The Sunnyvale City Council approved new development standards last week for the city’s seven Village Centers, requiring designated commercial spaces in an effort to preserve retail and community services as developers seek to build housing.
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Such planning aims to balance residential growth with retail in light of previously approved projects that prioritized housing and displaced existing businesses.
Not all of the Village Center sites have undergone redevelopment yet — it is up to developers to propose projects. Since 2021, however, three approved projects have significantly reduced the amount of commercial space at the site in favor of residential units. This, according to city staff, was enabled largely by changes in state law that limit local control over development.
“Our general perspective is that we can work with the developer and talk to them about what the community interest and desire is and try to persuade them to do things differently, but otherwise they have a lot of ability to say, ‘Well, that doesn’t work for my project,'” Trudi Ryan, Sunnyvale’s community development director, told this news organization.
Four additional project proposals are currently under review but will not be subject to new standards because they were submitted before the plan was adopted. Any new proposals moving forward must follow development requirements.
During last week’s hearing, councilmembers and city staff emphasized that the city’s flexibility is limited. If Sunnyvale fails to meet state housing construction goals, the state can decertify its Housing Element — the city’s roadmap for meeting housing targets through 2031 — and allow developers to bypass city zoning rules.
“You can kiss any retail goodbye in one of those scenarios,” said Councilmember Alysa Cisneros.
She said the City Council and city staff have been working for years on the plan to ensure outcomes are “as ideal as we can make them in a very unideal circumstance where we have limited control.”
Community outcry has been especially strong in north Sunnyvale, where residents say redevelopment plans could eliminate the few affordable grocery stores and family-owned restaurants they rely on and cherish. Plazas along Duane Avenue and Lawrence Expressway are among the sites slated for redevelopment, with two townhouse proposals submitted last year that utilize state law to potentially “override the city’s vision” for the centers.
Even with new commercial zoning requirements within Village Centers, small businesses may still struggle to return after construction.
If developers completely demolish the existing commercial space and rebuild it, Ryan said, they are likely to charge higher rent — which small businesses may not be able to afford. And even if the small businesses can afford the increased rent, they may have nowhere to relocate during demolition and construction, which can take years.
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