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Allen Matkins Leck Gamble Mallory &Natsis LLP Attomeys at Law Santa Ana City Council May 16,2023 Page 4 made by City Planning, there is no way of"ensuring access and creation of residential units affordable to lower income households" under the City's local inclusionary housing ordinance. On the other hand,AB 2011 requires the affordable units to be provided on-site as part of the project. To illustrate, conservatively assuming that lower income units would be provided to meet AB 2011 requirements, and based on the seemingly low total development estimate provided by City Planning, the development of the qualifying AB 2011 parcels would result in at least 6,825 on-site lower income units constructed as part of those projects, whereas the development of the "replacement" parcels could result in zero affordable units unless and until the in-lieu fees are used by the City to separately develop affordable housing. Lack of CEQA Review We caution that the finding that the proposed resolution is not subject to CEQA pursuant to CEQA Guidelines section 15061(b)(3),(b)(5) is inaccurate. The cited"common sense exemption" under CEQA only applies where"it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment." The second exemption cited only applies when project-specific CEQA findings are made for agricultural housing, affordable housing, and residential infill projects. CEQA case law is clear that an action by a local agency that sets in motion a chain of events that could result in a foreseeable indirect physical change in the environment qualifies as a project subject to CEQA. (See Muzzy Ranch Co. v. Solano County Airport Land Use Comm'n (2007) 41 Cal. 4th 383 [development restrictions in airport land use plan could result in changes to environment indirectly by causing development to be displaced to other areas].) Conclusion The City Council cannot act under AB 2011 until that law is operative on July 1, 2023 and based on the limited information provided by City Planning, the City Council cannot make the required findings under AB 2011, including a finding that the proposed resolution would result in the required "affirmative furthering of fair housing." Among other things, the City must calculate the actual number of net new housing units that could be approved by the City on or after July 1, 2023 to replace the market rate and affordable units that would otherwise be provided by qualifying AB 2011 housing development projects based on maximum (versus minimum) development density. We respectfully caution that the California Planning and Zoning Law authorizes the California Department of Housing and Community Development(HCD)to notify the Attorney General if HCD finds that the City has taken an action in violation of AB 2011.