SCoPE 2035’s Comments on the Silicon Valley/Alameda

County Affordable Housing Impact Fee Nexus Study

Stanford Coalition for Planning an Equitable 2035

May 1, 2018

We are members of the Stanford Coalition for Planning an Equitable 2035, a group of Stanford students
committed to seeing just outcomes from the 2018 GUP, in terms of housing, transportation, and labor.
We have reviewed the draft nexus study and feel strongly that Stanford should be required to pay the
maximum fees determined, for both Academic Space and Faculty and Staff housing.

It seems clear to us that the maximum fees found are the correct and appropriate fees for Stanford
during its development under the 2018 GUP. Although our group is concerned with the housing impacts
caused by anyone not housed on campus by Stanford, we believe the methodology used appropriately
adapts the nexus study methodology to Stanford’s unique development pattern. We note, however, that
the study is explicitly intended to be a “conservative” (pg. 36) estimate of Stanford’s true housing
impacts. For example, the indirect housing impacts caused by student housing is not included in the
estimate due to “data limitations” (pg. 36), which would yield an even higher Academic Space fee. This
suggests that anything less than the maximum fee found would be even more inadequate to address
Stanford’s housing impact.

Any fee below the maximum recommended level translates to a failure to mandate accountability for
housing impacts, which will be felt directly by constituents throughout Santa Clara County. The
thousands of people added to Stanford’s campus in the coming years have to live somewhere, and if
sufficient funds aren’t set aside to provide them housing, rest assured that they will come knocking in
other districts throughout the county. Stanford affiliates will come looking for housing in San Jose,
increasing displacement pressures for a city that has only built 7% of its affordable housing construction
goal for 2022, and flooding a rental market that saw rents rise 3% in the last year. Approving a fee below
the full mitigation level recommended by the nexus study will only add more people to the already long
line of County residents in search of affordable housing. The truth of the situation is that the impact fees
for full mitigation will be paid regardless. The decision that rests in the hands of the Board is whether
Stanford should pay for its own impacts, or whether County taxpayers should foot that bill on Stanford’s
behalf.

At first glimpse, the fee proposed by the County appears to be significantly higher than those paid by
other Universities (comparison in staff report)— it is possible that Stanford and other parties may
protest the fee on these grounds. However, the circumstances surrounding other Universities are
substantially different from those facing Stanford, justifying the difference in the BMR fee. First, several
of the other Universities mentioned in the staff report (e.g. Columbia, Yale) developed BMR fees through
Community Benefits Agreements (CBAs) or public-private partnerships. A CBA or PPP would reduce the
fee needed as both mechanisms include other measures (local hire requirements, living wage, etc.) that
combat housing affordability issues in other ways. Stanford is not bound to any such measure, and thus
should be required to pay the full fee. Furthermore, many of the agreements that established other
University fees were roundly decried by community members as failing to support communities and
combat negative externalities of development in meaningful ways1. Finally, it is safe to say that
Stanford’s situation is unique. First, Stanford already owns the land it is planning to develop on and
does not have to pay for property which typically drives up development costs in many cases, making
higher mitigation fees unreasonable. Second, Stanford lies at the heart of the most severe housing crisis
in America. Any fee levelled should reflect these unique circumstances.

We imagine that Stanford, and perhaps others, will object that the maximum fee found in nexus studies
is rarely used to set the actual fee, and that the fee suggested is exorbitantly high. However, the
maximum fee found in nexus studies is the fee that should be levied in order to fully mitigate the housing
impacts of a development project - it is only for political and practical reasons that a lower fee is
ultimately set. Such limitations do not exist for Stanford, and instead this is an opportunity to set the fee
at the level that the study shows is factually appropriate for the university. As a educational institution
Stanford is already exempt from nearly $80 million of property taxes towards the county which could
otherwise be used to mitigate its housing impact2 - this fee is necessary to allow the County to
compensate for the impacts studied and proven in the nexus study.

Stanford University, one of the world’s wealthiest institutions, can afford to pay the maximum BMR fee.
With an endowment of over $22 billion, the annual projected fee cost of about $19 million composes only
0.35% of Stanford’s annual operating budget. It is possible that the University may suggest that such a

1
http://features.columbiaspectator.com/eye/2015/03/25/ties-that-bind/
2
https://www.washingtonpost.com/news/grade-point/wp/2016/07/08/why-should-rich-universities-get-huge-
property-tax-exemptions/?utm_term=.5b9b8026e663
fee might detract from financial aid and raise tuition costs. It should be noted, however, that financial
aid accounts for only 5% of Stanford’s annual operating budget, making it a strange place to start
trimming excess costs. Furthermore, unlike a normal municipality for whom a very high fee might
mean an impediment to growth of development and commerce as businesses flee the area to escape the
fee, Stanford is impervious to the potential issues brought about by a higher fee. Indeed, the university,
well on the campus land that it owns, will not simply move to another location with lower fees.

Finally, we believe that an ordinance is the appropriate tool through which Stanford’s impact fees should
be determined and assessed. Stanford’s affordable housing impact fee should be determined the same
way as all other businesses in the County, rather than through a political negotiation in the GUP process.
The process of establishing this fee has been driven by data and analysis, while Stanford’s own proposed
BMR fee through the GUP is decidedly isolated from any real impact calculation. For this reason, and the
many others described above, we are in support of the maximum fee as recommended by the Planning
Division.

Sincerely,

Dan Sakaguchi
Chiamaka Ogwuegbu
Courtney Pal
Amulya Yerrapotu