At first glance, the town of Woodside may look more like a sprawl of mansions built on big-tech billions than crucial habitat for threatened California mountain lions.

But town officials might suggest looking again.

The wealthy San Francisco Bay area suburb has said it cannot approve the development of new duplexes or fourplexes to ease the statewide housing shortage because it encompasses the habitat of the elusive wildcats.

Residents in Woodside had long bristled at SB 9 – a new California measure that makes it easier to build multi-unit housing in neighborhoods previously reserved for single-family homes. But a clause in the measure exempts areas that are considered habitat for protected species. “Given that Woodside – in its entirety” is habitat for mountain lions that environmental groups are petitioning to list as threatened or endangered under the state’s Endangered Species Act, “no parcel within Woodside is currently eligible for an SB 9 project”, the town’s planning director wrote in a memo on 27 January.

Critics of the town council, including many housing advocates, have accused the town of cynically using environmental concerns to avoid compliance with state law. “This is nimbyism disguised as environmentalism,” said Scott Wiener, a California senator who co-authored SB 9. “The notion that building duplexes hurts mountain lions – it’s just ridiculous.”

Woodside is not only a habitat for mountain lions, but also for notable tech entrepreneurs including the Intuit co-founder Scott Cook and Oracle co-founder Larry Ellison. The latter modeled his 23-acre Woodside estate on a 16th-century Japanese imperial palace. The median home price in the town is $5.5m, and the median household income is more than $250,000. The landscape is scattered with sizable mansions and estates as well as sprawling ranches.

Mountain lions – also called pumas, cougars and panthers – have been known to wander into suburbs and cities across California, and may occasionally traverse the town. “You can see there’s a fair amount of habitat in the undeveloped areas around the city,” said Winston Vickers, director of the Mountain Lion Project at the UC Davis Wildlife Health Center.

“Any development should be done with careful consideration of whether it is going to impact a nearby travel corridor, green belt or large adjacent habitat area for mountain lions,” Vickers said. “But to say that any expansion of housing, anywhere in a given city, would likely impact mountain lions is likely a bit of a stretch.”

Woodside’s mayor, Dick Brown, declined an interview request from the Guardian. “We love animals,” he told AlmanacNews. “Every house that’s built is one more acre taken away from [mountain lions’] habitat. Where are they going to go? Pretty soon we’ll have nothing but asphalt and no animals or birds.”

As far as wildlife biologists know, mountain lions are not especially comfortable on land zoned for single family homes, nor are they particularly put off by two-story apartment buildings.

The biggest challenge that mountain lions are facing is “ex-urban development pushing into the wild areas that they need, and major roadways cutting through those habitats,” said Josh Rosenau, a conservation advocate with the Mountain Lion Foundation, one of the organizations seeking to have the mountain lions in the south and central coast listed as threatened or endangered under the California Endangered Species Act.

In most cases, “increasing [housing] density where possible, is going to be better for mountain lions ultimately”, he said, than expanding construction further into wildland areas.

As California pushes to expand housing amid a crisis of housing affordability and homelessness, communities across the state have resisted efforts to build more densely, often using the state’s strict environmental laws as a shield. With SB 9 taking effect this year, cities across the state also sought to pass design restrictions, or designate historic districts and sites in a scramble to find loopholes in the law.

Earlier last month, Woodside had passed an ordinance prohibiting basements in SB 9 developments, capping their size to 800 square feet – the minimum required by the law – and prohibiting their construction in “very high fire severity zones, for health and safety reasons”.

“My hope is that Woodside thinks better of its position, and figures out how to comply with this new law,” Wiener said.

Or there’s an option that some critics have offered: return all the land to the mountain lions that once prowled there freely.