Palo Alto's effort to encourage more affordable housing received a welcome boost Monday, when a developer proposed constructing 129 below-market-rate apartments on a Ventura site that was formerly occupied by Mike's Bikes.

Charities Housing, a nonprofit developer based in San Jose, filed an application on Monday for a five-story development that would consolidate three parcels at 3001-3017 El Camino Real, near Olive Avenue. The building will consist of 20 studios, 40 one-bedroom apartments, 35 two-bedroom apartments and 34 three-bedroom apartments, according to the application. It will also have 1,500 square feet of amenity space for residents on the ground floor.

The housing complex will provide apartments for residents who make between 30% of area median income and 50% of area median income, according to the application. While the exact affordability mix has yet to be determined, Charities Housing said the average affordability level is expected to be at 40% of area median income.

The community space would include a community room with a kitchen that could be used for social gatherings, a pantry to store and stage food that would be provided in partnership with organizations like Second Harvest Food Bank, a laundry room and offices for on-site social service providers.

Because the project provides affordable housing, it is entitled to obtain numerous concessions under the state density bonus law. The building would occupy 74% of the project site, well above the 50% threshold that the zoning code would typically allow. And it would not meet the city's requirement of providing 150 square feet of usable open space per dwelling.

Furthermore, because the project is within half a mile of a major transit stop, it qualifies for unlimited density under state law.

The application comes at a time when the city has been struggling to make inroads in meeting its own — as well as regional — targets for affordable housing. While Santa Clara County has spearheaded the development of below-market-rate projects at 231 Grant Ave., which targets teachers, and 525 E. Charleston Road, the city's only major 100% affordable-housing development in recent years has been Wilton Court, a 59-apartment complex at 3705 El Camino Real that the council approved in 2019 and that is now being constructed.

The city's struggles on affordable housing were highlighted in a recent Santa Clara County Civil Grand Jury Report, which compared Palo Alto's progress on housing development to that of Mountain View. The grand jury recommended that Palo Alto speed up its planning process, identify additional funding mechanisms to support affordable housing and explore the creation of "area plans," vision documents that target particular areas of the cities and typically involve significant zoning changes and redevelopments that align with the city's goals.

The shortage for residents in the "low income" and "very low income" categories have been particularly acute in Palo Alto. The grand jury noted that the city approved just 80 residences for these income categories between 2015 and 2019, which represents just 7% of its obligations under the Regional Housing Needs Allocation process.

Project plans for 3001 El Camino Real show an S-shaped building with courtyards in the front and the back of the development. The building's height will not exceed 60 feet, according to the application, and it will provide a "pedestrian-scale environment in keeping with the adjacent neighborhood," the application states.

It will also provide 106 parking spaces in its garage through use of parking lifts as well a 142 bicycle parking spaces, according to the application.

This isn't the first time that the city is considering adding residences to the former Mike's Bike's site, which today consists of two unoccupied commercial buildings and a parking lot. In 2017, The Sobrato Organization proposed building 50 apartments and nearly 2,000 square feet of retail space at the site, though it later withdrew its proposal.