For Palo Alto's housing advocates, the apartment complex proposed for the busy corner of El Camino Real and Page Mill Road represents the perfect model for dealing with the city's housing shortage.

Filled with studios and small one-bedroom apartments, the project from Windy Hills Property Ventures would cater to young professionals and include a host of programs aimed at encouraging carless commutes.

But for critics of recent development trends, the proposal for 2755 El Camino Real is at best a flawed solution and, at worst, a parking nightmare waiting to happen. It would require a zone change; its density goes far beyond what would be allowed in any of the city's residential district; and it only provides 45 parking spots, even though the code would require about twice as many.

Both views were aired during Monday night's public hearing on the latest plan for the much discussed site. And while the City Council didn't take any votes, the majority agreed that the project -- for all its flaws -- has plenty of merits and is worth further exploration and refinement.

The council's generally positive reception was a marked departure from its prior discussions over the site, which is currently occupied by a parking lot. A year ago, the property owner had proposed a mixed-use development with offices, retail and four residential units. That plan was soundly rejected by the council, with most members saying that they'd much prefer to see housing on the property.

On Monday night, council members lauded Windy Hill for listening to earlier feedback and for responding accordingly. They praised the developer for creating much needed housing and lauded Windy Hill's proposal to give preference to Palo Alto's teachers, firefighters and city workers. And while some on the council said they remained concerned about the prospect of rezoning a site to suit a specific project, most agreed that it has many of the features that the city desperately needs: small apartments and aggressive measures to curb traffic.

Councilman Marc Berman was among the project's most enthusiastic supporters, calling the parking lot "the perfect site for housing," and praising the developer for heeding the council's prior feedback and for checking "every box" in considering ways to add housing. Though he acknowledged that the project, as presented, wouldn't comply with any existing zoning designation (it's far more dense than any multi-family zoning district would allow), Berman didn't see that as a problem.

"Yes, we need to have zoning reforms that encourage more units per acre and not less units per acre, but we don't have that now, and I don't want to wait until that process is completed before possibly approving this project and creating units of desperately needed housing,” Berman said.

Councilman Cory Wolbach agreed and said the project would bring much needed diversity to the city's housing stock, where single-family homes on suburban lots remain the dominant use. And while neighborhood leaders and land-use watchdogs raised concerns about the project's insufficient parking, Wolbach said he would support even fewer parking spots, along with deed restrictions prohibiting renters in the new building from owning cars.

"I'd be open to a project where there was parking for visitors, maybe people who work for the property, contractors -- that's about it,” Wolbach said. "This actually has a lot more parking than what I would envision in a car-light, car-free project. I would call this a compromise."

He used the same word to describe the units sizes. At about 500 square feet, these apartments would be far smaller than most apartments in Palo Alto. But they are also roughly twice as big as the "microunits" that have recently been developed in cities such as Berkeley and New York City, according to the developers.

Even those council members who are generally cautious about new developments acknowledged that the project has some merits. Councilman Eric Filseth argued that adding 60 small units to the city's housing stock "seems generally reasonable," particularly since they would be so close to the city's primary job center: Stanford Research Park. His support, however, was heavily conditioned on having the housing be restricted to city workers, teachers, firefighters and police officers.

The site is currently zoned as "public facility," a designation that would have to be changed to accommodate any type of private housing development. Filseth noted that removing that designation would effectively take away from the city the option of constructing an amenity such as a new animal shelter here.

"We should be very conscious about rezoning public-facilities land," Filseth said. "It's a one-way thing. You never get it back."

While Filseth said he would be interested in having the site support low- and mid-income employees who would not otherwise be able to afford to live in Palo Alto, he was far less enthusiastic than Wolbach and Berman about simply having housing at the site. City workers and teachers are unlikely to meet the $2,000-and-above rents that these apartments would likely fetch, he noted.

"If we had workforce people here, that would be public value," Filseth said, "but that's not going to happen if they have to bid for housing against high-tech workers like the 6,500 that Facebook will put in Menlo Park next door."

Tod Spieker and Jamie D'Allesandro, representing Windy Hill, emphasized that the project will not have impacts on schools and that it's meant "for people working close by."

Though it won't have as many parking spaces as required, it would include 84 bike-parking spots, Caltrain passes for tenants and a "transportation-demand manager" who will live on site and help residents find the best way to get around without cars. They also proposed a "bike kitchen" on the ground floor, where residents can store their bikes and get them repaired. The operation would be managed by a local Palo Alto bike shop.

To alleviate anxieties about parking impacts, D'Allesandro told the council that the development team also fully supports having a Residential Parking Program (RPP) in the surrounding neighborhoods that excludes building tenants from being eligible to buy permits. This policy would effectively bar residents from parking in adjacent neighborhoods for more than two hours. He and Spieker also said they would support stringent enforcement of traffic-reduction targets and fines if these targets aren't met.

"We fundamentally believe that people who will rent these units ... they don't want stuff," Spieker said. "They want a place to live close to their work and they don't own a car. They ride their bikes."

These assurances were enough to win over some council members, with Vice Mayor Greg Scharff saying he would support the new development as a pilot project, provided that the developers can provide assurances that the building tenants won't have more cars than parking spaces.

"I think it's outside the box," Scharff said of the project. "I think it can be a great pilot project."

Others weren't so sure. Councilwoman Karen Holman echoed the concerns of several neighborhood leaders when she characterized the proposal as "spot zoning" and indicated that she cannot support it. Though it doesn't have a zoning designation, the project is effectively a "planned community," a controversial designation that allows developers to exceed zoning regulations in exchange for negotiated public benefits. In 2014, the council effectively eliminated the zoning designation after acknowledging that it no longer enjoys public trust.

Holman noted that the project is "drastically different from what zoning allows" and that it has not been vetted by the community and has not undergone any significant analysis. She also criticized the project's design and for having insufficient open space (most apartments, though not all, would have balconies).

"We need to be housing people and not warehousing people," Holman said. "If people don't have adequate open space, we're warehousing people."

Concerns over zoning also proved to be an insurmountable hurdle for Councilman Tom DuBois. The proposed 50-foot-tall project would be incompatible with the condominium around the site he argued.

"I'm not really supportive of the project as it's currently described," DuBois said.

Residents were similarly split, with some urging the council to approve the desperately needed housing and others warning about the project's potential traffic and parking impacts.

Elaine Uang, co-founder of Palo Alto Forward, called the 60-unit project "a good start to think about new ways to provide housing in the right places." Prior to the meeting, her group circulated a letter to the council that was signed (and, in many cases, slightly modified) by dozens of residents.

"While I hope some preference is given to city employees, teachers, nurses, or local workers, even market-rate studios and one-bedrooms fill a need in our community and help relieve (somewhat) the competition for smaller affordable units," Uang said.

Randy Popp, former chair of the city's Architectural Review Board (ARB), wrote that this is "the right time to consider changing the status quo for housing and parking requirements" and encouraged the council to "approve this project without delay."

And Steve Pierce, real estate broker with the firm Zane MacGregor, argued that the city is "in a housing hole and need to work our way out at every opportunity."

"Diversity of housing types is a must. Reduced parking is appropriate for the Uber generation, particularly when proximate to Caltrain and VTA," he said.

But there were also plenty of skeptics, including neighborhood leaders and land-use watchdogs affiliated with the group Palo Altans for Sensible Zoning. A letter submitted by the umbrella group Palo Alto Neighborhoods, made the case for rejecting the project. It was co-signed by Sheri Furman, Rebecca Sanders, Norm Beamer, Annette Glanckopf, Jeff Levinsky, Roger Petersen and Doria Summa.

Critics of the project blasted the developers' "invent-a-zone approach" and called the project "massively under-parked." They also took issue with the site's "spot zoning" under which "neighbors can no longer know what will be next to them." That is "unfair and not good planning."

"Spot zoning harms the city as a whole," the letter states. "When a developer and a bare majority of council members can rezone a property to be worth millions of dollars more, confidence in our city government erodes."

Because the Monday hearing was a "pre-screening," it did not feature a vote. It will now be up to Windy Hill to consider the council's feedback and determine whether it has enough support to move forward with a formal application.