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Posted inLocal News

Santa Clara high-rise project would displace businesses to provide affordable housing

by Annalise Freimarck, San Jose Spotlight November 6, 2025November 5, 2025

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The Moonlite Shopping Center, located at 2610 El Camino Real in Santa Clara, could be replaced with hundreds of homes. (Annalise Freimarck/San Jose Spotlight)

AFFORDABLE HIGH-RISE HOUSING is closer to sprouting along El Camino Real in Santa Clara, but it would displace numerous local businesses.

Pennsylvania-based developer Toll Brothers wants to replace more than a dozen stores in Santa Clara’s longstanding Moonlite Shopping Center with 601 homes at 2610 El Camino Real. The development proposal includes a trio of six- to seven-story buildings, divided between market-rate condos and 166 affordable apartments. The 14.3-acre project also includes plans for 159 three-story townhomes, 60,000 square feet of open space and thousands of square feet of commercial space.

Toll Brothers, which was unavailable for comment, is partnering with affordable housing developer USA Properties Fund to provide eviction prevention, social services connections and after-school programs. The development still needs City Council approval, and Toll Brothers aims to complete the project by 2029. If it goes through, businesses in the shopping center will have to move.

A virtual rendering of two seven-story buildings with a communal space in the middle.
A rendering of what housing at Moonlite Shopping Center could look like. (Toll Brothers via San Jose Spotlight)

Shops face uncertain future

Dilkush Bakery and Cafe is one of the small businesses located in the shopping center. It opened about two months ago and serves Indian pastries and Iranian chai.

Asish Baul, who works at the bakery, said the shop could reopen somewhere else, but he’s unsure what the future holds. He said international students frequent the bakery and shopping center for the homemade delicacies they can find at Brundavan Restaurant, including biryani and haleem.

“This is a good place for them in Santa Clara because (we have) some of the things we don’t get in Santa Clara,” he told San José Spotlight. “It’s very hard to find these kinds of things, and this is a beautiful place.”

“I’m all for the density. I’m all for the building,” Wang told San José Spotlight. “I just want it to be functional.”
Kevin Wang, Santa Clara resident

Residents have mixed feelings about the development proposal that could displace businesses that have been there for decades, such as Moonlite Vacuum & Sewing Center.

Kevin Wang, who’s lived a couple blocks away from the shopping center for the past 20 years, supports the development. He said large-scale housing projects are key to walkable and bikeable cities, but it’s a shame the proposal includes less commercial space. He’d like to see a grocery store in the new development’s plans because the last one nearby closed about a decade ago. He also wants to see the affordable housing integrated more throughout the project, rather than concentrated in one building.

“I’m all for the density. I’m all for the building,” Wang told San José Spotlight. “I just want it to be functional.”

City trying to comply with state mandates

Santa Clara must build 11,632 homes by 2031 to meet state mandates, 6,056 of which must be affordable. Other large developments have already been completed across the city, including the first phase of the Gateway Crossing project, which built 725 homes off Coleman Avenue.

Resident Theresa Touchatt said she’s fine with change in the area, including to the Moonlite Shopping Center, even though she grew up going there. The Moonlite Lanes townhome project across the street has already replaced one of Santa Clara’s only bowling alleys with 58 homes.

But Touchatt said she’s seen other properties in the city bought for large sums of money, evicting businesses, just to sit vacant for years because of unfavorable market conditions. She doesn’t like to see that happen because it takes away space small businesses need to succeed.

“I would just love to be able to see a small business surviving in Santa Clara,” Touchatt told San José Spotlight. “But with all the new building and the high rents and lease rates, nobody can afford to open anything here but big businesses.”

Contact Annalise Freimarck at [email protected] or follow @annalise_ellen on X.

This story originally appeared in San Jose Spotlight.

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Tagged: affordable housing, Bay Area, City Council, community, development, displacement, economy, El Camino Real, evictions, Gateway Crossing, housing, housing mandates, Moonlite Shopping Center, real estate, redevelopment, San Jose Spotlight, Santa Clara, Santa Clara County, small businesses, Toll Brothers, urban planning, USA Properties Fund, zoning
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