Commercial Real Estate in Atherton: No Commercial Zone, School and Civic Land, and the New Housing Overlays

By Matthew Martinez, Founder, CEO & Managing Broker, Diamond Real Estate Group. California DRE #01869679.

Atherton is one of the few Bay Area towns with no commercial zoning district at all. Its land is residential estates, parks, and a public facilities and schools district that holds town buildings and private school and college campuses. There are no shopping streets, office parks or hotels, and the code bars new lodging uses entirely. For an investor, "commercial" in Atherton means institutional land, development sites under the town’s new multifamily overlays, or businesses run from home. Confirm the district and any overlay for each parcel with the Town of Atherton Planning Department before relying on this page.

Who controls the parcel

Atherton is an incorporated town, so Title 17 of the Atherton Municipal Code governs zoning inside town limits. Retail, office and service businesses that serve Atherton residents sit just outside, in Menlo Park and Redwood City, under those cities’ codes; see our Menlo Park and Redwood City guides. Neighboring unincorporated areas such as North Fair Oaks and West Menlo Park follow the County’s Title 8; see our San Mateo County commercial guide. Mailing addresses do not reliably show which jurisdiction applies.

Atherton zoning districts

Chapter 17.30 designates only four base districts and three overlays, the overlays added by Ordinance 669 in 2024.

District	Intended uses	Notes
R-1A, R-1B Residential	Single-family estates	Home occupations under Chapter 17.48; no commercial uses
POS Park and Open Space	Town parks	Some parcels eligible for RM-10 housing
PFS Public Facilities and Schools	Town hall, library, corporation yard, public and private schools	Churches, country clubs and utilities by conditional use permit
P Parker Avenue Overlay	Small R-1A lots on a 70-foot-wide street	Single-family; 28 ft height
RM-10 Multifamily Overlay	By-right multifamily on listed R-1A and POS parcels	Up to 10 units per acre
RM-20/40 Multifamily Overlay	Multifamily on PFS sites, including the Menlo College campus	RM-20: 12 to 20 units per acre; RM-40: 24 to 40

No commercial lodging, and what PFS land allows

Lodging ban. Section 17.30.050 states that no new commercial-residential uses are permitted anywhere in the town, and names hotels, motels, boardinghouses and transient guest quarters, including bed and breakfasts. Atherton has no short-term rental permit chapter, and the hotel ban signals how the town treats transient stays; confirm any rental plan with the town.

PFS uses. Under Chapter 17.36, the PFS district exists for public uses and for public and private schools.

By right. Public libraries, public schools, the town hall and community uses, and the corporation yard.
Conditional use. Private schools, churches, convents, country clubs, public utilities and transportation terminals.
Campus housing. Dormitories and teacher housing are allowed by conditional use when tied to a primary non-residential use on the same site.
Emergency shelters. Allowed only at the town Civic Center, on specific lots in Watlinton Park.
Civic buildings. PFS properties on Ashfield Road and Station Way, which hold town hall, library and administration buildings, use R-1B setbacks.

Development standards. PFS buildings are capped at 34 feet with 40% lot coverage. Setbacks are deep: 60 feet in front, and 50 to 75 feet from residential side and rear lines depending on height. Adjoining school sites may use 10-foot setbacks between them.

Private school master plans and the Menlo College overlay

Master plans. The town council asks each private school for a master plan with enrollment and floor-space projections.

Consistency. Conditional use permit applications are checked against the filed master plan, and changes to buildings or faculty generally need a new or amended permit.
Application contents. Enrollment history and projections, traffic and parking analysis and a circulation plan.
Conditions. The Planning Commission can set hours and require noisy facilities such as gyms to be clustered away from homes.
Reporting. The town planner reports on master plans annually, with notice to owners within 500 feet.

For anyone buying, leasing or lending against a campus, the master plan and the CUP history are the core documents.

RM-20/40. The 2024 to 2025 amendments added multifamily housing on PFS land through the RM-20/40 overlay. On overlay sites, multifamily housing and single-room occupancy units are permitted with staff-level review.

Menlo College. The campus is eligible for RM-40, at 24 to 40 units per acre and up to 48 feet.
RM-20. Sites allow 12 to 20 units per acre and 34 feet.
Objective standards. Both require 40-foot setbacks, rising to 50 feet next to R-1 land, and 40% coverage, with parking, facade, window and lighting rules.

RM-10. Chapter 17.35 lets listed R-1A and POS parcels develop multifamily housing by right at up to 10 units per acre. Projects need at least half an acre and five units, apart from POS parcels, with 34-foot buildings and setbacks that grow next to single-family lots. Lot redesignations, variances and special structure permits remain discretionary.

Home occupations and events

Because there is no commercial district, Atherton business activity is mostly home-based, under the home occupation chapter (17.48), with special events regulated separately (17.56). We did not review those chapters’ standards; confirm employee, client-visit and signage limits with the town before buying a property for a home-based practice.

Transfer tax, business tax and property tax

Atherton’s code contains no real property transfer tax chapter in its table of contents, so only the County’s documentary transfer tax of $0.55 per $500 appears to apply; the County’s page names only the City of San Mateo as adding its own tax. We did not find a business license tax chapter in the town code’s contents. A change of ownership generally triggers Proposition 13 reassessment, and land owned by schools or other nonprofits may carry property tax exemptions that end on a sale to a taxable buyer.

Due diligence that matters in Atherton

Start with our commercial due diligence checklist, then add:

Confirm town, County or neighboring city jurisdiction; nearby commercial streets are in other cities.
For PFS land, pull the conditional use permit history and the school’s filed master plan.
Check whether the parcel is listed for RM-10 or RM-20/40 and run the minimum-density rules.
Do not underwrite lodging, bed and breakfast or boardinghouse income.
For a school or nonprofit seller, model property taxes after any exemption ends.
Confirm home occupation limits for a home-based professional use.

Questions people ask

Is there any commercial zoning in Atherton?

No. The town has only residential, park and open space, and public facilities and schools districts, plus three overlays.

Can I open a bed and breakfast in Atherton?

No. Section 17.30.050 bars new hotels, motels, boardinghouses and transient guest quarters, including B&Bs, anywhere in town.

Do private schools need permits to expand?

Generally yes. Private schools are conditional uses in PFS, and changes are checked against the school’s filed master plan.

What is the RM-40 overlay?

A multifamily overlay on PFS land, including the Menlo College campus, allowing 24 to 40 units per acre and buildings up to 48 feet.

Is multifamily housing by right on RM-10 sites?

Yes, for projects meeting the objective standards: up to 10 units per acre, at least five units and half an acre.

Is there an Atherton transfer tax?

We found no town transfer tax chapter; the County’s $0.55 per $500 applies. Confirm with escrow.

Does Diamond handle commercial property in Atherton?

Contact Matthew Martinez to discuss buying, selling or leasing institutional or development property in Atherton.

Sources & notes

Note: We did not review the home occupation (17.48), special events (17.56) or inclusionary (17.57) chapters, or which specific parcels carry the RM overlays. The absence of a transfer tax and business license chapter is based on the code’s table of contents.

This page is general information, not legal or tax advice. Last reviewed October 2026 by Matthew Martinez.

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