Hillsborough's Affordable Housing Plan Runs on Half-Acre Estate Lots

"Podium market rate program not financially feasible." That line is from a slide in the consultant presentation in Hillsborough's October 26, 2026 City Council packet. It explains why the Town's plan for its Tobin Clark property looks the way it does.

The consultant's first concepts tested condo or rental buildings stacked over two levels of parking. The refined plan uses a different kind of housing to cover the cost, and it's the kind Hillsborough has always sold: the half-acre custom lot. Twelve of those lots and 24 hillside townhomes would pay for the roads, water lines and site work that a 51-unit affordable building can't carry on its own. For anyone weighing Hillsborough against other Peninsula towns, this plan shows clearly what this market can price and what it can't.

The Site and the Original Promise

The Town owns a 50-acre piece of the former Tobin Clark estate on its southern border, next to the College of San Mateo. The adopted Housing Element sets aside 20 of those acres for multifamily housing and keeps the other 30 as open space. The plan called for 100 homes: 44 very-low-income units, 6 moderate-income units and 50 above-moderate units.

During the Housing Element process, the community's top priority was to keep current zoning on all private property. To meet its state housing allocation, the Town rezoned two sites it owns instead. Tobin Clark is the larger one. The other is the Town Hall Campus, about 2.5 acres near Floribunda Avenue and El Camino Real, where the Housing Element identifies 16 affordable units, according to the Town's fact sheet on its multifamily sites.

The Town hired Harmonie Park Development from five bidders, and the City Council authorized the contract on October 13, 2025. The firm then tested what could actually be built.

Three Designs, One That Penciled

The staff report puts the options side by side. All three keep the same affordable building. They differ only in the market-rate housing built next to it.

The consultant listed three reasons the podium buildings failed. Building and podium parking were very expensive to construct. The site needs a looped water system with costly tie-ins. And the market was limited, with competition from rentals and a short supply of stacked-condominium comparables.

The last reason matters to anyone shopping here. A developer financing a five-story condo building needs appraisers and lenders to agree on what the units will sell for. In Hillsborough, there were few stacked condo sales to point to. Staff concluded that a mix of townhomes, single-family homes and one podium building would be more feasible and would fit better with the town's existing land use.

What the Refined Plan Puts on the Hillside

Phase 2A ran from mid-June through the end of October 2026 and turned Option C into a more detailed master plan. The refined plan has three parts:

• Townhomes. 24 three-story homes of about 2,500 square feet each, on roughly 1.2 acres. They have family-oriented three- and four-bedroom layouts, step down the slope, and are expected to stand under 35 feet from the street.
• Custom estate lots. 12 half-acre lots on about 6 acres, two more than in Option C. Building pads run from about 2,600 to more than 3,000 square feet, which allows a 5,000 to 6,000 square foot custom home, plus room for up to 12 ADUs across the lots.
• Affordable building. 50 units plus a manager's unit on about 1.3 acres, 4 to 5 stories over parking and about 85 feet tall. It is designed to compete for the 9% Low-Income Housing Tax Credit program and serves households earning 30% to 60% of area median income.

The two lots were added "to get closer to the targeted 50 market rate homes." That brings the market-rate count to 36. New public streets take up about 3.2 acres, and about 10.1 acres stay under Town control as possible open space and community areas. That includes a community green of roughly 1.75 acres for gatherings, informal recreation and stormwater control.

Who Pays for the Water Main

On paper, the Tobin Clark housing area is 20 acres of town-owned land. In practice it's hard ground. Slopes run from about 8% to more than 60%, buildable areas are limited, and parts of the site carry biological constraints. No infrastructure exists yet, so building there means extending utilities, improving roads and creating a looped water system. The Central County Fire Department wanted public-standard streets wherever possible. That decision increased the land given to right-of-way.

The consultant's financial strategy slide sets out who covers those costs. Townhomes cost less per square foot to build than podium units and sell for more per square foot. Custom lots bring in revenue at limited cost because they would be sold utility-ready. Together, the market-rate homes pay for the infrastructure, and the affordable building can then draw on tax credits and other capital sources. The narrative report says it directly: the custom lots are "critical to offsetting substantial infrastructure costs that are necessary for unlocking the affordable housing portion of the design."

So the 51 affordable homes depend on how well the Town's half-acre lots sell.

Why Lots Have Prices and Condos Don't

Hillsborough's own records show how confidently the town can price land. At the September 14, 2026 council meeting, staff looked at two surplus water-facility parcels. One is 36 Orange Court, a 0.91-acre former reservoir site, estimated at about $4 million to $5 million. The other is 115 Reservoir Road, 1.04 acres, estimated at about $3 million to $4 million. Both still contain decommissioned underground reservoirs that would need geotechnical and environmental work before anyone could build. Staff could put a multimillion-dollar figure on a buried tank site without needing a buyer first.

The single-family market behind those figures is just as clear. According to the SAMCAR/MLSListings September 2026 report, Hillsborough recorded 12 single-family sales in September 2026, with a median price of $6,075,000, an average of 42 days on market and 98% of list price received. Twelve sales is a small month. Still, it's a dozen fresh data points for one product type. In the same month, the countywide condominium median across San Mateo County was $917,500 on 94 sales. A Hillsborough condo building would have had to price somewhere far from both numbers, with little local sales history to back it up.

For a buyer, this means Hillsborough doesn't get its first new attached homes through a new kind of market. It gets them because estate lots can carry the cost. The 24 townhomes passed the test because, by the consultant's analysis, they sell for more per square foot than they cost to build. The lots passed because Hillsborough land already has an established price.

Where the Calendar Stands This Month

The Council held study sessions on October 12 and October 26, 2026, to hear the presentation and take public comment. Those sessions were for receiving input. No approvals were on the agenda. The Town says no project approvals have resulted from the Housing Element and that no development application has been submitted. The planned sequence:

1. Phase 2B, November 2026 through February 2027. Harmonie Park updates costs and feasibility, works in October's public feedback, continues access talks, and drafts a project description for a future developer RFP.
2. An update by the end of 2026 on whether the site can hold more affordable homes than the current baseline.
3. Developer selection, which the consultant says draws from a smaller pool of firms willing to take on complex, small projects.
4. Environmental review once an application is filed. This would likely be a focused EIR building on the Housing Element EIR. It's expected to take 12 to 24 months, with a preliminary budget of about $971,750 that a future developer would typically pay.

The consultant's planning horizon is titled "Ensuring Readiness by 2031." Harmonie Park's contract budget is $539,100 and runs through March 24, 2028. Staff report the project is on time and under budget.

Quick Answers

Does Tobin Clark change zoning on private lots elsewhere in Hillsborough? No. The Housing Element kept current zoning standards on all private properties and rezoned two Town-owned sites instead.

How tall would the buildings be? The plan estimates about 35 feet from the street for the townhomes and custom homes, and up to about 85 feet for the affordable building.

How would the site be reached? That's still open. A loop road at the College of San Mateo was considered as the main entrance, but utilities need to connect to existing Town lines through the Tobin Clark site, which may change the access routes.

What income limits apply to the affordable units? The staff report lists $105,050 for a very-low-income family of four and $240,950 for a moderate-income family of four. Eligibility rules come from the Town and its funding programs, so applicants should confirm details with the Town directly. This post is general information and not legal or financial advice.

If you're comparing Hillsborough with other Peninsula towns and want to know how a half-acre lot, a hillside townhome or your current home would be valued in today's market, Matt Aragoni can walk you through the recent comparable sales behind the numbers. Get a free home valuation or schedule a consultation.