California is done waiting for cities to build housing. And Palo Alto is the first real test case.
Within two weeks of SB 79 taking effect on July 1, developers submitted nine housing proposals totaling 341 homes in Palo Alto — before the city could even adopt a plan to work around it.
What Is SB 79?
SB 79 allows qualifying multifamily housing to be built at greater heights and densities near major transit stops — like Caltrain and BART stations — even if local zoning would normally prohibit it.
The idea is straightforward: if there is a train station, there should be homes near it. Cities have had decades to build transit-oriented housing on their own. Most chose not to. Now the state is forcing the issue.
Why 341 Homes in Two Weeks Matters
The speed of the developer response tells you everything. Nine proposals in fourteen days. These developers had plans ready — they were just waiting for the legal green light.
This is not just a Palo Alto story. SB 79 applies statewide. Every city with a Caltrain, BART, or major transit stop is now a target for the same kind of rapid development proposals. Mountain View, Sunnyvale, San Mateo, Millbrae, Redwood City — they are all next.
What This Means for Buyers
More housing supply means more options. But do not expect prices to drop overnight. These 341 units will take 2-4 years to build. In the meantime, existing homes near transit remain the most accessible option.
If you are buying in Palo Alto or anywhere on the Peninsula, ShopProp gives you a flat fee starting at $1,995 with a rebate of up to 2.5% of the purchase price minus the flat fee. On a $2M Palo Alto home, that is a $48,005 rebate back at closing.
What This Means for Sellers
If you own property near a transit station, pay attention. New multifamily development nearby can go either way — it can increase land values (more demand for the area) or create competition (more units available). The smart move is to understand your position now.
When you are ready to sell, ShopProp lists your home for a flat fee of $7,995 (homes over $2M). On a $2.5M Palo Alto home, a traditional agent takes $62,500 at 2.5%. ShopProp saves you $54,505.
Real ShopProp Closing in Palo Alto
The Bigger Picture
SB 79 is a signal. California is done letting cities block housing near transit. The 341 homes proposed in Palo Alto in just two weeks prove there is developer demand — the bottleneck was always political, not economic.
For anyone buying or selling on the Peninsula, this reshapes the market for the next decade. More supply is coming. The question — as Rob Luecke Jr wrote on r/bayarea — is whether it actually gets built.
Calculate Your Savings
Use our savings calculator to see your exact rebate in Palo Alto or anywhere in California.
ShopProp: managing broker on every transaction. 4,000+ deals since 2007. Licensed in 8 states.
Source: SFGate. As featured in NPR, USA Today, and New York Post.