The Lafayette City Council is considering a settlement agreement aimed at resolving a lawsuit filed by the Housing Action Coalition, which argued that the city’s Housing Element does not adequately meet state housing requirements. The proposed agreement would increase housing densities along key corridors, specifically raising the maximum density from 60 to 65 dwelling units per acre on certain properties and from 35 to 45 units per acre on others. Additionally, about two acres of the De Silva South property would be rezoned for residential development at a density of up to 35 units per acre. The settlement would also prevent the city from counting several faith-based properties in future housing calculations. In return, the Housing Action Coalition will not oppose the city's use of alternative sites to enhance its housing inventory. If the council approves the changes by December 31, 2026, the lawsuit will be dismissed with prejudice, allowing the city to maintain its Housing Element without formal amendments. The city will also pay $120,080 in attorney fees to the coalition, with interest accruing until payment is completed.