Sunnyvale Holds 15% Affordable Housing Rule, Raises Developer Fees

Sunnyvale developers who pay a fee instead of building affordable homes will soon pay close to what those homes would cost to build on-site. The City Council voted 6-0 to introduce an ordinance that keeps the city's 15% inclusionary requirement, sets in-lieu fees at $93 per square foot and adds a four-year review. The same night, a crowd of residents debated a proposed cricket field at Las Palmas Park, and the council filled five commission seats.

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• Inclusionary ordinance introduced 6-0: 15% rate kept, in-lieu fees raised to $93 per square foot
• Las Palmas Park cricket field draws most public speakers, with most opposing tall fences and lights
• Five commission seats filled, while two applicants fell short of the four-vote threshold
• Silicon Valley Clean Energy awards $525,750 for electric food-rescue vans

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Fee-Outs Now Priced Near Real Costs

The basics: Inclusionary zoning requires new housing projects to set aside a share of units as below-market-rate (BMR) homes. An in-lieu fee lets a developer pay instead of building those units on-site.

Why it matters: Sunnyvale's fees had been well below the cost of building affordable units on-site. That made paying the fee the cheaper choice for developers. The new structure narrows that gap without raising the 15% requirement in what staff described as a weak market.

Where things stand: Under current rules, rental projects pay about $33 per square foot. Ownership projects pay 7% of the sale price, which works out to about $70 per square foot.

A March 2026 study by Strategic Economics put the on-site equivalent cost at:

• $98 per square foot for 8-story rentals
• $91 per square foot for 5-story rentals
• $89 per square foot for condos
• $93 per square foot for townhomes

Based on the study, staff found that "current market conditions do not support an increase of the inclusionary requirement for rental or condo developments," said Ryan Dyson, Housing Specialist. The study found townhomes could support a 20% requirement.

The ordinance does four things:

• Converts the ownership fee to $93 per square foot
• Raises the rental fee to $93, with reductions for smaller projects
• Indexes fees each year to the California Construction Cost Index
• Requires a policy review every four years

The Planning Commission and the Housing and Human Services Commission both supported the package unanimously.

Council questions: Members asked about:

• The prototype project's density of 111 units per acre
• Whether the policy stays consistent with funding rules from the Metropolitan Transportation Commission's One Bay Area Grant (OBAG) program
• Geographic differences in fees
• How Sunnyvale compares with other cities
• What would prompt an early review

Councilmember Eileen Le asked whether dropping below 15% in the future could disqualify the city from that regional funding.

On review triggers, Dyson acknowledged "there's not a defined trigger." On the four-year cycle, "we thought 4 years was a good middle ground," Dyson said.

The other side: Manuel S. of SV at Home supported keeping the 15% rate but urged lower fees for higher-density rental and condo projects and for growth areas. He warned that a uniform $93 fee could discourage density.

Decisions and stakeholder impacts: Vice Mayor Richard Mehlinger made the motion and Councilmember Murali Srinivasan seconded it.

"If we are going to allow developers to fee out, I want it to be for the equivalent cost of on-site units," said Richard Mehlinger, Vice Mayor.

Mayor Larry Klein said "moving to 20% inclusionary wasn't the right thing to do" while backing the fee changes.

• Vote: For: 6, Against: 0, Absent: 1 (Councilmember Alysa Cisneros)
• Developers: Those who choose to pay rather than build will pay more, and fees will rise automatically with construction costs.
• Affordable housing advocates: They gain a stronger push toward on-site units, but SV at Home's call for density-sensitive fees was not adopted.

What's next: The ordinance requires a second reading. The city attorney said the fees take effect 60 days after second reading under the Mitigation Fee Act. Other provisions take effect after 30 days.

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Las Palmas Park: Open Lawn vs. Cricket

Why it matters: The renovation of the 50-year-old, Polynesian-themed Las Palmas Park will decide whether it gains a regulation cricket field. The debate has grown to include claims about regional demand, campaign money and conflicts of interest.

Where things stand: Councilmember Linda Sell announced community open houses on Nov. 16 and 18, from 6 to 8 p.m. at City Hall. The council took no action because the topic came up during non-agenda public comment.

Most speakers asked the city to keep the open lawn and small hills and to avoid tall fences and bright lights:

• Manish D. said he supports cricket but questioned a large fence, pointing to Fair Oaks and Ortega parks and to softer balls as alternatives.
• Suchit M., a cricket fan, said the field would take lawn space used for volleyball, frisbee and picnics.
• Kalpana A. said fixed structures would conflict with the city's inclusivity principles for elders, people with special needs and dog walkers.
• Eva M., age 9, and Labanya Ayer, age 8, asked to keep the green space. Ayer said a pitch would serve a private group.
• Susan Bates, a longtime resident, urged that the renovation build on the park's original Johnson-Sue design and preserve its trees.

The other side: Speakers raised sharper claims:

• Brighton V., a cricketer, called hard fences and lights elite-tier facilities. He asked a commissioner affiliated with a cricket association to reflect on a perceived conflict of interest.
• Jane X. cited city rental records to argue that Sunnyvale Cricket Club demand is largely regional. She pointed to a 324-person roster compared with 41 registered players, six of them residents.
• Manny G. alleged, based on campaign filings, that one council member received $5,550 from five non-Sunnyvale donors tied to organized cricket. No council member responded on the record.
• Anuruddha K. urged civility, arguing that logical fallacies were inflaming the debate.

What's next: Mike Cascone invited the council to a community walk at the park on Saturday, Nov. 14, from noon to 2 p.m. The open houses follow on Nov. 16 and 18.

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Commission Seats: Abstain, Don't Oppose

Why it matters: Five vacancies opened on Sunnyvale's advisory commissions. Two came from expanding the Arts Commission from five to seven members, and three came from resignations.

Where things stand: Voting was by roll call because a member participated remotely. "Candidates receiving the most and at least 4 affirmative votes will be appointed," said David Carnahan, City Clerk.

Members made their case for favored candidates and mostly abstained on others rather than voting no. In practice, an abstention worked like a no vote.

Decisions and stakeholder impacts:

• Housing and Human Services Commission: Alan Zhang was appointed 6-0 to a term ending in 2028. Ritika Gupta received two yes votes, and Caspian Yang received none. Of Zhang, "I thought he had done a lot of homework," said Murali Srinivasan, Councilmember.
• Arts Commission: Isabella Salim, Jennifer Peruski and an applicant identified as Kyle each won 6-0. Biana Kovik received three yes votes, one short of the threshold. A motion by Vice Mayor Mehlinger, seconded by Councilmember Sell, gave Peruski the shorter term ending June 30, 2027. It passed 6-0.
• Heritage Preservation Commission: An applicant identified as Nathaniel was appointed 6-0 to a term ending June 30, 2028. Ashish Bhatia, who did not interview, received six abstentions.

"I'm really pleased that we expanded the commission recently," said Charlsie Chang, Councilmember.

What's next: The clerk noted a pending resignation from the Sustainability Commission.

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Clean Energy Dollars Fund Food Rescue

Silicon Valley Clean Energy (SVCE) awarded $525,750 to Sunnyvale Community Services for two refrigerated electric vans and chargers.

"Sunnyvale customers have saved over $58 million on their bills," said Eric Rodriguez of Silicon Valley Clean Energy. He said Sunnyvale has also received more than $900,000 in rebates and more than $4.5M in grants, including:

• Solar and storage at City Hall and Fire Station 2
• Electrification of the Lakewood Branch Library
• Heat pumps at Vargas Elementary

Marie Bernard, Executive Director of Sunnyvale Community Services, said the vans support the group's role as North County Food Recovery Hub. The organization distributed 2,480,848 pounds of food last year, and one-third of its food program clients are children.

Mayor Klein, who chairs the SVCE board, presented a ceremonial check.

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• Parking hearing continued: Item 26-0861 was continued 6-0 to Dec. 1, 2026, so staff can prepare a report after the Planning Commission's review. Public commenter Steven M. said the commission approved the proposal 5-2 and urged eliminating parking minimums entirely.
• Consent calendar approved 6-0: No items were pulled after Afsaneh J. challenged an instrumentation contract extension (Item 1C) and a CEQA exemption that she said skips sewer capacity review (Item 1F). The calendar included parental leave for council members (Policy 7.2.20).
• El Camino Health update: John Cowan reported 400,000 outpatient visits, an acute rehab facility opening in spring 2027 and a $170M Women's Hospital renovation.
• Regional reports: Councilmember Sell said the Air District delayed its zero-NOx water heater requirement to January 2028. She also said a regional transit measure appeared to be passing, which would add about $260M per year to VTA for 14 years.
• Outreach notices: Zach K. suggested city-branded envelopes for developer outreach mailers. "Staff could look at that," said Trudi Ryan, Director of Community Development.

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Looking ahead: Park walk on Nov. 14, Las Palmas Park open houses on Nov. 16 and 18, the continued hearing on Dec. 1, and a second reading of the inclusionary ordinance. Mayor Klein also previewed an upcoming SVCE data center rate policy.