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osomkk • Financial penalties based on an escalating structure if the City does not comply after one year with a court order to adopt an adequate housing element, starting at $10,000 per month and mounting to up to $100,000 per month. If a jurisdiction continues to fail to achieve a certified housing element, courts may multiply these fines further. • Court ordered remedies if the housing element is found to be inadequate, which may include suspension of permitting authority2 or mandated approval of housing developments. • Risk of legal challenge from outside groups,which, if successful will likely require payment of the plaintiffs legal fees. The attached memorandum from the City's legal counsel, Goldfarb Lippman, these and other potential consequences in more detail. Other Enforcement Powers of the State In recent years the State has announced a more proactive and aggressive stance towards enforcement of the multitude of laws aimed to facilitate and remove obstacles to housing production. The State Housing Accountability Unit(HAU)was formed in 2021, with the stated goal and authority, per guidance issued by HCD in 2021 to"review any action or failure to act by a local government(that it finds) inconsistent with an adopted housing element or housing element law. This includes failure to implement program actions included in the housing element. HCD may revoke housing element compliance if the local government's actions do not comply with state law."Either the state, a developer/applicant, or a third party can bring an action against a jurisdiction if they believe such an action (or failure to act)has occurred. If upheld, similar repercussions as outlined above, against the jurisdiction can result.3 Actions taken to date by the HAU and/or resulting from legal action have mostly been aimed at jurisdictions which HCD contends have taken actions contradictory to the purpose and intent of State law—for example, including provisions in implementing ordinances for SB 9 that may be overly restrictive,or to deny a project without being able to make valid findings of non-compliance with objective design and development standards. It is possible the State could choose to go further in its exercise of powers through the HAU and other mechanisms—and the above makes it clear this could extend to pursuit of jurisdictions deemed as having failed to implement the programs of the Housing Element. Recently a new division of the HAU was established entitled"Proactive Accountability"with the specific intent of monitoring housing element implementation. It is evident that the City is expected to live up the commitments made in the Housing Element to undertake programs intended to remove impediments to housing production, and facilitate more housing in Pleasanton. And, the City is obligated to process applications and issue entitlements and permits consistent with the requirements of State law. Failure to do so, or to act in a manner contradictory to the requirements of state housing law, could indeed result in the sorts of repercussions outlined above. 2 For example,in the Urban Habitat litigation from 2006 to 2010 regarding Pleasanton's failure to rezone sites for affordable housing to meet RHNA,the trial court ruled that Pleasanton"must cease issuing non-residential building permits and all related building permits for any construction or development...until the City brings its General Plan into compliance with the requirement of State Law." Court orders like that would prohibit the City from issuing a building permit to construct the already-approved Costco;as well as not allow the City to issue an plumbing permit for a new restaurant in the Downtown. 3 Although the penalties and repercussions are significant,the state has also defined a procedure for review,adjudication and correction of a violation,before specific penalties are imposed. Page 4 of 5