Campbell closes loophole that allowed high-density projects on single-family lots

Campbell City Council voted 4-1 Tuesday night to tighten the city’s interpretation of state housing law by requiring the land for a proposed project be vacant at the time a developer submits an application.

In 2025, Campbell adopted an interim ordinance to comply with the passage of two state laws that enable cities to fast-track developments for starter homes, which are small housing projects with up to 10 units. The ordinance, which is scheduled to expire on July 31, allows for starter homes to be built on certain vacant single-family parcels. Even if a parcel has a structure on it, developers could still propose a project if the lot might become vacant in the future.

This has led to developers submitting applications for single-family lots that currently have houses on them. Residents called on the council to repeal the ordinance due to the perception that these starter home projects are displacing existing homes and changing the character of single-family neighborhoods.

Since adopting its first interim housing ordinance in 2024, Campbell has received 15 applications for starter home projects in multi-family, mixed-use and single-family zoning districts, according to the staff report. Of 10 applications received by the end of January of this year, eight were located on single-family residential properties. All eight of those applications involve sites with a single-family home on them.

City staff gave the council two options to discuss on Tuesday night: Either keep the law as it stood or amend the ordinance to require the land to be completely vacant at the time an application is submitted. The original ordinance was intended to prevent speculative demolition so that a developer could not tear down a house without approval to build a new one. City staff said amending it could incentivize demolition before a project is submitted, leading to reduced housing stock and blighted properties. To mitigate this, staff proposed a adding a demolition-control ordinance to the amendment to keep people from simply tearing down houses.

A letter submitted by Rebecca Davis of the Oakland-based boutique law firm Lozeau Drury LLP argued that Campbell’s interim ordinance violates state law, which defines vacant as “having no permanent structure” or a structure that is “abandoned and uninhabitable,” while the local law applies the vacancy definition to properties that may become vacant in the future.

Davis’ letter was submitted on behalf of neighbors of 1573 Walnut Ave., 661 W. Parr Ave. and 1170 Steinway Ave., where Cupertino-based real estate investment company AlphaX RE Capital proposed construction of a combined 28 units on the three single-family properties. Davis argued that the project site is not vacant land and would require the destruction of one owner-occupied home and two unoccupied homes.

One resident who lives in the San Tomas Aquino area told the city council that the Campbell was interpreting the vacancy provision “so broadly that it basically circumvents state law.”

Mayor Daniel Furtado and Councilmember Elliot Scozzola spoke in favor of amending the ordinance to apply to lots that are completely vacant at the time a development application is submitted. Furtado reasoned that the change would prevent developers from creating vacant lots and advocated that the ordinance be bolstered to require developers to submit a proposal to replace demolished properties. Scozzola echoed residents’ concerns that real estate was being bought up by foreign nationals, corporations and hedgefund companies, driving up prices while keeping the actual properties vacant.

“If we allow our corrupt Sacramento politicians taking massive donations from these organizations to continue unabated, then our small-town feel will be gone in a short amount of time,” Scozzola said.

However, some residents and pro-housing advocates asked the council to keep the original ordinance in place. Resident Katie Gallagher said she supported a broader definition of “vacant” because building starter homes aids in environmental sustainability with infill developments and enables diversity of housing, which encourages people of diverse backgrounds to continue to economically contribute to the city and California as a whole.

“This will increase human diversity, increase development in urban areas like Campbell rather than natural habitats and save our schools,” Gallagher said.

Councilmember Sergio Lopez cast the lone dissenting vote on amending the ordinance. He said that even though he grew up in Campbell, it’s hard for him to imagine being able to buy a home in the city. He added that although many residents expressed that they have seen the city go through changes over the years, they are still choosing “to freeze things in time.”

“For my generation, unless we have the availability of starter homes, we’re going to get pushed further and further out,” Lopez said.

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