Commercial Real Estate in East Palo Alto: University Avenue, the Ravenswood Plan and Mixed-Use Zoning

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

East Palo Alto’s commercial property sits in three places: the University Avenue corridor running from the Bayshore Freeway toward the Bay, the shopping and office area along the freeway, and the Ravenswood and 4 Corners area around Bay Road and University Avenue, where the city has planned for office, research and life science space alongside housing. The city also has some of the Peninsula’s strongest tenant protections, which shapes any mixed-use deal with apartments. Confirm the zone and any specific plan rules for each parcel with the City of East Palo Alto.

Who controls the parcel

East Palo Alto is an incorporated city in southeastern San Mateo County, bordered by Menlo Park and by Palo Alto across the county line in Santa Clara County. Its Title 18 Development Code, current through an ordinance adopted February 6, 2024, governs zoning, subdivisions and permits inside the city. A Palo Alto or Menlo Park mailing address near the city line does not settle which code applies, so check the parcel’s jurisdiction first.

Within the Ravenswood area, the adopted Ravenswood Specific Plan governs land use, and the general code fills in only what the plan does not address.

East Palo Alto zoning for commercial, industrial and mixed use

District	Intended uses	Notes
C-G Commercial General	Regional and local retail, hotels, offices and services drawing on high traffic	No residential uses. Small industry under 5,000 sq ft permitted
C-N Commercial Neighborhood	Local retail, office and services in smaller, walkable projects	Apartments and live-work above the first floor by right
C-O Commercial Office	Office and R&D to diversify the job base, plus support services and lodging	Applied to specific districts. Live-work permitted
MUC Mixed Use Corridor	Vertical and horizontal mixed use on arterials	MUC-1 and MUC-2 subzones on central and northern University Avenue
MUL Mixed Use Low	Housing plus neighborhood commerce in areas with both today	Three-story limit; compatible with nearby single-family areas
MUH Mixed Use High	Multi-story mixed use at key locations	At least 35% of each ground floor in retail; housing-only projects prohibited
Ravenswood Specific Plan subdistricts	Plan-specific land uses, including the 4 Corners Gateway	Uses set by the plan’s own tables

University Avenue and the mixed-use zones

The mixed-use chapter divides the University Avenue corridor into two subzones. In MUC-1, housing is allowed only above the ground floor. In MUC-2, generally at specified corners, the ground floor is reserved for retail with housing above. Projects next to residential neighborhoods must step down in height or density or provide a buffer.

Across MUC, MUL and MUH:

By right: retail and business offices, and restaurants that do not serve alcohol.
Conditional use permit: medical and professional offices in MUC and MUL (permitted in MUH), hotels and B&Bs, research and development, restaurants with alcohol and all alcohol sales.
Gyms: permitted under 2,000 square feet, administrative use permit above that.
Not allowed: industrial uses in any mixed-use zone.

MUH retail replacement. Where new construction removes existing retail in MUH, the replacement retail must exceed 85% of the space removed. A buyer planning to redevelop a strip center there should model that retail.

Design review applies to new and modified buildings in all three zones, and a Planned Development Permit can take the place of separate permits.

Commercial zones, Ravenswood and 4 Corners

C-G, C-N and C-O. In all three commercial zones:

Retail under 10,000 square feet and offices of all kinds are permitted by right.
Larger stores need an administrative use permit.
Alcohol sales, veterinary services and urgent care need a conditional use permit.
Mini-storage is possible only in C-G, by conditional use permit, and laboratories are permitted in C-G.

Ravenswood and 4 Corners. The Ravenswood Specific Plan has nine overlay subdistricts. One, the 4 Corners Gateway at University Avenue and Bay Road, is described as multi-story mixed use with retail or community uses at street level and apartments or condominiums above. The city has also been updating the plan as the Ravenswood Business District/4 Corners TOD Specific Plan Update. Its CEQAnet record covers a 350-acre plan area and proposes more office, R&D, life science and light industrial space and more housing, without changing the plan boundaries. A Final Supplemental EIR was filed November 18, 2024. We did not confirm the update’s adoption or its final square-footage limits, so check the city’s current plan before relying on any cap.

Alcohol, affordable housing fees and other rules

Alcohol. Bars, lounges, late-hours food service and on- or off-site alcohol sales need a conditional use permit in the commercial and mixed-use zones, under Section 18.48.030.
Nonresidential housing fee. Title 18 includes an affordable housing impact fee on nonresidential development (Chapter 18.40). Ask the city for the current rate before pricing new office or R&D space.
Hotels. East Palo Alto applies a transient occupancy tax under Chapter 3.68, which the Rent Program’s exemption notice cites. We did not confirm the rate.
Apartments in mixed-use buildings. Units above shops can fall under the city’s rent stabilization ordinance. See our East Palo Alto multifamily guide.

Transfer tax, business tax and property tax

The San Mateo County Assessor-County Clerk-Recorder collects documentary transfer tax at 55 cents per $500 of consideration, or $1.10 per $1,000, when a deed records. The County page names only the City of San Mateo as adding a separate city tax; we did not verify any East Palo Alto transfer tax, so confirm on the escrow estimate. We also did not verify the city’s business license tax. A change of ownership generally triggers Proposition 13 reassessment.

Due diligence that matters in East Palo Alto

Start with our commercial due diligence checklist, then add:

Confirm the parcel is in East Palo Alto, not Menlo Park or Palo Alto.
Determine whether the Ravenswood Specific Plan, or its pending update, controls instead of the base zone.
In MUH, check the ground-floor retail share and the 85% replacement rule.
Pull conditional use permits for any bar, alcohol sales or late-hours restaurant.
For any building with apartments, check rent registration status and current rent ceilings with the Rent Program.
Ask about affordable housing impact fees for new floor area.

Questions people ask

Can I build housing over retail on University Avenue?

Generally yes. In MUC and MUH, apartments are permitted above the first floor; MUC-2 corners reserve the ground floor for retail.

Are housing-only projects allowed in MUH?

No. MUH requires a mix of uses and at least 35% retail on each ground floor.

Does a restaurant serving beer and wine need a use permit?

Yes. Food service with alcohol needs a conditional use permit in the commercial and mixed-use zones.

Can a light industrial user locate in East Palo Alto?

Not in the mixed-use zones. Small industry is permitted in C-G, and the Ravenswood plan area is where the city has planned light industrial and R&D space.

Has the Ravenswood Business District plan update been adopted?

A Final Supplemental EIR was filed in November 2024. We did not confirm the adoption status; check with the city.

Is there a city transfer tax?

We verified only the County tax of $1.10 per $1,000. Confirm on the escrow estimate.

Does Diamond handle commercial property in East Palo Alto?

Contact Matthew Martinez to discuss buying, selling or leasing commercial property in East Palo Alto.

Sources & notes

Note: We could not read the full use tables for auto, cannabis and lodging uses, or height and FAR limits, in the online code, and we did not read the Ravenswood Specific Plan itself. Several city web pages block automated access; confirm details with East Palo Alto Planning.

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

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