The location of resources for file services are located within the same site, thereby eliminating or reducing performance issues caused by cross-site accesses in a stretched cluster environment. A file server placement algorithm initially places file servers at a site based at least in part on host workload and affinity settings, and can perform failover to move the file servers to a different location (e.g., to a different host on the same site or to another site) in the event of a failure of the host where the file servers were initially placed. File servers may be co-located with clients at a location based on client latencies and site workload. Failover support is also provided in the event that the sites in the stretched cluster have different subnet addresses.