About SB 35

While California and the Bay Area economies are booming, the refusal by municipalities to produce adequate housing has left our State with the biggest housing and affordability crisis ever.

On January 1, 2018, Senate Bill 35 (SB 35) went into effect. SB 35 establishes a streamlined, ministerial approval process for development projects that meet the criteria established. The law is a direct response to the failure of many jurisdictions to approve housing development resulting in record low inventory being added to the market at a time of record growth. With SB 35, the State aims to increase the supply of market rate and below-market rate housing in California, and alleviating the current crisis.

The law is tailored to cities and counties in California that failed to meet their Regional Housing Needs Allocation (RHNA), which is the number of housing units each city or county must provide in its state-mandated Housing Element.

Experts see Cupertino’s housing supply and affordability is crisis levels. Moreover, Cupertino has the worst affordability in Santa Clara County at only one affordable unit for every fourteen low-wage jobs. By comparison, even Palo Alto provides one unit for every six low-wage jobs.Cupertino’s most recent report (2015-2016) shows that it is far below its RHNA for all categories of housing.

Income GroupRHNA for CupertinoCurrently Permitted Units
in Cupertino
Very low3560356
Above Moderate27017298

The project had to meet “object standard” requirements in order to be deemed eligible for SB 35’s streamlined approval process. Some of these requirements are:

Is the project a multifamily housing development with 2 or more units?Yes. Vallco Town Center is a multi-family housing development, with 2,402 residential units.
is the project located in an area designated by the U.S. Census Bureau as an urbanized area?Yes. The project is located in the City of Cupertino, which is within the U.S. Census urbanized area boundary for San Jose.
Is more than 75% of the project site's perimeter developed with urban uses?Yes. SB 35 defines "urban uses" as "any current or former residential, commercial, public institutional, transit or transportation passenger facility, or retail use, or any combination of those uses." SB 35 also clarifies that parcels that are only separated by a street or highway are considered to be adjoined. Based on these standards, the entirity of the project site's perimeter is developed with urban uses.
Does the site have either zoning or a general plan designation that allows for residential use or residential mixed-use development, with at least two-thirds of the square footage designated for residential use?Yes. The General Plan allows a mix of uses for the project site, including residential. In addition to residential uses, the project will include a vibrant "town center" as a community focal point, as called for in the General Plan. The total square footage of the project is 6,910,000 square feet. Of that amount, 4,700,000 square feet are dedicated to residential uses, comprising 68.0% of the total, in excess of the two-thirds requirement.
Will the applicant record a land use restriction for the project's affordable housing units?Yes. The Cupertino Municipal Code requires that projects applying for a density bonus enter an affordable housing agreement with the City that includes "the household type, number, location, size, affordability, and construction scheduling of all affordable units." Vallco Property Owner, LLC will enter and record such an agreement for the applicable minimum term prior to final or parcel map approval or prior to issuance of any building permits, whichever occurs first, as required by the Cupertino Municipal Code.
Has the California Department of Housing and Community Development (HCD) determined that the local jurisdiction is subject to SB 35?Yes. HCD has determined that the City of Cupertino is subject to SB 35, because it did not issue sufficient building permits to meet its share of the regional housing needs ("RHNA") for the most recent reporting period.
Will the project include the required percentage of below market rate housing units?Yes. The project will include at least 50% of housing units dedicated to households with incomes below 80% of the area median income.
Is the project consistent with "objective zoning standards" and "objective design review standards"?Yes. The project will comply with all applicable objective standards.
Is the project located outside of all types of areas exempted from SB 35?Yes. The project is not located within any of the exempt areas.
Will all construction workers employed in the project be paid at least the general prevailing wage?Yes. Vallco Property Owner, LLC certifies that all construction workers employed in the execution of the development will be paid at least the general prevailing rate per diem wages.
Will all construction workers employed in the project be certified as a "skilled and trained workforce?"Yes. Vallco Property Owner, LLC certifies that a skilled and trained workforce shall be used to complete the project.
May the project include a subdivision of a parcel because the project developer will pay prevailing wages and use a "skilled and trained" workforce?Yes. The project may include a subdivision because Vallco Property Owner, LLC will pay prevailing wages and use a "skilled and trained" workforce.

Sand Hill Property Company, the owner of Vallco Mall in Cupertino, began demolition in preparation for the Vallco Town Center project on October 11, 2018 after receiving approval from the City of Cupertino under SB 35.

The City found that Vallco Town Center meets the criteria established by State Law. The State has designated Cupertino as qualifying for SB 35 — meaning the City has not met its RHNA requirements — and the application meets the form and requirements necessary for the City’s review and approval under SB 35’s ministerial process.

Vallco Town Center will contribute to affordable housing under the standards established by the law. In doing so, it will also deliver on critical promises made to revitalize the retail experience at Vallco, bring forward an amazing entertainment district for the city and add significant open space and usable park lands to the City.