San Mateo’s City Council just gave the green light to a major housing project that could help ease the region’s affordability crisis. The Gateway project at 668 E. 3rd Ave. will bring 128 new rental units to the city, with 20 of those reserved as affordable housing. It’s a solid win in a county where the low-income threshold sits at $109,000 and finding an apartment that won’t drain your entire paycheck is basically a fantasy.

The eight-story residential building is getting special approval to go two stories taller than zoning typically allows. This flexibility comes thanks to state law that lets developers build bigger and denser buildings in exchange for including affordable units. The project is replacing an old one-story commercial building, so it’s maximizing the use of existing urban land instead of sprawling into new areas.

Here’s what you’re getting in the building: 89 one-bedroom apartments, 33 two-bedrooms, five three-bedrooms, and one studio. During the public hearing, some residents wished the project included retail space, but developers said it just wasn’t financially viable. The building will have 73 parking spots and 140 bicycle parking spaces, which is pretty solid for a transit-adjacent location.

The proximity to the downtown San Mateo Caltrain Station is actually key here. Because the project sits within a quarter-mile of the station, developers got to skip minimum parking requirements under state law. Mayor Adam Loraine praised the project’s design and efficiency, calling it impressive in how many residential units it squeezes into a confined space while supporting public transit.

This approval comes as California continues pushing cities to approve more housing through state legislation. Senate Bill 79, which takes effect July 1, will make it even easier for denser, taller housing near transit by giving developers more flexibility to override local zoning restrictions.

San Mateo has been smart about where it’s placing new housing, focusing on redeveloping former office, retail, and commercial sites rather than rezoning single-family neighborhoods, something that’s become a major point of conflict in other Bay Area cities. The city is planning over 1,600 additional units through other projects like Hillsdale Reimagined at Hillsdale Shopping Center and Bayshore Commons.

The city’s voters also approved zoning changes back in November 2024 that raised height and density limits near transit. Thanks to these approvals, San Mateo now has capacity for around 20,000 units, way more than the 7,000 units the state requires by 2031. While that sounds great in theory, some approved projects might stall due to financing or other issues.

The Gateway project still needs to clear permitting before construction can actually begin, but this approval is a solid step forward for adding more homes to one of the Bay Area’s most expensive housing markets.