Santa Clara County and Stanford Fight Over Affordable Housing Requirements

(CN) – Santa Clara County is home to some of the most formidable technology companies in the world, including Alphabet, Apple, Netflix, Adobe and Tesla.

While those companies have attracted jobs and ensured the county coffers are brimming with funds, it has also created an intractable affordable housing problem that continues to worsen.

Recently, the county looked to another of its prestigious inhabitants — Stanford University — for solutions, passing an ordinance in September 2018 requiring the university to include percentages of affordable housing per square footage of residential unit or academic space it develops.

Stanford quickly filed a lawsuit, saying the ordinance violated the equal protection clause of the U.S. Constitution, in that it treated the university differently from other similar institutions in the county.

The two sides were in federal court in San Jose on Thursday, where the county forwarded a novel argument in its quest to have the case dismissed.

The county argued that it had indeed singled out Stanford, but claims of unequal treatment were irrelevant because Stanford had no similar situated institutions within Santa Clara County.

Stanford University.

“There is not another developer within the county who could put forward a proposal for a development that is anywhere close to the size and scale of what Stanford has proposed,” said Tony LoPresti, arguing on behalf of Santa Clara. “Stanford is an academic institution and a residential developer and it has been developing institutional space at an incredibly high rate.”

U.S. District Court Judge Beth Labson Freeman, who enjoys the cut and thrust of debate in the courtroom unlike some of her more taciturn colleagues, said she feared that because Stanford had no similar institution to compare with that the county “could regulate Stanford with impunity.”

LoPresti replied that the lack of comparison was specific to the case and only applied to equal protection claims.

Another problem for Stanford, according to LoPresti, was the principle of judicial restraint, where courts were required to give significant latitude to legislative bodies who were attempting to solve problems, even if they did so in an incremental and piecemeal approach.

In other words, if Santa Clara identified affordable housing woes as a problem and felt a positive first step was to apply regulations to Stanford, they are perfectly within their legal rights.

Bradley Oliphant, arguing on behalf of Stanford University, said in terms of the scale of the project, the university was proposing 550 new units of development over a 20-year period and when factoring the number of developed units per year, the pace was equivalent to that of other developers seeking to build in the county.

Freeman seemed receptive to that argument and encouraged Stanford to frame their proposal in comparison to other pending development applications to see if an equal protection argument would hold water.

“It’s a much more specific way of looking at the Stanford plan and it may get you over the hurdle,” she said.

But the judge noted the argument was not in the complaint at present, meaning Stanford was back at the drawing board.

“I’m inclined to give Stanford an opportunity to amend,” Freeman said.

The judge also asked Stanford to explore whether a factual record is necessary to show Santa Clara is taking an incremental approach to affordable housing or whether it’s a purely legal matter.

Freeman said it’s worth the time to have yet another round of amendments before a final decision is rendered.

“It’s very important to Santa Clara County and to Stanford,” she said.

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