Palo Alto's 390-Home Cal Ave Tower Plan: Where It Stands After the 4-2 Vote

by Chris Renois

One of the largest housing proposals in Palo Alto's recent history is still moving forward. It's a three-tower plan on the Mollie Stone's Market site at 156 California Avenue, next to the California Avenue Caltrain station. A Hoodline headline this week said the City Council approved the 390-unit project 4-2, even though it has fewer affordable homes than the first version. We couldn't open the Hoodline article itself. Below is what we confirmed from the City of Palo Alto, Palo Alto Online and the Palo Alto Daily Post, including where the project actually stands.

What the council voted on

The 4-2 vote happened at the council's May 18, 2026 meeting, according to the Palo Alto Daily Post and Palo Alto Online. The council agreed to move forward with a negotiated alternative from developer Redco Development rather than its original application. The Daily Post reported that Council members Pat Burt and Keith Reckdahl voted no, Mayor Vicki Veenker was absent and Council member George Lu cast the deciding vote.

The May vote was not the last step. Palo Alto Online reported that under the agreement, Redco would formally submit the revised plans, the Architectural Review Board would review them, and then the project would go back to the council for final approval. Planning Director Jonathan Lait told the council that the review board step would be a courtesy review and that the project would come back to the council later in the year, according to the Daily Post.

How the project has changed

Redco filed its first proposal in November 2023 under the "builder's remedy." That provision of state law lets developers skip local zoning when a city hasn't met its deadline to get its eight-year housing plan (the Housing Element) certified by the state. State records and earlier news coverage describe the original plan this way:

382 homes in three buildings: a 17-story tower about 177 feet tall, an 11-story tower across Cambridge Avenue, and a seven-story building with a new Mollie Stone's grocery on the ground floor
About 19,500 square feet of commercial space in total, according to the city's environmental notice filed with the state
About 290 parking spaces, according to the Daily Post

The city formed a council ad hoc committee of Council member Ed Lauing and Vice Mayor Greer Stone to try to settle legal disputes with the developer, according to the city's May 7 announcement. The negotiated version has these features:

Height: one 14-story tower and two 12-story buildings. The tallest tower is 30 feet shorter and now tops out at about 144 feet, according to the Daily Post.
Homes: 390 apartments, eight more than the original plan.
Affordable units: 50 below-market-rate homes, about 13% of the total. Palo Alto Online reported that the original plan had 78. The Daily Post and earlier coverage put the figure at 77. Palo Alto Online reported that Redco used state Assembly Bill 1893, which lets builder's remedy projects meet a 13% affordability requirement instead of the usual 20%.

The drop in affordable units was the main objection from Burt and Reckdahl, both outlets reported. Supporters on the council said a shorter tower would cast less shadow on surrounding homes. Under the deal, the city also agreed to add the site to its Housing Element list of housing sites, according to Palo Alto Online.

The latest update: more parking

Parking was another major complaint at the May hearing. The parking figures reported for the negotiated plan don't all match. The Daily Post reported 266 spaces, and a speaker at the hearing referred to about 200. On November 2, Palo Alto Online reported that Redco has submitted updated plans with one more level of underground parking, adding about 100 stalls. The plans now show 390 homes and 396 parking spaces in total. The number of affordable units did not change. A Redco co-founder told the paper the change came in response to council comments.

City staff have said the project is legally exempt from state environmental review (CEQA) as an urban infill housing project, according to Palo Alto Online. A tolling agreement has put possible lawsuits between the city and Redco on hold while the process continues.

Who it affects

The site is on the California Avenue business district, steps from the Caltrain station. The Daily Post noted that most nearby buildings are two to three stories tall. Residents of the Evergreen Park neighborhood, including people on Park Boulevard and Cambridge Avenue, told the council they were worried about parking spilling onto their streets, traffic and the size of the buildings. Housing advocates spoke in favor.

The project is also part of a bigger trend. Palo Alto Online has reported on several other projects in the Cal Ave area and across the city that use state housing laws to build taller or denser than local zoning would normally allow.

What homeowners, buyers and sellers might consider

Follow the next hearings. The Architectural Review Board meeting and the council's final vote will be posted on the city's agendas. Public comment is usually accepted in person and by email.
Buyers near Cal Ave: ask about planned development nearby, possible construction schedules and street parking rules. City planning staff can answer questions about specific projects.
Sellers nearby: talk with your agent, and an attorney if needed, about what you know of planned nearby projects and how to disclose it.
Small landlords: 390 new rental homes near Caltrain would add to local supply once built. No construction start date has been announced.

We'll keep following 156 California Avenue as it heads back to the council.

Sources

Thinking about buying or selling in the Bay Area? Chris Renois can walk you through how these changes affect your home and your plans. Call or text (650) 512-9817, email chrisrenois@therealexperts.com, or get a free home value estimate.

This article is general information for Bay Area homeowners and buyers, not legal, tax or financial advice. Laws, rates and deadlines change; please confirm details with the original sources linked above or a qualified professional. Chris Renois, California DRE #02030130.