California's housing revolution hits one of America's wealthiest cities as developers race to build hundreds of apartments

A sweeping new California housing law is already reshaping one of America's most expensive property markets - triggering a rush of apartment proposals in affluent neighborhoods and sparking fears among some homeowners that it could change the character of their communities forever.

Just weeks after Senate Bill 79 (SB 79) came into effect on July 1, developers submitted plans for hundreds of new homes in the wealthy Silicon Valley city of Palo Alto, with local officials admitting they were caught off guard by the scale of the response.

The legislation, dubbed the Abundant and Affordable Homes Near Transit Act, is designed to tackle California's chronic housing shortage by allowing denser residential developments near train stations and major bus routes, even if local zoning rules would normally prohibit them.

Supporters say it could ease the state's affordability crisis by creating thousands of desperately needed homes in areas with good public transport.

But critics warn it could dramatically alter established neighborhoods, reduce property values and overwhelm local infrastructure.

In Palo Alto - where the average home is worth around $3.6 million and a one-bedroom apartment rents for roughly $3,630 a month - the law has already unleashed a wave of proposals.

Developers submitted nine multifamily housing projects totaling 341 apartments during a frantic two-week window before the city introduced a temporary pause on new SB 79 applications.

Among the proposals are futuristic six- and seven-story apartment buildings featuring sweeping curved facades, glass balconies and rooftop gardens that would dramatically change the skyline in parts of the city.

One proposed development near a Caltrain station would create 17 apartments above existing retail space, while another six-story building would feature a green roof and decorative aluminum fins.

Mayor Vicki Veenker admitted city leaders had not anticipated such a flood of applications arriving so quickly.

'We'll see who follows through and in what manner, but it's also important to note that these projects are a mixed bag,' she told SFGate.

'As the community and the council and staff digest this, we'll all be able to come to a better understanding of what the impact is.'

The new law allows apartment buildings to override many local zoning restrictions if they're located close to major transit.

Buildings next to rail stations such as Caltrain or BART can reach nine stories, while developments slightly farther away can still rise between six and seven stories depending on their proximity to transit.

The aim is to encourage people to live near public transportation, reduce car dependence and make it easier to build new housing in cities where restrictive zoning has long limited supply.

Housing advocates say California has failed to build sufficient homes for its population for decades, pushing prices far beyond the reach of many families.

'This has really given a giant boost to the YIMBY (Yes In My Backyard) movement,' Matthew Lewis, communications director for California YIMBY, told SFGate.

'YIMBYs across the country were watching this bill because it was proof of concept that actually we can have nice things.'

However, not everyone is convinced.

Some residents fear taller apartment buildings will fundamentally alter the character of suburban neighborhoods.

One Peninsula resident accused supporters of not caring 'how this law will disrupt the fabric of a neighborhood.'

Another warned it could lower property values and reduce residents' quality of life, while others argued that additional housing would increase congestion, pollution and strain public services.

Others, however, say California has little choice if it wants to tackle soaring housing costs.

Pro-housing groups argue that concentrating development around transit hubs is one of the most effective ways to address both the state's housing shortage and climate goals.

Palo Alto isn't the only city grappling with the changes.

Some municipalities, including Redwood City, Belmont, San Mateo and South San Francisco, have opted not to seek exemptions from the legislation.

Others, including San Francisco and Los Angeles, are introducing alternative plans or phasing in parts of the law over the coming years.

In San Mateo, one proposal would replace a single-family home with a five-story building containing 20 studio apartments just a short walk from the city's Caltrain station.

Meanwhile, cities including Mountain View and San Carlos have yet to receive any SB 79 applications.

The early response suggests developers are eager to take advantage of the new rules.

'We are more than surprised at how successful it's been,' Jack Farrell, a research attorney with YIMBY Law, told SFGate.

'There's clear interest in this law being utilized to create more housing. 

'If they were able to get nine projects in a two-week period, I can only imagine what it would be like if they were to just let SB 79 be in effect throughout the city.'

The battle highlights California's growing housing divide.

While the state desperately needs more homes to address decades of underbuilding and sky-high prices, many affluent communities remain resistant to higher-density development.

Whether SB 79 ultimately succeeds in easing the housing crisis - or simply fuels more local opposition - may determine how far California is willing to go in overriding local zoning rules in pursuit of more affordable housing.