"State law is not on our side there," Vice Mayor Maria Ristow said on August 18, as the Town Council approved 138 three-story townhomes on Oka Road, according to the Los Gatan's report on the meeting. In the same remarks she called the project's below-market-rate units "game-changing."
The Oka Road vote got a few local headlines. Put it next to two other approved projects and you get a much bigger story for anyone shopping in Los Gatos. The town's new construction now leans heavily toward attached homes, and the pipeline is large next to the market that already exists for them.
About 420 townhomes against a market that closed 119
These are the three large townhome projects that have cleared approval or are already under construction:
| Project | Developer | Townhomes | Where it stands |
|---|---|---|---|
| Solana, 50 Los Gatos-Saratoga Road | SummerHill Homes | 155 | Broke ground November 4, 2025; marketed as "Coming Spring 2027" |
| North 40 Phase II, 14859 Los Gatos Boulevard | Grosvenor Americas | About 127 within 450 total units | Approved January 13, 2026 |
| 14789 Oka Road | Urban Catalyst | 138, 28 for low-income households | Approved August 18, 2026 |
That comes to roughly 420 townhomes. Now look at the resale side. In all of 2025, the Santa Clara County Association of Realtors year-end report counted 119 closed condo and townhome sales in Los Gatos, at a $1,450,000 median. From January through September 2026, the monthly SCCAOR reports add up to 71 such closings.
At the 2025 pace, the approved townhomes equal about three and a half years of every attached-home resale in town. Even Solana by itself is more than the whole town's attached resale volume in 2025.
Single-family homes trade on a completely different scale. Los Gatos closed 305 single-family sales in 2025 at a $3,045,000 median. So the new supply isn't spread evenly across the market. It's concentrated in the smallest segment.
Why the new homes came out as townhomes
Los Gatos is in an eight-year cycle that requires it to plan for at least 1,993 new homes by 2031, under its Housing Element. The town did not adopt a compliant Housing Element by the state deadline. As the Los Gatan explained in its North 40 coverage, developers who applied after that point could ask for special concessions and propose bigger projects.
That provision is called the Builder's Remedy, and it gave developers leverage that shows up in the details of each project:
- Oka Road went forward as a Builder's Remedy project. Once at least 20 percent of the units are affordable, the state's Housing Accountability Act bars the Town from rejecting the project or cutting its density. Ristow said the walnut orchard next to the Addison-Penzak Jewish Community Center "was not identified for this level of density."
- North 40 Phase II did not use the Builder's Remedy, but the threat was there throughout the hearing. The Town Attorney confirmed that if the Town denied the project, Grosvenor could come back under the Builder's Remedy with a larger development. The project used the state's density bonus law instead, which earned two concessions because 17 percent of the units are affordable.
- The courts handed the Town a loss on a key processing question. On January 29, 2026, a Superior Court judge dismissed the Town's case over how many 90-day resubmittal periods developers get, siding with the state housing department, the Mercury News reported.
Townhomes are the format that fits this math. They're dense enough to pencil out on orchard-sized parcels. They're also a much smaller format than the 175-unit and 120-unit tower proposals filed for Los Gatos Boulevard.
The North 40 clause that ties affordable housing to townhome sales
The most consequential detail in the North 40 Phase II approval is the second concession. Grosvenor can build the market-rate townhomes first, to cover roughly $100 million in upfront costs, before building any of the affordable housing. According to the Los Gatan, the Town got a second opinion, which found the developer would end up "just barely in the black after selling all the townhomes."
That sequence has real effects. The 77 affordable units, including the Eden Housing building, come after the townhome phase and depend partly on the infrastructure that phase pays for. Eden Housing said having that infrastructure in place first would help it secure funding. Because the margin is that thin, the speed of townhome sales on Los Gatos Boulevard affects more than one developer's balance sheet. It also sets the timing for the next phase of the project.
Those same townhomes may hit the market around the same time as Solana and possibly Oka Road. The Town's May 22, 2026 planning report describes Oka Road with a condominium vesting tentative map, though no sales plan has been announced. If several projects launch sales in overlapping windows, they'll be competing for a buyer pool that has supported about 119 attached-home purchases a year.
What the existing attached market looks like right now
The resale numbers explain why this pipeline matters for prices. Here are Los Gatos condo and townhome medians for 2026 from the SCCAOR monthly reports:
- January through April 2026: medians between $1,517,250 and $1,660,000, on 5 to 13 sales a month.
- May through August 2026: medians eased from $1,457,500 to $1,370,000, on 5 to 10 sales a month.
- September 2026: a $895,000 median on just 6 sales, with 24 units in inventory and 35 average days on market.
The September figure shows how thin this segment is. Six closings can swing a median by several hundred thousand dollars in a single month, so September reads better as an outlier than as a new price level. In a market this small, a few hundred new units are a big share of the supply.
The gap above it is wide too. In September 2026, Los Gatos single-family homes sold at a $2,550,000 median and $1,296 per square foot. Condos and townhomes went for $727 per square foot. Solana's plans run from 2 to 4 bedrooms and 1,339 to 2,270 square feet. Homes that size, new and in Los Gatos, fall squarely in the range between a typical older condo and an entry-level house. That middle rung has been thin here for years. SummerHill hasn't published Solana pricing, so where these homes actually land between those two per-square-foot figures is still an open question.
What's still unsettled
Several facts that will shape this market aren't public yet:
- Pricing. Solana's project page lists its office hours as "Coming Soon" and gives no prices, and none of the three projects has announced prices.
- North 40 Phase II construction timing. No construction start had been reported in the sources reviewed.
- Oka Road tenure. The Town report describes a condominium map, but no sales plan has been announced.
- 178 Twin Oaks Drive. Pennant Properties' Surrey Farms Estates proposal for 12 single-family homes, three of them affordable, was set for another Council hearing in October after the August 11 meeting. It's the only single-family project in this group, and no outcome has been reported yet.
- The Housing Element itself. As of a December 2025 Los Gatan report, the Town's overlay-zoning approach was being challenged in court. How that case turns out could affect whether more projects like Oka Road follow.
FAQ
When does Solana open?
SummerHill Homes lists Solana as "Coming Spring 2027" and hasn't posted a tour date. Its project page gives a 2 to 4 bedroom range and floor plans from 1,339 to 2,270 square feet.
Who qualifies for the affordable units at Oka Road?
Ristow noted that the designated units at Oka Road and Twin Oaks Drive must be affordable to households earning 80 percent or less of the area median income, as reported by the Los Gatan. State income limits are published by the California Department of Housing and Community Development.
Do resale townhomes compete with new construction?
They compete for the same buyers. In 2025, about 119 Los Gatos condos and townhomes changed hands. Each new project will be selling into a segment of that size.
If you own a Los Gatos townhome or condo, the next few years will bring a lot more new construction into your segment than the town has seen before. Brian Flack tracks these projects one sale at a time and can show you how your home compares to what's coming. Get your instant home valuation as a starting point, then talk with us about timing.
This article is general information, not legal, tax or financial advice. Consult a qualified professional about your situation.
