On the night of January 13, 2026, the Los Gatos Town Council spent hours picking apart a project that would remove more than 100 walnut trees, demolish eight single-family homes, and add 450 new units of housing along Los Gatos Boulevard and Burton Road. Two former mayors, Mary Badame and Matthew Hudes, voted no. The measure passed anyway, 3-2. Mayor Rob Moore called it a difficult decision he took seriously. What almost nobody watching that night understood was that the vote had already been decided months earlier, not by the council, but by a state law the town had failed to comply with.
That distinction matters more than the unit count if you're comparing homes near this corridor to homes anywhere else in Los Gatos. The mechanism behind the North 40's second phase tells you something the median price on a portal never will: homes on this stretch of Los Gatos Boulevard are exposed to a supply pipeline that resets on a legal clock, while homes elsewhere in town are not. That difference already shows up in the numbers.
The Leverage Nobody Saw on the Dais
Los Gatos is required to plan for nearly 2,000 new homes by 2031 under its state-mandated Housing Element, with 847 of those reserved for low-income households, according to San José Spotlight's reporting on the project. The town missed its original deadline to get that plan certified. Under California's builder's remedy law, missing that deadline opens the door for developers to submit projects that bypass local zoning entirely, as long as a share of the units are affordable.
Grosvenor, the developer behind North 40 Phase 2, never formally invoked builder's remedy. It didn't need to. The town attorney confirmed during the hearing that if the council denied the project as proposed, Grosvenor could come back and assert builder's remedy rights, likely with something larger and less shaped by local input than what was on the table. That threat, not enthusiasm for the design, is what carried the vote. Grosvenor also used the state's density bonus law, which grants extra concessions to developers who include enough affordable housing, to secure design flexibility the town would not otherwise have granted.
None of that is unique to this one project. It's the operating logic for how large housing sites get approved in built-out Silicon Valley towns right now. What makes it relevant to a buyer is that this same site already went through one round of it.
What Phase 1 Already Told Us
Grosvenor originally developed Phase 1 of the North 40, then sold it to SummerHill Homes, which built it out as Bellaterra: 253 homes split between bungalows, rowhomes, and condo-style townflats, with the builder reporting the community 99 percent sold. Height limits imposed during that approval process, 45 feet in one section and 35 in another, pushed the design toward a boxy massing that a number of residents still bring up at town meetings. The one part of Phase 1 that drew consistent praise was the affordable senior housing built by Eden Housing, 49 very-low-income units plus a manager's unit.
Bellaterra is also the closest thing to a live experiment in what happens to resale pricing when a large batch of attached housing lands on this specific corridor. Over a recent 180-day stretch, resold condos there closed between $978,000 and $1,730,000, with a median sale price of $1,265,000 and a median price of $891 per square foot. Compare that to the town-wide figure for Los Gatos overall, where the median sale price per square foot sat at roughly $1,310 over the three months ending in May 2026. That's not a small gap. Attached product on this corridor is trading somewhere in the neighborhood of a third below the town's broader per-square-foot benchmark, in a market where sellers town-wide are still getting close to full asking price and homes are moving in a matter of weeks.
| Metric | Bellaterra condos (North 40 Phase 1) | Los Gatos overall |
|---|---|---|
| Median sale price | $1,265,000 | Town-wide medians vary by source, generally $2.2M to $2.95M for detached homes |
| Price per square foot | $891 | Roughly $1,310 (3 months ending May 2026) |
| Product type | Attached, master-planned | Predominantly detached single-family |
That gap isn't a sign Bellaterra is a bad building. It's a sign that attached housing on a corridor the town has committed to redeveloping in phases doesn't hold the same scarcity premium as a detached home elsewhere in Los Gatos, because it isn't scarce in the same way. More of it is coming by design.
Why This Corridor Runs on a Different Clock
Every eight-year housing cycle, the state hands Los Gatos a new quota, and every cycle the North 40 is the site the town keeps returning to because it's one of the few large, flat parcels left that isn't already built out as single-family. Phase 2 will add roughly double the density of Phase 1 on largely the same logic: a developer with land, a state law forcing the town's hand, and a design that trades height and unit count for affordable housing credit.
For a buyer comparing Los Gatos neighborhoods with a townhome near Los Gatos Boulevard on one side and a detached resale home in, say, the Almond Grove or Blossom Manor pockets closer to downtown on the other, that's the distinction that should shape the decision, not the school assignment or the commute time alone. Homes in Phase 1 and the future Phase 2 draw from the same three schools, Louise Van Meter Elementary, Raymond J. Fisher Middle School, and Los Gatos High School, so that part of the calculation doesn't change much block to block. What changes is exposure to future supply. A corridor the town has already zoned for its next housing cycle is not going to appreciate the same way as a street where the last new construction was decades ago and the next housing element cycle has nowhere obvious left to point.
None of this means values near the North 40 will fall. Bellaterra sold out nearly in full, and Phase 2 includes a two-to-three-and-a-half-acre public meadow that Phase 1 residents have said they want. It means the ceiling on price growth for attached product in this specific corridor is likely to stay lower than for scarce detached inventory elsewhere in town, because the corridor's whole reason for existing, in the town's planning documents, is to keep absorbing the next wave of required units.
What This Means If You're Comparing Neighborhoods
If you're weighing a home near this corridor against something elsewhere in Los Gatos, a few things are worth pricing in rather than treating as background noise:
- Attached homes near Los Gatos Boulevard and Burton Road sit inside a site the town has already tapped once and is tapping again, which caps how much scarcity is working in your favor as an owner.
- Detached resale homes elsewhere in town aren't subject to the same builder's remedy exposure, because there's no comparable large, underused parcel left to redevelop under the same pressure.
- The gap between $891 per square foot at Bellaterra and roughly $1,310 per square foot town-wide is a real, current data point, not a prediction, and it reflects how the market has already priced the difference between this corridor's supply trajectory and the rest of town.
- Phase 2's approval means more traffic study, more construction activity along Los Gatos Boulevard, and a longer runway before "The Meadow" and the new retail space are functional, all of which are reasonable things to factor into timing a purchase or a sale near the corridor.
A Few Direct Questions
Has a construction start date been announced for Phase 2? Not as of this writing. The project cleared its CEQA review in January 2026 and moved into the entitlement stage that typically precedes permitting and groundbreaking, but the town has not published a groundbreaking date.
Does this affect home values outside the North 40 area? Not directly. The exposure here is specific to attached housing on this particular corridor, not to detached homes in the rest of Los Gatos, which don't sit on a parcel the town has designated for repeated redevelopment.
What happened to the eight homes being demolished for Phase 2? Grosvenor has said it is working with the current residents of those homes so they can move back into the community once construction is complete.
If you're trying to figure out what a specific property, whether it's a resale townhome near the North 40 or a detached home elsewhere in Los Gatos, is actually worth given what's coming down the pipeline, that's a conversation best had with someone who tracks these filings as they happen, not after the vote. Knight Roberts Real Estate works with buyers and sellers across Los Gatos and the surrounding Silicon Valley communities every week, and we're glad to walk through what a project like this means for the specific street you're looking at.
