It’s been 10 years in the making, but Tuesday night the city of Monte Sereno approved its first-ever housing project that includes multi-family housing.

The small South Bay city, with a population of about 3,300, has only single-family homes, a church and an elementary school.

And now it has the approximately 4.5-acre Hacienda Inn property, which Monte Sereno agreed to annex Tuesday night from Santa Clara County.

The city council also voted 3-2 to approve a 36-home subdivision, Montalvo Oaks, that includes 21 market rate single-family homes and 15 market rate multi-family homes.

Arguments for and against developing the Hacienda property have raged for years, as the city of single family homes struggled to meet state multi-family housing requirements.

The showdown came Tuesday night.

“No more stalling, no more shilly-shallying, no more looking for little excuses not to act and trying to get out of meeting state requirements,” resident Phillipa Alvis said. “No more lawsuits that squander Monte Sereno taxpayer’s money.”

Property owner Russ Stanley sued the city over what he called the city’s “persistent refusal” to meet state housing laws. The 36-home agreement settles that lawsuit.

But Councilman Marshall Anstandig wasn’t buying it.

“It’s basically taking 15 multi-family homes and using a shoehorn as leverage to put in another 21 single-family homes. That’s really what this is all about,” he said.

Anstandig and Councilman Curtis Rogers voted against the proposal, saying it’s too dense.

The approval brings Monte Sereno into compliance with state-mandated multi-family housing requirements, city attorney Kirsten Powell said.

“Ignoring the state is not an option,” Councilwoman Rowena Turner said, voting for the plan.

The Hacienda Inn currently houses the Jack Rose and Bier & Bramble bars, and a 20-room hotel that will be torn down.

Sixty-six trees will be torn out, too. They’ll be replaced by 136 trees and a woodland area at the back of the property has been designated as open space in perpetuity.

The property is about mid-way between Los Gatos and Saratoga at 18840 Saratoga-Los Gatos Road, which is known locally as Highway 9 and is a California Scenic Highway.