The crash was reported at 4:23 p.m. in the 800 block of Boyce Avenue, police Agent Cynthia Kono said.
The car veered off of Boyce Avenue into a home that was scheduled for demolition next week for a remodel, according to the Palo Alto Fire Department.
A man in his 30s from San Francisco was struck in front of the house and rushed to Stanford Hospital's emergency room, officials said. He suffered moderate injuries and is expected to survive, Kono said.
The driver, a Palo Alto resident in his 70s, stayed at the scene and was later arrested on suspicion of drunken driving and will be booked into San Mateo County Jail, Kono said.
Firefighters are shoring the damaged structure to make it safe for the homeowners to retrieve belongings, fire officials said. Kono said the north side of the home was mostly destroyed.