STAFF REPORT
Meeting Date:
July 21, 2026
CONSENT
7 SUBJECT: RESPONSE TO 2025–2026 ORANGE COUNTY GRAND JURY REPORT:
CALIFORNIA HOUSING MANDATES, THE UNINTENDED RESHAPING OF
ORANGE COUNTY NEIGHBORHOODS
RECOMMENDATION: It is recommended that the City Council:
1. Review and approve the City of Laguna Beach’s attached response to the 2025–2026 Orange County Grand Jury report entitled California Housing Mandates, The Unintended Reshaping of Orange County Neighborhoods; and
2. Authorize the Mayor to sign and transmit the attached response to the Presiding Judge of the Orange County Superior Court, as required by law.
SUMMARY OF THE MATTER
In May of this year, the 2025–2026 Orange County Grand Jury issued a report entitled California Housing Mandates, The Unintended Reshaping of Orange County Neighborhoods (“Report”). The Report addresses State of California (“State”) housing laws, the Regional Housing Needs Assessment (“RHNA”) process, the Southern California Association of Governments (“SCAG”), the Orange County Council of Governments (“OCCOG”), housing affordability, infrastructure capacity, public participation, and the feasibility of meeting State housing mandates.
Pursuant to Penal Code Section 933(c), the Grand Jury requires a response from the City within 90 days as to the applicable “Findings” and “Recommendations” in the Report (the “Response”).
Staff has prepared the attached proposed Response for City Council consideration. In general, the draft Response agrees with the Grand Jury’s Findings and Recommendations regarding the complexity of State housing mandates, the importance of regional participation, the need for transparency in the RHNA process, and the continuing challenges created by limited affordable housing funding and infrastructure constraints.
However, the Response offers further clarifications to, and at times partially disagrees with, certain Findings and Recommendations based on Laguna Beach’s unique experience as a city in a largely built-out environment that is almost entirely within the coastal zone, mostly within the Very High Fire Hazard Severity Zone or High Fire Hazard Severity Zone, and bound by many environmental and topographical constraints.
DISCUSSION
Legal Background
California Penal Code sections 933 and 933.05 require a public agency that is the subject of a civil grand jury report to provide written responses to applicable findings and recommendations. For each finding, the responding agency must state whether it agrees or disagrees, wholly or partially. For each recommendation, the responding agency must indicate whether the recommendation has been implemented, has not yet been implemented but will be implemented, requires further analysis, or will not be implemented because it is not warranted or reasonable.
RESPONSE TO 2025–2026 ORANGE COUNTY GRAND JURY REPORT: CALIFORNIA
HOUSING MANDATES, THE UNINTENDED RESHAPING OF ORANGE COUNTY
NEIGHBORHOODS
July 21, 2026
Here, the Report concerns State housing mandates, the RHNA process, and production of affordable units.
The Report identifies Laguna Beach as one of the Orange County cities required to respond to certain Findings and Recommendations. In particular, the City of Laguna Beach is required to respond to Findings F1, F2, F4, F5, F6, F7, F8, F9, F10, F11, and F12, and to Recommendations R7, R8, R9, R11, R12, R14, R15, and R16. (See Report, p. 44, which is attached hereto as Attachment 1.) State Housing Law Mandates and Compliance in Laguna Beach The City of Laguna Beach’s current 6th Cycle Housing Element covers the 2021–2029 planning period.
The City’s assigned RHNA allocation for the cycle is 394 units, which includes:
• 118 very low income units,
• 80 low income units,
• 79 moderate income units, and
• 117 above moderate income units.
The City’s role under Housing Element Law is to plan for and accommodate its assigned RHNA numbers through land use policies, zoning, programs, and related implementation measures; the City generally does not itself construct private housing units (although it may be involved in providing funding to help with affordable housing, in certain scenarios).
Laguna Beach also faces unique local conditions relevant to the Report and its Response. Most notably, almost the entire City sits within the Coastal Zone of the California Coastal Act, creating a unique and challenging intersection of laws—i.e., State housing laws and the California Coastal Act—that at times create competing obligations and purposes, most notably through the City’s duty to protect coastal resources. Additional conditions that impact the City’s development of housing include, but are not limited to, a largely built-out development landscape, significant topographic constraints, wildfire and evacuation considerations (including that a significant portion of the City is in the Very High Fire Hazard Severity Zone or High Fire Hazard Severity Zone), public safety needs, and infrastructure and transit limitations.
Discussion
The proposed Response is attached as Attachment 2. In compliance with the Penal Code, for each of the respective Findings for which the City must respond, the proposed Response either (i) agrees, or (2) disagrees, in whole or in part, with the Finding; in the event of the latter, the Response must specify for what part it disagrees and why. For each of the respective Recommendations for which the City must respond, the Proposed response must indicate that the Recommendation (i) has been implemented; (ii) will be implemented in the future and when; (iii) requires further analysis, what such analysis is, and when its study will be complete (not longer than 6 months); or (iv) will not be implemented as it is not warranted or reasonable, and why.
Generally speaking, the proposed Response acknowledges the City’s legal obligation to comply with the State housing laws, while also recognizing that those laws—and the RHNA process—can create significant local implementation challenges and demand on City resources. The Response further emphasizes that successful housing planning requires transparent data, early participation in SCAG and OCCOG processes RESPONSE TO 2025–2026 ORANGE COUNTY GRAND JURY REPORT: CALIFORNIA
HOUSING MANDATES, THE UNINTENDED RESHAPING OF ORANGE COUNTY
NEIGHBORHOODS
July 21, 2026
for RHNA allocation, consideration of local constraints, meaningful public education, realistic infrastructure planning, adequate affordable housing funding from other (non-City) sources, and continued collaboration with nonprofit and affordable housing partners.
FINANCIAL ANALYSIS
Approval and submission of the Grand Jury response has no immediate fiscal impact.
ENVIRONMENTAL ANALYSIS
Pursuant to the California Environmental Quality Act (“CEQA”), a "project" means an action which has the potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment. (See CEQA Guidelines Section 15378(a).) А "project" specifically does not include organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment. (CEQA Guidelines Section 15378(b)(5).) The proposed action is administrative in nature because responding to a Grand Jury Report is a statutory obligation of the City that does not involve the approval of any physical development, land use change, or discretionary decision that could result in a direct or reasonably foreseeable indirect physical change in the environment. Accordingly, approval of the proposed response to the Orange County Grand Jury is not a “project” subject to CEQA.
.
ATTACHMENTS
1. 2025–2026 Orange County Grand Jury Report, California Housing Mandates, The Unintended Reshaping of Orange County Neighborhoods (Pgs. 4-70)
2. Proposed City of Laguna Beach Response to Orange County Grand Jury Report (Pgs. 71-84) Submitted By: Megan Garibaldi Approved: .David A Kiff
Megan Garibaldi, City Attorney Dave Kiff, City Manager
Report Prepared By: Coordinated With:
Megan Garibaldi, City Attorney