In years past, the 54-unit housing development currently proposed for a site on San Antonio Road in Palo Alto probably would have withered at the starting line.

It violates the zoning code, it clashes with the Comprehensive Plan and it is targeting a road that the council had previously agreed is far from ideal for housing. It could displace retail, including a popular martial arts studio, and it is already raising alarms among neighborhood residents about traffic, parking and noise impacts.

And at a time when some council members are calling for the city to focus on housing for low-income residents and those in the "missing middle," including teachers and other public employees, this proposed development would consist largely of two- and three-bedroom condominiums, the majority of which would be sold at market rate.

But in the latest sign of just how urgent the topic of housing has become in Palo Alto, members of the City Council offered words of encouragement on Monday night to the developer, Golden Gate Homes, for its project: a L-shaped building with 54 condominiums. The building would occupy an eclectic block near Leghorn Street, which includes a mix of retail and industrial uses, across the street from the condominium complexes Greenhouse and Greenhouse II.

The developer initially planned to build 48 units at the 1-acre site at 788 San Antonio Road and has since added six more units.

So far, the project is just a concept. The council's Monday discussion was a "pre-screening" session geared toward gauging interest in the project. Despite some reservations about zoning, traffic, lost retail and excessive building massing, members indicated that they are by and large interested.

Councilman Greg Scharff observed that during his nine years on the council, the council has not reviewed any multifamily condominium projects until now. He said he wants to see the project built and warned against killing it "by a thousand cuts," which he says is city's typical way of denying projects.

"We talk a lot about housing up here, but we don't actually approve it," Scharff said. "I definitely encourage you to move forward on this."

Councilwoman Karen Holman wasn't quite as enthusiastic. Given that the site is zoned for "service commercial" (CS) and that the developer has requested a zone change to dense multifamily residential (RM-40), Holman wondered why this doesn't constitute as "spot zoning." City Attorney Molly Stump said that this zone change would technically not be spot zoning if the council finds it to be in the public interest.

Holman also pushed back against the plan to make the project a purely residential complex without ground-floor retail. She suggested that the developer look for ways to integrate retail into the site and to potentially include Studio Kicks, the martial arts studio that currently operates at the site. She also recommended that the developer dedicate more units to affordable housing (the current proposal calls for eight of the 54 units to be offered at below market rate) and to break up the massing of the building.

"This is a pretty large monolithic building on two sides, with not much differentiation," Holman said.

These reservations notwithstanding, Holman noted that Palo Alto needs housing – a sentiment that everyone at the dais shared. Councilman Cory Wolbach lauded what he called an "interesting proposal" that will bring into focus some of the tough discussions the city will need to have as it seeks to meet its goal of producing about 300 housing units annually. Councilman Adrian Fine also said he hopes the developer will move ahead with the project, even if a few kinks still have to be worked out.

The residents who spoke at Monday's meeting were more polarized, with some residents lauding the potential influx of housing, others raising alarm about the development's potential impact on neighborhoods, and still others staying agnostic on the housing but bemoaning the potential loss of Studio Kicks.

Pamela Harter, a resident at the Green Acres II residential community, said she and her neighbors are concerned that this project – in conjunction with the two Marriott hotels now being constructed on the block – will bring "a constant barrage of more traffic and noise."

"I'm personally very much in favor of affordable housing but you have to balance that with the people who live in the neighborhoods," Harter said.

Stephanie Downey, who owns an office building next to the site, said she was excited about the project. Downey, a high school teacher, said the new development could potentially provide housing for some of her colleagues.

"It's a challenge for a teacher to be able to afford anything within commuting distance to this community to work here," Downey said.

Most council members found themselves somewhere between these two positions. Councilman Tom DuBois suggested that the developer consider making this a senior-housing proposal and suggested that San Antonio Road wouldn't be an ideal location for bicycling school commuters. He also recommended that the developer consider ways to retain retail, a sentiment that Vice Mayor Eric Filseth shared.

"The reason we have retail protection ordinances is because we don't want to lose this kind of feature of our community," Filseth said, referring to Studio Kicks. "Because there's only so much land and there's so much demand for it, I wouldn't want to see it go away."