I would have rewritten this lede:
Residents cheered as the San Marcos City Council rejected a zoning change Tuesday that would have allowed a controversial high-density development in a predominantly single-family neighborhood.
Residents cheered as the San Marcos City Council rejected a zoning change Tuesday that would have allowed a controversial student housing development across the street from the 34,000-student Texas State University.
The proposed development would have been a 42o-unit mixed-use development on 14 acres. As you can see, there is a lot of undeveloped land on the development's side of Sessom Drive, surrounded by low-density single-family housing. As you can also see, a very large university does indeed lie across the street.
(The outline shows the general area and size of the tract; I haven't attempted to accurately sketch its somewhat complicated boundary.)
Texas State University used to be a small, sleepy teachers' college. The area to the northwest was obviously low-value land that developed as low-density single-family housing. Now Texas State University is very large and generates huge demand for student housing. Large, vacant tracts across the street are logical places to put it.
San Marcos is off my beat, so I don't presume to understand the politics in that town. Do homeowners there believe their interests are homogeneous? They are not. The homeowners in the immediate vicinity might hate the idea of lots of students living nearby, but those students have to live somewhere. If they can't live in one neighborhood, they will find another neighborhood. They'll double-up or triple-up in homes in other single-family neighborhoods. Rather than walk or bike across Sessom to get to class, they'll pile into a car and clog the city's streets. If I were a homeowner in San Marcos who didn't live on or near Sessom, I'd be delighted by this project.
And, as a San Marcos homeowner, I would also recognize that my property's value depends on the long-term health of Texas State University. San Marcos has no particular competitive advantage over other central Texas locations other than that university. San Marcos needs to zone its land to accommodate a large, growing university. If it doesn't, students will be stuck with lower-quality but more-expensive housing, and the university will be a less attractive place.