CITY COUNCIL STAFF REPORT
MAY 6, 2025
Subject
Approval of an Interim Urgency Ordinance Imposing a Moratorium on the Transition of Multiple-Family Use Housing to Student Housing within a One Half Mile Radius of Foothill-De Anza Community College in the City of Cupertino; or approval of a Resolution of the City Council Encouraging the Building of Newly Constructed Student Housing and Preventing the Conversion of Multiple-Family Use Housing to Student Housing within the City of Cupertino.
Recommended Action
Staff recommends that the City Council take the following actions:
1. Open and conduct a public hearing to consider the attached interim urgency ordinance; and 2a. Waive further reading and adopt, by a four-fifths (4/5ths) vote of the City Council, the attached interim urgency ordinance by title only (the same to take effect immediately upon adoption), entitled, “An Interim Urgency Ordinance of the City of Cupertino, California, Enacted Pursuant to California Government Code section 65858 Establishing a 45-Day Temporary Moratorium on the Transition of Multiple-Family Use Housing to Student Housing Within One Half Mile Radius of Foothill-De Anza Community College in the City of Cupertino During the Pendency of the City’s Review and Adoption of Permanent Zoning Regulations for Such Uses;” or 2b. Approve the attached resolution entitled, “Resolution of the City Council Encouraging the Building of Newly Constructed Student Housing and Preventing the Conversion of Multiple-Family Use Housing to Student Housing within the City of Cupertino.” At the April 2, 2025 City Council meeting the City Council first learned from residents of McClellan Terrace that more than 90 families, with over 60 children and youths, would be displaced if the District acquires McClellan Terrace and converts it to student housing for its student population. At that meeting, the City Council learned that District had entered into a purchase agreement with the current owner of the building. The City Council then unanimously approved a study session to consider generally the conversion of multiple-family use housing to student housing.
In furtherance of the City’s Housing Element contained in the General Plan, the District should be building new housing for its students that need housing rather than seeking to convert existing multiple-family housing to student housing.
The District has, in fact, now stated that it intends to convert McClellan Terrace into student housing. As such, the District plans to displace all of the current residents, who will be required to move out, either upon the expiration of their 12-month leases, or sooner, but all would receive a minimum of 120 days’ notice to vacate.
The proposal raised immediate concerns from the families to be displaced, many with school-age children and youths attending nearby Abraham Lincoln Elementary, Kennedy Middle School, and Monte Vista High School. At the April 2, 2025 City Council meeting, residents living at McClellan Terrace, and many others from the surrounding community and greater City area, expressed deep concern regarding the loss of the residents’ community, social ties, and stable living environment for themselves, their children, and their neighbors, which would be the result.
This also raises serious concerns about displacing longtime residents in a City already facing a shortage of rental housing. The City has long recognized the importance of protecting families and other residents from displacement, as reflected in the goals and policies of the City’s General Plan, which emphasizes that “new housing sites should avoid or minimize displacement of existing uses, particularly existing residential uses that would necessitate the relocation of residents” (see Appendix B (Housing Element) of the General Plan at B-21), causing both the loss of homes and critical community support networks.
To prevent the displacement of long-term residents, the City of Cupertino has historically adopted policies that limit housing conversions which could reduce affordability or availability. (CMC section 19.116.030 (A)(1)(a).) For example, the City’s Municipal Code states “[i]n no case shall an apartment project be converted to a common interest development unless and until it can reasonably be demonstrated that comparable replacement housing exists within the housing market area to accommodate those residents displaced as a direct result of the proposed conversion.” (CMC section 19.116.030 (A)(1)(a).) It further states that “[n]o conversion of apartment houses . . . to common interest developments shall be permitted unless and until the City Council of the City of Cupertino finds that the proposed conversion will not conflict with the housing goals and policies of the General Plan and will not adversely impact the local school system.” (CMC section 19.116.030 (A)(2).) While common interest developments are not student housing, this example demonstrates the City’s longstanding commitment to protecting existing residents from displacement.
In line with this commitment to housing stability, and based on the Housing Element, General Plan, and past regulations, staff is recommending that the City Council adopt an interim urgency ordinance temporarily prohibiting the conversion of multi-family housing to student housing.
Reasons for Recommendation
The City should be encouraging the building of new housing, including encouraging institutions of higher education located within or near its boundaries to prioritize the development of new student housing to meet the growing demand for student accommodations rather than displacing families to transition the multiple-family housing stock to student housing.
In fact, the City’s failure to protect multiple-family housing for families and other long-term residents could further reduce the availability of permanent housing options, negatively impacting overall housing stability. According to the California Department of Finance E-5 Report (2024), Cupertino’s housing unit vacancy rate was 5%, compared to the statewide rate of 6.4%. This lower vacancy rate indicates tighter housing availability in the City, supporting the conclusion that residents already face limited housing choices.
Moreover, rent in the City is significantly higher than in most communities and according to Zillow is 81% higher than the national average. As of April 24, 2025, 103 total units were listed for rent on Zillow for the entire City. Of these, only 70 multiple-family units were available, ranging from $1,300/month to $6,810/month. With a population in the City of approximately 58,000 people, (US Census Bureau) this means that a single multiple-family unit is only available for less than 5% of community members. In addition, land, environmental, and infrastructure constraints combine to keep prices high. Although the City of Cupertino is doing what it can to facilitate the development of new multiple-family housing, it also must take steps to preserve existing multiple-family housing.
The City’s current regulatory environment towards the transition of multiple-family housing to student housing will: 1) result in the loss of essential housing, including rental housing, for families and others within the City, 2) displace current tenants, including families and families with school-age children and youth currently enrolled in local public schools, 3) disrupt established relationships between and among families and friends residing in the multiple-family use building or nearby residences who may be unable to find alternate housing within the neighborhood, school district, or even within the City, 4) encourage the loss of multiple-family use housing in favor of student housing, 5) potentially increase the commute distance to and from work for tenants displaced by student housing potentially increasing Greenhouse Gas emissions; and 6) reduce the incentive for institutions of higher learning to build new student housing to accommodate the needs of the institutions’ students for local housing.
Providing for a diverse range of housing types is an important consideration in any community. A diverse range of housing types helps ensure that all households in a community, regardless of income level, size, age, and family type, have the ability to find adequate housing that meets their needs, including K-12 schools for children and youths.
The need to preserve existing multiple-family housing is especially acute due to the limited availability of other housing types. For example, according to Redfin.com the median sale price of a home in Cupertino was $2,493,950 in February 2025. This places home ownership out of reach for many members of the community, resulting in a greater need for safe and affordable multiple-family rental housing.
Moreover, converting existing multiple-family housing to student housing or similar uses is intertwined with the loss of housing choices and the risk of displacement. It exerts upward pressure on rents, forcing families to pay a greater proportion of household income on rent, which creates a strain on household finances. It also increases the likelihood that households will be forced to move out of the area when housing stock is converted to other uses. When households are displaced due to rising rents or the lack of available housing, it disrupts community stability, increases stress and anxiety among residents, results in longer commute times and greater traffic impacts as workers are forced to live farther from their jobs, and adversely affects the educational continuity and opportunities for children and youth. The shortage of multiple-family housing supply, combined with rising rents, heightens the risk of housing insecurity and further disenfranchises the unhoused.
Based on these concerns about the likely unintended consequences, as well as the findings provided in the attached interim urgency ordinance, staff is proposing that the City Council pass the interim urgency ordinance, which temporarily prohibits the conversion of multiple-family use housing to student housing, as defined in the attached interim urgency ordinance within a one half mile radius of Foothill-De Anza Community College for an initial period of 45 days. This initial period will allow staff time to review, study, and potentially revise the Cupertino Zoning Ordinance or other City planning documents and rules as they relate to these uses.
State Planning and Zoning Law empowers the City to plan for and regulate the use of land to provide for orderly development. State law further authorizes the City Council to adopt an ordinance for the preservation of the public peace, health or safety and to prohibit a use that conflicts with a contemplated general plan, specific plan, or zoning proposal that the legislative body, or the planning department is considering or studying or intends to study within a reasonable time. Municipal Code section 19.04.020 gives authority to the City of Cupertino to establish comprehensive zoning regulations to facilitate the creation of a convenient, attractive and harmonious community.
The proposed interim urgency ordinance would be effective for an initial period of 45 days. Staff anticipates providing a written report 10 days prior to the expiration of the interim urgency ordinance. The City Council would then have the option to extend the interim urgency ordinance for up to an additional 10 months and 15 days to allow for any permanent ordinance or amendment to the City’s Zoning Ordinance or other City planning documents or rules to be adopted. Any extension would require a 4/5ths vote of the entire City Council.
Both staff and the City Attorney will be available to respond to questions regarding the City Council’s consideration of this matter at the public hearing.
Available Options
1. Approve the interim urgency ordinance to allow staff time to study and perhaps develop an appropriate zoning ordinance to ensure that much needed multiple-family use housing is not converted to student housing and the building of newly construction student housing is encouraged.
2. Approve the resolution encouraging the building of newly constructed student housing and directing staff to press forward with studying options to prevent such transitions in the future to both encourage the development of new student housing and retain current multiple-family use housing.
3. If the City Council determines there are issues which should be addressed prior to taking any action on this item, the Council should continue this action and instruct staff to resolve those issues.
4. Do nothing.
Sustainability Impact
No sustainability impact.
Fiscal Impact
The cost associated with preparing the permanent zoning ordinance.
City Work Program Item and Item Description
This is not a City Work Program item.
Council Goal
To preserve Multiple-Family Housing with the City of Cupertino.
California Environmental Quality Act
In accordance with Section 15061(b)(3) of the California Environmental Quality Act (CEQA) Guidelines, this action is statutorily exempt. Further, even if a project, it is clear that the proposed moratorium Ordinance will not create an environmental impact as it preserves existing conditions, and is therefore exempt from CEQA review. _____________________________________
Prepared by: Vrunda Shah, Deputy City Attorney
John Fox, Assistant City Attorney
Floy Andrews, Interim City Attorney
Reviewed by: Bejamin Fu, Community Development Director Tina Kapoor, Deputy City Manager
Approved for Submission by: Pamela Wu, City Manager
Attachments:
A – Moratorium Radius Map
B – Draft Ordinance
C – Draft Resolution
01276.0005 1071337.5
01276.0005 1071337.5