REPORT TO COUNCIL
SUBJECT
Title
Consider a Below Market Rate Alternative Compliance Plan and Amended Conditions of Approval for Residential Development at 777 Sunnyvale-Saratoga Road: 77Seven Housing Partners LLC, Planning File 2024-0621
Report
SUMMARY OF COMMISSION ACTION
The Housing and Human Services Commission (HHSC) considered this item on May 28, 2025 (see Attachment 1 for Report to the Housing and Human Services Commission).
The HHSC voted to recommend that the City Council approve Alternative 1 to approve the Applicant’s Below Market Rate (BMR) Alternative Compliance Plan for the project located at 777 Sunnyvale-Saratoga Road. (Attachment 2 for Affordable Housing Compliance Plan Request and Letter). The vote was 6-1 with Vice Chair Weiss dissenting.
DISCUSSION
If the City Council approves the BMR Alternative Compliance Plan, the Conditions of Approval (COAs) approved during the initial entitlement of the project must be amended to reflect the modification to the project. Amended COAs are provided as Attachment 4 to this report and reflect the land dedication requirements and specific conditions applicable to the projects separately instead of a single (joint) project that the Planning Commission previously approved. The modification to the COAs was not presented to the HHSC, as this commission does not have land use authority.
The site is zoned ECR MU-54, which has minimum requirements for both residential and commercial uses. In October 2024, the City Council adopted a Program for Modified Commercial Requirements in Mixed-Use Development in the El Camino Real Specific Plan (RTC 24-0953). Sites with no frontage on El Camino Real and that include more than 66% of the units as affordable to lower-income households (with at least 25% of the affordable units affordable to households at or below 50% of the area median income) have no minimum requirement for commercial uses. Approval of Alternative Compliance for this site would relieve the developer of the requirement for a minimum commercial area.
After preparation of the report to the HHSC the applicant inquired whether the City would be interested in also receiving Lot G. Lot G is the parcel that includes a joint driveway between the townhomes and the affordable housing site. Staff has not completed a thorough review of the offer and therefore has not included any modifications to the COAs to reflect such a change in the alternative compliance. The Council could direct staff to further explore this offer and grant the Director of Community Development the authority to modify the COAs if it is shown that there is benefit to the Alternative Compliance.
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. Approve the Applicant’s Below Market Rate (BMR) Alternative Compliance Plan for the project located at 777 Sunnyvale-Saratoga Road as shown in Attachment 2, approve the amended Conditions of Approval (COAs) as shown in Attachment 4 to this report, and determine that the project is consistent with the El Camino Real Specific Plan Program Environmental Impact Report and no additional environmental review is required under the California Environmental Quality Act.
2. Alternative 1 with modifications.
3. Do not approve the BMR Alternative Compliance Plan or the Amended COAs for the project and require the Applicant to comply with the BMR requirements outlined in the Sunnyvale Municipal Code.
STAFF RECOMMENDATION
Recommendation
Alternative 1: Approve the Applicant’s Below Market Rate (BMR) Alternative Compliance Plan for the project located at 777 Sunnyvale-Saratoga Road as shown in Attachment 2 to the report, approve the amended Conditions of Approval (COAs) as shown in Attachment 4 to the report, and determine that the project is consistent with the El Camino Real Specific Plan Program Environmental Impact Report and no additional environmental review is required under the California Environmental Quality Act.
JUSTIFICATION FOR RECOMMENDATION
Staff recommends approving the requested Alternative Compliance Plan to allow the dedication of a roughly 1.5-acre parcel to the City for an affordable housing project aimed at providing 160 affordable housing units for incomes between 30-60% of the area median income. These units are generally restricted for 55 years or more depending on financing.
Through this Alternative Compliance Plan, the City would receive land that accommodates well over the number of affordable housing units that would have been required for this project through the City’s Inclusionary Housing Requirement. This approach enables the City to leverage the land by partnering with a non-profit developer to develop extremely low-, very low-, and low-income units in the community. The site is well-located near transit and shopping, which adds to its desirability for affordable housing. As the affordable housing site also includes site and architectural approval, the cost to develop the affordable housing is reduced.
The amended COAs clarify the requirements for the market-rate townhome portion of the site and the affordable housing portion of the site.
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
x 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
___ General policy and legislative actions
* "Competitively bid" means a contract that must be awarded to the lowest responsive and responsible bidder.
Staff
Prepared by: Ernie Defrenchi, Affordable Housing Manager
Reviewed by: Jenny Carloni, Housing Officer
Reviewed by: Trudi Ryan, Director, Community Development
Reviewed by: Connie Verceles, Deputy City Manager
Approved by: Tim Kirby, City Manager
ATTACHMENTS
1. Report to Housing and Human Services Commission [25-0503, May 28, 2025] (without attachments)
2. Affordable Housing Compliance Plan Request and Letter
Additional Attachments for Report to Council
3. Excerpt of Draft Minutes of the Housing and Human Services Commission Meeting of May 28, 2025
4. Amended Conditions of Approval
5. Links to CEQA Documents