Commercial Real Estate in Saratoga: The Village, Neighborhood Centers and Mixed-Use Zones

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

Saratoga is overwhelmingly residential, so its commercial property is a short list: the historic Village along Big Basin Way, a few neighborhood shopping centers, professional office sites and, since 2024, a set of mixed-use districts created for new housing. Every commercial building in town goes through design review, and many everyday uses that are automatic elsewhere need a use permit here. Confirm the district for each parcel with the City of Saratoga Community Development Department before relying on this page.

Who controls the parcel

Saratoga is an incorporated city, and Chapter 15 of the Saratoga City Code sets its zoning, including separate articles for Professional and Administrative Office (P-A), Commercial (C), Mixed-Use (M-U) and Village design standards. Chapter 13 adds a heritage preservation program with its own commission, designation process and permits, which matters for older Village buildings. Hillside and agricultural land around the city falls under separate residential and A districts, and unincorporated land in the hills is County jurisdiction; see our Santa Clara County commercial guide.

Saratoga zoning for commercial and mixed use

District	Intended uses	Notes
CH-1 (C-H district)	Village shops, restaurants, offices, personal services	5,000 sq ft minimum site; 80% coverage, up to 100% with pedestrian open space; 35 ft, 3 stories; no setbacks
CH-2 (C-H district)	Village sites with more open space	7,500 sq ft minimum; 60% coverage plus 20% pedestrian open space; 35 ft
C-N	Retail and services for nearby neighborhoods	10,000 sq ft minimum; 60% coverage; 20 ft, or 35 ft with housing
C-N(S)	Neighborhood commercial with larger buffers	Up to 30 ft side and rear setbacks next to homes
C-V	Commercial with larger rear setbacks	20 ft, or 35 ft with housing; 30 ft rear setback
P-A Professional and Administrative Office	Office sites	Separate article (15-18)
MU-MD, MU-HD, MU-VHD	Housing with up to 50% commercial floor area	15 to 150 units/acre by district; up to 125 ft in MU-VHD

All commercial districts allow mixed-use housing by conditional use permit at up to 20 units an acre.

The Village and Big Basin Way

The commercial article states the Village Plan Area goals plainly: keep its small-scale, walkable character, its architecture and landscaping, a town-center mix of uses and its historic structures. The CH-1 and CH-2 districts carry those goals into the rules.

Street-level offices. Offices, medical offices and banks are permitted above street level, or at street level if a retail use sits between them and the street. With their own street frontage at grade, they need a conditional use permit.
Personal services. Salons and similar services are permitted upstairs. At street level they need a use permit if their main entrance faces Big Basin Way.
Historic landmarks. The Planning Commission can grant exceptions to development standards for designated landmarks in CH districts, and Chapter 13 governs designation and alteration permits.
Enclosure and music. Uses in CH districts must be fully enclosed except parking and outdoor dining, and music follows the city’s noise sections.
Design. The Village has its own design standards article (15-62).

Citywide limits on commercial uses

Saratoga’s general commercial rules, last amended by Ordinance 399 on April 3, 2024, are stricter than most Silicon Valley cities.

By right. General retail, home occupations, parking and small markets whose food and drink area stays at or under 25% of floor area and 2,000 square feet.
Use permit. Restaurants, larger markets, alcohol sales other than tasting rooms, hotels and bed-and-breakfasts, arcades, animal businesses and tobacco retailers.
Gas stations. Allowed by use permit only on sites fronting and taking access from Saratoga/Sunnyvale Road, Saratoga/Los Gatos Road or Saratoga Avenue.
Prohibited. Drive-throughs (except in one designated C-N overlay), auto body work, mini-storage and outdoor vehicle sales or storage.
Late hours. Operating between 1:00 and 6:00 a.m. requires a use permit.
Grandfathering. Clinics, alcohol sellers and restaurants or markets lawfully in place before September 6, 1989 can continue without a new use permit.

Lodging. Saratoga bars renting a home or any part of one for 30 days or less under Article 15-42, rewritten by Ordinance 416 on February 4, 2026, with fines up to $5,000 for repeat violations. Hotels and inns are excluded from that ban, so licensed lodging in commercial districts is the only overnight option.

Mixed-use districts

Article 15-21, added by Ordinance 399 in 2024 and amended by Ordinance 406 on March 5, 2025, sets three districts. Projects must put at least half their floor area into housing, with retail, office, financial, day care and personal services in the rest. Maximum density rises with site size: MU-MD runs 15 to 25 units an acre, MU-HD 30 to 40, and MU-VHD 80 to 150, with MU-VHD buildings allowed up to 125 feet or 12 stories. A commercial buyer of an M-U site is really buying a housing site with a commercial component.

Transfer tax, business tax and property tax

The County’s documentary transfer tax is $0.55 per $500 of value, excluding liens that remain, with a credit for a conforming city tax at half that amount. Saratoga’s Article 5-15 sets 27.5 cents per $500 on transfers over $100, administered by the County Recorder, so the city’s share generally comes out of the County rate; confirm in escrow. Business license fees are in Articles 4-05 and 4-06 and transient occupancy tax in Article 5-25; we did not verify rates. A change of ownership generally triggers Proposition 13 reassessment.

Due diligence that matters in Saratoga

Start with our commercial due diligence checklist, then add:

Confirm the district and whether the planned tenant needs a conditional use permit; restaurants and most alcohol sales do.
In the Village, check whether a ground-floor office or salon will face Big Basin Way.
Check heritage resource status and any Chapter 13 permit history.
For a gas station or auto use, confirm the site fronts one of the three named arterials.
Ask for any pre-1989 use rights a seller is relying on.
For an M-U site, model the 50% residential minimum and the density tier for the site size.

Questions people ask

Can I open a restaurant in Saratoga Village?

Yes, with a conditional use permit; restaurants are not permitted by right in any Saratoga commercial district.

Are drive-throughs allowed in Saratoga?

Generally no. They are prohibited except in one designated neighborhood commercial overlay.

Can a bank take a ground-floor storefront on Big Basin Way?

Only with a conditional use permit, unless a retail use separates it from the street.

How tall can a Village building be?

35 feet and three stories in CH-1 and CH-2.

Can I run a short-term rental above my shop?

No. Saratoga prohibits rentals of 30 days or less in any residential dwelling.

Is there a Saratoga transfer tax?

Yes, 27.5 cents per $500 under Article 5-15, generally credited within the County’s $0.55 rate.

Does Diamond handle commercial property in Saratoga?

Contact Matthew Martinez to discuss buying, selling or leasing commercial property in Saratoga.

Sources & notes

Note: We did not read the P-A article, the Village design standards, Chapter 13 text, the zoning map or business license rates. District names CH-1/CH-2 are labeled "C-H" in the code; locations are inferred from the Big Basin Way references.

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

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