Lafayette could be headed for one of its biggest housing policy shifts in years.
The city has reached a settlement with the Housing Action Coalition, ending a lawsuit that challenged Lafayette’s state-mandated Housing Element and opening the door to higher-density housing on roughly 130 acres of land in and around the Mt. Diablo Boulevard corridor.
Under the settlement, Lafayette agreed to consider upzoning large stretches of land near downtown, BART, Highway 24, shops, restaurants, the library, parks and the Lafayette-Moraga Regional Trail. The city also agreed to pay $120,080 in attorney’s fees as part of the deal.
The settlement does not automatically approve any specific housing project. It also does not mean 130 acres will suddenly become construction sites. What it does mean is that Lafayette has agreed to move forward with a public process that could allow more homes to be built in areas that are already central to the city’s housing plans.
The proposed zoning changes include increasing some parcels currently zoned for 60 dwelling units per acre up to 65 dwelling units per acre. Other parcels currently zoned for 35 dwelling units per acre could be increased to 45 dwelling units per acre. The affected areas include land north of Mt. Diablo Boulevard from El Nido Ranch Road to Pleasant Hill Road, as well as parcels on the south side of Mt. Diablo Boulevard near Mountain View Drive and Golden Gate Way.
The city will also consider adding two more acres of the De Silva South property at a maximum density of 35 dwelling units per acre.
The lawsuit was filed by the Housing Action Coalition in 2025. The group alleged that Lafayette’s Housing Element did not comply with California housing law because it relied on unrealistic housing sites and overstated how much housing could realistically be built. Among the disputed issues were sites with existing businesses or institutional uses that HAC argued were not realistically available for redevelopment during the current housing cycle.
Lafayette disputed HAC’s allegations. Mayor Carl Anduri said the agreement was a compromise intended to avoid costly and time-consuming litigation, while also reaffirming that the city is committed to providing more housing, including affordable housing.
The stakes are significant because Lafayette’s Housing Element is the city’s blueprint for how it will plan for new homes between 2023 and 2031. Lafayette’s state-mandated Regional Housing Needs Allocation calls for the city to plan for 2,114 homes during that period, including 599 very-low-income units, 344 low-income units, 326 moderate-income units and 845 above-moderate-income units.
If the proposed upzoning is ultimately approved, the city would no longer rely on five specific faith-based organization properties to meet its housing obligations. Those parcels had been one of the flashpoints in the broader dispute over whether Lafayette’s housing site inventory was realistic.
The settlement also gives HAC a reason to stand down. The organization agreed not to support or fund further litigation challenging Lafayette’s Sixth Cycle Housing Element or actions the city takes under the settlement agreement. If the city adopts the agreed-upon actions by the end of 2026 and pays the attorney’s fees, HAC is expected to dismiss the lawsuit with prejudice.
If the city does not move forward with the required actions, however, the lawsuit could resume.
For Lafayette residents, the next major step is not construction, but public hearings. The city must consider the proposed changes through its regular review process, which means residents, property owners, housing advocates and city officials will likely spend the coming months debating how much density Lafayette should allow along its central corridor.
The broader question is whether Lafayette’s downtown should absorb more of the city’s future housing growth.
City officials say they envision a more vibrant, connected downtown where more residents can live close to local businesses, public amenities and transit. Housing advocates say that is exactly where new homes should go, especially in a high-resource East Bay community with strong schools, jobs, parks and regional transportation access.
Either way, the settlement turns a legal fight into a planning fight. And for Lafayette, that could shape what the city’s downtown looks like for decades.
