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Menlo Park City Council greenlit the next steps for Habitat for Humanity Greater San Francisco’s 100% affordable townhome development project in the Belle Haven neighborhood, but the project lost one revenue source, tightening its budgetary prospects.
The City Council approved a vesting tentative map combining two plots of land at 335 and 355 Pierce Road to accommodate the project, known as Laurel Landing. Members also rejected a request to waive the city’s development impact and permitting fees, citing Menlo Park’s tight fiscal outlook, but asked Habitat for Humanity to resubmit the request closer to when the fees would be due.
Laurel Landing will have eight townhomes for low-income families, with two-, three- and four-bedroom units available. The townhomes will be affordable to those making up to 80% of the area median income, which supporters say offers a rare chance at homeownership in one of the state’s most expensive housing markets.
In 2026, the area median income for a family of four in San Mateo County is $200,800.
“Supporting affordable homeownership projects like this one helps ensure that the people who contribute to our community have the opportunity to live, work, and build their future here,” District 1 resident Eduardo Hernandez wrote in a letter to the city council.
Under the state’s density bonus laws, this project qualifies for unlimited waivers of the city’s development standards and up to five cost reduction requests, called concessions or incentives. Among Habitat for Humanity’s concessions was a request for the city to waive its development impact and permitting fees, which are mostly collected for infrastructure purposes, such as improving public park spaces or the project’s sewage connection. Habitat for Humanity estimated the fees to total around $944,000, while the city estimated a total of about $596,000.
Most of the discussion at the meeting was about the project’s financials, particularly the fee waiver request. The city allocated $3.6 million from its below-market housing fund toward the project — the city’s largest per-unit allocation toward any project so far.
The project previously had $1.5 million earmarked from the Stanford Affordable Housing Fund, but city staff noted that the expected grant is no longer available. Habitat for Humanity Chief Real Estate Officer Felix AuYeung said at the meeting that the grant committee decided not to honor the awarded grant because the project didn’t have enough units at a deep enough affordability level, though he questioned whether that applied to homeownership or only to rental units.
Councilmembers similarly questioned why the grant was rescinded. The fund is mostly overseen by Santa Clara County, and Mayor Betsy Nash and Councilmember Cecilia Taylor both said they previously discussed the grant as part of a committee which guides how the land around Stanford University should be developed, alongside former Santa Clara County District 5 Supervisor Joe Simitian.
Despite the project’s financial concerns, AuYeung affirmed the nonprofit’s commitment to building the project and finding a way to close the funding gap if the fee waiver wasn’t approved.
“I know and recognize this is a difficult decision,” AuYueng said at the meeting. “Our commitment is that, regardless of how council makes this decision, Habitat will start construction on this project and it will not impact what the buyers ultimately pay.”
If the city waived the fees, the city council would need to backfill the funding and identify where to pull the extra money — a challenge voiced by multiple councilmembers, given how they had to pinch pennies during June’s budget discussions.
Senior city planner Calvin Chan said construction is scheduled to start by December 2026 and projected to end by summer 2028, when the certificate of occupancy would be approved.
While councilmembers discussed potential funding sources, such as the city’s Below Market Rate housing fund, they ultimately rejected the waiver and asked Habitat for Humanity to resubmit the fee waiver request closer to when the project receives its certificate of occupancy, in case more funds can be raised for the project. Councilmembers also asked city staff to investigate why the $1.5 million grant was rescinded before the request comes back.
“We know that we’ve got a lot of other affordable units to be building,” Nash said at the meeting. “While I think everyone loves this project, I think that it would be much wiser to wait until the end when the fee is due, to see whether they still actually need the funds rather than to make decisions prior to that.”
