Silicon Valley’s booming tech industry is helping to drive up housing demand, but constant debates over where and how to build, not a lack of resources, are slowing down long-overdue solutions.

The Menlo Park City Council on Tuesday, despite significant opposition, unanimously approved the first step of a controversial downtown housing plan, inviting builders to propose plans for over 480 affordable units on land that is currently occupied by city parking lots.

During the meeting, more than 100 community members voiced their opinions, which were almost evenly split between support and opposition.

Proponents emphasized the urgent need for affordable housing, while critics argued that converting downtown parking lots into housing would harm small businesses, increase traffic and make shopping less convenient due to a reduction in available spaces.

The proposed sites, identified in the city’s housing element, are located at parking lots 1, 2 and 3, off Santa Cruz Avenue at Maloney Lane, Chestnut Street, and Crane Street.

City officials are concerned about possible sanctions by California regulators, who have intensified enforcement of housing laws in recent years amid the overall crisis in the state.

“These are real decisions still to be made, and it’s unclear what proposals we’ll receive,” Mayor Drew Combs said, emphasizing that the vote only invites project proposals and does not approve any specific project. “We might see densities that don’t align with the community’s needs.”

Neighboring Portola Valley faced repercussions last year when state regulators decertified its housing plan due to delays.

A decertified plan opens cities to a possible builder’s remedy solution, a rule that allows developers to bypass local zoning rules if 20% of a proposed building’s units are affordable.

Noncompliant cities and towns also risk losing access to state and federal grants.

Menlo Park’s housing element, approved by state regulators in 2023, outlines plans for nearly 3,000 units across various income levels by 2031. In the region, local governments must build at least 442,000 units to meet growing housing demands, according to the Association of Bay Area Governments.

Menlo Park Vice Mayor Betsy Nash clarified to residents that the council’s resolution is not an approval of a building project but rather an exploration of potential development, emphasizing that the council has not yet designated the parking lots as surplus land.

“I would not proceed if I didn’t feel this was the right path,” Nash said.

Menlo Park, home to technology titan Meta, is one of California’s wealthiest cities, with a median home price of $2.6 million. Nearby tech hubs like Palo Alto, Mountain View, and Redwood City face similar housing shortages, forcing many workers to compete for limited housing supply or move to more affordable areas on the outskirts of the Bay Area or Central Valley.

Two petitions reflect the divided community: Save Downtown Menlo gathered 2,900 signatures opposing the project, while Menlo Together collected 350 in support. Although opponents had more signatures, attendance at Tuesday’s meeting from both groups appeared balanced, with members cheering and jeering throughout the night.

Nick Hartley, a former downtown resident now living in Vintage Oaks, supports the project, recalling how living downtown allowed him to forgo a car.

“It was amazing to walk to the train, shops and commute by bike,” Hartley said. “I want others to have that opportunity.”

Tony Draeger, a downtown grocer, opposed the project, citing potential harm to businesses.

“This development will negatively impact businesses that rely on convenient parking,” Draeger said. “Eliminating parking on the north side will cause overcrowding on the south side, hurting our market and altering the city’s tax base.”

Some residents proposed building housing at the Menlo Park Civic Center, about half a mile from downtown, pointing to its open green spaces and arguing it would minimize the impact on downtown businesses. When the idea was previously raised, the city’s housing plan maintained it was important to preserve open green spaces.

The next step for potential housing on the parking lot sites will involve the release of a request for qualifications by the end of the month, inviting developers to propose plans. Developers will have two months to respond, and the council could designate the lots as surplus land to expedite development.

While the council has cleared a hurdle in its housing plans, significant work remains before construction begins. Proposals are expected to be reviewed by the council this spring.