What is a Village Center?
Village Centers were first introduced in Sunnyvale’s General Plan Land Use and Transportation Element (LUTE). This was a planning document adopted by the City Council on April 22, 2017. The process to update the LUTE was called Horizon 2035. The Village Center concept was intended to guide the redevelopment of older shopping centers and offices into neighborhood hubs that would combine higher-density housing with retail and commercial uses.
There are seven Village Center sites in Sunnyvale:
- VC1 – W. Fremont Avenue and S. Mary Avenue
- VC2 – E. Fremont Avenue and Sunnyvale-Saratoga Road
- VC3 – Old San Francisco Road and S. Wolfe Road
- VC4 – N. Mathilda Avenue and W. Maude Avenue
- VC5 – E. Duane Avenue and San Rafael Street
- VC6 – Lakehaven Drive and Lawrence Expressway
- VC7 – Fair Oaks Avenue and Tasman Drive
What is the Village Center Master Plan (VCMP) and what does it do?
The VCMP was adopted by the City Council on July 1, 2025. It regulates the development of Sunnyvale’s Village Center neighborhoods. The VCMP applies to all new project applications submitted to the City after July 1, 2025. If development applications for Village Center sites were submitted or approved before July 1, 2025, they are not subject to the requirements of the VCMP.
The VCMP does not propose any specific projects or require development to occur. Instead, it sets a vision for how Village Centers can develop over time. And it establishes the land use regulations and development standards that apply to future Village Center redevelopment. This guidance ensures that future development by property owners, if it occurs, is done in a high-quality manner and consistent with the intent of the General Plan.
Did the 2017 LUTE include all the requirements for Village Centers?
No. The LUTE is a long-range planning document. It described the concept of Village Centers but did not specify every requirement for these developments. The City’s plan was for each Village Center to create its own unique Village Center concept. We envisioned collaborating closely with developers and getting extensive community input prior to adopting each plan.
What were the general requirements for Village Centers in the 2017 LUTE?
The 2017 LUTE’s requirements for Village Centers were intended to guide how much development could occur and achieve a balance of residential and commercial uses. The LUTE stated that:
- Residential uses in most Village Mixed-Use areas are anticipated to achieve an average density of 18 dwelling units per acre (medium density)
- There could be “variations in density” and “residential densities may be higher subject to a public review process”
- Mixed uses in Village Centers “should include commercial components equal to a minimum Floor Area Ratio (FAR) of 10% of the entire site area, up to a maximum FAR of about 25%
What changed after the LUTE was adopted in 2017?
In 2019, the California Legislature enacted Senate Bill 330 (SB 330). It is also known as the Housing Crisis Act. This sweeping legislation dramatically changed how cities can regulate development.
Historically, cities had broad “discretion” over land use projects. SB 330 now requires objective design standards to be used when approving or denying a development project that includes housing. Cities and counties are prohibited from denying a development project or modifying a project based on a “subjective” design standard.
Additionally, if the General Plan allows any density of residential on a site, SB 330 allows a residential project to move forward even if the zoning district has not been changed to allow residential use. And if the General Plan requires commercial or mixed uses on the site, a developer can ignore these requirements.
Understanding the terminology
“Discretion” is a legal term. It describes authority to make decisions based on general principles and judgment rather than fixed specific rules. SB 330 limited cities’ discretion over housing developments by requiring cities to approve projects that meet “objective standards.” The law defines an objective standard as a rule that involves no personal or subjective judgment by public officials. And it must be uniformly verifiable by reference to external and uniform benchmarks or criteria that are measurable and fact-based.
“Subjective” standards often contain words like “should” or “may.” In addition, City planning documents traditionally rely on concepts like “neighborhood character.” They also describe the desired development with subjective adjectives like consistent, desired, compatible, unique and convenient. By contrast, an objective standard has quantifiable criteria and contains mandatory language like “must” or “shall.”
So all the City needed to do was adopt objective standards for Village Centers?
We did adopt Citywide Objective Design Standards in 2023. In 2025, we also adopted the VCMP which includes specific objective design standards for the Village Centers. These standards will apply to future Village Center Master Plan redevelopment. While adopting them was important, state laws took local jurisdictions’ discretion away.
Since 2019, the Legislature has passed over 100 laws affecting housing. Many of these laws are designed to override both subjective discretion and objective standards. In other words, even when cities have objective standards, the state law offers a variety of ways for developers to get around the objective standards.
One of the primary ways that developers can override the City’s standards is through the Density Bonus Law. The Density Bonus Law rewards developers for providing affordable housing by allowing them to build more dwelling units than would otherwise be allowed. In addition, developers can use “concessions” and “waivers” to reduce or eliminate development standards that are either costly, reduce profitability, or would physically preclude the construction of the project as proposed by the developer.
How does state law affect the development of Village Center sites?
The changes in state law had a major impact on the City’s vision for the Village Centers.
- Because the LUTE opened the door to residential development of the Village Centers, SB 330 allowed developers to propose residential projects without the need for a Village Center Master Plan.
- The General Plan references minimum required retail and commercial space for Village Center developments. The City could not hold developers to the minimum 10% floor area ratio referenced in the LUTE due to state laws that enable concessions and waivers from local standards.
- Under current economic conditions, selling residential units is more profitable for developers than including retail/commercial space. Now, developers can use a “concession” under the Density Bonus Law to build projects that are 100% or nearly 100% residential even where objective standards require commercial space to be included. The recently adopted VCMP addresses this concern by zoning some portions of each Village Center for commercial use only
- Because the LUTE called for residential density of an “average” of 18 dwelling units per acre across a site, developers can propose townhome projects on most of a site rather than, for example, designing a shopping area with multistory apartments. The VCMP resulted in consolidating the residential density to designated portions of a Village Center and strictly commercial in other portions. This would still meet the average density of 18 dwelling units while helping preserve commercial portions of the site.
Why can't the City deny developments that are using state housing law?
There are severe consequences for violating the state housing law.
- If the City denied a housing development project in violation of the law, a judge could:
- Order the City to summarily approve the project
- Impose monetary fines of at least $10,000 per housing unit. This could be multiplied if the City acted in bad faith
- Require payment of the developer’s attorney’s fees and costs
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The California Department of Housing and Community Development (HCD) is responsible for approving the City’s Housing Element and could de-certify it for non-compliance. This would allow developers to build residential projects anywhere in Sunnyvale without complying with any of the City’s standards.
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The California Attorney General could file an enforcement lawsuit which could potentially result in future state or court oversight and compliance monitoring.
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The City could potentially lose eligibility for state funds and grants.
