When the Palo Alto City Council created the "planned housing" zone a year ago, it sent a signal to developers that it is ready to negotiate over aspects such as height, density and parking requirements if that means getting more affordable housing.

On Tuesday night, as the council considered the latest proposal for a planned-housing project — a mixed-use development with 113 apartments at 2951 El Camino Real — council members clearly declared that they are ready to deal. In doing so, they handed the developer a preliminary victory and increased the odds that the concept presented by Menlo Park-based Acclaim Companies will become reality.

For a council that has frequently clashed over land use issues and that has consistently struggled to approve new housing, the Acclaim project represented a rare point of consensus. Even those council members who regularly scoff at exceeding zoning regulations found something to like in the latest iteration of the proposal.

Both the project and the council have changed since Oct. 5, when Acclaim first presented its proposal, which in addition to the housing units includes 1,000 square feet of retail and 5,000 square feet of office space. After getting a lukewarm reaction, Acclaim reduced the building's height, cut the number of apartments from 119 to 113 and slightly decreased the project's floor area and density. The revised proposal consists of 24 studios, 65 one-bedroom units and 24 two-bedroom units. A total of 23 apartments would be offered at below market rate.

While the council saw two of its most passionate housing advocates — Adrian Fine and Liz Kniss — conclude their council terms since that hearing, the roster change has not impeded Acclaim's momentum.

Council member Lydia Kou, the council's most consistent critic of new developments, lauded the developer for working with residents to address their concerns about height (which has been reduced since the initial filing) and parking (the project does not seek a reduction in parking requirements). Even though she maintained that "upzoning" properties increases land values and makes the construction of affordable housing more difficult, she thanked the developer for revising its plan.

Mayor Tom DuBois, who like Kou belongs to the council's "residentialist" camp, said he would like to see the project move ahead as a formal application. While he said that he generally opposes using R-1 zones to facilitate higher density projects, he called the Ventura property an "interesting opportunity" because most of it is commercially zoned. The project site consists of five parcels: three along El Camino Real that are zoned "service commercial" and two along Olive Avenue that are zoned for single-family residential use.

"I think this is the kind of proposal we asked for when we talked about this planned housing zone," DuBois said.

For a council that has struggled for years to meet its own housing goals, the Acclaim development would represent a rare accomplishment. If it moves ahead, it would be only the second major residential development to earn the council's support in the past year, following its approval in November of a 119-unit project on San Antonio Road. It would also be the first project to utilize the "planned housing" zone, which like its predecessor — the "planned community" zone — allows the city and the builder to haggle over zoning standards such as height, density and parking requirements and public benefits. But whereas under the "planned community" zone, the list of public benefits included public parks, grocery stores and sculptures, the "planned housing" zone specifies that housing is the chief benefit.

Projects using the new zoning designation are required to offer at least 20% of their units at below market rate. And while they are allowed to have commercial components, they should not worsen the city's notoriously high jobs-housing imbalance.

Of the nearly 30 residents who addressed the council on Tuesday night, the majority suggested that the Acclaim project checks all these boxes and urged the council to advance it. Jessica Clark, a south Palo Alto resident who works for the Palo Alto Unified School District, said she and her family have been on the waiting list of the city's below-market-rate purchase program for 10 years.

"We as a city have built close to nothing. Compromises and tradeoffs have to be made," Clark said "I hope this project moves forward and provides as much housing as possible. My family and many others can't afford to hang on to the BMR list for another 10 years."

Keith Reckdahl, a member of the Parks and Recreation Commission who serves on a working group that has been putting together a new land use vision for a 60-acre portion of Ventura, said the project — while imperfect — is worth advancing.

"We're much better off refining this project instead of killing it," Reckdahl said. "Palo Alto does not have the luxury of only accepting housing projects that have no challenges."

Daniel Allen, a renter who lives in Old Palo Alto, said that the project's proximity to the California Avenue business district and the Caltrain station make it particularly appealing.

"It's close to transit, it's close to jobs, it's close to retail and the developer seems to have made significant compromises to address some of the concerns raised by the City Council and some of the community," Allen said. "I feel like compromise like this is needed to actually act on this long-term, big-scale project, and I think this is the type of development that the city should be encouraging."

Not everyone was as thrilled. Suzanne Keehn, a member of the group Palo Altans for Sensible Zoning, was among those who called the zoning exceptions excessive and suggested that the proposed 54-foot-tall building "does not fit in Palo Alto."

"It shouldn't be next to a residential area, and if it is going to be next to one, it should be a lot lower," Keehn said.

The umbrella group Palo Alto Neighborhoods also issued a letter that criticized the project and cataloged the zoning exceptions that Acclaim is seeking.

"Steady up-zoning of properties along El Camino Real disproportionately affects neighborhoods nestled behind El Camino Real in South Palo Alto," PAN Co-Chairs Sheri Furman and Becky Sanders wrote in the letter. "Upzoning is not allowed in other neighborhoods, why in these neighborhoods?"

Gary Johnson, a partner at Acclaim Companies, said the project is intended to help teachers, police officers, firefighters and other community service workers who cannot afford to live in Palo Alto and have to endure "punishing commutes." The city's housing shortage, he said, has "obviously stressed our community."

"Although no single project is a panacea and no project is perfect, this project provides the housing and BMR housing near a transit corridor. … This project is the first housing project to deed restrict over 20% of its units without a subsidy from the city of Palo Alto or a housing nonprofit," Johnson said.

The council's positive response to the project paves the way for Acclaim to present a formal application, which would then go through reviews by the Planning and Transportation Commission and the Architectural Review Board before returning to the council for formal approval.