June 24, 2019 – Stanford University,\nwhose $20+ billion endowment ranks as one of the largest in the nation – has\nsubmitted a counter-offer to Santa Clara County officials in an effort to get\napproval for a general use permit to expand its student housing and campus\nfootprint.<\/p>\n\n\n\n
The headline is impressive – $4.7\nbillion for the benefit of local housing, transportation and public school\nbenefits over approximately 20 years, roughly broken out as follows:<\/p>\n\n\n\n
Stanford President Marc\nTessier-Lavigne said:<\/p>\n\n\n\n
\u201cThe Stanford community is\nconfronting the serious regional challenges of affordability, housing\navailability and traffic congestion, and we\u2019re working to do our part to\npromote solutions that serve Stanford and our neighbors, This offer reflects\nour values as a residential university committed to sustainable development and\nservice to the community.\u201d<\/em><\/p>\n\n\n\n Public\nService or Self-Gifting?<\/strong><\/p>\n\n\n\n For cynical journalists and\ninvestors, the brazen self-serving nature of Stanford’s proposal should be\napparent.<\/p>\n\n\n\n For decades, the Stanford effect on\nhousing prices has driven out thousands of low and middle-income Californians\nwho aren’t consulting for VC funds or earning $150,000 as a junior Economics\nprofessor. <\/p>\n\n\n\n Not to begrudge Stanford’s – or\nSilicon Valley’s – success, but any junior Economics professor would tell you\nthat absent of a black market, changes in the price of inputs (like, housing)\nimpact the entire value chain. <\/p>\n\n\n\n As the 4th largest employer in the\ncounty (behind Apple, Google and the county itself), Stanford, like large\ntechnology companies, is not immune to escalating personnel costs in the\nvalley. High rents and mortgage payments contribute to higher break-even\ncompensations for employers. <\/p>\n\n\n\n Taken in that context, Stanford’s\nmulti-billion dollar housing offer can almost be described as buying a dress\nfor your identical twin – with the intention of using that dress for yourself.\nIt’s worse than re-gifting. It’s self-gifting – wrap, ribbon and bow included! <\/strong><\/p>\n\n\n\n The vast majority of residents –\nStanford would have us call them “beneficiaries”? – of the 3,000 new\nhousing stock (that would be the aggregate of employee and affordable units)\nwould end up working in Stanford. Even if the housing perk does not result in a\ndecrease in total gross compensation paid by the university system, the\navailability of housing would certainly improve Stanford’s ability to attract\nworkers and younger academics. <\/p>\n\n\n\n Likewise with infrastructure\nimprovements. As the owner of lands adjacent to the current campus, Stanford\nwould have always picked up the tab of “light infrastructure’ improvements\nthe university scopes out. Yes, a robust commuting program would indeed help\n“…address critical pressures facing the region…”. Stanford’s press\nrelease just didn’t finish the sentence which should have ended with “in\ntheir commute to the university”.<\/p>\n\n\n\n Last we heard, condos don’t install\nfinishes and improvements to the building and represent that such installations\nwere for the benefit for the public – unless they received a subsidy, which is\na different matter altogether. When a condo is given a make-over, the appraised\nvalue often increases and condo owners actually pay more<\/em><\/strong> taxes to\nthe local government.<\/p>\n\n\n\n Which brings to bear one sticky\ndetail, as a tax-exempt institution, Stanford pays very little direct taxes (as\na percentage\/value) to local municipalities.<\/p>\n\n\n\n Finally – the icing on the cake.\nStanford is valuing its “community benefits package to the Palo Alto\nSchool District at $138 million. The bulk of which will be used to defray\neducational costs for students living in tax-exempt Stanford housing. Remember,\nmore students in Stanford housing translates to less property tax revenues for\ncity and county. <\/p>\n\n\n\n Stanford calls its new proposal an “unprecedented commitment” with the “largest” investment in housing and transportation in “its history”. <\/strong><\/p>\n\n\n\n The sentence may be 100% factually\ncorrect, but only hints at the heart of the issue – that Stanford despite all\nits largese pays very little direct taxes to the county and local districts. <\/p>\n\n\n\n While municipalities drowning in\nunfunded pensions and retiree healthcare costs, Stanford and her $20+ billion\nendowment are sitting pretty alongside its paltry 15,000 student body and\n2,000+ faculty writing for the Financial Times, consulting with McKinsey and\nanalyzing voter demographics for ambitious U.S. senators running presidential\ncampaigns.<\/p>\n\n\n\n Institutions like Stanford haven’t paid their full costs, contributing to dwindling governmental budgets at a time where more Americans insist governments broaden social services, provide “universal” coverage in health, insurance and even jobs; and pursue greater socio-economic justice to combat racial inequities. <\/strong><\/p>\n\n\n\n An enlightened Board of Trustees should certainly agree that these progressive goals are laudable goals, so Santa Clara county officials need to be a lot more insistent that Stanford puts serious money on the table to kick-start the better America its faculty and student body aspire to.<\/p>\n\n\n\n