizon Sunnyvale office park on Oakmead Parkway, to be replaced by a 315-unit townhome and apartment complex.

The office park, owned by Embarcadero Capital, defaulted on a $63.5 million loan from LoanCore Capital Credit REIT.

LoanCore Capital then teamed up with Sares Regis Group of Northern California to file plans this month to level the 181,200-square-foot office campus and replace it with 100 townhomes in 16 buildings along with a five-story, 215-unit apartment complex.

— Dana Bartholomew