Stanford Challenge of County Affordable-Housing Law Tossed

Stanford University.

SAN JOSE, Calif. (CN) – Stanford University failed to convince a federal judge Thursday that it is being unconstitutionally singled out over the shortage of affordable housing in Santa Clara County.

U.S. District Judge Beth Labson Freeman dismissed the university’s lawsuit challenging a county ordinance that requires 16% of any new market-rate housing built to be affordable.

“We’re very pleased with the decision,” County Counsel James Williams said in a phone interview. “We think the lawsuit is meritless.”

He said Stanford should be helping Santa Clara County “deal with the affordable housing crisis and deal with the affordable housing needs that result from Stanford’s own development activities,” adding, “Stanford has unfortunately decided to litigate instead of working collaboratively.”

The county passed the ordinance in September 2018, attributing long commutes and traffic congestion to the paucity of affordable housing. The university sued in December, claiming it was being singularly forced to answer for a countywide housing shortage.

It also said the ordinance was being used as leverage in negotiations over Stanford’s pending application for a general use permit aimed at development on Stanford-owned land. The university had planned to build 3,150 new housing units, with up to 550 for faculty and staff.

Stanford also pointed out impending development on nearby land it doesn’t own.

But in her ruling Thursday, Freeman nixed Stanford’s equal protection claim, saying it could not show a single similarly situated property owner that was treated differently by the county. She said she would give Stanford leave to amend “to give Stanford the opportunity to allege the existence of a similarly situated comparator.”

Freeman also found Stanford failed to meet its burden to show the county lacked a rational basis for the ordinance. While the need for affordable housing near Stanford may or may not be more severe than elsewhere, Freeman found “the county has discretion to take an incremental approach to a perceived problem, and an incremental approach can constitute a rational basis for an ordinance that targets some but not all contributors to the problem.”

Freeman gave the university to leave to amend on this claim as well.

Williams said this was generous of Freeman, but “shows how weak Stanford’s case is.”

“They’ll get one more shot at trying to file again, but on the law, their arguments were not compelling,” he said.

Stanford spokesperson E.J. Miranda said in an email that the decision is” largely procedural” and that the university intends to amend its complaint. He added that the university has proposed to meet the ordinance’s 16% requirement through a development agreement tied to the general use permit, and will “continue seeking an opportunity to work collaboratively with the County on a Development Agreement that delivers much-needed affordable housing.”

“However, Stanford maintains that the County’s inclusionary housing ordinance unfairly targets the university by applying only to Stanford within all of unincorporated Santa Clara County, thus violating the university’s right to equal protection,” Miranda said. “The issue in the litigation is not about Stanford’s commitment to more affordable housing, but rather that it is unlawful for Stanford to be singled out for unequal treatment in a county ordinance.”

In a statement, Santa Clara County Supervisor Joe Simitian said housing ordnances like the one imposed on Stanford are commonly used to promote affordable housing construction.

“I’m pleased the court has confirmed that fact,” he said. “And, by the way, our inclusionary housing ordinance is just one tool among many that the county is using to ensure housing solutions that benefit the entire community.”

He added, “Frankly, I was disappointed this ended up in court. People are spending time and money on litigation that would be better spent creating affordable housing.”

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