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

Transfer of Regional Housing Needs Allocations and Credits – Merritt Property Annexation Page 2 March 17, 2026 Summary of Merritt Property Land Use Designation/Zoning and County Methodology for RHNA Transfer The Merritt Property consists of four parcels totaling approximately 46.4 acres. The property is not identified in the County’s 6th Cycle Housing Element Sites Inventory, and the County did not anticipate residential development of these parcels during the current 6th Cycle Housing Element cycle. While the existing County General Plan designation allows low-density residential development of approximately one to four units per acre, there is no pending or reasonably foreseeable development proposal for the site with the County. Furthermore, absent the City providing municipal utilities, which could occur only with annexation, any residential development would be required to be served by on-site water wells and septic systems, which limit development capacity. Conversely, the City’s 6th Cycle Housing Element does include this site in its inventory (Area 22 – Meritt Property) on the basis of 20 years of continued interest in annexing and developing the property, including an application submitted in 2022 for a 111-unit age-restricted project. The Housing Element conservatively assumed a total of 90 units of market-rate (above-moderate) housing. The 111-unit project, including 92 market-rate units, 18 deed-restricted moderate- income units, and the retention of one existing unit (a second existing unit would be demolished as part of the project), was approved by the City on July 16, 2024. An annexation application was submitted to LAFCo on July 16, 2024, and approved on February 4, 2026. Accordingly, the County and the City propose that the RHNA transfer associated with the Merritt Property annexation be based on the property's current as-zoned development capacity within the unincorporated area of the County. The parcels presently allow limited residential uses by right, including agricultural caretaker units and accessory dwelling units (ADUs). Under the current County zoning, the four parcels collectively allow up to 20 residential units by right, of which two units currently exist. This results in a net potential of 18 additional units. The County and the City, therefore, propose a corresponding reduction of 18 units from the County’s RHNA obligation, with the City receiving RHNA credit for any residential units ultimately constructed on the Merritt Property following annexation. Income Category Determination Given the extremely low potential density of development at this location, the County and City agree that the appropriate RHNA income designation for any future units constructed under County jurisdiction is Above-Moderate-Income. With a maximum theoretical buildout of 20 units across approximately 45.6 acres, the resulting density is approximately 0.44 units per acre, including ADUs, and lower without ADUs. This density is consistent with rural and very low- intensity residential development patterns and does not support consideration for lower-income housing at this location. Mutual RHNA Transfer Agreement Through this letter, the County of Alameda and the City of Pleasanton agree and affirm their mutual agreement that: Page 56 of 242