Few projects reflect Palo Alto's hopes and fears like the 57-apartment development that the City Council approved early Tuesday morning for the traffic-congested corner of Page Mill Road and El Camino Real.

Supporters used words like "workforce housing" and "car-light" to describe the Windy Hill Property Ventures project at 2755 El Camino Real, which secured a 7-2 vote, with Council members Karen Holman and Lydia Kou dissenting. With the building's central location and apartments averaging 526 square feet each, proponents see it as the perfect project to address the "missing middle" class -- employees and residents who make too much money to qualify for traditional below-market-rate housing but not enough to afford the city's sky-high market rates.

By giving each resident a suite of incentives to avoid driving -- including public transit passes, bike amenities and an on-site trip coordinator -- the project also represents a critical test case in Palo Alto's much-touted pivot toward "transit-oriented development."

Councilman Adrian Fine, who made the motion to approve the development, called the development "exactly what we've been asking for and exactly the kind of units we need in Palo Alto."

Critics, on the other hand, charge that the apartments -- for all their merits -- are hardly the kind of "affordable housing" that council members have often talked about. Twelve units will be earmarked for individuals who make between 140 and 150 percent of the area's median income, or $115,800 to $124,000 for an individual. The rest will be rented out at market rate, with preference given to those who work or live within 3 miles of the property. Holman observed during the council's long discussion that $3,000 rent for a studio apartment is hardly affordable.

She also questioned whether Windy Hill would really target the local workforce -- a concern shared by some of her colleagues. The city's agreement with Windy Hill requires the developer to give preference but city staff have yet to work out a regulatory agreement to make sure this provision is enforced.

Tod Spieker Jr. of Windy Hill tried to alleviate these concerns by noting that the project will submit annual reports to the city about the building's tenants to ensure compliance. It will also allow the city to conduct compliance audits.

"The goal of the whole project -- the location, the size of the units, the TDM (transportation-demand management) program -- is premised on getting people to live where they work," Spieker said. "That's the goal of the whole thing."

Holman suggested that the regulatory agreement return to the council for approval, but her proposal fell by a 4-5 vote, with Kou, Vice Mayor Eric Filseth and Councilman Tom DuBois joining her.

For the council majority -- as well as for most of the speakers who opined on the development -- the project represented a rare victory on the housing front. The council adopted a goal earlier this year of producing 300 housing units per year between now and 2030, consistent with the aim of the city's newly approved Comprehensive Plan. This is the first significant project approved this year.

Eric Rosenblum, a former planning commissioner who co-founded the citizens group Palo Alto Forward, was one of more than a dozen public speakers who urged the council to approve the development. Rosenblum noted that the council often talks about housing being a "top priority" but then criticizes actual projects for being too big or too small, or for being located in neighborhoods where the transitions are awkward.

"It's time for us to put our money where our mouth is," Rosenblum said.

For some council members and residents, zoning was the chief problem. The property is zoned as "public facility," which -- as the name suggests -- is earmarked for public buildings and municipal amenities. The Santa Clara Valley Transportation Authority had used it as a parking lot before selling it to a private developer.

In approving the project, the council rezoned the site to create the new "workforce housing combining district," which allows higher building density and relaxed parking standards for projects within half a mile of railroad stations (in this case, the California Avenue Caltrain station).

Even some supporters of the project, including Vice Mayor Eric Filseth, expressed reservations about rezoning a "public-benefit" parcel for a different use. Resident Becky Sanders, who took it a step further, called the rezoning proposal "legalized theft of a public-benefit property." She suggested that given the zone change, the project should be required to provide 100 percent below-market-rate housing. If Windy Hill can't do that, the city should find another developer who would.

Kou shared this concern and called the proposal "a customized ordinance to benefit one property."

"We have a responsibility to the city," she said; but instead, "everything is being rushed through to make something happen that might not benefit the city."

She also took issue with the very idea of "workforce housing."

"Are you saying retired people will not live there? Will those people not be considered, if they can pay the rent? Are we discriminating now?" Kou asked.

But most of her colleagues agreed that while the issues surrounding the "public facility" zone merit further consideration, this particular project is laudable and merited support. Windy Hill has already gone through two years of public hearings and has modified the project repeatedly to address concerns. Revisions include lowering the number of proposed units from 60 to 57 (with 40 studios and 17 one-bedroom apartments), decreasing the project's floor-area ratio, increasing parking from 45 to 68 stalls and adding space for guest parking and for deliveries.

Mayor Liz Kniss lauded the project as "good housing." Fine, one of the council's leading housing advocates, called the redevelopment of the parking lot with much-needed housing "a win for the city."

"If we're not going to do this kind of housing, we should not do any housing," Fine said. "We should remove it from our priorities and stop talking about it."