Post Office
FUTURE HOMES? - A developer is eyeing the post office site downtown for housing. (Alia Arafeh / Los Gatan)

On June 2, CSM Investments, LLC revealed its plans to convert the United States Post Office building downtown into a mixed-use development with housing. 

This proposal, which is still in the “pre-application” stage, has been met with opposition from some local residents, but recent changes to State housing laws mean it must be fast-tracked, according to the developer.

CSM Investments aims to tear down the current 1960s-vintage structure at 101 South Santa Cruz Ave. and replace it with a five-story, 72-condo building. Twenty percent of the units would be affordable to lower-income households and the rest would be market-rate.

The project is just one of several new developments aiming to take advantage of a tool Sacramento introduced not long ago to force communities to generate more housing. Senate Bill 330, signed into law by Gov. Gavin Newsom in 2019, declared a statewide housing emergency and shifted the State’s focus on solving the issue by amending the Housing Accountability Act and changing housing regulations.

In its letter to the Town, CSM Investments says explicitly that it will use the “Builder’s Remedy,” a California law brought in through the Housing Accountability Act. It allows projects that include at least 20% lower-income housing or feature 100% moderate-income units to bypass local zoning requirements and avoid some hearings. 

los gatos must approve or deny the project in no more than five public hearings, the developer says

“This Project is protected by the provisions of the Housing Accountability Act,” the document reads. “Under SB 330, housing development projects that comply with applicable objective general plan and zoning standards are subject to a maximum of five public hearings prior to final action by the City. The City must consider and either approve or disapprove the project at one of these five hearings, after which no further hearings may be held in connection with project approval.”

In short, if it’s determined a developer’s plan meets the criteria for a Builder’s Remedy project, it’s much easier for it to become a reality—regardless of local opposition.

CSM Investments’ real estate attorney did not respond to a request for comment.

The post office proposal has landed on the desks of Town planners alongside three other similar projects. Meanwhile, Los Gatos has been working to stay in compliance with the Housing Accountability Unit—a division of California’s housing authority, the Department of Housing and Community Development (HCD), that Newsom created in 2021.

Los Gatos is required to plan for 1,993 additional homes by the year 2031. Through the 2040 General Plan, the Town Council created initiatives to encourage the building of apartments, condos and other housing, and the 101 South Santa Cruz parcel came up frequently during deliberations as a potentially suitable site for new residential units. Many of these were suspended, at least temporarily, via a referendum drive that questioned the amount of upzoning that was approved.

North 40 at sunset
The North 40 – Phase 1, pictured at sunset, Aug. 5. (Drew Penner / Los Gatan)

Several other projects, still in early stages, have drawn concern from locals. These include: Phase 2 of the North 40 development at 14859 Los Gatos Blvd.; 405 Alberto Way; and 50 Los Gatos-Saratoga Road. These projects are relying on SB330 provisions to improve their odds of making it across the finish line.

As Los Gatos’ population has hovered around 30,000 for the past decade, many residents are worried about the placement of developments and the population increase they will bring.

Members of discussion group Democracy Tent have raised concern about the post office project, arguing it could make traffic in surrounding areas worse and result in schools that are bursting at the seams with students.

For now, the Town is focused on fulfilling its housing mandates and is awaiting a formal planning application to be submitted before moving forward, Town Manager Laurel Prevetti told the Los Gatan.

“If and when it is submitted, Town staff will analyze it as we do all development proposals,” she said. “The analysis includes any requests to invoke State law. The Town will need to verify that the application meets those State laws, as well as other requirements.”

Update Aug. 14, 2023: An earlier version of this article incorrectly suggested three local projects—besides the one at the USPS property—were being envisioned as Builder’s Remedy Projects. They are, in fact, being developed as SB330 sites.

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Alia Arafeh grew up in Los Gatos and wrote for El Gato News, the student newspaper of Los Gatos High School. She joined the Los Gatan masthead as an intern in June 2023. She’s currently attending New York University, where she’s pursuing a double major in International Relations and Journalism.


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