REPORT TO COUNCIL
SUBJECT
Title
Direct Staff to Prepare an Implementation Plan and Undertake California Environmental Quality Act (CEQA) Review of an Interim Housing Community at 1240 Fair Oaks Way; and Find this Action Exempt from CEQA Pursuant to CEQA Guidelines Section 15262
Report
REPORT IN BRIEF
Sunnyvale is advancing three complementary programs to address vehicular homelessness: an interim housing community, an RV permit parking program, and a safe parking site. The need for these programs is significant: approximately 75% of the City’s unsheltered homeless population - about 250 people - live in vehicles. The City currently funds five hotel rooms available through its temporary hotel program. The RV permit parking program and safe parking program will be presented to Council for consideration under a separate Report to Council (RTC No. 26-0183).
To fill the shelter gap, the City is proposing a 40-unit interim housing community at 1240 Fair Oaks Way, which is expected to provide the most substantial housing intervention of the three proposed programs. The site will prioritize residents of vehicular encampments throughout the City. The City has identified $12 million in capital funding and $32 million in operating funding over 20 years, with construction completion anticipated in FY 2030/31.
Staff is recommending moving forward with detailed project planning, including development of a full implementation plan and completion of the appropriate environmental review. This would allow staff to further evaluate the site's feasibility, refine project costs and funding, develop the program and operational model, and conduct community outreach. The implementation plan and environmental review would be returned to Council for consideration before the project advances to construction.
BACKGROUND
In 2020, the City Council approved the Housing Strategy, which identified developing a Safe Parking program as an action to address vehicular homelessness in Sunnyvale.
In 2022, the City Council added Supporting the Unhoused Community as a Council Strategic Priority. Council also authorized street outreach services to augment other social service programs in the County and help unhoused individuals learn about and access services.
In December 2023, the City Council adopted the 2023-2031 Housing Element of the General Plan (RTC No. 23-1120). The City Council incorporated remaining programs from the 2020 Housing Strategy into the Housing Element, including Program H34 - Safe Recreational Vehicle (RV) Parking, which directs staff to work with local service providers to encourage the creation of a Safe RV parking program for the unhoused community.
In November 2024, the City Council adopted Ordinance No. 3233-24, which amended Article 5 of Title 19 of the Sunnyvale Municipal Code to allow Safe Parking as a primary or ancillary use at specified sites (RTC No. 24-1171). Council also approved a $100,000 General Fund appropriation for a capital grants pilot program to support establishing a safe parking program on private land; however, no interest has been expressed in a grant to date. Additionally, Council directed staff to pursue implementing a Safe Parking Pilot program on public property and to return to Council with program details.
In December 2025, a draft Homelessness Response Plan (formerly titled “Strategic Plan to Address Homelessness”) was presented to Council (RTC No. 25-0110); Council directed staff to conduct additional community outreach and return to Council.
Sunnyvale’s January 2025 Point-in-Time count reflected 328 people experiencing unsheltered homelessness, with 75% living in vehicles (about 250 people).
In April 2026, Council directed staff to develop an interim housing site, an RV buyback program, and an RV permit parking program on designated City streets to address vehicular dwelling and homelessness and return to Council with implementation details and funding recommendations (RTC No. 26-0016). Council also directed staff to further explore the feasibility of safe parking or interim housing at “Site 10” (city-owned parking lot under the Mathilda Overpass) and look at safe parking type programs for passenger vehicles.
On September 29, 2026, Council adopted the Homelessness Response Plan (RTC No. 26-0120), which included programs to address vehicular homelessness - interim housing, safe parking, and an RV permit parking program.
In calendar year 2026, the City received hundreds of service requests related to RV parking in both commercial and residential neighborhoods. These requests consume staff and financial resources with little progress toward resolution of homelessness.
EXISTING POLICY
GENERAL PLAN - HOUSING ELEMENT
GOAL HE-5 EQUAL HOUSING OPPORTUNITIES AND SPECIAL NEEDS - Promote equal housing opportunities for all residents, including Sunnyvale’s special needs populations, so that residents can reside in the housing of their choice.
Policy H-5.13 Housing and Services to Address Homelessness. Participate in the County Collaborative on Affordable Housing and Homeless Issues to support its efforts to prevent and end homelessness. Facilitate and sponsor the provision of permanent supportive housing for homeless people. Support local service providers that offer facilities and support services to homeless individuals and families, and persons at risk of homelessness.
H32. Programs to Address Homelessness. Continue to provide funding for programs that seek to prevent and end homelessness and provide supportive services to homeless and at-risk clients. Continue to implement programs such as WorkFirst Sunnyvale and Tenant-Based Rental Assistance. Using new funds such as Permanent Local Housing Allocation and HOME-ARP, create and fund new programs that support City residents experiencing homelessness or at risk of homelessness.
Council Strategic Priority: Support the Unhoused Community
Council Strategic Goal: A model to prevent homelessness, prioritize new housing and support the unhoused community.
ENVIRONMENTAL REVIEW
This action being considered is exempt from California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines Section 15262 because it involves only a feasibility or planning study for possible future actions which have not been approved, adopted, or funded. Appropriate CEQA review will be completed along with the implementation plan and will return for Council approval.
DISCUSSION
At the April 2026 Council meeting on Safe Parking, Council directed staff to develop an implementation plan and timeline for an approximately 40-unit non-congregate interim housing program at 1240 Fair Oaks Way. The proposed implementation plan will consider options for constructing and operating a program with the following elements.
Program Overview
Unlike congregate shelter models, non-congregate interim housing provides individuals experiencing homelessness with private living accommodations while connecting them to supportive services and pathways to permanent housing. This model is intended to provide a more stable living environment where participants can focus on addressing the circumstances contributing to their homelessness and work toward securing permanent housing.
The program is proposing to serve single adults experiencing homelessness who do not have minor children. This population represents the largest segment of Sunnyvale's unhoused population. Priority may be given to individuals residing in vehicular encampments in impacted areas of Sunnyvale.
Onsite services are anticipated to include:
• Case management and housing navigation.
• Behavioral health services and referrals.
• Employment assistance and connections to benefits.
• Housing search assistance and permanent housing placement support.
Final program eligibility criteria, service delivery expectations, and operational details will be established in coordination with the selected nonprofit service provider.
Site Operations
The City intends to procure an experienced nonprofit service provider to operate the facility. The selected operator will manage day-to-day program operations, on-site staffing, participant services, and facility management.
Program Oversight
The City will maintain ongoing program and contract oversight, monitor program performance and housing outcomes, conduct annual on-site monitoring, and address escalated participant grievances and operational concerns.
Program Performance
To evaluate program effectiveness, City staff will establish performance measures related to program utilization, supportive services, and housing outcomes and incorporate these metrics into the program contract.
Site Details
The City has conducted a preliminary evaluation of the proposed site at 1240 Fair Oaks Way as part of its efforts to identify a city-owned location that can accommodate an interim housing program.
Pending Council direction, next steps would involve a full scope implementation plan with accurate development costs, site plans, infrastructure, utility connections, site improvements, and facility design to support the proposed use. Additional pre-development activities will include site due diligence, engineering assessments, permitting, and coordination with applicable City departments.
The site's proximity to Highway 237 and to nearby residential communities will require consideration of site access, pedestrian and vehicle safety, emergency access, traffic circulation, noise, and other potential neighborhood impacts.
As the project advances through design and development, staff will coordinate with the appropriate departments and project partners to address site requirements and identify appropriate design and operational measures.
Development Timeline
The preliminary implementation plan is organized into four phases to provide Council with a clear project timeline from funding and pre-development through construction and program launch. If the next phase of the project- a full scope implementation plan- is approved, program and construction planning would begin in early 2027, with the program expected to open in late 2030.
Details about each of the four phases can be found in Attachment 1 to this report.
Community Engagement
Community engagement will be an important component of project implementation. Following Council direction, staff will conduct organized community meetings to gather input and address questions and concerns. Staff will use feedback to inform site planning, design, program operations, and strategies to address neighborhood concerns. Engagement will continue throughout project development and after the program opens. A City staff member will also serve as the main point of contact for the project throughout the development process and ongoing operations to respond to community concerns.
Engagement will include nearby residents and stakeholders, including the Traditions, Edwina Benner and Solaire residential communities, and the Sunnyvale Hindu Temple & Community Center.
City staff will also work closely with street outreach to inform individuals experiencing homelessness about the upcoming program.
A preliminary implementation plan and funding are included in Attachment 1 to this report.
FISCAL IMPACT
The estimated capital cost to develop the 40-unit interim housing site is approximately $12 million. Annual operating costs are estimated at approximately $1.6 million, or approximately $32 million over 20 years. These estimates do not include City staff time required for project development and ongoing program oversight. Staff has applied for grant funding to help cover some of the capital expense. Funding for the first three years of operations has been identified however ongoing operations are only partially funded and will require additional funding once the program is finalized. This will be incorporated into the FY 2027/28 Recommended Budget.
PUBLIC CONTACT
Public contact was made by posting the Council meeting agenda on the City's official-notice bulletin board at City Hall, at the Sunnyvale Public Library and in the Department of Public Safety Lobby. In addition, the agenda and this report are available at the City Hall reception desk located on the first floor of City Hall at 456 W. Olive Avenue (during normal business hours), and on the City's website.
ALTERNATIVES
1. Direct staff to move forward with developing an Interim Housing site at 1240 Fair Oaks Way:
a. Direct staff to prepare an implementation plan and completion of CEQA review; and
b. Find that these actions are exempt from the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15262.
2. Alternative 1 with modifications
3. Take no action at this time
STAFF RECOMMENDATION
Recommendation
Alternative 1: Direct staff to move forward with developing an Interim Housing site at 1240 Fair Oaks Way:
a. Direct staff to prepare an implementation plan and completion of CEQA review; and
b. Find that these actions are exempt from the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15262.
JUSTIFICATION FOR RECOMMENDATION
The staff recommendation is consistent with the Homelessness Response Plan (“Plan”), which establishes a coordinated framework for reducing unsheltered homelessness while also addressing its impact on the broader community.
With approximately 75% of individuals experiencing homelessness in Sunnyvale living in their vehicles, and only five hotel rooms currently available through the City’s temporary hotel program, it is important to invest in more impactful, scalable programs that can provide meaningful housing stability while reducing the impacts of vehicular homelessness on the community.
Levine Act
LEVINE ACT
The Levine Act (Gov. Code Section 84308) prohibits city officials from participating in certain decisions regarding licenses, permits, and other entitlements for use if the official has received a campaign contribution of more than $500 from a party, participant, or agent of a party or participant in the previous 12 months. The Levine Act is intended to prevent financial influence on decisions that affect specific, identifiable persons or participants. For more information see the Fair Political Practices Commission website: www.fppc.ca.gov/learn/pay-to-play-limits-and-prohibitions.html
An “X” in the checklist below indicates that the action being considered falls under a Levine Act category or exemption:
SUBJECT TO THE LEVINE ACT
___ Land development entitlements
___ Other permit, license, or entitlement for use
___ Contract or franchise
EXEMPT FROM THE LEVINE ACT
___ Competitively bid contract*
___ Labor or personal employment contract
___ Contract under $50,000 or non-fiscal
___ Contract between public agencies
_X_ General policy and legislative actions
* "Competitively bid" means a contract that must be awarded to the lowest responsive and responsible bidder.
Staff
Prepared by: Jocelyn Vidales, Unhoused Specialist
Reviewed by: Annette Tran, Human Services Manager
Reviewed by: Amanda Sztoltz, Housing Officer
Reviewed by: Trudi Ryan, Director of Community Development
Reviewed by: Kurtis Mock, Budget Manager
Reviewed by: Dennis Jaw, Assistant Director of Finance
Reviewed by: Matt Paulin, Director of Finance
Reviewed by: Connie Verceles, Assistant City Manager
Approved by: Tim Kirby, City Manager
ATTACHMENTS
1. Preliminary Interim Housing Implementation Plan
2. Public Comments