Planning & Transportation Commission - August 12, 2026

Palo Alto’s Planning and Transportation Commission voted 4-2 Wednesday to send a proposed eight-story, 82-unit apartment development at 332 Forest Ave. to the Architectural Review Board, keeping the project in the city’s discretionary review process but not granting final approval.

The proposal would replace a two-story, 16-unit residential building and a vacant rear parcel near downtown with an 85-foot rental building containing one-, two- and three-bedroom apartments. Plans include 113 parking spaces across three levels, 82 long-term bicycle spaces and shared open space with the adjacent Casa Royale property, which is under the same ownership.

The commission’s action directs the project to the Architectural Review Board for design review. It would later return to the Planning and Transportation Commission for a recommendation before going to the City Council for a final decision.

Affordability and site questions remain unresolved

A central issue was the applicant’s request to meet its affordable-housing obligation with existing off-site units rather than newly built on-site below-market-rate units. The applicant said it intended to provide 16 or more deed-restricted off-site units, potentially through rehabilitation, but had not identified the units or finalized the proposal’s terms.

Several commissioners said the proposal must demonstrate a clear public benefit and should increase the city’s affordable-housing stock rather than simply place affordability restrictions on existing units. They asked for further analysis of the number, location, affordability level and long-term restrictions of any off-site units before the project returns.

The project also would involve a lot-line adjustment between the development parcel and Casa Royale to accommodate shared open space. Staff said it would evaluate whether the adjustment would create or worsen zoning nonconformities on the adjacent parcel and said the legal, environmental, historic-resource and tree analyses would be completed before the commission’s next review.

Commissioners also requested diagrams showing the proposed building’s relationship to required daylight-plane standards and nearby properties, along with information about the existing tenants’ rents and relocation protections. The current building’s residents would be displaced if redevelopment proceeds.

Neighbors cite massing, privacy and trees

Residents of adjacent buildings urged the commission to pause the project over its height, setbacks, privacy effects, mature trees and the lot-line adjustment. They said the building’s scale and its proximity to neighboring condominiums could reduce daylight and increase noise, light and privacy impacts.

The applicant said it had revised the project after earlier City Council feedback by setting back portions of the building along one side, retaining eight significant trees and proposing eight additional trees. The development team said it would study additional screening and other changes, including enclosing or screening portions of the parking structure in response to concerns about exhaust and noise.

Commissioners generally supported adding family-sized housing close to downtown services and Caltrain, but differed on whether the unresolved issues should be addressed before Architectural Review Board consideration. The 4-2 vote allowed the project to proceed to that board, while the two dissenting commissioners said questions about the lot-line adjustment, affordable housing and the project’s overall building envelope should be resolved first.

Primary sources

Watch the meeting on YouTube · Read the official meeting packet