Ask most people driving down San Carlos Avenue what happens next to the aging office building near the Caltrain tracks, and they'll shrug. It's just the SamTrans building. Buses come and go. Nothing to see.
That building is about to become one of the more interesting housing stories on the Peninsula, and not for the reason you'd expect. In late 2025, San Carlos had a chance to require more housing density on that site than the zoning already called for. The city said no. And the reason it said no is the part worth understanding if you're weighing San Carlos against Redwood City or Belmont and trying to figure out what the next few years actually look like near downtown.
The Building Everyone Drives Past
SamTrans has run its headquarters out of 1250 San Carlos Avenue since 1990, in a building of a little over 100,000 square feet that went up in 1979. It sits one block from the San Carlos Caltrain station, right along the northern edge of Howard Park, close enough to Burton Park and Laurel Street that you could walk to either on a lunch break.
The agency is leaving. Its board voted 8 to 1 to acquire a new headquarters at the Gateway at Millbrae Station, a $126 million lease-to-purchase deal for roughly 180,000 square feet of office and retail space next to the Millbrae BART and Caltrain platforms. SamTrans says the San Carlos building has fallen into an advanced state of disrepair and was built to seismic standards the state stopped relying on decades ago. Moving is cheaper than fixing it.
SamTrans plans to keep ownership of the San Carlos Avenue site and redevelop it with the city. That's the part that matters for anyone reading a market report instead of a transit newsletter. A parking lot and a tired office block sitting one block from a Caltrain station, right at the edge of one of San Carlos's most walkable neighborhoods, is about to become a construction site.
The Number Nobody Expected the City to Turn Down
Here's where it gets interesting. The site's current zoning sets a minimum density of 75 dwelling units per acre. In November 2025, San Carlos's Planning and Transportation Commission recommended raising that floor to 90 units per acre, on the theory that a higher minimum guarantees more housing gets built on a site the region badly needs.
The City Council looked at that recommendation and kept the minimum at 75.
I spent years reading contracts before I sold a single house, and a zoning minimum works the same way a contract clause does. The number on the page tells you what's required. It doesn't tell you what gets built. Councilmember Neil Layton put it plainly at the meeting where the broader downtown plan was approved: plans on paper are one thing, but the details decide what actually happens.
Why Asking for More Would Have Gotten San Carlos Less
An independent feasibility review by Economic & Planning Systems looked at both numbers and came back with an answer that runs against the instinct that bigger requirements produce bigger results. Push the minimum to 90 units per acre, and a developer likely has to shrink the average unit to hit that per-acre count, which squeezes out the two- and three-bedroom homes that would actually suit families. It also raises the odds the project needs a density bonus waiver and a design overhaul before it can move forward, which is exactly the kind of delay that stalls a project for years rather than months.
Keep the minimum at 75, and the flexibility runs the other way. Nothing stops a developer from building at higher density if the economics support it. Nothing forces them into a unit mix that doesn't work. San Carlos gets the site moving instead of watching it sit empty while a developer re-runs the numbers.
Here's the choice laid out side by side:
| Minimum stays at 75 DU/acre | Minimum raised to 90 DU/acre | |
|---|---|---|
| Unit mix | Room for family-sized two and three bedroom units | Pressure toward smaller units to hit the per-acre count |
| Approval path | Fits within current zoning | Likely needs a density bonus waiver and redesign |
| Timeline risk | Lower, per the EPS review | Higher, with a real chance of stalling for years |
| What the city risks | Losing nothing, since density can still go higher than 75 if it pencils | An empty HQ building sitting vacant longer |
The city's own reasoning made a point of noting that a floor of 75 doesn't cap anything. If a developer wants to build denser and the numbers work, they can. What the lower minimum buys is the option to fail gracefully instead of stalling on a technicality.
What This Means If You're Weighing San Carlos Against Redwood City or Belmont
If you're comparing towns on the Peninsula and you've already looked past the median price, this is the kind of thing that doesn't show up in a listing sheet. A multi-hundred-unit site one block from Caltrain, zoned for a mix of market rate and affordable housing, is now economically de-risked in a way it wasn't a year ago. That's a meaningful signal about how downtown San Carlos changes over the next five years, separate from anything a single-family resale comp will tell you.
It doesn't mean more competition for the ranch house you're bidding on in Howard Park or Cordes. This is multifamily housing on a commercial parcel, not new single-family inventory. What it does mean is more density, more foot traffic, and more residents within walking distance of Laurel Street right as the city's Downtown Specific Plan reshapes the streets around it. If part of your decision between San Carlos and a neighboring city is how lively downtown feels in five years, this project is a bigger part of that answer than any single home sale.
The Plan This Sits Inside
The SamTrans site isn't an isolated decision. It sits inside the Downtown Specific Plan, a twenty year framework covering Laurel Street roughly from Holly to Greenwood, which took effect in early 2026 after months of council review. Mayor Sara McDowell framed the plan's purpose plainly when it passed: downtown is going to change regardless, and having a plan gives residents a say in how that change happens.
San Carlos is also working against state-mandated housing production targets that run through 2028, which is part of why the city's staff pushed to keep the SamTrans site's zoning workable rather than aspirational. A site that pencils gets built. A site that only looks good on a planning document sits empty.
A Few Questions I Get on This
When does construction actually start? SamTrans hasn't finalized redevelopment plans for 1250 San Carlos Avenue, and the agency's move to its new Millbrae headquarters still has to play out before the San Carlos site is fully vacated. There's no public groundbreaking date yet. What changed in late 2025 is that the zoning obstacle that could have stalled the project for years got resolved before the building is even empty.
Will this affect what I pay for a house near downtown? Not directly, and not soon. This is multifamily housing on a commercial parcel, and it doesn't add single-family inventory that competes with a resale listing in Howard Park or White Oaks. What it changes is the character of downtown over time, which matters more for lifestyle than for your offer price today.
Is this affordable housing? The project is expected to include a mix of market rate and affordable units, consistent with how SamTrans described the housing goals of the site during the zoning review. Specific unit counts and affordability tiers haven't been finalized publicly.
If you're trying to figure out how a story like this fits into a decision about buying near downtown San Carlos, that's exactly the kind of question I like getting before an offer, not after one. Call Bob and let's talk through what it actually means for the block you're looking at.
