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/'44, Rita Road), and Area 29 (Oracle). Area 2 (Stoneridge Mall)could be eligible, although as discussed at the December 15 Joint Meeting, if the City Council wished to reduce the maximum density, it may also not be possible to simultaneously increase the minimum. • There needs to remain at least 131-unit buffer in the Above-Moderate income capacity if Merritt and Lester are included, since both require annexation and thus negotiation with the County to absorb at least a portion of County RHNA for these two sites. 2. Consequences of Housing Element Noncompliance At the December 14 hearing, a Planning Commissioner queried whether there were any specific penalties or repercussion with respect to Housing Element compliance,with the question focused on whether the City could be held liable or penalized for failing to meet the RHNA production targets(i.e., production of the specified number of housing units) outlined in the Housing Element. Separately, questions have come up during the Housing Element update process, about specific penalties that come with failure to have a certified housing element. As the City Council is aware,the requirements for each California jurisdiction to adopt a Housing Element, and the statutory requirements to deem the Housing Element compliant, are set forth in state law. In addition to the requirements with respect to Housing Element adoption in particular, State law has recently come to embody more robust provisions and procedures for the State, through a"Housing Accountability Unit"of the Department of Housing and Community Development,to enforce the more comprehensive body of state housing laws, including but not limited to laws related to the Housing Accountability Act, Density Bonus,No Net /1•14, Loss, Fair Housing laws, ADU law, and others. While the establishment of the Housing Accountability Unit is relatively recent, since 2017 HCD has been required to report any non-compliant actions by a local government to the Attorney General for review. Repercussions for Failing to Meet Housing Permitting Goals In the current statute, only one law, Senate Bill 35 (SB 35), codified as Government Code Section 65913.4,directly ties failure to meet housing permitting goals to specific remedies or repercussions. SB 35 stipulates that when housing permits issued in a jurisdiction fails to remain on-pace with the"pro- rata"number of units and affordabilityI as set forth in the current cycle RHNA,qualifying projects are subject to a streamlined, ministerial review. Qualifying projects are required to include a minimum proportion of affordable units and meet certain other requirements to be eligible for streamlining. Penalties and Other Repercussions of Failure to have a Compliant Housing Element There are several repercussions for a jurisdiction when determined to have a housing element not in compliance with the requirements of state law, or to have failed to meet deadlines for adoption of a compliant housing element. These include: • Requirement to re-zone parcels more quickly(in one year, versus three) if HCD does not find the housing element in compliance with State law by May 31, 2023. • Ineligibility to apply for certain grants and other State funding. • The so-called "builder's remedy,"which means that a city cannot deny a housing development with 20 percent lower income housing because it does not conform with the general plan and zoning. ' For example,at the mid-point of the Housing Element cycle(4 years into the 8 year cycle),the performance metric is set at 50%of the RHNA. Page 3 of 5