The Palo Alto City Council voted late Monday to limit office space on University and California avenues to 50,000 square feet.
The move shows city leaders want to limit Palo Alto's growth and to slow down the pace of building.
"One of the attractions of a small area like California Avenue is that it's local -- neighborly type of place, informal in nature," Palo Alto Vice Mayor Greg Schmid said.
The council's vote received opposition from local tech giants, including Google and Hewlett-Packard, along with the Palo Alto Chamber of Commerce.
Those who disagree with the council's decision said the move could hurt Palo Alto's bank account.
"The officer workers are contributing a lot to economic vitality of downtown retail and California Avenue retail," said Peter Stone with the Palo Alto Chamber of Commerce.