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City of Santa Ana Mayor Valerie Amezcua, Mayor Pro Tern Jessie Lopez, and Councilmembers Page 4 No Net Loss Requirement The City has not shown that under Government Code sections 65912.114, subdivision (i)(3)(A) and 65912.124 (i)(3)(A), the development of the alternative parcels will result in a "[n]o net loss of the total potential residential density in the jurisdiction." (Emphasis added.) The total potential residential density in the jurisdiction includes both the existing potential density resulting from local land use designations and zoning, and the potential density created by AB 2011. Therefore, to meet the no net loss requirement, the City must accurately count the total amount of lost potential density — and the resulting unit capacity — that will result from exempting the parcels from AB 2011 and accurately count the total amount of potential residential capacity created through alternative sites to offset that loss and maintain the total potential residential capacity in the jurisdiction. The same analysis applies to the requirement under sections 65912.114, subdivision (i)(3)(B) and 65912.124 (i)(3)(B) that development of the alternative parcels will result in "[n]o net loss of the potential residential density of housing affordable to lower income households in the jurisdiction." The AB 2011 parcel exemption allows for two options for compliance with this requirement, as described in Government Code sections 65912.114, subdivision (i)(2) and 65912.124, subdivision (i)(2): 1. A local government may allow alternative parcels to be developed under AB 2011 that "would not otherwise be eligible for development pursuant to this chapter" (Gov. Code, §§ 65912.114, subd. (i)(2)(A) and 65912.124, subd. (i)(2)(A)), thereby creating additional potential residential capacity in the jurisdiction. 2. A local government may allow for alternative parcels eligible for development under AB 2011 to be developed at higher residential density than what is required under the AB 2011 affordable density requirements (Gov. Code, § 65912.113, subd. (b)) or mixed -income density requirements (Gov. Code, § 65912.123, subd. (b)), thereby creating additional potential residential capacity. The mixed income exemption also imposes certain restrictions on height limits (Gov. Code, § 65912.123, subd. (c)). The City's proposed AB 2011 resolution attempts to use a combination of both options to meet this requirement. However, while the alternative parcels that could not have previously been developed under AB 2011 would create new potential residential capacity that can offset some of the loss, the City has not demonstrated that it has increased the potential residential density on the alternative parcels already eligible. under AB 2011, instead relying erroneously on the fact that these sites already support densities greater than what AB 2011 requires. Relying on existing densities does nothing to create new residential capacity that can further offset the loss from the exemptions. To be sure, the baseline to which a local government should measure its no net loss for AB 2011 exemption purposes is, at present, not explicit. But statutes must be read to give its intended effect, and the most reasonable interpretation of AB 2011, read in its Al-3