Two story modern homes along a paved street with a blue sky.
Bellaterra @ North 40, one of the projects of the Los Gatos North 40 developments already built. Photo by Annalise Freimarck.

Los Gatos is expected to submit the fourth revision of its housing plan in the next few weeks outlining how it will accommodate 1,993 new homes by 2031.

The town is one of many Bay Area municipalities that’s out of compliance with state goals for affordable housing. Los Gatos missed the Jan. 31, 2023 deadline for state certification of its housing plan.

Until the state greenlights the town’s housing element — a detailed plan submitted every eight years to the state outlining how a municipality will create more housing to keep up with population needs — developers can apply a law called builder’s remedy, where the state exempts developers from local zoning regulations.

Councilmember Rob Moore, a representative on the Housing Element Advisory Board, said getting the plan certified proved difficult because the board had to balance the state’s strict guidelines and residents’ reticence toward development.

“We’ve been trying to be really thoughtful about walking right up to the point of certification without going above and beyond,” he told San José Spotlight. “It has made us appear to the state as a municipality that is not doing everything we can to to build more housing.”

Some of the issues the state had with Los Gatos’ previous revisions included parking minimums, not enough dense housing and the town’s pole ordinance, which mandates each project have poles mapping out the building’s stories. The state has requested the poles be minimized or eliminated.

As a result of the housing element’s delay, nine projects referencing builder’s remedy and Senate Bill 330, a law that makes it easier to build affordable and moderately priced housing, have been submitted to the planning department, according to the Los Gatos town manager’s office.

Los Gatos isn’t the only municipality out of compliance. This month, Cupertino had to allow the use of builder’s remedy after housing advocates won a judgment against its noncompliant housing element. San Jose submitted its revised document last year after setbacks, and is also awaiting approval. While in limbo, a number of developers have used builder’s remedy to advance or change city projects.

Although the Los Gatos housing target is set at 1,993, the town is planning for 2,371 homes as a buffer, according to the revised draft. Of that total, more than 1,100 homes are designated for residents making less than 80% of the area’s median income. The median household income in Los Gatos was more than $198,000 in 2022, according to U.S. Census data. In Santa Clara County, the area median income for a single person was just under $127,000 in 2023, according to the Department of Housing and Community Development.

The plan identifies multiple areas throughout Los Gatos as potential housing sites, including Los Gatos North 40, Los Gatos Lodge and parts of Los Gatos Boulevard. More than 560 homes are planned for Los Gatos North 40 in phase two of its development, with 290 homes already built and counted toward the previous state housing requirements.

Each new development that includes 101 homes or more in town has to designate at least 20% for affordable housing, under a Los Gatos housing policy, according to the town’s below market-price housing guidelines.

Some of the sites identified for housing include small businesses, such as a hardware store.

Councilmember Maria Ristow, a member of the Housing Element Advisory Board, said she hopes the plan doesn’t shutter local businesses on sites allocated for housing.

“It’s a little bit heartbreaking because there are beloved institutions in a lot of these shopping centers,” she told San José Spotlight.

A finished white multi-story house next to a wooden house still under construction with scaffolding. In front of the houses is greenery and a pickup truck.
More than 560 homes are planned for Los Gatos North 40 in phase two of its development, with 290 homes already built. Photo by Annalise Freimarck.

Los Gatos has a history of not supporting affordable housing. From 2015 to 2022 during the town’s last housing element cycle, no extremely low-income homes were built, 48.5% of homes built were very low-income housing and 2.7% were low-income housing. In comparison, 118.2% of moderately priced housing and 272.9% of above moderately priced housing were built in the last cycle.

Moore lives on Los Gatos Boulevard, where many large houses stand, and said he thinks the town needs to house residents from every income bracket.

“We need to build more affordable housing. We need to build more small units, we need to build starter homes for young families,” he said.

Ristow shared similar sentiments.

“Most of us have seen the fact that our kids can’t live here. Teachers live really far away, downtown businesses struggle to find workers,” she said. “If we and our nearby neighbors don’t start providing more housing units, we’re not going to have people to support our communities.”

Contact Annalise Freimarck at [email protected] or follow @annalise_ellen on X, formerly known as Twitter.

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