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

Page 3 of 4 jurisdiction would be limited by low-density zoning (1–4 units per acre) and reliance on wells and septic systems. • Included in City Housing Element: The City identified the site (Area 22 – Merritt Property) in its 6th Cycle Housing Element based on longstanding annexation efforts and the anticipated, and ultimately approved, development application described herein. • Basis for RHNA Transfer: The proposed RHNA transfer is based on the property’s existing County zoning capacity. Under current zoning, the four parcels allow up to 20 units by right; with two existing units, the net potential is 18 additional units. • Proposed Adjustment: The County and City propose reducing the County’s RHNA obligation by 18 units, reflecting the site’s remaining by-right capacity, with the City receiving RHNA credit for units constructed following annexation. • Income Category: Due to the very low-density potential (approximately 0.44 units per acre at maximum buildout), the transferred units are categorized as Above-Moderate- Income, consistent with rural, low-intensity development patterns. CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) As part of its project approvals, in July 2024, the City Council determined that the Project was exempt under California Environmental Quality Act (CEQA) Guideline Section 15183, as documented in the adopted Section 15183 Checklist for the Project. The transfer of RHNA units between the County and City is a ministerial action associated with the previously approved annexation component of the Project. Therefore, no additional environmental review is required. CONCLUSION In summary, City staff believes the proposed agreement, which would transfer 18 above- moderate-income units based on the factors outlined above, reflects a reasonable and equitable proposal for both the City and the County. The City would be able to receive credit in future reporting of housing production, for most of the market-rate and all of the deed-restricted units ultimately constructed. If authorized by the City Council, the Mayor would sign the RHNA unit transfer agreement letter. County staff expects to take a similar request for approval to the Board of Supervisors in March, after which staff would submit the joint letter to ABAG/Metropolitan Transportation Commission (MTC) for review and approval, in accordance with the procedures outlined in the Government Code. Pursuant to Government Code Section 65584.07(d), if both the City and the County mutually agree on the apportionment, ABAG/MTC shall accept the proposal as submitted and adjust the RHNA allocations for both jurisdictions accordingly. EQUITY AND SUSTAINABILITY The action directly implements the Housing Element, a key goal of which is to increase housing opportunities, including affordable housing for lower- and middle-income residents – both through inclusionary requirements and by creating more opportunities for partnerships with housing developers. The construction of the Merritt project would allow for the construction of 18 senior-age-qualified BMR units, consistent with the requirements of the City’s inclusionary ordinance. Page 49 of 242