Permits and Entitlements in Silicon Valley: What Building a Custom Home Actually Requires

Almost every conversation I have with a buyer planning to build in Palo Alto, Atherton, Los Altos, Los Altos Hills, or Menlo Park eventually gets to the same question: "How long will the permits take?" It's the right question, but it's usually asked as if there were one permit. There are two very different approvals, run by two different departments, on two different clocks. Understanding that split is the difference between a realistic project timeline and a year of frustration.

Entitlements vs. building permits

The first approval is the entitlement. This is the planning department's answer to a simple question: is this project allowed on this lot? Zoning, setbacks, height, floor-area limits, lot coverage, tree protection, hillside and grading rules, and — in most Peninsula towns — some form of design or architectural review all live here. Entitlements are discretionary in many cases, which means a person or a board is exercising judgment, and judgment takes time and can be appealed.

The second approval is the building permit. Once the project is entitled, the building department checks whether the construction drawings comply with the California Building Code and local amendments: structural, energy (Title 24), fire, plumbing, electrical, and so on. This review is ministerial — if the plans meet code, the permit issues. It is more predictable than the planning phase, and, since 2023, it is on a statutory clock.

The practical mistake is treating them as one step and hiring an architect to draw full construction documents before the planning question is settled. Design review changes the massing, the massing changes the structure, and the expensive drawings get redone. Entitle first. Engineer second.

What each town actually reviews

The Peninsula's cities are small, and each has its own personality. Broad strokes only — confirm current rules with the relevant planning department before you commit to a design:

• Palo Alto. Single-family homes are governed by the R-1 standards and the Individual Review process for two-story homes and second-story additions, which weighs privacy, scale, and neighborhood compatibility. The city also has strong protected-tree rules; a heritage oak can shape a floor plan.
• Atherton. Large-lot, one-acre-minimum zoning with generous floor area, but a serious focus on heritage trees, drainage, and construction impacts. Basements are common, and the town's grading and drainage standards are a real part of the design.
• Los Altos. Design review for new two-story homes and larger additions, with attention to neighborhood pattern, daylight plane, and privacy. Single-story projects that stay within the numeric standards move more quickly.
• Los Altos Hills. The most rule-driven of the group: a site development permit governed by slope, Maximum Development Area (MDA), Maximum Floor Area (MFA), and Lot Unit Factor calculations. On a hillside lot, these numbers — not the lot size — determine what you can build. I've written about that separately.
• Menlo Park. Zoning varies more by neighborhood than most buyers expect, particularly between the older west-side districts and the newer specific-plan areas. Check the district before you assume the floor-area ratio.

Two things are true everywhere: neighbor notification is part of the process, and a well-designed project that respects the standards is far cheaper than a fight over an exception.

The state's thumb on the scale

California has spent the last several years narrowing local discretion over housing, and some of it benefits a single custom home. The most relevant change is AB 2234, in effect since January 2023, which sets statutory timelines for "post-entitlement" permits — the building permit phase. Cities must determine whether an application is complete within 15 business days, and, for projects of 25 units or fewer, complete their review within 30 business days once the application is complete. Missing those deadlines is treated as a Housing Accountability Act violation, which gives the rule teeth. It does not shorten planning or design review, and cities can still send comments back for correction, so the total time to a stamped set is longer than 30 days — but it removes the open-ended limbo that used to define the building phase.

Separately, California's ADU laws have made accessory units close to by-right, with a 60-day review clock, and recent CEQA reforms have simplified environmental review for infill housing. For a single-family project, the useful takeaway is this: the state has made the ministerial phases faster and more predictable, which makes the discretionary phase — your design review — the part where preparation matters most.

Where the months actually go

In my experience the timeline is rarely lost to the city. It's lost to the applicant:

• Buying the lot before knowing what it allows. Slope, easements, creek setbacks, tree canopies, and utility locations can all shrink the buildable envelope. Run the zoning and constraints analysis during due diligence, not after close.
• Incomplete submittals. Every resubmittal restarts a review cycle. A complete arborist report, survey, geotechnical report, and drainage plan on day one saves more time than any expediter.
• Designing to the maximum. Projects that use every square foot of allowable floor area and every inch of height attract scrutiny and neighbor objections. A little margin buys a lot of goodwill.
• Skipping the pre-application meeting. Most Peninsula planning departments will meet with you before formal submittal. It's the cheapest advice in the process.

A realistic sequence

Constraints analysis and site survey before purchase; a pre-application meeting and schematic design; planning entitlement and any design review; then construction documents, building permit, and — only then — a contractor's real schedule. On the Peninsula, from a bare or teardown lot to a permit in hand, it's reasonable to plan in seasons rather than weeks, and to treat any promise of a specific number of months with caution until the planning phase is behind you. The homes that come in on time are the ones where the owner understood the sequence before they bought.

Payne Sharpley is a Silicon Valley real estate agent with Intero | Forbes Global Properties and co-founder of Citis, a housing-entitlement intelligence platform. CA DRE #02195155. This article is general information about residential permitting in California, not legal, tax, or investment advice; zoning standards, review procedures, and statutory timelines change, so confirm current requirements with the relevant city or county planning and building departments and, where appropriate, a land-use attorney. Equal Housing Opportunity.