Proposal for next phase of Los Gatos’ North 40 includes 430 housing units

Developers submitted a preliminary application this month.

Developers unveiled their plan for the second phase of Los Gatos’ controversial North 40 development last week, which includes 437 housing units.

The plan for the parcel at the intersection of highways 17 and 85 calls for 119 townhomes and 250 multi-family units, as well as commercial spaces and a two-acre public park.

The plan also includes 68 affordable housing units for lower-income residents earning 60% or less of the area’s median income. Grosvenor Property, which led the project team, donated 1.7 acres to Eden Housing to develop these units. Eden Housing worked on the Walnut Grove affordable senior community in the first phase of the North 40 project.

If the plan is approved, it would bring the total number of housing units from both phases of the North 40 development to more than 800, with 117 of those being affordable units.

Grosvenor Property submitted its preliminary application to the town last week, citing a state housing law that limits local laws or ordinances from blocking new housing development.

The law, Senate Bill 330, is meant to prevent cities from changing zoning laws to halt construction of high-density apartment buildings by freezing the existing rules at the time of the preliminary application.

“The team has followed the town’s Housing Element and General Plan 2040 over the years,” said Steve Buster, senior vice president for Grosvenor, in a press release. “Throughout this time, we have evaluated a number of options to help the town meet its Department of Housing and Community Development (HCD) requirements. We are pleased that we were able to find a viable solution while still delivering a strong public open space area that will meet the needs of the community and local residents.”

Los Gatos has to build 1,993 housing units in the next eight years, per a requirement from the state, and 310 of those units must be low income. All California cities are tasked with creating a plan, known as the Housing Element, that outlines how they will achieve those numbers.

Grosvenor has until Oct. 15 to submit its final, formal application for the project, to planning manager Jennifer Armer said in an email. The project will then head to the planning commission and town council.

The project’s two-acre central park, which was initially going to be private, will now be open to the public. Developers said they changed it after several residents who attended community meetings about the project said they wanted a public gathering space.

Phase one of the North 40, at the northwest corner of Los Gatos Boulevard and Lark Avenue, is currently under construction and includes 253 market-rate units at Bellaterra, 49 affordable units for seniors at Walnut Grove, and a market hall with restaurant and retail space.

Residents started moving into Walnut Grove earlier this year. More than 340 people were on the waiting list for the 49 units, and residents were selected through a random lottery. Ten units rented for $948 a month, and 39 units were listed at $1,580 a month.

Around half of the units at Bellaterra have already been purchased, developers said. Constriction is forecasted to complete by the summer of 2024, and prices range from $900,000 to $2.3 million for the 23 different styles of units, including townhouses, flats, detached units, bungalows and single-family homes.

The average home value in Los Gatos is $2.5 million, according to Zillow, which is 3.5% lower than last year.

The North 40 has been decades in the making, and a controversial development for existing residents who don’t want to see an influx of high-density housing.

Grosvenor proposed a development plan for the land that the town council initially rejected, saying the housing density was too high and did not include enough affordable units.

The developers sued the town and won, pushing the development forward.