A Bedbury Group Local Market Update | September 2026

If you spend any time in downtown San Carlos, you’ve probably heard some conversation about the proposed development on Walnut Street.

There are a lot of opinions floating around, but before forming one, it’s important to understand what is actually being proposed, what has been decided, and what hasn’t.

MidPen Housing, a nonprofit affordable housing developer, has proposed a 95-unit, 100% affordable housing development at 626-648 Walnut Street, on three parcels currently owned by San Mateo County. As proposed, the building would be approximately seven stories and 80 feet tall, making it the tallest building in San Carlos.

And one important point: the project has not been approved yet.

What exactly is being proposed?

All 95 residences would be affordable housing. There are currently no market-rate units planned.

The proposed building would have a U-shaped design surrounding a courtyard of more than 2,000 square feet, with approximately one parking space per unit under the current plan.

The proposed affordability mix includes:

• 25% of the units reserved for county and city employees, with discussion about including school district employees

• 15% for extremely low-income households

• 5% for previously unhoused individuals receiving tenant subsidies

• The remaining units primarily around 80% of area median income, with a goal of bringing more of those units down to 60% AMI

• Some two-bedroom and larger residences, not just studios and one-bedroom units

Because San Mateo County already owns the property, the economics are different from a typical privately developed project. The county-owned land is one of the factors that makes a 100% affordable development possible.

One of the biggest questions: How tall will it be?

At approximately 80 feet and seven stories, the building would be considerably taller than what San Carlos residents are accustomed to seeing downtown.

State density bonus law allows a project like this to reach approximately 83 feet, so the current proposal is close to that maximum.

That height is one of the reasons the project is generating so much conversation.

For homeowners nearby, the more useful questions are very property-specific:

How close is your home to the project? Could it affect a view? Would you experience construction noise or additional traffic? Could the location improve walkability for a particular buyer?

Those questions are far more meaningful than simply hearing that a seven-story building may be coming downtown.

Where does the project stand today?

This is where some of the conversation can get ahead of the facts.

The project is still under review.

The San Carlos City Council has already asked MidPen to reconsider portions of the design, including whether some of the ground floor should be used for commercial space or childcare rather than residential units.

The current projected timeline looks like this:

Spring 2027: MidPen expects to compete for state financing.

Approximately 2029: Construction could begin if the necessary financing and approvals are obtained.

2029 to 2031: Construction is currently estimated to take about two years.

2031 at the earliest: Residents could begin moving in.

So while this is absolutely something worth knowing about, we are talking about a project with a very long runway.

And between now and then, plenty could change.

The height, number of units, parking, ground-floor uses, and other elements of the design may be revised before anything is ultimately built.

What does this mean if you own a home near downtown San Carlos?

This is probably the question homeowners care about most.

The answer right now is simple: we simply don’t know yet.

It would be premature for anyone to say that this development will definitely increase or decrease the value of a particular home. The impact will depend on the property itself, its location, orientation, views, proximity to the site, buyer perception, the final design of the project, and what the San Carlos market looks like years from now.

What homeowners can do is stay informed.

If you’re thinking about selling a home near downtown, buyers may come across this project while doing their research. It’s much better to be able to explain the facts clearly than to have a buyer make assumptions based on a headline or something they found online.

That means knowing:

What is proposed. What has actually been approved. What could still change. And when any of it is realistically expected to happen.

That distinction matters.

If you're watching the Peninsula more broadly, San Carlos isn't alone. This is part of a wider pattern of cities working through state housing mandates in their own ways, from Menlo Park's downtown parking-lot housing debate to development pressure tied to the broader housing shortage affecting markets nationwide.

What if you’re considering buying near downtown?

A buying decision shouldn’t be based solely on a project that may not begin construction until 2029 or later.

But it also shouldn’t be ignored.

If you’re evaluating a particular property nearby, the practical questions are about views, traffic, construction, walkability, location, timing, and how long you expect to own the home.

That is where local knowledge becomes much more useful than a generalized prediction about whether a development is “good” or “bad.”

San Carlos is changing

This project is part of a much larger conversation happening throughout the Peninsula as cities respond to housing requirements and look for ways to add housing.

San Carlos will continue to evolve. Some proposals will move forward, some will change dramatically, and others may take years longer than originally anticipated.

The important thing is not to overreact to a headline, but not to ignore these changes either.

Stay informed. Understand how close a proposed project is to your property. Pay attention as plans evolve. And when you’re making a real estate decision, look at how it applies to your particular home and your particular plans.

That’s the conversation worth having.

Have a question about your San Carlos home?

If you own property near downtown San Carlos and are wondering how this or another local development could affect your plans, Kat would be happy to talk it through with you.

Whether you’re thinking about selling, curious about your home’s current value, or simply trying to better understand what’s happening in the neighborhood, reach out anytime.

Kat Bedbury
The Bedbury Group
Golden Gate Sotheby’s International Realty
650-740-4494
BedburyGroup.com

Your Dreams, Non-Negotiable®

About Kat Bedbury and The Bedbury Group

Kat Bedbury is a Peninsula Realtor® with Golden Gate Sotheby’s International Realty and co-founder of The Bedbury Group. She helps buyers and sellers throughout San Mateo and Santa Clara Counties navigate real estate with thoughtful strategy, local expertise, and hands-on guidance from preparation through closing.

This article is intended for general informational purposes only and is not legal, tax, or financial advice. The development described above remains a proposal. Details including unit count, height, affordability mix, design, and timeline may change during the review and approval process. Verify the current project status with the City of San Carlos before relying on any specific detail.