Identifying sites for affordable housing just jumped to the top of Menlo Park's priority list, according to a lawsuit settlement agreement released Thursday (May 17). Three housing advocacy groups filed the suit yesterday, alleging that the city has failed to comply with state-mandated housing laws.

"Unless compelled by this Court to perform those acts and duties and to refrain from acts as required by law, the City will continue to refuse to carry out those duties and will continue to violate the law, and Petitioners and lower-income persons and affordable housing developers and/or housing service providers will continue to be injured as a result," the lawsuit stated.

Every seven years, according to state law, cities must assess and plan to meet their fair share of regional housing needs, which includes affordable housing. Communities also must plan zoning so that it's possible to provide the right number of housing units, although the law doesn't require cities to actually build them.

The lawsuit -- filed by Peninsula Interfaith Action, Urban Habitat, and Youth United for Community Action -- points out that Menlo Park hasn't met the state requirements since 1992. Menlo Park must commit to finishing an update by March 2013 as part of the settlement.

"We're about 10 years behind," said Menlo Park City Manager Alex McIntyre. "We should have taken care of the Housing Element Update before now but fell behind due to other priority planning projects. These planning projects could achieve a substantial portion of what is required to meet Housing Element law."

Mr. McIntyre explained that, in the absence of the negotiated settlement, the court could force the City to complete the update within 120 days. "The benefit of the settlement agreement is to allow the City additional time to incorporate a public outreach and participation process that would otherwise not be possible under a shorter court-ordered timeline."

Possible sanctions for not complying with the state housing laws include a moratorium on all non-residential building permits and the withholding of grant funding to maintain the local roadway network.

"The last thing the City of Menlo Park wants right now is to interfere with the progress of our local economy," Mr. McIntyre said.

According to the staff, the city may need to provide the zoning necessary to add sites for 1,975 housing units, both market-rate and affordable housing, to its current stock of 12,500. One of the first steps will be an inventory of local housing, existing capacity for additional homes within current zoning, and any new housing built since 1998, which could be deducted from the preliminary number.

The settlement states that Menlo Park will identify potential housing sites for affordable housing, create zoning that provides incentives for affordable housing production at those locations, and set aside a portion of local below-market-rate funds for nonprofit development of affordable housing on those sites.

The city will also form a housing element steering committee made up of two council members, two planning commissioners and two housing commissioners. The steering committee will first meet in June and will oversee public involvement in the process.

The settlement agreement goes before the City Council on Tuesday, May 22. The council will also be asked to approve plans to launch a housing element update process within the next few weeks, review a set of draft criteria for choosing specific sites for zoning changes, and appoint two members to the steering committee.

The city plans to hold a series of community workshops in July and August to get public input on the proposed changes in order to finish the update by next spring.

"We want and need the community's help in deciding how and where we can plan for additional and high density housing in Menlo Park. If we work together, we can come up with a plan tailored to our community that will meet our needs and comply with state law," Mayor Kirsten Keith said.

Go to the project's website to review associated documents and the proposed process.