Stanford continues pursuing housing solutions despite possible setback

A vote this week by the Santa Clara County Board of Supervisors means that Stanford could be required to pay significantly higher mitigation fees on the academic facilities it hopes to construct as part of its application for a renewed General Use Permit.

Supervisors also passed an “inclusionary housing” zoning ordinance that would require 16 percent of all housing for Stanford faculty and staff to be designated as affordable housing.

This recent action by the Board of Supervisors is part of a much broader continuing discussion of Stanford’s land-use request to expand on-campus housing and academic facilities to accommodate the academic needs and opportunities to the year 2035.

The permit requested by the university would allow Stanford to add on campus housing as well as academic space to keep pace with teaching and research demands, while promoting sustainability, conservation of natural resources and alternative transportation strategies.

General Use Permits allow landowners to forecast needs over the long-term – in this case, projected to be through 2035 – easing the day-to-day regulatory burdens for both county and university officials for individual construction projects. The permit would also provide flexibility to accommodate unexpected opportunities, such as the Anderson Collection constructed under the university’s current General Use Permit.

Distinctive feature

One of the distinctive features of Stanford’s application was the goal of building new housing on pace with the building of new academic space in recognition of the region’s profound housing challenges. The 2018 General Use Permit application also proposed to contribute an estimated $56 million to affordable housing projects over the life of the permit.

The university subsequently submitted a housing proposal to Santa Clara County in July in response to feedback from supervisors that they would prefer to see units delivered rather than collect a housing impact fee. Stanford’s housing proposal includes three main components:

• The creation of 200 new affordable housing units for staff and postdocs, with the first 100 becoming available before any new academic facilities are occupied under the 2018 General Use Permit, and the second 100 provided prior to occupying more than 1 million square feet of new academic facilities.
• An immediate payment of $14.3 million to Santa Clara upon approval of the 2018 General Use Permit to support the creation of 38 Extremely Low Income units in the community.
• Immediately establishing an Evergreen Capital Fund of $21.7 million to subsidize regional affordable housing construction, with a goal of providing 434 affordable units within the first five years of the 2018 General Use Permit.

University officials are most excited about the innovative Evergreen Capital Fund because it provides the “missing slice” of financing that often prevents affordable housing developers from accelerating the delivery of units. As loans are repaid, those funds will be made available to new projects, creating the potential for many more units to be built in the future. There is also the possibility of attracting additional investors to the fund, further magnifying its impact.

The Board of Supervisors this week opted to set new housing impact fees for each square foot of nonresidential development Stanford constructs at $68.50, three to four times the amount charged to for-profit developers of commercial office space in surrounding jurisdictions, despite concerns raised by the university. In doing so, they also left open the possibility of negotiating a development agreement with the university in lieu of the ordinances that would create additional housing and community benefits.

Disappointing decision

“We are disappointed in the Board of Supervisors’ decision to prioritize collecting a fee over approximately 20 years that is dependent on Stanford’s academic growth rate, instead of delivering housing now,” said Jean McCown, assistant vice president for government and community relations.

“Enacting this fee will delay by up to a decade the delivery of more affordable housing, and therefore will not address the acute housing shortage the region faces now. We are also concerned about the legality of ordinances that single out a specific entity and assess fees that are not consistent with surrounding jurisdictions or supported by accurate methodology. A true calculation of the fee needed to support affordable units is $17 per square foot, not $68.50. Based on previous feedback from the supervisors, Stanford put forward a proposal that guaranteed the creation of regional affordable housing much faster than any ordinance could produce.”

McCown continued, “While we disagree with the decision to adopt the ordinances, the possibility of a suspension or rescission of the ordinances if a development agreement is reached still allows for discussions to take place. We look forward to beginning discussions with Santa Clara County on a development agreement that actually delivers much-needed affordable housing and other community benefits.”

The General Use Permit application process now moves toward its final stage, which will include numerous opportunities for members of the Stanford community to provide input. While a schedule has not been released, Santa Clara County administration officials have indicated a Final Environmental Impact Report will be released in December, following by Planning Commission workshops and review in January and February of 2019. The Board of Supervisors will then undertake final consideration of the application in March and April.

More information about the 2018 General Use Permit can be found at gup.stanford.edu.