I think we both know how many legal and political levers can be brought to bear by large government institutions when they wish. This is a priority and the NIMBYs in this case are being absurd. In the 1950s Santa Cruz actively campaigned to have the campus there with widespread support from residents. They signed up for it and that huge chunk of land was granted with the idea of having plenty of space to have all the students on campus, and for future growth. The residents were repaid by the skyrocketing values of their homes. The current residents either grew up with that knowledge, or chose to move there despite it. The city can't just decide 60 years into its existence that they've changed their minds and want to limit the university's growth. That's what the plan was from the beginning.

Anyways, when the UC finally decides it has to be done, Santa Cruz will have little power to stop them short of an outright legal war. Like I said, they simply don't want to.