For years, Palo Alto's elected leaders have focused their housing efforts on downtown and around California Avenue, the two parts in the city with the most transportation options and retail opportunities.

But with the city's housing efforts falling well short of the City Council's goals, officials are now considering an option that would be almost unthinkable a few years ago: encouraging housing density along San Antonio Road, the very area that they previously deemed unsuitable for residential construction.

Palo Alto's plans for San Antonio remain modest compared to Mountain View, which in the last three years has approved more than 1,000 residential units along the busy east-west artery. Even so, they represent a shift for a city that has traditionally been cautious about approving housing in areas outside the core commercial areas.

Even though the City Council designated several sites on El Camino Real and San Antonio as potential housing areas in 2014, when it approved the latest Housing Elements, city officials generally agreed that these sites are intended to be "placeholders" until the city can identify better options in downtown and around California Avenue. But with the council approving the Wilton Court project on El Camino Real earlier this year and now considering a housing development with 102 units along San Antonio, these busy arteries are now seen as Palo Alto's most promising opportunity sites for new housing.

The latest sign of the shift came Wednesday, when the Planning and Transportation Commission discussed and generally supported the idea of extending the city's Housing Incentive Program — which offers density bonuses for residential projects and which currently applies only to downtown, California Avenue and El Camino Real — to San Antonio Road. The change was proposed by a developer who is looking to build a four-story, mixed-use building with 102 apartments at 788 San Antonio Road.

So far, the Housing Incentive Program hasn't drawn the type of interest from residential developers that the city has been hoping for. The council, which has a target of approving 300 housing units per year, has yet to review a single housing proposal under the new program in the three designated areas. In May, council members generally supported the prior version of the applicant's proposal, which included 64 units. Since then, the developer revised the plan to include 102 units.

Ted O'Hanlon, representing the property owner Yurong Han, told the commission on Wednesday that the site represents a great opportunity for housing, given its proximity to major employers, including Google; its accessibility to a major thoroughfare, U.S. Highway 101; and the existence of shopping areas within walking distance, most notably Charleston Shopping Center.

"The main message here is that Palo Alto has some very strong goals to build 3,000 units in 10 years — 300 units per year," O'Hanlon said. "We're proposing 102 units in this project and we think it will be a great fit."

The commissioners largely agreed, with varying levels of enthusiasm. Vice Chair Michael Alcheck was particularly excited about the prospect of bringing housing to San Antonio and pointed to Mountain View for example.

"To some degree, Mountain View has demonstrated that San Antonio is suitable for high-density residential," Alcheck said. "I'm thrilled that the council is exploring this idea of expanding the housing incentive program."

He later added that he doesn't think there is "a parcel in Palo Alto that isn't suitable for housing."

Others were more discerning about potential housing locations. Commissioners Ed Lauing and Doria Summa, while generally open to the idea of having housing at 788 San Antonio, pointed at the traffic and parking challenges that the area is already experiencing.

The city frequently requires developers of major projects to create transportation-demand-management (TDM) plans, which aim to steer tenants away from cars and toward modes such as transit and biking. Because of the shortage of good transit options and biking amenities in this area, such a program would have to be especially aggressive, Lauing said.

"This would have to be a Barry Bonds-on-steroids TDM program that we haven't seen, before you address what happens here with congestion and gridlock," Lauing said.

Lauing also questioned whether, given these challenges, the city should really be "liberalizing" zoning in this area by applying the Housing Incentive Program here.

If the council ultimately approves the 102-unit proposal, the site would be allowed to have a floor-area-ratio (a measure of building density) of 2.0, equivalent to what the Housing Incentive Program allows in the California Avenue area (in downtown, the program allows a FAR of 3.0). The prior proposal with 64 units would need FAR of 1.5, which is what the program allows along El Camino Real.

Summa said she was intrigued by the idea of having housing in this area but, like Lauing, cautioned about changing the development standards. She and Commissioner Asher Waldfogel both spoke in favor of a broader planning effort for the San Antonio area that would consider the needs of the growing neighborhood.

"I think there is an opportunity to do it holistically and make sure we get the things we want there. ... Doing it piecemeal might mean we don't get the things we want," Summa said.

Not everyone is welcoming the prospect of new housing coming to the block. Several residents of Greenhouse 1 and Greenhouse 2, residential complexes across the street from the site, attended the meeting and warned the commissioners that approving more dense development would add to the area's traffic congestion. Some pointed to the two recently approved Marriott hotels that are now in construction near the proposed project site.

Resident Joan Larrabee pushed back against the notion that San Antonio should be treated like El Camino Real when considering housing opportunities. San Antonio has only four lanes, while El Camino has six. Also, the lanes on San Antonio are narrow, making bicycling hazardous.

"It's not safe for bicycles. It's hardly safe for pedestrians and cars," Larrabee said.

Warren Storkman, who also lives near the project site, concurred. The road, he argued, doesn't have the capacity to accommodate the hotel projects and the proposed residential complex.

"San Antonio Road is going to be gridlocked from there all the way to El Camino Real in a short while," Storkman said.

Stephen Levy, an economist and housing advocate, took the opposite position and told the commission that the city will need to significantly ramp up its residential production to meet its regional housing allocations. This is becoming particularly important given Sacramento's recent push to more aggressively enforce housing targets.

"How are you going to meet our housing goal without at least opening up incentives for what looks like it could be a reasonably large number of units — and then working like hell to solve the traffic problems here and in every place?" Levy said.

The commission didn't take any votes on the project, which will face reviews from the Architectural Review Board before returning to the commission and ultimately the council. The Wednesday meeting served as a scoping session for an Environmental Impact Report that will be prepared for the project.

Residents who wish to comment on what the EIR should study have until Oct. 7 to weigh in. Comments can be emailed to SAhSing@M-Group.us or mailed to Sheldon S. Ah Sing, City of Palo Alto, 250 Hamilton Ave., Palo Alto, CA 94301.