CITY COUNCIL REGULAR MEETING AGENDA PACKET 3-17-26 (3)

Page 2 of 4 As part of its project approvals, the City Council also authorized the City to move forward with annexation proceedings for the property. The Alameda County LAFCo, the agency empowered to review and approve boundary changes among agencies, approved the annexation on February 4, 2026. Regional Housing Needs Allocation (RHNA) Transfer Process For housing projects that include income-restricted units, Government Code Section 65584.07(d) encourages counties and cities to enter into a mutually acceptable agreement to transfer RHNA units when a city annexes unincorporated county land. If the annexation occurs after the Council of Governments (COG), in this case the Association of Bay Area Governments (ABAG), has adopted its final RHNA allocation, the county and city may agree to transfer a portion of the county’s RHNA to the city. The transfer agreement must be submitted to the COG within 90 days of the annexation, although the COG may grant an extension if it is consistent with the objectives of the Housing Element Law. The agreement becomes effective immediately upon receipt by the COG. Any transfer must be based on the RHNA methodology adopted by the COG pursuant to Government Code Section 65584.04. However, a transfer cannot occur if the COG determines that the annexed property was already fully accounted for in the methodology used to establish the city’s RHNA allocation. In this instance, a RHNA transfer agreement letter transferring 18 of the County’s above- moderate-income RHNA units is attached for the City Council’s consideration (Attachment 1). The proposed terms of this transfer are discussed in more detail below. DISCUSSION Proposed RHNA Transfer County and City staff have negotiated a proposed RHNA transfer that would assign 18 above- moderate-income units from the County RHNA to the City's RHNA. The City’s RHNA would increase by this number; however, the City would receive credit for any units ultimately constructed on the site, which would be reported as part of the Annual Planning Report (APR) submittal to the California Department of Housing and Community Development (HCD). For the Merritt Property, this is expected to include 92 above-moderate-income units and 18 deed- restricted moderate-income units. Thus, including the retention of one existing single-family residence (a second existing single-family residence would be demolished with construction of the project), the net unit count would be 109 units. Since the City's RHNA would be increased by 18 units with the transfer, the effective "credit" to the CIty would be 91 units. Staff notes that, in addition to the 18 moderate-income for-sale units included as part of the project, pursuant to the City’s Inclusionary Zoning Ordinance, the project has committed to a minimum of four Accessory Dwelling Units to be constructed as part of the project, which can also be reflected in the APR when constructed. The methodology for the negotiated RHNA unit transfer number is outlined on Page 2 of the RHNA transfer agreement letter (Exhibit A to Attachment 1). The letter notes the following points with respect to the methodology for the transfer: • Not in County Housing Element: The 46.4-acre Merritt Property is not included in Alameda County’s 6th Cycle Housing Element Sites Inventory, and no residential development was anticipated during the current cycle. Development under County Page 48 of 242