Facebook's Zuckerberg plans to demolish and rebuild his four-home complex

The luxury residence of Mark Zuckerberg is set for an overhaul, with plans to downsize surrounding houses amid concerns of privacy on the part of the Facebook (NASDAQ: FB) CEO.

A public document filed with the city of Palo Alto, California, last week — and first reported by local media — shows detailed plans to reduce the size of the four houses that surround Zuckerberg's home in Palo Alto's Crescent Park neighborhood.

"The proposed project seeks to maintain the character of the neighborhood, replacing four single family homes in kind with smaller, updated versions," the document posted on the city's website says.

"The proposed homes represent approximately half of the allowable square footage for the four properties and a 20 percent reduction in square footage relative to the existing homes that will be replaced. Additionally, three of the four proposed homes are single story. Each is carefully located to preserve the existing tees on site."

With Walker Warner Architects mocking up the designs, the goal is to ensure the homes and surrounding gardens "blend seamlessly with the neighborhood and feel as if they have always been there."

A Crescent Park resident told The San Jose Mercury News on Monday that the neighborhood is "curious, but also concerned" about what Zuckerberg has planned.

"Is he just developing it or is he creating some sort of compound which will have a constant turnover of visitors and employees?" the resident asked, according to the newspaper. "It's a question of whether it's a normal residential development or some unusual use that might create traffic and security issues and so forth."

There is no information on whether the new homes will be leased or any confirmation on why the project is being undertaken. Facebook and Walker Warner did not immediately respond when contacted by CNBC for comment.

However, the proposals are yet another development in an ongoing story surrounding the Zuckerberg residence centered on privacy issues.

In October 2013, the Facebook chief bought four more houses on his street in order to take their backyards for his own and use the houses as a buffer. The original idea was for Zuckerberg to lease back the existing homes to the families who were living there.

Zuckerberg paid way over market rates. One of his neighbors who spoke to CNBC on condition of anonymity said at the time that the Facebook founder paid over $14 million for a house that would not have gone for more than $4 million before he came to the area. In total, Zuckerberg paid more than $30 million for the four homes adjacent to his main property.

An added complication came in May 2014 when the Mercury Newsreported that a California real estate developer was suing Zuckerberg claiming the billionaire Facebook CEO breached a property contract.

Mircea Voskerician had agreed to buy a piece of property behind Zuckerberg's home for $4.8 million, the newspaper said. However, Zuckerberg didn't want development around his house, so he paid Voskerician $1.7 million to give up the right to the property, and then another $4.8 million to buy it from the owner, according to the newspaper. A settlement between the two parties was reached earlier this year after a legal dispute, according to Bloomberg.

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