Cupertino Approves 32 Townhomes Near Vallco Amid Housing Clash

The project will include six moderate-income units, as the city and state clash over development rules.

Apr. 6, 2026 at 10:37pm

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A miniature, stylized 3D illustration of a townhome development with three-story buildings, lush landscaping, and a winding road, representing a new project in Cupertino that is part of the city's efforts to meet state housing goals.A new townhome development in Cupertino aims to add more housing near the former Vallco mall, as the city navigates a clash with the state over development rules.Cupertino Today

Cupertino has approved a 32-unit townhome project by Dividend Homes along Stevens Creek Boulevard, with six units reserved for moderate-income buyers. The approval comes amid an ongoing dispute between the city and the state over housing development rules, including how long cities must give developers to respond when an application is deemed incomplete.

Why it matters

This project is part of Cupertino's efforts to meet its state-mandated housing goals, but the clash over development rules could impact the pace of future approvals. The outcome of the legal battle between Cupertino and the state could shape how quickly similar projects can move forward across the city.

The details

The 32 three-story townhomes will replace three low-rise office buildings on a 1.77-acre site. The units will range from 1,548 to 2,156 square feet, with a maximum height of 45 feet. Dividend Homes requested density bonus concessions to exceed local zoning limits in exchange for including the six moderate-income homes.

  • The Cupertino City Council approved the project in a 4-0 vote with one abstention earlier this year.
  • In 2025, the California Department of Housing and Community Development told Cupertino that the 90-day response window under the Permit Streamlining Act resets every time the city issues an incompleteness letter.

The players

Dividend Homes

The developer behind the 32-unit townhome project approved by Cupertino.

California Department of Housing and Community Development

The state agency that has clashed with Cupertino over housing development rules, including the 90-day response window.

Cupertino City Council

The local governing body that approved the 32-unit Dividend Homes townhome project.

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What’s next

With entitlements in hand, the Dividend Homes project will move into building permits and technical plan checks. Neighbors who raised privacy concerns during public hearings are expected to continue monitoring the project as it progresses.

The takeaway

This project highlights the ongoing tension between Cupertino and the state over housing development rules, which could impact the pace of future approvals in the city. The outcome of the legal dispute over the 90-day response window could have broader implications for how quickly similar projects can move forward.