State law does not require jurisdictions to build or finance new housing, but they must plan for it. Through the Housing Element update process, the City must show that it has land use regulations and policies to accommodate its housing needs. The actual development of housing is primarily done by the private market.
The Housing Element is required to demonstrate potential sites where housing can be accommodated. Identification of a site's capacity does not guarantee that construction will occur on that site. If there are insufficient sites and capacity to meet the RHNA allocation, then the Housing Element is required to identify a rezoning program to create the required capacity. The City initiated work on identifying these potential sites for rezoning in the Downtown and El Camino Real Specific Plan.
It is important to note that if the City does not identify capacity for its RHNA targets, the City may be deemed out of compliance and risk losing important sources of funding currently provided by the State. It may also lose the right to deny certain projects and be limited in its local land use decision-making authority.