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Allen Matkins Leck Gamble Mallory & Natsis LLP Attorneys at Law Santa Ana City Council June 20, 2023 Page 4 Loss of Potential Affordable Housing in the City As explained above, the City Council must find that there would be "no net loss of the total potential residential density of affordable housing to lower income households in the jurisdiction" due to the replacement of qualifying AB 2011 parcels. As you are aware, the City's local inclusionary housing ordinance allows project sponsors to pay a fee in -lieu of constructing some or all of the required affordable units. Contrary to the assertion 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. Solana 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 02-4 02-5 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 02-6 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,