Housing advocates scored a rare victory in Palo Alto on Wednesday night, when the city's first affordable-housing development in seven years received a critical zone change from the Planning and Transportation Commission.

By a 6-0 vote, with Doria Summa absent, the commission agreed to apply the city's newly created "affordable-housing combining district" to proposal by the nonprofit Palo Alto Housing at 3705 El Camino Real, near Wilton Avenue. The zoning district, which the City Council created earlier this year specifically to encourage construction of below-market-rate housing, will allow the 65-apartment complex for individuals making between 30 percent and 60 percent of area median income. Sixteen of these units will be designated for adults with developmental disabilities.

If approved by the council, the development in the Ventura neighborhood would become only the second significant multifamily residential project to win approval this year and the only one to consist exclusively of below-market-rate housing.

The project is also seeking a waiver from the city's requirement for ground-floor retail, as permitted under the overlay ordinance. The ground floor would include a management office, a mailroom, bike storage and a computer lab. There would also be a floor with a community room, a gym and laundry facilities, according to the application.

Though planning commissioners were somewhat skeptical about the new overlay zone earlier this year (the council created it despite the commission's objections), on Wednesday they were overwhelmingly in support of the first project to apply it.

Commission Chair Ed Lauing characterized the Palo Alto Housing proposal as exactly the type of development the city should encourage. Commissioner Przemek Gardias lauded the nonprofit for making the economics work for a project that could accommodate individuals well below the area median income and said he hopes the project "becomes a model for further development."

Vice Chair Susan Monk noted that the project would give teachers, restaurant workers and landscapers a rare chance to live close to where they work. She also said she was heartened by the support the project has received from the wider community, as evidenced by the letters the commissioners received and the roughly dozen speakers who addressed the commission Wednesday to advocate for the project.

"I don't think we should be treating housing as a luxury, and we're far behind on our housing production as a state," Monk said. "We are seeing people living on the streets in numbers that just keep growing. We do need to do our part to address that problem."

For Palo Alto Housing, which develops affordable-housing projects and manages Palo Alto's below-market-rate program, the project would be its first built in the city since the 45-unit Treehouse development on West Charleston Road in 2011. It attempted to build 60 apartments for low-income seniors and 12 single-family homes on Maybell Avenue in 2013, but city voters by referendum overturned the council-approved zone change that would have allowed it.

Though most speakers on Wednesday supported the project, residents of the Ventura neighborhood have expressed mixed feelings and have called on the council to make sure the new project doesn't create traffic and parking congestion on their roads. Todd Lewis, who owns two buildings across the street from the property, suggested that the proposed four-story building is too massive and that its 41 parking spots would be insufficient.

The building, he said, is going to be "very imposing for everyone in that area" and cause a lot of problems for the local community, he said.

Ventura resident Ken Joye was more sanguine about the proposal.

"I know fellow neighbors of mine are concerned about the impacts of parking," Joye said. "I'm confident Palo Alto Housing will work with us and make sure it's not a huge problem."

The new overlay district would apply to a site that was previously zoned "service commercial" and that historically has accommodated retail and auto services. Resident Bob Moss took issue with the zone change, which he argued would violate the city's Comprehensive Plan and El Camino Real design guidelines.

Kelsey Banes, a psychologist at VA Palo Alto Healthcare System, was one of more than a dozen people who urged the commission to support the zone change Wednesday night.

"We want to build more units and be creative about the ways we do that in order to get people into housing because there's a lot of people who are really suffering and struggling," Banes said.

Commissioners saw the project as one that both fulfills an urgent community need and a key council goal. With their approval at hand, the project now heads to the Architectural Review Board, which will consider the design of the building on Oct. 4. The proposal is then scheduled to go to the council for final approval later in the year.