The liquor store at the corner of Willow Street and Kotenberg Avenue sat on a commercially zoned parcel for decades, the kind of five-thousand-square-foot building that blends into a corridor without anyone thinking twice about what else it could become. Then, in December 2025, San Jose approved a plan to tear it down and put up seven stories and 126 apartments in its place. Nearly two thousand Willow Glen residents signed a petition against it. Neighbors packed a March 2026 Planning Commission hearing to appeal the decision. The appeal was denied.
If you are comparing Willow Glen to other Silicon Valley neighborhoods right now, that sequence matters more than the square footage or the unit count. It tells you something the zoning map itself will not: in this town, at this moment, the promise of a quiet, low-rise street is only as durable as the city's paperwork with the state of California.
What the Zoning Map Actually Said
Under normal rules, that corner's commercial zoning would have blocked a project like this outright, or forced it into a narrower lane, projects on that site were limited to developments built entirely as below-market-rate housing. A market-rate, mixed-income apartment building seven stories tall was not something the site's zoning contemplated.
Redco Development, the San Francisco-based firm behind the project, filed its application in June 2023 anyway. It worked, and it worked for a reason that has nothing to do with the merits of this particular design and everything to do with a gap in San Jose's compliance calendar.
The Window Nobody in Willow Glen Was Watching
California's builder's remedy law took effect in January 2023. It gives developers a way around local zoning and planning rules, but only in cities that do not have a housing plan certified by the state at the time an application is filed. San Jose fell into that category. The city's plan was not yet compliant when Redco submitted its paperwork, and that timing is the entire story.
A short timeline makes the mechanism clear:
- January 2023: California's builder's remedy provision becomes active statewide.
- June 2023: Redco files its preliminary application for 940 Willow Street, while San Jose's housing element remains out of compliance.
- Later in 2023: San Jose's housing plan is certified by the state, closing the window for new builder's remedy filings, though applications already submitted, including Redco's, keep their protected status.
- December 3, 2025: The San Jose Planning Director approves the project.
- March 11, 2026: The Planning Commission denies a neighborhood appeal, upholding the approval.
Thirty-three applications were reportedly submitted to San Jose during that compliance gap. Willow Street is the one currently working its way through the pipeline, but the same twelve-month window applies to every other application filed in the same stretch, wherever in the city they happen to sit.
What Got Approved, and Why the Numbers Made It Harder to Fight
The project that survived isn't a stripped-down, minimum-affordability filing. Redco's plan pairs the builder's remedy application with a State Density Bonus Law request for a 97 percent density bonus, roughly doubling what the parcel could otherwise support. In exchange, 15 percent of the units are reserved for very low income households and another 15 percent for moderate income households, using Santa Clara County thresholds of roughly $70,350 a year for one person and $100,450 for a household of four in the very low income tier. The final mix comes to 52 studios, 50 one-bedrooms, 20 two-bedrooms, and 4 three-bedroom units, plus more than 1,600 square feet of ground-floor retail replacing the liquor store.
That combination, a state-protected filing stacked with a state-protected density bonus, is what made the appeal such a long shot. At the March hearing, Planning Commission member Michael Young acknowledged the project's unpopularity while explaining why the commission's hands were tied:
"There's no question the developer has the legal ability to do the project. There's a reason why the state has passed all the building and planning bills that they have. We don't want anything to change. We just want our single-family neighborhoods to stay the same. The problem is that can't happen anymore."
Why the Appeal Failed on the Facts, Not Just the Politics
Opponents, including 40-year resident Michelle Belasco, argued the seven-story scale did not fit a neighborhood of single-family streets and raised concerns about sewer capacity and traffic. The hearing officer overseeing the case, principal planner Ruth Cueto, laid out why those arguments could not carry the day under the law as written: the builder's remedy and density bonus statutes leave very narrow grounds for denial, and a city has to show a project creates a specific, demonstrable public health or safety risk, not simply that it changes the character of a block.
San Jose is also working against a state-mandated target of 62,200 new housing units by 2031. That backdrop does not decide any single case, but it shapes how much room a Planning Commission has to lean on discretion when a project otherwise checks the legal boxes.
What This Means If You're Weighing Willow Glen Against Other Neighborhoods
A median price or a walkability score will not tell you any of this. What it should change is where you look before you write an offer.
- Check what sits on commercially zoned parcels near the address you're considering, not just the address itself. A quiet corner store or aging retail building on Willow Street, Lincoln Avenue, or Bird Avenue is a different kind of neighbor today than it was in 2022.
- Ask whether San Jose's housing element remains certified. A future compliance lapse, even a brief one, can reopen a similar window on a different parcel.
- Treat a builder's remedy approval as a durable outcome, not a rumor. The pattern at 940 Willow Street shows how little room a city retains to reverse course once density bonus law is layered on top of the state housing statute, even against organized, well-documented opposition.
- Recognize that this cuts both ways. A buyer near a commercially zoned parcel is absorbing a real, if hard to price, chance of nearby redevelopment. An owner of that same commercially zoned parcel may be sitting on more development potential than a strict reading of the local zoning code would ever suggest.
None of this means Willow Glen's character is disappearing overnight. It means the character you're buying into is conditional on a compliance status that can change, and that the parcels worth a second look are not always the ones a listing description points you toward.
The Question Still Open
Opponents at 940 Willow Street have not said their fight is over. The next step available to them is a legal challenge seeking judicial review of the commission's decision. Whether that happens, and whether it changes anything, is not yet settled. What is settled is the mechanism itself: a compliance gap in a city's housing plan created a narrow but real window, and at least one project used it to build something the neighborhood's own zoning code would never have allowed on its own.
A Few Questions Worth Asking Before You Make an Offer
Does builder's remedy only apply to this one project? No. Thirty-three applications were reportedly filed with San Jose during the same compliance gap. The 940 Willow Street project is simply the one that has moved furthest through approvals and appeals so far.
Can a city still deny a builder's remedy project? Only on narrow grounds, generally a demonstrable public health or safety risk under objective standards. Concerns about neighborhood character, traffic, or scale, on their own, have not been enough to stop an approval once a project qualifies.
Does this affect resale value on nearby single-family homes? That depends on proximity to a commercial or mixed-use parcel and on how the completed project performs once occupied. It is a genuine unknown, which is exactly why it belongs in a due diligence conversation rather than an assumption either way.
If you're weighing a purchase near Willow Glen's commercial corridors, or trying to figure out what a parcel like this could mean for a property you already own, that's a conversation worth having before you're under contract, not after. Mark Vantress has spent years reading Silicon Valley zoning fights like this one for exactly what they mean to buyers and sellers on the ground. Let's Connect.
