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Jonathan Lowell, Esq. February 15, 2012 Page 3 of 4 B. Commitment to Promote Affordable Housing. Exhibit C to the Settlement Agreement is Resolution 10-390, which the Council adopted as part of the Settlement. Section 1 of the Resolution states that City staff and the City Council will act affirmatively to promote the development of well- designed affordable housing for families with children in Pleasanton. The City Manager will report regularly to the City Council on the City's efforts to fulfill this policy, the success of those efforts, and plans and proposals to attract well-designed affordable housing for families with children in the future. The Resolution is incorporated into the Settlement Agreement(§ 5.1), which goes on to provide that the City will implement provisions of the Resolution in connection with its Housing Element update. (§ 6.5.) These obligations, including the obligation to permit stand-alone affordable housing development, are consistent with the provision of California law that prohibits cities from discriminating against affordable housing development. (Gov. Code § 65008(d)(1).) Policy 37 of Pleasanton's updated Housing Element is in violation of these provisions. It sets out the City's intention to "Disperse housing units affordable to extremely-low-, low- and very-low- income households throughout new residential developments." Although it goes on to state that this should be done "consistent with City Resolution No. 10-390," the actual policy language does not comply with the City's settlement obligations. As we brought to the City's attention over a year ago (see Letter from Christopher Mooney to Jonathan Lowell, dated November 10, 2012), the requirement to "disperse" affordable units can be (and has been) interpreted to discourage or even prohibit stand-alone affordable development in violation of Gov. Code § 65008(d), especially when incorporated as a binding Policy of the City's Housing Element. Policy 37 must be revised to reflect the City's commitment in Resolution No. 10-390 to promote affordable housing development and not to discriminate against any affordable housing development regardless of the mix of incomes in the development. C. Remedies. As you know, we have made repeated efforts to resolve these and other issues since the draft Housing Element was issued last August.' The Council's failure to complete the site rezoning by the February 13 deadline, and to amend portions of the Housing Element to meet the city's legal obligations, now requires us to invoke Section 12.3 of the Agreement. That Section provides: In the event that any Party believes that another Party is in breach of any of the terms set forth in this Settlement Agreement, that Party asserting a breach shall give written notice to the other Party of the breach and the Parties shall meet and confer within fourteen (14) business days of such notice before any party seeks judicial enforcement. If these issues are not promptly resolved through negotiation, and the intervention of the Court becomes necessary, we will ask the Court to re-impose its injunction on the City's authority to We first spoke with you about these issues on September 16, and continued discussing these issues with you in person or by phone on at least five subsequent occasions, including November 10 and 23, December 19,January II, and February 13.