DUBLIN >> A proposal to build 573 houses in the east Dublin hills is moving forward following a unanimous City Council approval.

The decision marks the latest chapter in a back-and-forth between the city and the developer, and a group of residents who earlier petitioned to halt the proposal and who could still bring further legal challenges against the project.

The plans from San Ramon developer Trumark Homes would add even more housing and parks across a 165-acre site called East Ranch, near an area where thousands of homes have gone up over the past two decades.

The land where Trumark wants to build the houses was formerly known as the Croak Property, and straddles Croak Road, north of Interstate 580.

The council approved the project in December, over the objections of some residents who said the city should do an updated environmental review for the areaand address the potential for school overcrowding before signing off on the homes.

But the council had to walk back its approval in March after a successful petition by a residents group opposed to the development called Dubliners Against Overdevelopment, which gathered more than 5,000 signatures opposing the project.

The petition forced the council to either put the development on a ballot for a referendum or repeal its approval. Since the council repealed its approval, it could not vote on the same ordinance for a year, according to city staff.

The council voted Tuesday to alter an affordable housing agreement with the developer that city officials say makes the entire project from Trumark compliant with Dublin’s standards for development in the area, allowing it to go forward.

Under state housing laws meant to encourage home building, such as the Housing Accountability Act, the council and city staff said Dublin was required to approve a project that follows the city’s existing guidelines for development, or risk facing a likely lawsuit from the developer.

“We have to approve this because the cost of a lawsuit would be tremendous if we did not,” Council member Jean Josey said Tuesday.

The residents group and its attorney said this week that Dublin is wrongly circumventing its successful petition by approving essentially the same project, with only minor changes to the affordable housing agreement for the project.

Dublin resident Norm Lewandowski said the city and developer looked to be trying to “pull a fast one” by residents.

“It’s really sad to know that Dublin residents have to hire a lawyer to understand today’s agenda and to protect ourselves from what clearly looks to be a plan by the city and the developer to get around the referendum,” Lewandowski told the council Tuesday.

“The only way to really tell which is the right direction, is a judge is going to have to make a decision on this,” he said.

“That sort of statement is just totally false,” City Manager Linda Smith said in an interview Wednesday. “We were so transparent during this process, and made sure the community knew this was going to happen regardless,” she said.

City officials have warned residents since the petition was turned in in January that Trumark could return with a similar project that meets the city’s standards for development in the area, and the council could be forced to approve it because of state law.

Smith pointed to city staff reports and a “Frequently Asked Questions” page about the project the city posted on its website, which all indicated that state housing laws could force Dublin to approve the project.

City Attorney John Bakker acknowledged in an interview Wednesday that the competing legal issues between the referendum laws and the state housing laws present a “unique situation.” If the city denied Trumark’s proposal, it would likely be sued by the developer. But since it approved the proposal, Dublin could also be sued by the residents group, he said.

Beverly Grossman Palmer, the residents group attorney, said Dublin erred in approving the plans.

“The city’s approval of the East Ranch project expressly relies upon the development plan that was the subject of Dubliners Against Overdevelopment’s referendum,” she said Wednesday in an interview.

Approving the affordable housing amendment and the project is essentially defeating the people’s right to force a referendum on issues, which is the “ultimate check” on a city’s legislative power under the state constitution, she said.

“(The city) may feel like they are caught between a rock and a hard place, but the constitution is a bigger rock,” she said.

Palmer said it’s too soon to say whether the residents group will sue, but the group is “evaluating its legal options.”

Council member Shawn Kumagai said during the meeting he would have supported the development even if the city wasn’t forced to approve it because the region needs housing. He said Dublin officials have been clear that the council would likely have to approve the project, and said the residents’ challenges are wasteful.

“It doesn’t matter if you get 5,000 signatures or 35,000 signatures, the outcome is going to be the same. Doesn’t matter if we sent it back to a vote. The outcome is going to be the same. And if you are going to continue with litigation on this, you are just going to waste our tax dollars,” he said.

“This effort is just a delay tactic, it’s just a waste of taxpayer dollars,” he said. “That’s all it is.”