San Mateo County: Menlo Park parking lot debate highlights housing struggles

A debate over the redevelopment of three downtown parking lots in Menlo Park highlights the broader housing crisis in San Mateo County, pitting affordable housing advocates against business owners fearing revenue loss due to reduced parking.

With a March 31 deadline for developer proposals, city officials face pressure from state housing mandates and local business owners worried about economic impacts. Even before specific plans for 480-plus affordable housing units are revealed, both sides have threatened legal action.

Save Downtown Menlo Park, a pro-business group, has collected over 3,450 signatures in an online campaign and raised more than $130,000 in legal fees to block the project.

Downtown property owner Kevin Cunningham, a lead organizer, said the city’s decision deepened existing frustrations among downtown businesses regarding the city’s economic climate. He suggested alternative housing sites, like the Civic Center two blocks away and near enough to the Caltrain station, to avoid disrupting downtown parking.

Cars fill parking lots behind the Santa Cruz Avenue shopping district in Menlo Park, Calif., Friday, March 28, 2025. Plans to replace the parking with low-cost housing are proving controversial. (Karl Mondon/Bay Area News Group)

“One business owner said that (the parking lot issue) is not the sole reason he’s leaving, but he’s had a lot of frustrations with the city lately,” Cunningham said. “He said he didn’t even want to see how this plays out and is just so frustrated with doing business downtown that the decision to pursue these lots was the tipping point.”

Menlo Park Assistant City Manager Stephen Stolte, the only city official to respond to a request for comment, did not comment on the ongoing debate but emphasized that no commitments to development have been made.

“The city has issued a request for qualifications (RFQ) for developers to submit their experience, ideas, and approaches to development on parking plazas 1, 2, and/or 3,” Stolte said in an emailed statement to this news organization. “No formal plans have been submitted.”

This local conflict reflects the broad struggle across the Bay Area to build affordable housing.

According to the California Department of Housing and Community Development, San Mateo County, home to Meta and numerous tech and biotech companies, leads the Bay Area in jurisdictions out of compliance with state housing law.

Menlo Park’s housing element, approved in 2023, plans for nearly 3,000 units by 2031. Across the Bay Area, cities must build at least 442,000 units to meet demand, according to the Association of Bay Area Governments.

The state has increased scrutiny of cities failing to comply.

Last year, nearby Portola Valley’s housing element was decertified, risking the “builder’s remedy,” which allows developers to bypass local zoning if 20% of units are affordable. Non-compliant cities like Menlo Park also risk losing state and federal grants.

Sustainable housing advocate Jordan Grimes of Greenbelt Alliance said even 3,000 units in Menlo Park is a “drop in the bucket” but critical for addressing the housing shortage.

“Menlo Park has added tens of thousands of jobs over the last decade, since Facebook took root in the city, and has added very few new homes,” Grimes said. “So it has created this really extreme shortage.”

According to 2023 U.S. Census data, about 420,000 people commute into San Mateo County for work. The average home price is $2.6 million, making it one of the most unaffordable places to live in the nation.

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Opponents, including Cunningham, reiterated they were not against new housing but suggested alternative sites such as the nearby Civic Center or the USGS site, about 1.2 miles away, as better fits for development.

However, a city staff report stated that the Civic Center and other parks were excluded to preserve green space and community gathering areas.

Jenny Michel, a commercial real estate professional and affordable housing advocate, emphasized the importance of a downtown location for workers.

“Menlo Park is one of the few cities actively fostering housing production,” said Michel, a Menlo Park native and formerly homeless teacher, acknowledging the city’s efforts. “However, all affordable housing is concentrated in Belle Haven, on the east side of Highway 101.”

Belle Haven is a historically underserved neighborhood bordering East Palo Alto. Michel pointed out that state law says cities must make sure everyone has equal access to housing by building in “resource-rich areas.”

“What’s missing is not just low-income housing, but all types of housing to meet different demographic needs, such as seniors, disabled people, young families, and those looking to expand their families,” she said.

Most local workers in the city, especially non-tech workers, don’t live in Menlo Park, Michel noted.

“I know security guards, maintenance staff, and other service workers who commute from as far away as El Dorado County, driving up to three hours each way,” she said.

While acknowledging his staff would benefit from affordable housing, Coffee Bar owner Greg Buchheister echoed concerns about construction impacts on his business, even with the understanding that parking space reductions might be temporary.

“When you talk about affordable housing bringing more customers, you also have to consider the commuters who come to downtown Menlo Park,” he said. “This isn’t a place where you can just walk everywhere — people working on Sand Hill Road or in nearby offices need to pull in quickly, grab a coffee, and go. Moving parking to a garage creates a barrier many won’t deal with.”

He agreed with Save Downtown Menlo Park’s suggestion to locate housing projects away from areas reliant on quick customer turnover.

As proposals move forward following the Monday deadline, Grimes downplayed concerns about parking loss.

“The development of the parking lots is going to include new public parking — it’s not like the city is just abolishing all parking downtown,” he said.

Michel countered that businesses and clients will adjust, citing the example of parking garages used on California Avenue in downtown Palo Alto.

“There will be parking. It’ll be a phased approach,” Michel said. “People may need to walk a block for a couple of months, but that’s OK. If they really like shopping at your store, they’ll still shop there.”

On bridging the divide, Michel stressed the importance of recognizing the severity of the crisis, and engaging in productive dialogue.

“The ultimate aim is economic stability and vibrancy — not just for employers and companies, but also for workers and local residents. From my perspective, this is a win-win-win for everyone,” Michel said.

Customers walk past a sign on the front of Draeger’s Market in Menlo Park, Calif., Friday, March 28, 2025, that protests a plan to replace parking with low-cost housing. (Karl Mondon/Bay Area News Group)