Judge dismisses lawsuit against affordable housing on downtown Lot T

Palo Alto’s push to build affordable housing on downtown parking lots got a boost this week. Judge Theodore C. Zaynor of the Santa Clara County Superior Court dismissed a lawsuit from nearby property owners. If the ruling stands, nonprofit Alta Housing can proceed with a six-story, 72-unit building on Lot T at Lytton Avenue and Kipling Street (450 Lytton Avenue).

The City Council backed the proposal unanimously. A group of owners, represented by attorney David Lanferman, sued the city in April 2025. They argued public parking lots cannot simply be converted. Zaynor rejected all seven claims, including a requirement for approval from 51 percent of owners in the downtown assessment district — that rule, he said, does not apply to charter cities such as Palo Alto.

Alta filed a formal application in February. About half the units are for households with “extremely low incomes” (no more than 30 percent of median income). Most of the rest are for “very low” (30 to 50 percent) and “low” incomes (50 to 80 percent). Lot T is part of a broader Housing Element plan for six lots, totaling about 290 below-market homes. To offset lost parking, the city plans a 266-space garage on Lot D; the Architectural Review Board approved that design in June.

“The City is pleased with the trial court’s ruling, which paves the way for the City to develop much-need affordable housing in downtown Palo Alto,” said city spokesperson Meghan Horrigan-Taylor. The city and Alta want to bring the design to the council by the end of the calendar year.