Sunnyvale has officially adopted new zoning standards for its Village Centers, aiming to boost housing production while keeping neighborhood retail intact. The new rules introduce higher densities, mixed-use requirements, and design standards—yet questions remain around feasibility and small business preservation.
On July 1st, the Sunnyvale City Council unanimously approved the Village Center Master Plan (VCMP), with one councilmember abstaining. The plan establishes new zoning rules for seven neighborhood-serving retail areas across the city, including creating three new districts: Village Center Mixed Use (VCMU), Village Center Commercial (VCC), and Village Center Office (VCO). Only mixed-use housing is allowed moving forward—meaning no more standalone residential in these zones—and commercial uses are now required as part of new development.
The VCMP stems from a long-standing City goal to transform its aging shopping centers into vibrant hubs that blend homes, businesses, and walkable streetscapes. Originally envisioned in the 2017 General Plan update, the Village Centers are meant to accommodate moderate levels of growth while ensuring communities continue to have access to essential goods and services close to home.
To that end, the plan includes tools intended to balance housing production with retail preservation. It raises maximum densities—up to 56 units per acre in some locations—and requires projects to build to at least 85% of the allowable density. Ground-floor commercial is mandatory in all new developments, and sidewalk and setback requirements aim to enhance pedestrian access. But some provisions could prove challenging, especially for 100% affordable housing developers, who may struggle to meet commercial minimums without local flexibility. At the same time, the City’s reliance on State Density Bonus Law to enforce certain mandates could undercut its own ability to shape project outcomes.
Ultimately, Council adopted the plan with several notable additions: stronger language around commercial use types, a new reporting mechanism to monitor buildout progress, and direction to explore small business displacement mitigation strategies. While we had hoped to see more ambitious minimum densities and clearer incentives for affordability, the approved plan represents a meaningful step toward more complete, connected neighborhoods—and we are encouraged by the City’s commitment to refining it over time.
Stay engaged as Sunnyvale begins to implement the Village Center Master Plan. Continued community involvement is key to making sure the city delivers on its promises.