Lake Forest City Council
July 21, 2026

Figure 9 Cities Reporting Outreach Program to Provide Information and Guidance to Property Owners on Wildfire Risk Mitigation Measures and/or Grants .......... 28 Figure 10 Cities Reporting Their Outreach Program Refers to Orange County Fire Authority Outreach Programs and Resources ............................................. 29 Figure 11 Top 20 Deadliest California Wildfires ............................................................ 50 Figure 12 Top 20 Most Destructive California Wildfires ................................................ 51 Figure 13 Large Fires 300 Acres and Greater - State and Contract Counties Direct Protection Area ............................................................................................ 52 Figure 14 Orange County Wildfires by Size ................................................................. 52 Figure 15 Safer from Wildfires Flyer, Page 1 ................................................................ 53 Figure 16 Safer from Wildfires Flyer, Page 2 ................................................................ 54 Figure 17 Fire Hazard Severity Zone Map of Orange County ...................................... 55 Figure 18 Fire Hardening and Defensible Space Disclosure, Page 1 .......................... 56 Figure 19 Fire Hardening and Defensible Space Disclosure, Page 2 .......................... 57 Figure 20 California Property and Casualty Insurance Company Homeowners Premium and Loss ....................................................................................... 58 Figure 21 FAIR Plan Data for Orange County Zip Codes 90620 - 92679 ..................... 59 Figure 22 FAIR Plan Data for Orange County Zip Codes 92680 – 92899 .................... 60 Figure 23 Orange County Fire Authority Covered Cities .............................................. 61 Figure 24 Orange County Fire Jurisdictions ................................................................. 62 Figure 25 Ready, Set Go! Flyer for Immediate Zone .................................................... 63 Figure 26 Ready, Set, Go! Flyer on Defensible Space ................................................. 64 Figure 27 Ready, Set, Go! Flyer for Home Hardening, Page 1 .................................... 65 Figure 28 Ready, Set, Go! Flyer for Home Hardening, Page 2 .................................... 66 Figure 29 Ready, Set, Go! Flyer on Vegetation Management ...................................... 67 Figure 30 Ready, Set, Go! On Be Ember Aware .......................................................... 68 Figure 31 Ready, Set, Go! Flyer on Home Assessment ............................................... 69 Figure 32 Ready, Set, Go! Flyer on Wildfire Home Risk Assessment, Page 1 ............. 70 Figure 33 Ready, Set, Go! Flyer on Wildfire Home Risk Assessment, Page 2 ............. 71 Figure 34 Zone 0 At-A-Glance, Page 1 ........................................................................ 72 Figure 35 Zone 0 At-A-Glance, Page 2 ........................................................................ 73

Item: 12
291

Wildfires Hit Home

Orange County Grand Jury 2025-2026 Page 5 of 74

SUMMARY
Wildfires have become a fact of life in California. Persistent drought conditions and accelerated warming have led to an increase in wildfires throughout the state. Of the twenty most destructive wildfires in California history, fifteen have occurred in the last ten years (see Appendix A). From the Camp Fire, also referred to as the Paradise Fire, in Northern California to the Palisades and Eaton Fires in Los Angeles and the Airport Fire in Orange County, the tragic loss of life and the destruction of thousands of homes and structures have upended homeowners’ lives and rocked the insurance industry with billions of dollars in claims just in the last few years. These conditions have made home insurance unaffordable or unavailable for many Orange County residents. The State of California has attempted over recent years to mitigate the impact on ratepayers and insurers and has provided tougher regulations for hardening homes and property. Both the California legislature and the California Department of Insurance have issued recent laws and regulations to address these issues. Significant for this report are Safer from Wildfires (2022), California Fair Access to Insurance Requirements (FAIR) Plan (1968, revised 2025), Assembly Bill 888 (2025) and California Wildland-Urban Interface Code (2025).

The California FAIR Plan was established in 1968 to provide basic insurance for property owners who could not obtain fire coverage through the traditional insurance market due to being in high-risk fire areas. The FAIR Plan is not a state agency, and it receives no taxpayer funding. It is a syndicated fire insurance pool made up of all insurers licensed to write property/casualty insurance in the state. The FAIR Plan is intended to be the insurer of last resort and is meant to be a temporary safety net helping property owners until they can transition back to the traditional insurance market. The numerous fires over the last few years coupled with private insurers leaving the California market or no longer insuring homes in high-risk areas, have resulted in the FAIR Plan being financially strained with the number of policies more than doubling since September 2023.1 The State Legislature and Department of Insurance both responded with strategies to rebalance this problem requiring insurers to increase the number of policies issued in high-risk areas and to change the way rates are established, however, insurance companies, using loopholes in the legislation, have so far largely avoided meeting the goals set for them.2
The Safer from Wildfires regulation was issued by the Insurance Commissioner after development in partnership with California Department of Forestry and Fire Protection (CAL FIRE) and the Governor’s Office of Emergency Services. The regulation mandates

1 Key Statistics & Data. The California FAIR Plan. https://www.cfpnet.com/key-statistics-data/ 2 The New York Times, California Promised Insurance Relief, But Delivered Loopholes, Nov. 2, 2025.

Item: 12
292

Wildfires Hit Home

that insurance companies provide rate discounts for various actions that property owners take to create defensible space and harden their homes against wildfires (see Appendix B).

AB888, the California Safe Homes Grant Program, aims to reduce wildfire losses, improve insurability and resilience of vulnerable communities, and support home hardening efforts to help residents qualify for insurance premium incentives. It provides grants to aid qualifying residents and communities to complete wildfire risk mitigation measures.

The California Wildland-Urban Interface Code (CWUIC) refers to the California Building Standards Code, Title 24, Part 7. Effective in January 2026, the CWUIC requires fire- resistant and ignition-resistant construction in Fire Hazard Severity Zones or the wildland-urban interface. Requirements were also established for vegetation and hazard mitigation in the same areas. Studies have definitively shown that implementing these home hardening and defensible space requirements, including retrofitting existing homes, will greatly reduce ignition and fire spread, thereby reducing damage and resulting claims. Compliance with the 2015 International Wildland-Urban Interface Code (IWUIC) could save $4 for every $1 invested and retrofitting structures to the IWUIC could provide from $2 to as much as $8 in benefits for each $1 invested.3 Home hardening and defensible space measures that align with wildland-urban interface codes and Safer from Wildfires regulations will help save homeowners and insurance companies from catastrophic loss.

The 2025-2026 Orange County Grand Jury found evidence that clearly shows Safer from Wildfires home hardening and defensible space measures protect homes and communities, saving homeowners, local governments, and fire authorities as well as insurance companies from catastrophic loss while also providing discounts for homeowners’ insurance premiums.

BACKGROUND
California’s Wildfire Crisis and Insurance Impact
California faces an escalating wildfire crisis fueled by accelerated warming, prolonged droughts, increasingly windy conditions, and expanded development into fire-prone areas. Between 2015 and 2025, 15 of the 20 most destructive wildfires in state history

3 National Institute of Building Science, Natural Hazard Mitigation Saves. 2019. https://nibs.org/wp- content/uploads/2025/04/NIBS_MMC_MitigationSaves_2019-1.pdf. Accessed March 3, 2026.

Item: 12
293

Wildfires Hit Home

Orange County Grand Jury 2025-2026 Page 7 of 74
occurred, including the Palisades and Eaton Fires in 2025. These events have caused loss of life, devastated communities, destroyed thousands of homes, and resulted in billions in insured losses (see Appendix A).

The Eaton Fire in January 2025, spread through the suburbs of Pasadena destroying 9,413 structures and burning 14,021 acres. It became Los Angeles County’s most destructive and second deadliest fire with 19 fatalities (see Appendix A).

On the same day in January 2025, the Palisades Fires swept through Pacific Palisades, Topanga, and Malibu, consuming 6,833 homes and 23,707 acres. It became Los Angeles County’s third-most destructive fire and third deadliest with 12 fatalities (see Appendix A). Both fires were fueled by strong Santa Ana winds of between 80-100 mph, extremely dry conditions, and dense vegetation, creating what officials called a "perfect storm" for wildfire spread.4,5

Figure 1 Map of Eaton and Palisades Fires in January 2025 The most destructive California wildfire listed by CAL FIRE is the November 2018 Camp Fire in Butte County which burned 153,336 acres, destroyed 18,804 structures, and resulted in 85 deaths. The CAL FIRE list of the Top 20 Most Destructive California Wildfires can be viewed in detail in Appendix A. Data for Orange County wildfires for the period 2008 through 2024 can be viewed in Appendix A.

Orange County’s 2024 Airport Fire that started in Trabuco Canyon burned 23,500 acres and destroyed 160 structures. The fire raged for nearly a month, prompting a state of

4 Andrea Thompson, How the Ferocious Santa Ana Winds are Fueling the Palisades Fire, Scientific American, Accessed January,8, 2026, http://www.scientificamerican.com 5 Julia Jacobo and Ginger Zee, A perfect storm of weather and climate conditions led to the severity of the California fires, ABC News, Accessed January 8, 2026, http://www.abcnews.com/US/perfect-storm- weather-climate-conditions-severity-california-fires/story?id=117468072 Item: 12
294

Wildfires Hit Home

emergency and millions of dollars in claims. This fire and others not only caused property loss, but also damaged ecosystems, water resources, and impacted air quality.

Post-fire soil degradation and the expansion of invasive, non-native plants has further hindered recovery.6
In California, wildfires have strained the private insurance market. Many insurers, facing frequent and unsustainable financial exposure and constraints on rate hikes caused by Proposition 103 have withdrawn from high-risk areas, or stopped issuing new policies altogether. Some insurers have even withdrawn from the state completely.

California homeowners in high-risk wildfire areas report premiums ranging from $5,000 to $12,000 annually.7 Orange County, California’s fifth most expensive housing market as of the 4th quarter 2025,8 faces challenges that are different than the statewide market. With an average home price of $1.2 million,9 rising insurance costs further threaten housing affordability. A recent survey found that 43% of Orange County seniors worry most about housing costs and financial security.10 Among the hardest hit by insurance premium increases and policy nonrenewal are retirees, renters, and owners of condominiums, townhomes, and mobile homes.

The Safer from Wildfires regulation requires insurers to offer discounts to homeowners who take proactive steps to reduce wildfire risk. Discounts are based on both achieving community-level designations, which assess the collective mitigation efforts of neighborhoods, and property-level improvements such as installing fire-resistant roofing, ember-resistant vents, and clearing defensible space.11 Reducing wildfire risk in the wildland-urban interface helps ensure that insurance coverage remains accessible. California’s wildfire and insurance crisis demands coordinated action from local governments and fire authorities, communities, and homeowners to reduce risk of wildfire.

6 Mashall A. Hayrikian, Engineering and Environmental Implications of the LA wildfires: Eaton and Palisades Fire, Marshall Geoscience – Geotechnical Engineering, Laboratory Services, http://www.marshallgeo.com/geotechnical-engineering/engineering-and-environmental-implications-of-la- wildfires-eaton-palisades-fires/
7 Merlin Law Group. Fire Insurance in California: A Complete Guide. https://www.merlinlawgroup.com/fire- insurance-california-guide/. Accessed March 6, 2026.
8 California Association of Realtors®, Median Prices of Existing Single Family Homes. Accessed March 8, 2026. https://www.car.org/marketdata/data/housingdata
9 O.C. CA Real Estate and Property Data, ATTOM, October 2025 10 Gabriel San Roman, New report on aging in Orange County outlines key concerns among seniors, Los Angeles Times, June 21, 2024, https://www.latimes.com/socal/daily-pilot/entertainment/story/2024-06- 21/aging-in-orange-county-report
11 California Code of Regulations, Title 10, Section 2644.9, Consideration of Mitigation Factors; Wildfire Risk Models. https://regulations.justia.com/states/california/title-10/chapter-5/subchapter-4-8/article- 4/section-2644-9/
Item: 12
295

Wildfires Hit Home

Orange County Grand Jury 2025-2026 Page 9 of 74

REASON FOR STUDY
Wildfires have become an increasingly severe threat to residential communities in Orange County, particularly those in high-risk fire zones. The frequency and intensity of wildfires has escalated due to prolonged droughts, rising temperatures, and development encroachment into wildland-urban interface areas. Catastrophic losses from these wildfires have resulted in a continuing insurance crisis.

This study aims to (1) identify the shared responsibilities of local governments and fire service agencies, communities and homeowners to reduce the risk of wildfire in the wildland-urban interface, (2) investigate the status of actions taken by the California legislature and Department of Insurance to provide relief to policyholders, and (3) inform communities and homeowners on home hardening, defensible space, insurance risk reduction, and wildfire safety awareness.

METHOD OF STUDY
The investigation reviewed the efforts of Orange County local governments, local fire departments, and homeowner associations to better understand and provide an independent look at the above concerns and possible solutions. To achieve a clear picture of the wildfire problem in the Orange County wildland-urban interface and its impact on insurance rates, the 2025-2026 Grand Jury has done the following:
 Reviewed studies and academic papers
 Issued a Fire Hazard Severity Zone survey to all Orange County cities  Examined the 2025 California Wildland-Urban Interface Code  Observed a demonstration at a Yorba Linda Water District Heli-Hydrant™  Visited Firewise USA Site designated communities
 Conducted literature review of previous statewide Grand Jury reports  Interviewed California Department of Insurance staff, reviewed Department website and pertinent regulations
 Visited Orange County Fire Authority facilities to better understand their training, procedures, and preparedness
 Conducted multiple interviews with city, county, and fire officials, as well as homeowners association staff and residents regarding wildland-urban interface wildfire risk reduction
Item: 12
296

Wildfires Hit Home

Orange County Fire Authority helicopter approaching Yorba Linda Water District Heli-HydrantTM Source: Orange County Grand Jury 2025-2026

INVESTIGATION AND ANALYSIS
The 2025-2026 Grand Jury investigated the risk of wildfire in Orange County wildland- urban interface areas, the insurance industry’s response to this risk, actions taken by fire prevention authorities to reduce the risk of damage and destruction of homes by wildfire, and the state legislature and California Department of Insurance (CDI) response to the insurance crisis. The Grand Jury also investigated actions homeowners should take to share the responsibility to reduce community wildfire risk, and by doing so, potentially reduce their insurance costs.

The Grand Jury investigation included evaluation of CDI initiatives, the Safer from Wildfires insurance regulation,12 and other regulations related to wildfire and insurance risk reduction. The investigation also included examination of recent changes to Fire Hazard Severity Zone mapping, the 2025 CWUIC, and pending amendments to the ember-resistant Zone 0 regulations that comprise defensible space requirements.

Shared Responsibility for Reduction of Wildfire and
Insurance Risk
There is a broad scope of shared responsibility for risk reduction in wildland-urban interface areas. State legislators, CDI, state and local fire prevention authorities, counties and cities, community-level organizations, and homeowners all share responsibility for taking actions necessary to prevent wildfires in wildland-urban interface areas and thereby reduce insurance risk and policy rates. Figure 2 below illustrates the shared responsibility.

12 California Code of Regulations, Title 10, Section 2644.9 Item: 12
297

Wildfires Hit Home

Orange County Grand Jury 2025-2026 Page 11 of 74

Figure 2 Shared responsibility for risk reduction in wildland-urban interface areas The conclusion of this report focuses on the responsibilities of local governments and fire prevention authorities to provide homeowners the information and guidance needed to reduce property-level wildfire and insurance risk and thereby reduce these risks across entire communities.

Wildland-Urban Interface
Wildland-urban interface (WUI) is where urban development meets or intermixes with undeveloped natural areas. The term
“wildland-urban interface” refers most often
to areas where houses are located within or
adjacent to relatively larger areas of natural
vegetation. The U.S. Forest Service refers to
WUI simply as “areas where human
development meets natural landscapes.13
WUI is at greatest risk of wildfire in

13 Forest Service, U.S. Department of Agriculture. Wildland-Urban Interface. https://research.fs.usda.gov/nrs/fire/wui. Accessed January 12, 2026.

Source: RanchoMissionViejo.com
Item: 12
298

Wildfires Hit Home

California, where we have led the nation in both WUI growth and wildfires for 30 years.14 The Wildland-Urban Interface Fire Problem
The current National Fire Protection Association (NFPA) Firewise USA program was developed out of the 1986 Wildfire Strikes Home conference principally organized by the U.S. Forest Service and the NFPA. This initiative was the initial fire management response to the home destruction problem related to wildfires nationally recognized in 1985 which has since become known as the WUI fire problem.15 By the middle of this century, many Orange County residents may have a dramatic experience with wildfire due to increasingly drier, hotter conditions. Research that examined wildfires during the period from 1959 through 2009 predicts that in the next 25 years Southern California will see increased wildfires during months when fall winds occur and also during the warmer, summer months. It is estimated that by the mid-21st century there will be a 64% increase in acreage burned during higher intensity fall winds, and a 77% increase during summer winds due to warmer and drier climate. A greater concern is the estimated 20% increase in structures destroyed due to fires during fall winds and estimated 74% increase in structures destroyed due to fires during summer winds in warmer, drier conditions.16
Orange County development that continues into the WUI should expect to face these predictions. This Orange County Grand Jury report focuses on the implications for increased wildfire and insurance risk and our concern that most homes in WUI areas are not prepared to resist ignition and destruction by wildfire.

Wildland-Urban Interface Fire Disaster and Suburban Conflagration WUI fire disasters and suburban conflagrations occur during extreme fire conditions when numerous houses ignite and burn simultaneously, overwhelming the capabilities of firefighting resources.17 If enough homes are ignition-resistant, many homes do not ignite during extreme fire conditions and fire protection is not overwhelmed by the

14 Center for Critical Urban and Environmental Studies. University of California, Santa Cruz. Wildland Urban Interface (WUI) Research for Resilience: Addressing California’s Climate, Conservation & Housing Crises. https://criticalurbanenvironments.ucsc.edu/projects/wildland-urban-interface-wui-research-for- resilience/
15 Jack Cohen. The Wildland-Urban Interface Fire Problem: A Consequence of the Fire Exclusion Paradigm. Forest History Today. Fall 2008: 20-26.
https://www.fs.usda.gov/rm/pubs_other/rmrs_2008_cohen_j002.pdf. Accessed March 25, 2026. 16 Yufang Jin, et al. Identification of two distinct fire regimes in Southern California; implications for economic impact and future change. Environmental Research Letters, Volume 1, Number 9. IOP Science, September 8, 2015. https://iopscience.iop.org/article/10.1088/1748-9326/10/9/094005.

Accessed January 9, 2026.
17 Cohen, The Wildland-Urban Interface Fire Problem, 22.

Item: 12
299

Wildfires Hit Home

Orange County Grand Jury 2025-2026 Page 13 of 74
homes that do ignite; the ignition-resistant homes can survive without firefighter protection, and an extreme wildfire can occur without becoming a WUI fire disaster18 or suburban conflagration.

Suburban conflagrations occur when fire spreads from the wildlands into the WUI and suburban environment. Suburban conflagration follows the conceptual WUI fire chain of events in Figure 3.19 Once a structure in a community ignites, the probability of its complete destruction is high and the risk to the rest of the community increases as the burning structure produces significant heat and embers.20 Effective prevention of structure ignitions through home hardening and defensible space measures can break the WUI fire chain of events.

Figure 3 WUI and suburban conflagration fire disaster chain of events.21 Home Ignition Zone and Home Ignition Potential
The home ignition zone refers to a home and its immediate surroundings within 100 to 200 feet. The home ignition zone principally determines the potential for WUI fire disasters. Research shows that a home’s ignition potential during extreme wildfires is determined by the characteristics of its exterior materials and design, their response to

18 Cohen, The Wildland-Urban Interface Fire Problem, 23. 19 Ian M. Gammanco, et al. The Return of Conflagration in Our Built Environment. Insurance Institute for Business and Home Safety. September 2023. https://ibhs.org/wp- content/uploads/Suburban_Wildfire_Conflagration_WhitePaper.pdf. Accessed March 20, 2026. 20 Gammanco, The Return of Conflagration, 22.
21 Gammanco, The Return of Conflagration, 14.

Item: 12
300

Wildfires Hit Home

burning objects within 100 feet, and their response to embers. Most destroyed homes in residential areas ignite from smaller flames and firebrands (lofted embers), not surrounding vegetation.22 Reducing home ignition potential is the key to preventing WUI fire disaster.

Reducing Home Ignition Potential Can Prevent Wildland-Urban Interface Fire Disaster and Suburban Conflagration
During extreme WUI fires, homes ignite and burn and sustain the requirements for combustion both indirectly and directly: Indirectly from radiation and convection heating from flames, and directly from ember spot ignitions on a house. Computational modeling and laboratory and field experiments show that large flames of burning shrubs and tree canopies must be within 100 feet to ignite a home’s wood exterior, while most destroyed homes ignite from smaller flames and directly from burning embers.23 These research results suggest that addressing the conditions in the home ignition zone to significantly reduce home ignition potential can prevent WUI fire disaster. Reducing home ignition potential means addressing the ignitability of the structure rather than the immediate surroundings.

Source: Patrick T. Fallon / Agence France-Presse / Getty Images An analysis of CAL FIRE data and Butte County property records shows that about 51% of the 350 single-family homes built after 2008 in the path of the Camp Fire were undamaged. By contrast, only 18% of the 12,100 homes built prior to 2008 escaped damage.24 The homes built after 2008 were required to conform to 2008 Title 24, Chapter 7A of the California Building Standards Code which focused on construction of new buildings located within WUI and Fire Hazard Severity Zones. These 2008 wildfire risk mitigation requirements for new homes included materials such as fire-resistant

22 Cohen, The Wildland-Urban Interface Fire Problem, 23. 23 Cohen, The Wildland-Urban Interface Fire Problem, 24. 24 Dale Kasler and Phillip Reese. In Camp Fire, Newer Houses Were Much Less Damaged. The Sacramento Bee. April 11, 2019, updated January 9, 2024. https://www.kqed.org/science/1940012/newer- %D8%8Cuses-much-less-damaged-in-camp-fire. Accessed March 4, 2026.

Item: 12
301

Wildfires Hit Home

Orange County Grand Jury 2025-2026 Page 15 of 74
roofs and siding, and construction methods for exterior wildfire protection. These wildfire risk mitigation requirements for new construction directly reduce home ignition potential and help homes constructed to the new standards survive undamaged.

Benefits of Reducing Home Ignition Potential Can Exceed Costs The benefits of reducing home ignition potential through compliance with new construction requirements can exceed costs, with 90% of the benefits estimated from reduced property losses and insurance costs. The benefit-cost ratio (BCR) for complying with the 2015 International Wildland-Urban Interface Code (IWUIC) has been calculated by the National Institute of Building Science for a number of representative counties with moderate to extreme fire risk. Total benefits were calculated at $3 billion and total costs at $800 million, suggesting a BCR of approximately 4:1 or $4 saved for every $1 of additional construction and maintenance cost.25 A national average BCR for retrofitting typical 2,000 square-foot existing homes plus nearby non-residential buildings (stores, schools, etc.) to 2018 IWUIC ignition-resistant construction and defensible space was also calculated. Benefits of retrofit exceed costs, with 93% of the benefits estimated from reduced property losses. Total benefits were calculated at $430 billion and total costs at $240 billion, equivalent to a national average BCR of 2:1 or $2 saved for every $1 of retrofit and maintenance costs.26 The per-house retrofit cost is highly uncertain. The lowest average per-house retrofit cost would imply a much higher benefit-cost ratio, perhaps as high as 8:1, equivalent to an average of $8 saved for every $1 of retrofit cost.27
Office of the State Fire Marshal Fire Hazard Severity
Zone Mapping
California laws now require Fire Hazard Severity Zone (FHSZ) mapping.28,29,30 The need for FHSZ mapping arose from repeated occurrence of major destructive fires. The FHSZ maps are developed using a science-based and field-tested model that assigns a hazard score based on the factors that influence fire likelihood and fire behavior. There are three levels of hazard score: Moderate, High, and Very High. Many factors are

25 National Institute of Building Science, Natural Hazard Mitigation Saves. 63 26 National Institute of Building Science, Natural Hazard Mitigation Saves, 114. 27 National Institute of Building Science, Natural Hazard Mitigation Saves, 115. 28 California Public Resources Code 4201-4204. https://law.justia.com/codes/california/code-prc/division- 4/part-2/chapter-1/article-9/
29 California Government Code 51175-89. https://law.justia.com/codes/california/code-gov/title-5/division- 1/part-1/chapter-6-8/section-51175/
30 California Code of Regulations Title 14, Section 1280. https://regulations.justia.com/states/california/title-14/division-1-5/chapter-7/subchapter-3/article-1/section- 1280/
Item: 12
302

Wildfires Hit Home

considered such as fire history, existing and potential fuel (natural vegetation), predicted flame length, blowing embers, terrain, and typical fire weather for the area. FHSZ maps evaluate hazard, not risk. “Hazard” is based on the physical conditions that create a likelihood and expected fire behavior over a 30- to 50-year period without considering mitigation measures such as home hardening, recent wildfire, or fuel reduction efforts. “Risk” is the potential damage that a fire can do to the area under existing conditions, accounting for any modifications such as fuel reduction projects, defensible space, and ignition resistant building construction.31
FHSZ mapping began with the State
Responsibility Area (SRA), defined as a
designated area in California where the
state has primary responsibility for fire
prevention and suppression. The SRA
FHSZ mapping went into effect in April
2024. Since then, the Office has also been
mapping Local Responsibility Areas (LRA),
defined as a portion of land where local
agencies, such as city or county fire
departments, are responsible for wildfire
protection. All Orange County FHSZ maps
are accessible at the CAL FIRE website.32
Figure 4 shows an example of an Orange
County city FHSZ map. Appendix C shows
a screenshot of Orange County FHSZs
using the CAL FIRE Find Your Fire Hazard
Severity Zone viewer accessible at this
CAL FIRE web address:33

31 CAL FIRE. Office of the State Fire Marshal. Fire Hazard Severity Zones. Explore Fire Hazard Severity Zones. . https://osfm.fire.ca.gov/what-we-do/community-wildfire-preparedness-and-mitigation/fire-hazard- severity-zones. Accessed March 20, 2026.
32 CAL FIRE. Office of the State Fire Marshal. Fire Hazard Severity Zones in Local Responsibility Area.

Phase 4. Orange County.
https://calfire.app.box.com/s/wahuw9ny7cgn89xpxh7092ur50r1pwvj/folder/312669458215. Accessed March 12, 2026.
33 CAL FIRE. Office of the State Fire Marshal. Fire Hazard Severity Zones. https://osfm.fire.ca.gov/what- we-do/community-wildfire-preparedness-and-mitigation/fire-hazard-severity-zones. Accessed March 12, 2026.

Figure 4 Example of an Orange County City LRA
Fire Hazard Severity Zone Map
Item: 12
303

Wildfires Hit Home

Orange County Grand Jury 2025-2026 Page 17 of 74
https://experience.arcgis.com/experience/5065c998b4b0462f9ec3c6c226c610a9.

Homeowners can enter their address in this viewer to find whether their property is located within a specific FHSZ.

How Fire Hazard Severity Zone Maps Impact Homeowners
FHSZ maps have no direct impact on insurance coverage. The CDI states that the FHSZ maps are intended to drive local planning decisions, not insurance decisions, and that FHSZ maps have nothing to do with insurance rating.34 Though not used directly for insurance rating, FHSZ mapping does have significant indirect impacts. Properties located in High or Very High FHSZs are subject to certain legal requirements. New state building code requirements effective January 2026 for homes within a FHSZ or a WUI area include fire-resistant materials and construction methods. Buildings in these areas are subject to defensible space requirements. If you sell a home located in these areas, you are required to disclose fire risk and compliance to potential buyers using a specific form.

These regulations are in place to increase fire-resistance of communities and ensure property owners are aware of the risks involved in living in a wildfire-prone area.

California Wildland-Urban Interface Code Effective January 1, 2026 Title 24, Part 7 of the California Building Standards Code, also referred to as the 2025 California Wildland-Urban Interface Code (CWUIC),35 became effective January 1, 2026.

Title 24, Part 7, Chapter 5, Special Building Construction Regulations establishes minimum standards to locate, design and construct buildings and structures or portions thereof for the protection of life and property, to resist damage from wildfires, and to mitigate building and structure fires from spreading to wildland fuels.36 Chapter 5 requirements for construction within a FHSZ or a WUI area include:
 Specifications for fire-resistance-rated construction and non-combustible materials
 Ignition-resistant construction and material
 Replacement or repair of roof coverings

34 California Department of Insurance. CAL FIRE Hazard Maps Do Not Affect Insurance Rates or Availability. https://www.insurance.ca.gov/0400-news/0102-alerts/2025/CAL-FIRE-hazard-maps-do-not- affect-insu.cfm. Accessed March 6, 2026.
35 2025 California Wildland-Urban Interface Code, Title 24, Part 7, 2024 IWUIC Amended, Effective Date:

Jan 01, 2026. https://codes.iccsafe.org/content/CAWUIC2025P2. Accessed January 22, 2026. 36 2025 California Wildland-Urban Interface Code, Title 24, Part 7, 2024 IWUIC Amended, Effective Date:

Jan 01, 2026. https://codes.iccsafe.org/content/CAWUIC2025P2. Accessed January 22, 2026.

Item: 12
304

Wildfires Hit Home

Defensible Space Requirements and the New Ember-Resistant Zone 0 The State Board of Forestry and Fire Protection is responsible for the existing defensible space regulations37 for buildings or structures located in the SRA or in Very High FHSZ in the LRA. If you have a home or building in the SRA or in the Very High FHSZ in the LRA, you are responsible for ensuring that your property complies with defensible space requirements to protect structures from wildfire. The Board of Forestry and Fire Protection webpages include an illustration of existing Defensible Space Zones 0, 1, and 2 (Figure 5), and links to Zones 0, 1, and 2 resources.38

Figure 5 Board of Forestry and Fire Protection Defensible Zones 0, 1, and 2 It is important to note that “ember-resistant Zone 0” does not mean all vegetation, including trees, within 0-5 feet must be removed. New ember-resistant Zone 0

37 California Public Resources Code Division 4 - Forests, Forestry and Range and Forage Lands Part 2 - Protection of Forest, Range and Forage Lands Chapter 3 - Mountainous, Forest-, Brush- and Grass- Covered Lands Section 4291. https://law.justia.com/codes/california/code-prc/division-4/part-2/chapter- 3/section-4291/. Accessed January 14, 2026.
38 State of California Board of Forestry and Fire Protection. https://bof.fire.ca.gov/projects-and- programs/defensible-space-zones-0-1-and-2. Accessed January 14, 2026.

Item: 12
305

Wildfires Hit Home

Orange County Grand Jury 2025-2026 Page 19 of 74
vegetation options will be finalized later in 2026. The next public workshop meeting is scheduled for April 23, 2026. New ember-resistant Zone 0 requirements enhance existing defensible space requirements in High and Very High FHSZs in the LRA to create an ember-resistant zone within 0 to 5 feet of a building. 39 Compliance with existing or enhanced defensible space requirements addresses home ignition potential and reduces home ignitability. Reducing the ignitability of enough homes can break the WUI fire chain of events and help more homes escape destruction or survive undamaged.

AB38 Defensible Space Compliance Documentation and Disclosure AB38 became effective in 2021, requiring sellers of property located in a High or Very High FHSZ to provide buyers with documentation stating the property complies with state defensible space requirements or local vegetation management ordinances, as applicable. The law provides that if documentation demonstrating compliance cannot be obtained by the close of escrow, a written agreement may be executed showing that the buyer agrees to obtain documentation of compliance within one year of the close of escrow. 40
The law also requires a Defensible Space Disclosure be provided by sellers of property located in a High or Very High FHSZ to buyers of homes constructed before January 1, 2010. The Disclosure must include specified information and a copy of a final inspection report, or information on where the report may be obtained. A sample Defensible Space Disclosure notice is reproduced at Appendix D.

California Homeowners Insurance Crisis
Devastating property losses and casualties resulting from numerous wildfires in California WUI areas and other natural disasters beginning in 2018 have precipitated a continuing homeowners insurance crisis. Beginning in 2022 and 2023, insurers began dramatically raising California homeowners fire insurance premiums in what were considered wildfire risk areas, and some insurers began to stop issuing policies in high- risk areas or withdraw from the California homeowners’ insurance market altogether.

Like many homeowners throughout the state that are severely impacted by the insurance crisis, many Orange County homeowners are also impacted.

39 Board of Forestry and Fire Protection. Summary of October 2025 Draft Zone 0 Regulation Language. https://34c031f8-c9fd-4018-8c5a-4159cdff6b0d-cdn-endpoint.azureedge.net/-/media/bof-website/projects- and-programs/defensible-space-zones-0-1-2/october-zone-0-summary-and-rule- plead.pdf?rev=927f9551dc7b4f15b8263671cca15ef2&hash=F80F2C5451370BB3C855E38CCCC516D4.

Accessed February 17, 2025.
40 Assembly Bill 38, Wood. Fire safety: low-cost retrofits: regional capacity review: wildfire mitigation.

Approved October 2, 2019. California-2019-AB38-Chaptered Item: 12
306

Wildfires Hit Home

Actions have been taken by the state legislature and the CDI during the last three years to strengthen the property insurance market, increase insurer commitments to write more policies in wildfire-distressed areas, and provide a framework to support homeowners in securing premium reductions from insurers when they take specific actions to reduce their community- and property-level wildfire risk.41 Despite these actions, many homeowners remain vulnerable to dramatic policy premium increases, nonrenewal, or the inability to secure traditional insurance coverage.

A recent New York Times article42 cites a 2023 California Association of Realtors survey wherein “nearly 7 percent of realtors surveyed…said that they had deals fall out of escrow that year because buyers couldn’t find adequate, affordable coverage.” As further cited in the article: “The percentage of realtors reporting that they had deals fall through for lack of insurance has more than doubled since 2023, to 16.6 percent.” Unabated Growth of the California FAIR Plan
The continuing statewide insurance crisis is further demonstrated by the unabated growth in California FAIR Plan residential insurance policies. The FAIR Plan provides basic fire insurance coverage for
eligible high-risk properties when
such coverage is demonstrated by
the applicant to be unavailable in
the traditional insurance market.43
FAIR Plan coverage is limited,
relatively expensive, and is the
insurer of last resort for these
properties. During the period from
September 2023 to September
2025, the number of FAIR Plan
residential dwelling policies in
force (PIF) increased from
320,581 to 625,033 as shown at

41 California Department of Insurance. Sustainable Insurance Strategy. https://ains.assembly.ca.gov/system/files/2023-12/insurance-commissioner-ricardo-lara-california- sustainable-insurance-strategy-presentation-to-assembly-insurance-committee-12-13-2023.pdf. Accessed January 29, 2026.
42 New York Times.California Promised Insurance Relief, But Delivered Loopholes. November 1, 2025. https://www.nytimes.com/2025/11/01/us/los-angeles-california-fire-insurance-regulations.html. Accessed March 25, 2026.
43 The California FAIR Plan. https://www.cfpnet.com/. Accessed March 25, 2026.

Figure 6 Total FAIR Plan Dwelling and Commercial Policies Have Increased, September 2023 to September 2025 Item: 12
307

Wildfires Hit Home

Orange County Grand Jury 2025-2026 Page 21 of 74
Figure 6.44 FAIR Plan data for Orange County residential policies in 2022 is shown in Appendix E.

The FAIR Plan is a syndicated fire insurance pool comprised of all insurers licensed to conduct property and casualty business in California. The FAIR Plan was established by statute45 in August 1968 as an insurance placement facility and all licensed property/casualty insurers that write basic property insurance are required to be members of the FAIR Plan. The FAIR Plan issues policies on behalf of its member companies, and each member company participates in the profits, losses, and expenses of the FAIR Plan in direct proportion to its market share of business written in the state. The FAIR Plan is not a state agency or public entity; it does not receive public or taxpayer funding. As the total number of FAIR Plan policies continues to grow unabated, so does the financial strain on the overall FAIR Plan fire insurance pool.

Insurance Relief for Homeowners: Safer from Wildfires
Insurance Regulation
The first of the wildfire safety regulatory incentives was the Safer from Wildfires regulation enacted in fall 2022.46 Safer from Wildfires requires insurers to offer premium discounts based, in part, on mandatory factors including community-level wildfire risk mitigation designations and property-level wildfire risk mitigation efforts. Every action taken under Safer from Wildfires qualifies applicants and policyholders for insurance discounts.

Safer from Wildfires: Community-Level Wildfire Risk Mitigation There are two examples of community-level wildfire risk mitigation designations listed in the Safer from Wildfire regulation: 1) Fire Risk Reduction Community Listing47 approved by the Board of Forestry and Fire Protection, and 2) Firewise USA Site Designation48 approved by the National Fire Protection Association. Other examples of community- level wildfire risk mitigation designations include local Fire Safe Council supported by the California Fire Safe Council, Community Wildfire Protection Plan supported by the

44 Key Statistics & Data. The California FAIR Plan. https://www.cfpnet.com/key-statistics-data/. Accessed March 25, 2026.
45 California Insurance Code sections 10090 et seq. https://law.justia.com/codes/california/code- ins/division-2/part-1/chapter-9/section-10090/. Accessed April 21, 2026. 46 California Code of Regulations, Title 10, Section 2644.9 47 Fire Risk Reduction Community listed by the Board of Forestry and Fire Protection pursuant to Public Resources Code Section 4290.1. https://bof.fire.ca.gov/projects-and-programs/fire-risk-reduction- community-list. Accessed February 10, 2026.
48 Firewise USA program managed by National Fire Protection Association (NFPA). https://www.nfpa.org/Education-and-Research/Wildfire/Firewise-USA. Accessed April 21, 2026.

Item: 12
308

Wildfires Hit Home

U.S. Fire Administration, and the Wildfire Prepared Neighborhood™ Pilot Program49 being launched by the Insurance Institute for Business & Home Safety (IBHS).

Safer from Wildfires: Property-Level Wildfire Risk Mitigation Safer from Wildfires also requires insurers to offer premium discounts based, in part, on the reduced wildfire risk resulting from each and every property-level wildfire risk mitigation action. These individual property-level wildfire risk mitigation efforts include measures addressing the immediate surroundings of a building and building hardening.

The IBHS offers homeowner guidance based on its research,50 and a property-level Wildfire Prepared Home™ designation51 that recognizes mitigation measures addressing both immediate surroundings and home hardening.

Safer from Wildfires: Property-Level Measures Addressing Immediate Surroundings - Defensible Space
The following measures are specified in Safer from Wildfires to address the immediate surroundings of a building. Each of these actions qualifies for insurance discount:
a. Clearing of vegetation and debris from under decks
b. Clearing of vegetation, debris, mulch, stored combustible materials, and any and all movable combustible objects from the area within five (5) feet of the building c. Use of only noncombustible materials in any improvements to the property, including fences and gates situated within five (5) feet of the building d. Removal or absence of combustible structures, including sheds and other outbuildings, from the area within thirty (30) feet of the building or as much of such area as is under the control of the applicant or policyholder e. Whether the property upon which the building is situated complies with state or local defensible space requirements, as applicable
Safer from Wildfires: Property-Level Building Hardening Measures The following building hardening measures are specified in Safer from Wildfires. Each of these actions qualifies for insurance discount:
a. Class-A fire rated roof
b. Enclosed eaves

49 Institute for Business & Home Safety. Wildfire Prepared Neighborhood Pilot Program. https://wildfireprepared.org/wildfire-prepared-neighborhood-pilot-program/. Accessed March 19, 2026. 50 IBHS Research. Wildland Fire Embers and Flames: Home Mitigations That Matter. April 2023. https://ibhs1.wpenginepowered.com/wp-content/uploads/Home-Mitigations-that-Matter-FINAL.pdf.

Accessed February 10, 2026.
51 Institute for Business & Home Safety. Wildfire Prepared Home: Take Proven Steps to Reduce Your Risk. https://wildfireprepared.org/. Accessed March 19, 2026.

Item: 12
309

Wildfires Hit Home

Orange County Grand Jury 2025-2026 Page 23 of 74
c. Fire-resistant vents
d. Multipane windows, including dual pane windows, or functional shutters, which when closed, cover the entire window and do not have openings e. At least six (6) inches of noncombustible vertical clearance at the bottom of the exterior surface of the building, measured from the ground up Safer from Wildfires: Optional Factors
The Safer from Wildfires regulation also incorporates other optional factors that are substantially related to risk of wildfire loss. These optional factors may include, but are not limited to: fuel, slope, access, aspect, structural characteristics, wind, and other community-level or property-level mitigation efforts, or designations as recommended by a state or local fire safety agency or organization as reducing wildfire risk.

Reducing Wildfire and Insurance Risk: AB888 The
California Safe Homes Grant Program
AB888 established the California Safe Homes Grant Program in October 2025 to be developed and administered by the Department of Insurance for the purpose of achieving the following goals:
(1) Reducing local and statewide wildfire losses
(2) Improving insurability and resilience of vulnerable communities (3) Home hardening of insurable properties to mitigate wildfire risk and enable consumers to get access to insurance premium incentives offered by insurance companies and in alignment with the department’s rules.

Eligible California Safe Home Grant Program applicants include qualifying individuals and qualifying cities, counties, and special districts. For individuals, grant funds may be awarded if the following criteria are met:
(1) The property of the applicant is covered by an admitted insurer or the California FAIR Plan
(2) The property of the applicant is in a ZIP Code that overlaps with a High or Very High FHSZ.
(3) The income of the applicant is no higher than the low-income limit for the county in which they reside
Item: 12
310

Wildfires Hit Home

As of January 1, 2026, the Department of Insurance was developing the grant application portal and planned to begin accepting California Safe Homes Grant applications in spring 2026.52
Our Shared Responsibilities
Orange County Fire Authority (OCFA)
OCFA serves all unincorporated areas of Orange County and its 23 Orange County member cities. The OCFA Board of Directors is made up of elected officials from the County and its member cities. The 11 Orange County cities that are not served by OCFA have their own city fire departments, i.e., their own fire service agencies having jurisdiction. The list of OCFA member cities and other Orange County fire service agencies is included at Appendix F.

OCFA education and outreach programs are comprehensive. Online materials and event scheduling is accessible at their website. and a staff of seven community education specialists and a community education supervisor are available to coordinate and attend events. The Wildfire Preparedness53 webpages cover multiple topic areas including:
 Ready, Set, Go!
 Home Assessment
 Defensible Space Disclosure
Inspection
 Pest Control (tree pests
management)
 Immediate Zone
 FHSZ Maps
 Insurance
 Contractors (specializing in
wildfire preparedness)

OCFA takes a systematic approach to mitigating risk through its Community Risk Reduction Department (formerly Fire Prevention). OCFA Community Risk Reduction (CRR) staff identifies community risks, collaborates with developers, agencies, and residents to build and maintain safe communities.54 In addition to the extensive Wildland Preparedness webpages, the CRR department webpages include a section on Wildland & Vegetation with specific information for homeowners in wildland interface areas. The CRR department supports homeowners’ risk reduction efforts by providing an online

52 CalMatters. California homeowners could qualify for grants for new roofs and fire safety. January 1, 2026. https://calmatters.org/economy/2026/01/california-safe-homes-grants/. Accessed February 17, 2026.
53 Orange County Fire Authority. Wildfire Preparedness. https://ocfa.org/ready-set-go/. Accessed February 24, 2026.
54 Orange County Fire Authority. About Us. Departments. https://ocfa.org/about- us/departments/community-risk-reduction/. Accessed February 24, 2026.

Item: 12
311

Wildfires Hit Home

Orange County Grand Jury 2025-2026 Page 25 of 74
home assessment tool55 that covers the basics of both home hardening and defensible space principles. The online assessment tool guides the homeowner through a series of questions and ends with the opportunity to receive an emailed report providing recommendations for fire mitigation strategies. Before beginning the online questionnaire, homeowners are given the option to request an in-person home assessment with an OCFA Fire Prevention Specialist.

Fire Hazard Severity Zone Survey Results - Local Governments and Fire Service Agencies
This investigation included a survey of Orange County cities to gather information about their efforts to reduce risk of wildfire in WUI areas and their outreach programs for homeowners. The Grand Jury invited 34 Orange County cities to respond to the survey and received 28 responses. Of these 28 responses, 20 were from various city departments, and eight were from city fire departments.

The Orange County cities that responded to the survey reported having from zero to 100% of their city land area within Moderate, High, or Very-High FHSZs. Reported land areas may not match each individual city’s FHSZ map. A summary of the survey results for city area reported in FHSZs are shown at Figure 7:

55 Orange County Fire Authority. Home Assessment Tool. https://ocfa.org/ready-set-go/home- assessment/. Accessed February 24, 2026.

Item: 12
312

Wildfires Hit Home

City Area Reported in
Fire Hazard Severity Zones
% of
Responding
Cities
# of
Responding
Cities
No area in FHSZ 21% 6
Some area in FHSZ (not quantified) 14% 4
2% to 25% in FHSZ 25% 7
26% to 50% in FHSZ 18% 5
51% to 75% in FHSZ 11% 3
76% to 100% in FHSZ 11% 3
Figure 7 City Area Reported in Fire Hazard Severity Zones 11 of 28 responding cities reported having achieved or have applications pending approval for community-level wildfire risk mitigation designations. Achievement of community-level wildfire risk mitigation designations is a significant way local governments, local fire departments, unincorporated areas, and special districts can reduce wildfire and insurance risk for their residents. A summary of the survey results for cities that have achieved or applied for community-level wildfire risk mitigation designation are shown at Figure 8.
21%14%25%18%11%11%City Area Reported in Fire Hazard Severity ZonesNo area in FHSZSome area in FHSZ (not quantified)2% to 25% in FHSZ26% to 50% in FHSZ51% to 75% in FHSZ76% to 100% in FHSZ Item: 12
313

Wildfires Hit Home

Orange County Grand Jury 2025-2026 Page 27 of 74

Achieved, Applied for, or Plan to Apply
for a Community-Level Wildfire Risk
Mitigation Designations
% of
Responding
Cities
# of
Responding
Cities
Yes 39% 11
No 61% 17
In progress 0% 0
Figure 8 Cities Reporting Achieved, Applied for, or Plan to Apply for a Community-Level Wildfire Risk Mitigation Designation
16 of 28 responding cities reported having an outreach program that provides information and guidance to property owners on wildfire risk mitigation measures and grant programs. A summary of the survey results on cities reporting whether they have these outreach programs in place are shown at Figure 9. These outreach programs are needed to help homeowners achieve awareness and ability to plan and take actions required to reduce individual and community wildfire and insurance risk. 39%61%0%Cities That Have Achieved, Applied for, or Plan to Apply for a Community-level Wildfire Risk Mitigation DesignationYesNoIn progress Item: 12
314

Wildfires Hit Home

Outreach Program to Provide Information
and Guidance to Property Owners on
Wildfire Risk Mitigation Measures and
Grants
% of
Responding
Cities
# of
Responding
Cities
Yes 57% 16
No 29% 8
In progress 14% 4
Figure 9 Cities Reporting Outreach Program to Provide Information and Guidance to Property Owners on Wildfire Risk Mitigation Measures and/or Grants
11 of the 16 cities reported having their own outreach programs, are Orange County Fire Authority (OCFA) member cities, and referred to one or more of OCFA’s comprehensive programs and resources (see Figure 10). While OCFA member cities’ use of OCFA outreach programs and resources is efficient and beneficial to their residents, the availability of a direct local contact at the city who is knowledgeable and can provide even a minimum of information and guidance on wildfire mitigation resources would help remove barriers to homeowners’ actions to reduce wildfire risk. 57%29%14%Cities That Have an Outreach Program to Provide Information and Guidance to Property Owners on Wildfire Risk Mitigation Measures and/or Grants YesNoIn progress Item: 12
315

Wildfires Hit Home

Orange County Grand Jury 2025-2026 Page 29 of 74

Outreach Program Refers to Orange
County Fire Authority Programs and
Resources
% of
Responding
Cities
# of
Responding
Cities
Yes 55% 11
No 45% 9
Figure 10 Cities Reporting Their Outreach Program Refers to Orange County Fire Authority Outreach Programs and Resources
Orange County Homeowners Associations Play an Important Role According to the California Community Managers Association, there are 4,927 homeowners associations (HOA) in Orange County, and 82% of Orange County residents live in HOAs.56 These HOAs communicate directly with their residents, and thus have the ability to mobilize people and resources to effectively achieve and maintain community-level wildfire risk mitigation designations and reduce their residents’ homeowner insurance premiums.

HOAs are the local contact for their residents, and through their architectural and landscape standards can effectively communicate information on home hardening and defensible space requirements. HOAs often host community leaders and local fire service agencies for fire prevention workshops and other outreach events for HOA residents. Their local contact function can also provide information and organize opportunities to volunteer and support local fire prevention overall through activities such as Citizens Brigade57 and Bike Brigade.58 These HOA-hosted workshops, outreach

56 California Association of Community Managers. Estimated number of residents living in HOAs based on average of 2010-2014 Census reports of 3.04 persons per household. www.cacm.org. 57 Weathered: After the LA Firestorm. PBS, KCET, 2026.
58Ellis, Rebecca. Los Angeles Times. January 10, 2026. Topanga Canyon felt abandoned. So residents are banding together to fight fire. https://www.latimes.com/california/story/2025-01-10/topanga-canyon- felt-abandoned-so-residents-are-banding-together-to-fight-fire. Accessed March 6, 2026. 55%45%Cities With an Outreach Program That Refers To OCFA Programs and ResourcesYesNo Item: 12
316

Wildfires Hit Home

events, and local contact functions are effective means to help homeowners achieve awareness and ability to plan and take actions necessary to reduce wildfire and insurance risk.

HOAs often have significant responsibility for large open space areas of Orange County that can total hundreds of acres of fuel modification zones. The HOAs’ collaborative role with local fire service agencies in managing these fuel modification zones is as important as their role with HOA residents in the shared responsibilities for wildfire and insurance risk reduction.

Homeowners are Responsible for Reducing Home Ignition Potential Fire science research has demonstrated that ignition-resistant homes can survive wildfire without firefighter protection.59 Where there are enough ignition-resistant homes, the WUI fire chain of events can be broken to prevent fire disasters, and these homes can escape destruction or survive undamaged. Taking the actions necessary to make homes ignition resistant to windborne embers is the responsibility of homeowners. The role of the homeowner is critical in the shared responsibilities for reducing wildfire and insurance risk in WUI areas.

Homeowners need support from local governments and fire service agencies to achieve the awareness and ability to plan and take actions necessary to make homes ignition resistant. This support is most effectively delivered through local outreach programs; effective communications in outreach programs have been found to be the more local, personalized efforts such as one-on-one consultation with fire experts, townhall events, small workshops, tours, and demonstrations.60 For example, provision of in-person or online home assessments that result in written recommendations to homeowners for specific wildfire risk mitigation actions. Documentation of the recommended actions taken can then be presented to homeowners’ insurers for the insurance discounts required by Safer from Wildfires.

Safer from Wildfires home hardening and defensible space measures protect homes and communities, save homeowners, local governments, and fire authorities as well as insurance companies from catastrophic loss while also providing discounts for homeowners’ insurance premiums.

Reducing wildfire risk in the wildland-urban interface helps ensure that insurance coverage remains accessible. California’s wildfire and insurance crisis demands coordinated action from local governments and fire authorities, communities, and homeowners to reduce risk of wildfire.

59 Cohen, The Wildland-Urban Interface Fire Problem, 23. 60 Gammanco, The Return of Conflagration, 34.

Item: 12
317

Wildfires Hit Home

Orange County Grand Jury 2025-2026 Page 31 of 74

FINDINGS
In accordance with California Penal Code Sections 933 and 933.05, the 2025-2026 Orange County Grand Jury requires (or, as noted, requests) responses from each agency affected by the findings presented in this section. The responses are to be submitted to the Presiding Judge of the Superior Court.

Based on its investigation “Wildfires Hit Home” the 2025-2026 Orange County Grand Jury has arrived at the following six findings:

F1 More frequent and severe wildfires driven by increasingly hotter, drier, and windier conditions in the Orange County wildland-urban interface are escalating impacts on financial and non-financial resources. Among the financial costs are dramatic increases in homeowners’ insurance premiums, nonrenewals, and inabilities to obtain insurance.

F2 Actions that address conditions in the home ignition zone to significantly reduce ignition potential can prevent a community wildland-urban interface fire disaster or suburban conflagration.

F3 Expanded engagement with the community to raise awareness and provide support regarding home hardening and defensible space will increase effectiveness of wildfire risk mitigation and insurance risk reduction efforts.

F4 Achievement of community-level and property-level wildfire risk mitigation designations (such as Firewise USA Site, Fire Risk Reduction Community or Insurance Institute for Business and Home Safety certification) lessens wildfire risk and helps reduce insurance premium costs.

F5 All county residents should be made aware that Safer from Wildfire regulation requires insurers to provide discounts to homeowners and communities that implement home hardening and defensible space measures regardless of whether a property is located within a Fire Hazard Severity Zone.

F6 AB888, California Safe Homes Grant Program, provides financial assistance to eligible homeowners, cities, counties, and special districts for home hardening and defensible space measures. Applying for and using these grant funds will reduce wildfire losses and improve insurability and resilience of vulnerable communities.

Item: 12
318

Wildfires Hit Home

RECOMMENDATIONS
In accordance with California Penal Code Sections 933 and 933.05, the 2025-2026 Orange County Grand Jury requires (or, as noted, requests) responses from each agency affected by the recommendations presented in this section. The responses are to be submitted to the Presiding Judge of the Superior Court.

Based on its investigation described herein, the 2025-2026 Orange County Grand Jury makes the following recommendations:

R1 By December 31, 2026, the Orange County Board of Supervisors should plan to host a county-wide annual wildfire prevention fair for the County and all cities and fire service agencies, including Orange County Fire Authority, to showcase respective wildfire outreach programs, and for the first annual wildfire prevention fair to be scheduled no later than December 31, 2027. [F1, F2, F3, F4, F5, F6]
R2 By December 31, 2026, cities and fire service agencies, including Orange County Fire Authority should commit to participation in a county-wide annual wildfire prevention fair planned by the Orange County Board of Supervisors to showcase wildfire prevention outreach programs. [F1, F2, F3, F4, F5, F6]
R3 By December 31, 2026, cities, unincorporated areas, special districts, and fire service agencies in High and Very-High Fire Hazard Severity Zones should initiate planning activities to achieve community-level wildfire risk mitigation designations and/or establish a local Fire Safe Council within one year. [F4, F5, F6]
R4 By December 31, 2026, to ensure city residents are engaged and aware of wildfire risk reduction resources, OCFA member and non-member cities should provide information, develop their own outreach program, and establish a direct contact person(s) for their residents. This is in addition to whatever referrals or references made to OCFA outreach programs. [F1, F2, F3, F4, F5, F6]

Item: 12
319

Wildfires Hit Home

Orange County Grand Jury 2025-2026 Page 33 of 74

COMMENDATIONS
Yorba Linda Water District
The 2025-26 Orange County Grand Jury extends its special thanks to the Yorba Linda Water District (YLWD) for providing two tours of its facilities, including their non-portable Heli-Hydrants™. The YLWD with foresight and planning installed three Heli-Hydrant™ facilities. One of the tanks was the first
to be installed in Southern California.

These innovative tanks enable fire
department helicopters to access water
more quickly and efficiently, improving
helicopter firefighting capabilities in
areas where wildland vegetation and
human development intersect, such as
in the Yorba Linda service area.

Newport Beach Fire Department
The 2025-2026 Orange County Grand Jury acknowledges and recognizes the Newport Beach Fire Department for their outstanding and continuing efforts to lead the Southern California region in dedication and adherence to the highest level of fire protection and safety. They are a role model for other cities in Orange County and elsewhere. In 2024, the Insurance Services Office honored Newport Beach Fire Department as a Top Tier Class 1 fire agency through its Public Protection Classification Program Newport Beach Fire Department shares the Top Tier Class 1 designation with only about 1% of the top fire departments nationwide.

The Grand Jury particularly commends Newport Beach Fire Prevention leadership, who generously dedicated time and expertise to share insights from their extensive knowledge of fire science.

Source: 2025-2026 Grand Jury
Item: 12
320

Wildfires Hit Home

REQUIRED RESPONSES
California Penal Code Section 933 requires the governing body of any public agency which the Grand Jury has reviewed, and about which it has issued a final report, to comment to the Presiding Judge of the Superior Court on the findings and recommendations pertaining to matters under the control of the governing body. Such comment shall be made no later than 90 days after the Grand Jury publishes its report (filed with the Clerk of the Court). Additionally, in the case of a report containing findings and recommendations pertaining to a department or agency headed by an elected County official (e.g., District Attorney, Sheriff, etc.), such elected County official shall comment on the findings and recommendations pertaining to the matters under that elected official’s control within 60 days to the Presiding Judge with an information copy sent to the Board of Supervisors.

The following excerpts from the California Penal Code provide the requirements for public agencies to respond to the Findings and Recommendations of this Grand Jury report:
§933
(c) No later than 90 days after the grand jury submits a final report on the operations of any public agency subject to its reviewing authority, the governing body of the public agency shall comment to the presiding judge of the superior court on the findings and recommendations pertaining to matters under the control of the governing body, and every elected county officer or agency head for which the grand jury has responsibility pursuant to Section 914.1 shall comment within 60 days to the presiding judge of the superior court, with an information copy sent to the board of supervisors, on the findings and recommendations pertaining to matters under the control of that county officer or agency head and any agency or agencies which that officer or agency head supervises or controls. In any city and county, the mayor shall also comment on the findings and recommendations. All of these comments and reports shall forthwith be submitted to the presiding judge of the superior court who impaneled the grand jury. A copy of all responses to grand jury reports shall be placed on file with the clerk of the public agency and the office of the county clerk, or the mayor when applicable, and shall remain on file in those offices. One copy shall be placed on file with the applicable grand jury final report by, and in the control of the currently impaneled grand jury, where it shall be maintained for a minimum of five years.
§933.05.
(a) For purposes of subdivision (b) of Section 933, as to each grand jury finding, the responding person or entity shall indicate one of the following:

Item: 12
321

Wildfires Hit Home

Orange County Grand Jury 2025-2026 Page 35 of 74
(1) The respondent agrees with the finding.
(2) The respondent disagrees wholly or partially with the finding, in which case the response shall specify the portion of the finding that is disputed and shall include an explanation of the reasons, therefore.
(b) For purposes of subdivision (b) of Section 933, as to each grand jury recommendation, the responding person or entity shall report one of the following actions:
(1) The recommendation has been implemented, with a summary regarding the implemented action.
(2) The recommendation has not yet been implemented, but will be implemented in the future, with a timeframe for implementation.
(3) The recommendation requires further analysis, with an explanation and the scope and parameters of an analysis or study, and a timeframe for the matter to be prepared for discussion by the officer or head of the agency or department being investigated or reviewed, including the governing body of the public agency when applicable. This timeframe shall not exceed six months from the date of publication of the grand jury report.
(4) The recommendation will not be implemented because it is not warranted or is not reasonable, with an explanation, therefore.
(c) However, if a finding or recommendation of the grand jury addresses budgetary or personnel matters of a county agency or department headed by an elected officer, both the agency or department head and the board of supervisors shall respond if requested by the grand jury, but the response of the board of supervisors shall address only those budgetary or personnel matters over which it has some decision-making authority. The response of the elected agency or department head shall address all aspects of the findings or recommendations affecting his or her agency or department.

The Orange County Grand Jury requires the following responses:

Orange County Board of Supervisors 90 Day Response Required Findings: F1, F2, F3, F4, F5, F6
Recommendations: R1, R2, R3

Item: 12
322

Wildfires Hit Home

Orange County Fire Authority Board of Directors 90 Day Response Required Findings: F1, F2, F3, F4, F5, F6
Recommendations: R2, R3

City of Aliso Viejo 90 Day Response Required
Findings: F1, F2, F3, F4, F5, F6
Recommendations: R2, R3, R4

City of Anaheim 90 Day Response Required
Findings: F1, F2, F3, F4, F5, F6
Recommendations: R2, R3, R4

City of Brea 90 Day Response Required
Findings: F1, F2, F3, F4, F5, F6
Recommendations: R2, R3, R4

City of Buena Park 90 Day Response Required
Findings: F1, F2, F3, F4, F5, F6
Recommendations: R2, R3, R4

City of Costa Mesa 90 Day Response Requested
Findings: F1, F2, F3, F4, F5, F6
Recommendations: R2, R4

City of Cypress 90 Day Response Requested
Findings: F1, F2, F3, F4, F5, F6
Recommendations: R2, R4

Item: 12
323

Wildfires Hit Home

Orange County Grand Jury 2025-2026 Page 37 of 74
City of Dana Point 90 Day Response Requested
Findings: F1, F2, F3, F4, F5, F6
Recommendations: R2, R4

City of Fountain Valley 90 Day Response Requested
Findings: F1, F2, F3, F4, F5, F6
Recommendations: R2, R4

City of Fullerton 90 Day Response Requested
Findings: F1, F2, F3, F4, F5, F6
Recommendations: R2, R4

City of Garden Grove 90 Day Response Requested
Findings: F1, F2, F3, F4, F5, F6
Recommendations: R2, R4

City of Huntington Beach 90 Day Response Requested
Findings: F1, F2, F3, F4, F5, F6
Recommendations: R2, R4

City of Irvine 90 Day Response Required
Findings: F1, F2, F3, F4, F5, F6
Recommendations: R2, R3, R4

City of La Habra 90 Day Response Required
Findings: F1, F2, F3, F4, F5, F6
Recommendations: R2, R3, R4

Item: 12
324

Wildfires Hit Home

City of La Palma 90 Day Response Requested
Findings: F1, F2, F3, F4, F5, F6
Recommendations: R2, R4

City of Laguna Beach 90 Day Response Required
Findings: F1, F2, F3, F4, F5, F6
Recommendations: R2, R3, R4

City of Laguna Hills 90 Day Response Required
Findings: F1, F2, F3, F4, F5, F6
Recommendations: R2, R3, R4

City of Laguna Niguel 90 Day Response Required
Findings: F1, F2, F3, F4, F5, F6
Recommendations: R2, R3, R4

City of Laguna Woods 90 Day Response Required
Findings: F1, F2, F3, F4, F5, F6
Recommendations: R2, R3, R4

City of Lake Forest 90 Day Response Required
Findings: F1, F2, F3, F4, F5, F6
Recommendations: R2, R3, R4

City of Los Alamitos 90 Day Response Requested
Findings: F1, F2, F3, F4, F5, F6
Recommendations: R2, R4

Item: 12
325

Wildfires Hit Home

Orange County Grand Jury 2025-2026 Page 39 of 74
City of Mission Viejo 90 Day Response Required
Findings: F1, F2, F3, F4, F5, F6
Recommendations: R2, R3, R4

City of Newport Beach 90 Day Response Required
Findings: F1, F2, F3, F4, F5, F6
Recommendations: R2, R3, R4

City of Orange 90 Day Response Required
Findings: F1, F2, F3, F4, F5, F6
Recommendations: R2, R3, R4

City of Placentia 90 Day Response Requested
Findings: F1, F2, F3, F4, F5, F6
Recommendations: R2, R4

City of Rancho Santa Margarita 90 Day Response Required Findings: F1, F2, F3, F4, F5, F6
Recommendations: R2, R3, R4

City of San Clemente 90 Day Response Required
Findings: F1, F2, F3, F4, F5, F6
Recommendations: R2, R3, R4

City of San Juan Capistrano 90 Day Response Required Findings: F1, F2, F3, F4, F5, F6
Recommendations: R2, R3, R4

Item: 12
326

Wildfires Hit Home

City of Santa Ana 90 Day Response Required
Findings: F1, F2, F3, F4, F5, F6
Recommendations: R2, R3, R4

City of Seal Beach 90 Day Response Requested
Findings: F1, F2, F3, F4, F5, F6
Recommendations: R2, R4

City of Stanton 90 Day Response Requested
Findings: F1, F2, F3, F4, F5, F6
Recommendations: R2, R4

City of Tustin 90 Day Response Required
Findings: F1, F2, F3, F4, F5, F6
Recommendations: R2, R3, R4

City of Villa Park 90 Day Response Required
Findings: F1, F2, F3, F4, F5, F6
Recommendations: R2, R3, R4

City of Westminster 90 Day Response Requested
Findings: F1, F2, F3, F4, F5, F6
Recommendations: R2, R4

City of Yorba Linda 90 Day Response Required
Findings: F1, F2, F3, F4, F5, F6
Recommendations: R2, R3, R4

Item: 12
327

Wildfires Hit Home

Orange County Grand Jury 2025-2026 Page 41 of 74
Acronyms
AB Assembly Bill
B Brush
BCR Benefit Cost Ratio
CAL FIRE California Department of Forestry and Fire Protection CAL OES California Governor’s Office of Emergency Services CC Contract Counties
CDI California Department of Insurance
CRR Community Risk Reduction
CWUIC California Wildland-Urban Interface Code
FAIR Fair Access to Insurance Requirement
FEMA Federal Emergency Management Agency
FHDS Fire Hardening and Defensible Space
FHSZ Fire Hazard Severity Zone
G Grass
HOA Homeowners Association
IBHS Insurance Institute for Business & Home Safety®
IWUIC International Wildland -Urban Interface Code
LRA Local Responsibility Area
NFPA National Fire Protection Association
OCFA Orange County Fire Authority
P&C Property and Casualty
PIF Policies in Force
SB Senate Bill
SRA State Responsibility Area
USDA United States Department of Agriculture
Item: 12
328

Wildfires Hit Home

USFS United States Forest Service
WRAP Wildfire Risk Reduction and Asset Protection
WUI Wildland-Urban Interface
YLWD Yorba Linda Water District

Item: 12
329

Wildfires Hit Home

Orange County Grand Jury 2025-2026 Page 43 of 74
Glossary
Aspect Compass direction that a slope or terrain surface faces, influencing sunlight exposure, temperature, and vegetation.

Catastrophic loss A sudden, severe, and often, widespread event resulting in extreme financial, loss of life, or permanent injury.

Class-A roof Highest fire resistance classification for a roof assembly, signifying its effectiveness against severe fire exposure.

Conflagration A particularly large and destructive fire; in the built environment, this may describe a fire that spreads via structure to structure.

Defensible space Buffer zone created and managed between buildings and surrounding wildland area to protect buildings from embers, flames, or heat, slow or stop wildfire spread, and help ensure safety of firefighters.

Ember Small piece of burning or glowing fragment from a fire.

Ember-resistant Refers to features that reduce the risk of ignition from embers.

Ember spot ignition Refers to one of the principal ways homes can ignite during extreme WUI fires, by embers directly on a house.

Firebrands Refers to airborne embers; pieces of burning wood.

Firewise USA Program administered by NFPA® and co-sponsored by the USDA Forest Service and the National Association of State Foresters.

Fuel modification zone Designated area where vegetation is managed to reduce wildfire risk for protection of homes and communities.

Fuel reduction Management of vegetation to reduce risk of wildfires.

Heli-Hydrant™ Patented rapid-fill water tank system for helicopter firefighting operations.

Home hardening Utilizing building materials, construction methods and maintenance practices to increase resistance to ignition from fire exposure.

Home ignition potential Susceptibility of a home and its immediate surroundings within 100 feet (thirty meters) to ignite during a wildfire.

Home ignition zone A home and its immediate surroundings within 100 feet (thirty meters).

Item: 12
330

Wildfires Hit Home

Ignition Process leading to the onset of a sustained combustion reaction; “start of a fire.”
Ignition-resistant Refers to materials and construction methods designed to resist ignition or sustained flaming combustion; difficult to catch fire when exposed to direct flame or heat.

Wildland fuels Burnable plant materials that can act as fuel during wildfires, including grasses, shrubs, trees, dead leaves, and fallen pine needles.

Zone 0 Ember-resistant defensible space within the first five feet around a structure, required for properties in State Responsibility Area or Very High Fire Hazard Severity Zone in the Local Responsibility Area.

Item: 12
331

Wildfires Hit Home

Orange County Grand Jury 2025-2026 Page 45 of 74
Bibliography
2025 California Wildland-Urban Interface Code, Title 24, Part 7, 2024 IWUIC Amended, Effective Date: Jan 01, 2026. Accessed January 22, 2026. https://codes.iccsafe.org/content/CAWUIC2025P2.
2025 California Wildland-Urban Interface Code, Title 24, Part 7, 2024 IWUIC Amended, Effective Date: Jan 01, 2026. Accessed January 22, 2026. https://codes.iccsafe.org/content/CAWUIC2025P2/chapter-6-fire-protection- requirements.

Artemis. “Golden Bear Re Ltd. (Series 2026-1).” Artemis Deal Directory. Accessed February 1, 2026. https://www.artemis.bm/deal-directory/golden-bear-re-ltd-series-2026- 1/.

Austin, Troy, et al. “A Spatial Analysis of Structure Loss and Survival Resulting from the 2018 Camp Fire in Paradise, California.” Frames Resource Catalog. February 19, 2020.

Accessed November 25, 2025. https://www.frames.gov/catalog/60818 Becker, Jo. “California Promised Insurance Relief, But Delivered Loopholes.” New York Times. November 1, 2025. Accessed November 25, 2025.
https://www.nytimes.com/2025/11/01/us/los-angeles-california-fire-insurance- regulations.html
CAL FIRE. Office of the State Fire Marshal. Fire Hazard Severity Zones. Fire Hazard Severity Zones in Local Responsibility Area>Phase 4>Orange> https://calfire.app.box.com/s/wahuw9ny7cgn89xpxh7092ur50r1pwvj/folder/3126694582 15 CAL FIRE. Top 20 Deadliest California Wildfires. Accessed October 9, 2025. https://34c031f8-c9fd-4018-8c5a-4159cdff6b0d-cdn-endpoint.azureedge.net/- /media/calfire-website/our-impact/fire-statistics/top-20-deadliest-ca- wildfires.pdf?rev=0d4612ff0cb447fb827fa0ac6c309d3d&hash=34718653A215C315C5E 3CB5BB6A4E550
CAL FIRE. Top 20 Most Destructive California Wildfires. Accessed October 9, 2025. https://34c031f8-c9fd-4018-8c5a-4159cdff6b0d-cdn-endpoint.azureedge.net/- /media/calfire-website/our-impact/fire-statistics/top-20-destructive-ca- wildfires.pdf?rev=737a1073f76947b4a3bfb960b19f44c7&hash=7CA02D30D9BF46A32 D5D98BD108BA26A
California Board of Forestry and Fire Protection. Fire Risk Reduction Community List.

Accessed February 16, 2026. https://bof.fire.ca.gov/projects-and-programs/fire-risk- reduction-community-list.

Item: 12
332

Wildfires Hit Home

California Code of Regulations Title 14, Section 1280.
https://regulations.justia.com/states/california/title-14/division-1-5/chapter-7/subchapter- 3/article-1/section-1280/
California Department of Insurance – Wildfire Risk Reduction Regulations California Department of Insurance. CAL FIRE hazard maps do not affect insurance rates or availability. Accessed February 1, 2026. https://www.insurance.ca.gov/0400- news/0102-alerts/2025/CAL-FIRE-hazard-maps-do-not-affect-insu.cfm The California FAIR Plan. https://www.cfpnet.com/
California Government Code 51175-89. https://law.justia.com/codes/california/code- gov/title-5/division-1/part-1/chapter-6-8/section-51175/ California Insurance Code § 2644.9
California Insurance Code sections 10090 et seq.
https://law.justia.com/codes/california/code-ins/division-2/part-1/chapter-9/section- 10090/
California Public Resources Code 4201-4204.
https://law.justia.com/codes/california/code-prc/division-4/part-2/chapter-1/article-9/ California Public Resources Code Division 4 - Forests, Forestry and Range and Forage Lands Part 2 - Protection of Forest, Range and Forage Lands Chapter 3 - Mountainous, Forest-, Brush- and Grass-Covered Lands Section 4291. Accessed January 14, 2026. https://law.justia.com/codes/california/code-prc/division-4/part-2/chapter-3/section- 4291/.

California’s Sustainable Insurance Strategy. Accessed January 22, 2026. https://boe.ca.gov/meetings/pdf/2024/202402-CA-Insurance-Martinez.pdf.

Center for Critical Urban and Environmental Studies. University of California, Santa Cruz. Wildland Urban Interface (WUI) Research for Resilience: Addressing California’s Climate, Conservation & Housing Crises. Accessed November 25, 2025. https://criticalurbanenvironments.ucsc.edu/projects/wildland-urban-interface-wui- research-for-resilience/.

Cohen, Jack. The Wildland-Urban Interface Fire Problem: A Consequence of the Fire Exclusion Paradigm. Forest History Today. Fall 2008: 20-26.

Copley, Michael. “California Fire Victims Say Fighting with Insurance Companies Has Delayed Rebuilding.” NPR News, January 13, 2026. https://www.kanw.org/npr- news/2026-01-13/california-fire-victims-say-fighting-with-insurance-companies-has- delayed-rebuilding.

Item: 12
333

Wildfires Hit Home

Orange County Grand Jury 2025-2026 Page 47 of 74
Edelson, Josh. [Cover page lower left image of a home survives Palisades Fire].

Photograph. Agence France-Presse / Getty Images. Accessed March 25, 2026.

Edelson, Josh. [Cover page lower right image of a home burns in Paradise, California during the Camp Fire]. Photograph. “In Camp Fire, Newer Houses Were Much Less Damaged Accessed.” The Sacramento Bee. April 11, 2019. Accessed March 25, 2026. https://www.kqed.org/science/1940012/newer-houses-much-less-damaged-in-camp-fire Executive Order N-13-23. https://www.gov.ca.gov/wp-content/uploads/2023/09/9.21.23- Homeowners-Insurance-EO.pdf
Executive Order N-18-25. Accessed January 13, 2026. https://www.gov.ca.gov/wp- content/uploads/2025/02/2025-2-6.Urban-Conflagration-EO-ATTESTED.pdf.

Fallon, Patrick T. [A House a hill with fire and smoke]. Photograph. Agence France- Presse / Getty Images. Accessed March 25, 2026.

Firewise USA program managed by National Fire Protection Association (NFPA). https://www.nfpa.org/Education-and-Research/Wildfire/Firewise-USA Hall, Alex – Journal of Environmental Research, September 8, 2015.

Gammanco, Ian M., et al. The Return of Conflagration in Our Built Environment.

Insurance Institute for Business and Home Safety. September 2023. Accessed March 20, 2026. https://ibhs.org/wp-
content/uploads/Suburban_Wildfire_Conflagration_WhitePaper.pdf.

Hayrikian, Mashall A.. Engineering and Environmental Implications of the LA wildfires:

Eaton and Palisades Fire. Marshall Geoscience – Geotechnical Engineering Laboratory Services. http://www.marshallgeo.com/geotechnical-engineering/engineering-and- environmental-implications-of-la-wildfires-eaton-palisades-fires/.

Instagram. [Cover page upper left image of Wildland-Urban Interface at Rancho Mission Viejo]. Photograph. Accessed March 25, 2026.
https://www.instagram.com/popular/rancho-mission-viejo-ca/.

Instagram. [Rancho Mission Viejo.com]. Photograph. Accessed March 25, 2026. https://www.instagram.com/p/CsmLvqlMqm2/?utm_source=ig_web_copy_link&igshid=M zRlODBiNWFlZA%3D%3D.

IBHS Research. Wildland Fire Embers and Flames: Home Mitigations That Matter. April 2023. Accessed February 10, 2026. https://ibhs1.wpenginepowered.com/wp- content/uploads/Home-Mitigations-that-Matter-FINAL.pdf.

Item: 12
334

Wildfires Hit Home

Institute for Business & Home Safety. Wildfire Prepared Neighborhood Pilot Program.

Accessed March 19, 2026. https://wildfireprepared.org/wildfire-prepared-neighborhood- pilot-program/.

Jacobo, Julia and Ginger Zee, Ginger. A perfect storm of weather and climate conditions led to the severity of the California fires, ABC News, Accessed January 8, 2026, http://www.abcnews.com/US/perfect-storm-weather-climate-conditions-severity- california-fires/story?id=117468072
Kasler, Dale and Reese, Phillip. “In Camp Fire, Newer Houses Were Much Less Damaged.” The Sacramento Bee. April 11, 2019, updated January 9, 2024. Accessed March 4, 2026. https://www.kqed.org/science/1940012/newer-%D8%8Cuses-much- less-damaged-in-camp-fire.

McChrystal Group. After-Action Review of Alert Notification Systems and Evacuation Policies for the Eaton and Palisades Fires. Los Angeles County Board of Supervisors, September 25, 2025. https://lacounty.gov/2025/09/25/la-county-releases-after-action- review-of-alert-notification-systems-and-evacuation-policies-for-the-eaton-and- palisades-fires/.

Miller, Rebecca. “Residents Reducing Wildfire Risks: Findings from the NFPA® Firewise® Sites of Excellence Pilot, 2019-2020,” May 2022. NFPA® Firewise USA®:

Residents Reducing Wildfire Risks. https://www.nfpa.org/education-and- research/wildfire/firewise-usa/firewise-sites-of-excellence National Institute of Building Science. “Natural Hazard Mitigation Saves.” 2019. https://nibs.org/wp-content/uploads/2025/04/NIBS_MMC_MitigationSaves_2019-1.pdf Orange County Fire Authority. Resource Library. Accessed March 8, 2026. https://ocfa.org/documents/.

Orange County Grand Jury (2025 – 2026). [OCFA helicopter approaching Yorba Linda Water District Heli-Hydrant™]. Photograph, January 27, 2026. Unpublished internal documentation.

Orange County Grand Jury (2025 – 2026). [Cover page upper right image of Orange County Fire Authority helicopter water drop]. Photograph, January 27, 2026.

Unpublished internal documentation.

Polacek, Andy. 2018. “Catastrophe Bonds: A Primer and Retrospective.” Chicago Fed Letter, no. 405. Federal Reserve Bank of Chicago.
https://www.chicagofed.org/publications/chicago-fed-letter/2018/405.

Rojanasakul, Jira, & Brown, Claire. “America’s Home Insurance Affordability Crunch:

See What’s Happening Near You.” New York Times. November 19, 2025. Accessed Item: 12
335

Wildfires Hit Home

Orange County Grand Jury 2025-2026 Page 49 of 74
November 25, 2025. https://www.nytimes.com/interactive/2025/11/19/climate/home- insurance-premiums-costs-usa.html?smid=nytcore-android-share San Diego County Grand Jury. “Fire Country: Forging a United Defense in the Backcountry,” SanDiegoCounty.gov. May 15, 2025.
https://www.sandiegocounty.gov/content/dam/sdc/grandjury/reports/2024-2025/fire- country/Fire-%20Final%20Filed%20Version.pdf
Senate Bill 504. Accessed January 14, 2026.
https://legiscan.com/CA/text/SB504/id/3018449.

State of California Board of Forestry and Fire Protection. Accessed January 14, 2026. https://bof.fire.ca.gov/projects-and-programs/defensible-space-zones-0-1-and-2.

The California FAIR Plan. Key Statistics & Data. Accessed March 8, 2026. https://www.cfpnet.com/key-statistics-data/
Thompson, Andrea. How the Ferocious Santa Ana Winds are Fueling the Palisades Fire. Scientific American. Accessed January 7, 2026. http://www.scientificamerican.com United Policyholders – WRAP Resource Center and Safer from Wildfires Initiative U.S. Fire Administration. What is the WUI? Accessed November 25, 2025. https://www.usfa.fema.gov/wui/what-is-the-wui/
Weathered: After the LA Firestorm. Directed by Trip Jennings. Presented by Maiya May.

PBS, 2026. 56 min.

Wildland-Urban Interface. Forest Service, U.S. Department of Agriculture. Accessed January 12, 2026. https://research.fs.usda.gov/nrs/fire/wui.

Yufang, Jin, et al. Identification of two distinct fire regimes in Southern California:
implications for economic impact and future change. Environmental Research Letters, Volume 1, Number 9. IOP Science, September 8, 2015. Accessed January 9, 2026. https://iopscience.iop.org/article/10.1088/1748-9326/10/9/094005. “ZIP Codes in Orange County, California.” Felt.com. Accessed November 11,2025. https://felt.com/map/ZIP-Codes-in-Orange-County-California- GX3e19BKrS5uwCICY3r5gFD?loc=33.6408,-117.7804,9z.

Item: 12
336

Wildfires Hit Home

Appendix A
CAL FIRE Wildfire Data

Source: CalFire Redbook Data
Figure 11 Top 20 Deadliest California Wildfires
Item: 12
337

Wildfires Hit Home

Orange County Grand Jury 2025-2026 Page 51 of 74

Source: CalFire Redbook Data
Figure 12 Top 20 Most Destructive California Wildfires

Item: 12
338

Wildfires Hit Home

Figure 13 Large Fires 300 Acres and Greater - State and Contract Counties Direct Protection Area

Figure 14 Orange County Wildfires by Size

Item: 12
339

Wildfires Hit Home

Orange County Grand Jury 2025-2026 Page 53 of 74
Appendix B
Safer from Wildfires Flyer

Figure 15 Safer from Wildfires Flyer, Page 1
Item: 12
340

Wildfires Hit Home

Figure 16 Safer from Wildfires Flyer, Page 2

Item: 12
341

Wildfires Hit Home

Orange County Grand Jury 2025-2026 Page 55 of 74
Appendix C
Fire Hazard Severity Zone Map of Orange County

Figure 17 Fire Hazard Severity Zone Map of Orange County

Item: 12
342

Wildfires Hit Home

Appendix D

Figure 18 Fire Hardening and Defensible Space Disclosure, Page 1 Item: 12
343

Wildfires Hit Home

Orange County Grand Jury 2025-2026 Page 57 of 74

Figure 19 Fire Hardening and Defensible Space Disclosure, Page 2 Item: 12
344

Wildfires Hit Home

Appendix E
California Department of Insurance Data

Figure 20 California Property and Casualty Insurance Company Homeowners Premium and Loss Item: 12
345

Wildfires Hit Home
Orange County Grand Jury 2025-2026 Page 59 of 74

Note: P. O. Boxes are excluded from this list. Data is for calendar year 2022 and includes homeowners (excluding condominium), mobile home, dwelling fire owner- and tenant-occupied insuring structures with four or less units.

Source: California Department of Insurance
Figure 21 FAIR Plan Data for Orange County Zip Codes 90620 - 92679 Item: 12
346

Wildfires Hit Home

Note: P. O. Boxes are excluded from this list. Data is for calendar year 2022 and includes homeowners (excluding condominium), mobile home, dwelling fire owner- and tenant-occupied insuring structures with four or less units.

Source: California Department of Insurance
Figure 22 FAIR Plan Data for Orange County Zip Codes 92680 – 92899 Item: 12
347

Wildfires Hit Home
Orange County Grand Jury 2025-2026 Page 61 of 74
Appendix F
OCFA and Covered Cities

Figure 23 Orange County Fire Authority Covered Cities
Item: 12
348

Wildfires Hit Home

Figure 24 Orange County Fire Jurisdictions
Item: 12
349

Wildfires Hit Home
Orange County Grand Jury 2025-2026 Page 63 of 74
Appendix G
Ready, Set, Go!, Zone 0 At-A-Glance and Links

Figure 25 Ready, Set Go! Flyer for Immediate Zone
Item: 12
350

Wildfires Hit Home

Figure 26 Ready, Set, Go! Flyer on Defensible Space
Item: 12
351

Wildfires Hit Home
Orange County Grand Jury 2025-2026 Page 65 of 74

Figure 27 Ready, Set, Go! Flyer for Home Hardening, Page 1 Item: 12
352

Wildfires Hit Home

Figure 28 Ready, Set, Go! Flyer for Home Hardening, Page 2 Item: 12
353

Wildfires Hit Home
Orange County Grand Jury 2025-2026 Page 67 of 74

Figure 29 Ready, Set, Go! Flyer on Vegetation Management Item: 12
354

Wildfires Hit Home

Figure 30 Ready, Set, Go! On Be Ember Aware
Item: 12
355

Wildfires Hit Home
Orange County Grand Jury 2025-2026 Page 69 of 74

Figure 31 Ready, Set, Go! Flyer on Home Assessment
Item: 12
356

Wildfires Hit Home

Figure 32 Ready, Set, Go! Flyer on Wildfire Home Risk Assessment, Page 1 Item: 12
357

Wildfires Hit Home
Orange County Grand Jury 2025-2026 Page 71 of 74

Figure 33 Ready, Set, Go! Flyer on Wildfire Home Risk Assessment, Page 2 Item: 12
358

Wildfires Hit Home

Figure 34 Zone 0 At-A-Glance, Page 1
Item: 12
359

Wildfires Hit Home
Orange County Grand Jury 2025-2026 Page 73 of 74

Figure 35 Zone 0 At-A-Glance, Page 2
Item: 12
360

Wildfires Hit Home

Links
Immediate Zone
https://storageocfaprod001.blob.core.windows.net/blobocfaprod01/2025/12/Immediate- Zone-2025.pdf
Defensible Space
https://storageocfaprod001.blob.core.windows.net/blobocfaprod01/2025/03/OCFA-RSG- Defensible-Space-1-1.pdf
Home Hardening
https://storageocfaprod001.blob.core.windows.net/blobocfaprod01/2025/12/Home- Hardening-2025.pdf
Vegetation Management
https://storageocfaprod001.blob.core.windows.net/blobocfaprod01/2026/01/OCFA-RSG- Vegetation-Management.pdf
Be Amber Aware
https://storageocfaprod001.blob.core.windows.net/blobocfaprod01/2025/07/OCFA-RSG- Be-Ember-Aware-688b04d7e4fb9.pdf
Home Assessment
https://storageocfaprod001.blob.core.windows.net/blobocfaprod01/2025/12/Home- Assessment-2025.pdf
Wildfire Home Risk Assessment
https://storageocfaprod001.blob.core.windows.net/blobocfaprod01/2025/07/OCFA-RSG- Home-Assessment-Form-688b05b09d57e.pdf
Zone 0 At-A-Glance
https://34c031f8-c9fd-4018-8c5a-4159cdff6b0d-cdn-endpoint.azureedge.net/- /media/calfire-website/prepare/zone-0-at-a-glance.pdf
Item: 12
361

ATTACHMENT 2
Item: 12
362

[email protected] (949)461-3400 lakeforestca.gov
100 Civic Center Drive
Lake Forest, CA 92630
Mayor
Robert Pequeño
Mayor Pro Tem
Doug Cirbo
Council Members
Mark Tettemer
Scott Voigts
Benjamin Yu
Sheila F. Hanson, Presiding Judge of the Superior Court 700 Civic Center Drive West
Santa Ana, CA 92701
S
UBJECT: City of Lake Forest Responses to Grand Jury Findings Dear Judge Hanson,
This letter is written on behalf of Mayor Robert Pequeño and the Lake Forest City Council. The City of Lake Forest is in receipt of your request to provide a response to each of the findings in the 2025-26 Orange County Grand Jury report, “Wildfires Hit Home”. The City Council reviewed and approved the following response at its July 21, 2026 meeting.

Note: The original Grand Jury findings are repeated below in italics. The City’s responses are in bold, with additional explanation and commentary in regular typeface. References to the “City” refer to the City of Lake Forest.

F1: More frequent and severe wildfires driven by increasingly hotter, drier, and windier conditions in the Orange County wildland-urban interface are escalating impacts on financial and non-financial resources.

Among the financial costs are dramatic increases in homeowners’ insurance premiums, nonrenewals, and inabilities to obtain insurance The respondent disagrees wholly or partially with the finding, in which case the response shall state the specific the portion of the finding that is disputed and shall include an explanation of the reasons.

The City agrees that severe wildfires have impacted a number of different resources in Orange County in recent years, however the City lacks sufficient knowledge and expertise of the private insurance market to agree with the entire finding.

Item: 12
363

[email protected] (949)461-3400 lakeforestca.gov
F2: Actions that address conditions in the home ignition zone to significantly reduce ignition potential can prevent a community wildland-urban interface fire disaster or suburban conflagration.

The respondent agrees with the finding.

T
he City agrees that addressing conditions in the home ignition zone to reduce ignition potential is one of many potential ways to reduce the likelihood of a fire disaster.

F3 : E
xpanded engagement with the community to raise awareness and provide support regarding home hardening and defensible space will increase effectiveness of wildfire risk mitigation and insurance risk reduction efforts.

The respondent agrees with the finding
The City agrees that community engagement to raise awareness of different wildfire risk mitigation strategies can be a useful tool in assisting with wildfire risk and insurance risk. The City works in conjunction with the Orange County Fire Authority to ensure comprehensive educational resources are available to residents.

F4
: Achievement of community-level and property-level wildfire risk mitigation designations (such as Firewise USA Site, Fire Risk Reduction Community or Insurance Institute for Business and Home Safety certification) lessens wildfire risk and helps reduce insurance premium costs.

The respondent disagrees wholly or partially with the finding, in which case the response shall state the specific the portion of the finding that is disputed and shall include an explanation of the reasons.

The
City agrees that community-level designations can help lessen localized wildfire risk. As part of this effort, the City has received the designation of a Fire Risk Reduction Community, effective July 1, 2026. This designation helps with overall efforts towards wildfire mitigation. However, the City lacks sufficient information and expertise related to the private insurance market to agree with the entire finding.

F5:

All county residents should be made aware that Safer from Wildfire regulation requires insurers to provide discounts to homeowners to homeowners and communities that Item: 12
364

[email protected] (949)461-3400 lakeforestca.gov
implement home hardening and defensible space measures regardless of whether a property is located within a Fire Hazard Severity Zone.

The respondent disagrees wholly or partially with the finding, in which case the response shall state the specific the portion of the finding that is disputed and shall include an explanation of the reasons.

While the City agrees that home hardening and defensible space can significantly help with wildfire risk mitigation, the City lacks sufficient information and knowledge of the private insurance market to agree with the entire finding.

F6:

AB888, California Safe Homes Grant Program, provides financial assistance to eligible homeowners, cities, counties, and special districts for home hardening and defensible space measures. Applying for and using these grant funds will reduce wildfire losses and improve insurability and resilience of vulnerable communities.

The respondent disagrees wholly or partially with the finding, in which case the response shall state the specific the portion of the finding that is disputed and shall include an explanation of the reasons.

While the City agrees that the California Safe Homes Grant Program could be useful in efforts for home hardening and defensible space measures, the City lacks sufficient knowledge and information to know for certain if this will reduce wildfire losses and improve insurability and resilience of vulnerable communites.

Re
sponse to Recommendations
R2: By December 31, 2026, cities and fire service agencies, including Orange County Fire Authority should commit to participation in a county-wide annual wildfire prevention fair planned by the Orange County Board of Supervisors to showcase wildfire prevention outreach programs. (F1, F2, F3, F4, F5, F6)
The recommendation has not yet been implemented, but will be implemented in the future.

If the County elects to move forward with R1 and R2, the City is open to participating in a county-wide annual wildfire prevention fair to showcase wildfire outreach prevention programs. The City is willing to commit to participation pending actions to organize by the County of Orange.

Item: 12
365

[email protected] (949)461-3400 lakeforestca.gov
R3
: By December 31, 2026, cities, unincorporated areas, special districts, and fire service agencies in High and Very-High Fire Hazard Severity Zones should inititate planning activities to achieve community-level wildfire risk mitigation designations and/or establish a local Fire Safe Council within one year. (F4, F5, F6)
The recommendation has been implemented.

The City of Lake Forest is included on the State of California Board and Fire Protection’s 2026 Fire Risk Reduction Community List designation. This list includes agencies in state responsibility areas or very high fire hazard severity zone that meet best practices for local fire planning. Designation is effective July 1, 2026.

R4
: By December 31, 2026, to ensure city residents are engaged and aware of wildfire risk reduction resources, OCFA member and non-member cities should provide information, develop their own outreach program, and establish a direct contact person(s) for their residents. This is in addition to whatever referrals or references made to OCFA outreach programs (F1, F2, F3, F4, F5, F6).

The recommendation has been implemented.

The City conducts various types of outreach to ensure residents are aware of wildfire risk reduction resources. On an annual basis, OCFA provides resources to residents related to wildfire risk mitigation. The City conducts outreach through both City staff as well as its Community Emergency Response (CERT) team. Outreach is provided at citywide events such as National Night Out and other public engagement events related to public safety such as Neighborhood Watch meetings and HOA meetings. Information distributed includes physical flyers as well as information on the City’s website and social media pages. All information distributed includes contact information for City staff and/or OCFA staff should residents wish to learn more about wildfire risk reduction resources.

Should you have any questions, please contact Sean McGovern, Deputy City Manager, at [email protected] or 949-461-3419.

Item: 12
366

[email protected] (949)461-3400 lakeforestca.gov
Sinc
erely,
De
bra D. Rose
City Manager
cc: Orange County Grand Jury, 700 Civic Center Drive West, Santa Ana, CA 92701 Item: 12
367

CITY COUNCIL AGENDA REPORT
MEETING DATE: 7/21/2026
DEPARTMENT: Community Development
SUBJECT:

RESPONSE TO ORANGE COUNTY GRAND JURY REGARDING CALIFORNIA

HOUSING MANDATES REPORT
RECOMMENDED ACTION(S):

Approve and authorize the City Manager to submit the City's response to the Orange County Grand Jury Report regarding California Housing Mandates.

EXECUTIVE SUMMARY:

The Orange County Grand Jury ("OCGJ") is a civil grand jury made up of Orange County residents empaneled by the Superior Court of California. The OCGJ routinely conducts investigations related to the operations of the County of Orange. On May 27, 2026, the OCGJ published a report titled "California Housing Mandates, The Unintended Reshaping of Orange County Neighborhoods" (“Report”) (Attachment 2).

The Report examines how California Housing Mandates operate in practice within Orange County, and how well-intended legislation has produced unintended consequences for cities, neighborhoods, and local governance. It evaluates the feasibility, effectiveness, and equity of current state policies, and highlights the growing disconnect between mandated housing goals and the capacity of communities to absorb them responsibly. The Report seeks to establish a strategic framework for influencing future housing allocations within the Southern California Association of Governments (“SCAG”) region by strengthening the role and effectiveness of the Orange County Council of Governments (“OCCOG”).

The Report also includes recommendations suggesting that member agency contributions to OCCOG be reassessed and potentially increased to strengthen the organization’s capacity to engage in regional housing and Regional Housing Needs Allocation (“RHNA”) related planning and coordination activities.

Under State law, each city, and the County, is required to submit a response to each finding and recommendation designated to the respective City in the Report (pg. 42), and a schedule for implementing accepted recommendations.

Responses are due August 27, 2026 (Attachment 1). Staff’s draft response letter is provided as Attachment 3.

Item: 13
368

FISCAL IMPACT:

There is no fiscal impact associated with the recommended action.

ATTACHMENTS:

1. Attachment 1 - OCGJ Transmittal Letter (May 21, 2026)

2. Attachment 2 - 2025-2026 OCGJ Report: California Housing Mandates, The Unintended Reshaping of Orange County Neighborhoods

3. Attachment 3 - Draft Response to OCGJ Report
Initiated By: Ron Santos, Senior Planner
Submitted By: Gayle Ackerman, AICP, Director of Community Development Approved By: Debra Rose, City Manager
Item: 13
369

ATTACHMENT 1
Item: 13
370

May 2 l, 2026
The Honorable Robeti Pequeno
Mayor of Lake Forest
l 00 Civic Center Drive
Lake Forest, CA 92630
Dear Mayor Pequeno:

ORANGE COUNTY GRAND JURY
700 CIVIC CENTER DRIVE WEST • SANTA ANA, CALIFORNIA 92701 • 714/834-3320 www.ocgrandjury.org • FAX 714/834-5555
Enclosed is a copy of the 2025-2026 Orange County Grand Jury repo11, California Housing Mandates, The Unintended Reshaping of Orange County Neighborhoods. Pursuant to Penal Code 933.05(f), a copy of the report is being provided to you at least two working days prior to its public release. Please note that under that subsection, '·No officer, agency, department, or governing body of a public agency shall disclose any contents of the report prior to the public release of the final report." (Emphasis added.) It is required that you provide a response to each of the findings and recommendations of this report directed to your office in compliance with Penal Code 933.05(a) and (b), copy is enclosed.

Please distribute this report to your governing body.

For each Grand Jury recommendation accepted and not implemented, provide a schedule for future implementation. In addition, by the end of March of each subsequent year, please report on the progress being made on each recommendation accepted but not completed. These annual reports should continue until all recommendations are implemented.

Please mail the response to the reco1TJ111endaticns to Sheila F. Hanson, Presiding Judge of the Superior Court, 700 Civic Center Drive West, Santa Ana, CA 9270 I, with a separate copy mailed to the Orange County Grand Jury, 700 Civic Center Drive West, Santa Ana, CA 9270 I, no later than 90 days after the public release date, May 27, 2026, in compliance with Penal Code 933, copy enclosed. The due date then is August 27, 2026.

Should additional time for responding to this report be necessary for further analysis, Penal Code 933.05(b)(3) permits an extension of time up to six months from the public release elate. Such extensions should be advised in writing, with the information required in Penal Code 933.05(6)(3), to the Presiding Judge of the Superior Court, with a separate copy of the request to the Grand Jury.

We tentatively plan to issue the public release on May 27, 2026. Upon public release, the repo11 will be available on the Grand Jury website at www.ocgrandjury.org.

Yer� trul:�ours,
�
-
�we?/�
Judy Howard, Foreperson
2025-2026 ORANGE COUNTY GRAND JURY
JH:jm
Enclosures: Grand Jury Repo11
Penal Code 933, 933.05
Cc: Debra Rose. City Manager
\
Item: 13
371

ATTACHMENT 2
Item: 13
372

California State Housing Mandates

Orange County Grand Jury 2025-2026

Item: 13
373

California State Housing Mandates

This page left intentionally blank!

Item: 13
374

California State Housing Mandates

Orange County Grand Jury 2025-2026

TABLE OF CONTENTS

SUMMARY .................................................................................................................................................... 5 BACKGROUND ............................................................................................................................................ 6 REASON FOR STUDY .................................................................................................................................. 9 METHOD OF STUDY ................................................................................................................................. 10 RESEARCH ........................................................................................................................................... 10 INTERVIEWS ......................................................................................................................................... 10 OBSERVATIONS AND SITE VISITS ............................................................................................................... 10 PUBLIC FORUMS AND EVENTS .................................................................................................................. 11 GOVERNMENT MEETINGS ........................................................................................................................ 11 DOCUMENT REVIEW ............................................................................................................................... 11 CITY SURVEY ........................................................................................................................................ 11 INVESTIGATION AND ANALYSIS ............................................................................................................ 11 STATE HOUSING MANDATES AND LOCAL IMPLEMENTATION ............................................................................. 11 ENVIRONMENTAL CONTEXT AND CEQA ...................................................................................................... 13 REGIONAL HOUSING NEEDS ASSESSMENT PROCESS ..................................................................................... 15 REGIONAL HOUSING NEEDS ANALYSIS CHALLENGES .................................................................................... 17 PENALTIES FOR NOT HAVING AN HCD-APPROVED HOUSING ELEMENT ............................................................. 19 PENALTIES FOR NOT MEETING HOUSING-PLAN CONSTRUCTION GOALS ............................................................ 20 FEASIBILITY OF HOUSING MANDATE IN ORANGE COUNTY ............................................................................... 20 ONE SIZE DOES NOT FIT ALL .................................................................................................................... 22 CALIFORNIA AND ORANGE COUNTY POPULATION TRENDS .............................................................................. 23 6TH CYCLE (2021–2029) HOUSING ALLOCATIONS IN OC ............................................................................... 25 CITY CHALLENGES ................................................................................................................................. 27 7TH CYCLE (2029-2037) CONCERNS ......................................................................................................... 31 CONCLUSION ............................................................................................................................................ 32 FINDINGS ................................................................................................................................................... 34 RECOMMENDATIONS .............................................................................................................................. 36 RESPONSES CODE ..................................................................................................................................... 40 RESPONSES ................................................................................................................................................ 41 GLOSSARY AND ACRONYMS ................................................................................................................... 45 BIBLIOGRAPHY ......................................................................................................................................... 49 APPENDIX .................................................................................................................................................. 55 APPENDIX A: MAJOR HOUSING LAWS & WHAT THEY TRIED TO DO ................................................................. 55 APPENDIX B: ORANGE COUNTY HOUSING MANDATE SURVEY QUESTIONS ...................................................... 65 APPENDIX C: RESPONSIBILITIES ............................................................................................................ 65 Responsibilities of OCCOG ........................................................................................................... 65 Item: 13
375

California State Housing Mandates

Responsibilities of SCAG .............................................................................................................. 66 Responsibilities of HCD ................................................................................................................ 66

Item: 13
376

California State Housing Mandates

Orange County Grand Jury 2025-2026

SUMMARY
California’s perceived housing shortage has prompted the California Legislature to impose increasingly bureaucratic prescriptive State Housing Mandates (Housing Mandates) on local governments, with the stated goal of accelerating production across all income levels. Core frameworks such as the Housing Element and the Regional Housing Needs Allocation (RHNA) process require cities and counties to plan for significant increases in housing capacity. Many additional statutes have contributed to a streamlined development approval process and weakened local discretion with severe penalties for noncompliance. These measures are intended to overcome decades of the perceived underbuilding and restrictive zoning within cities, yet their cumulative effect has been to create unnecessary local government costs, confusion, inequity, and growing tension between state directives and local realities. All of these efforts have led to minimal housing being built.

In Orange County, a region defined by diverse cities, established neighborhoods, and distinct infrastructure constraints, as well as environmentally sensitive areas, these Housing Mandates operate as a one-size-fits-all system poorly suited to local conditions. Housing targets are derived from opaque formulas, that fail to account for land costs, land availability, funding limitations, labor shortages, construction costs, infrastructure capacity and accurate population projections. Without corresponding investments in transit, utilities, schools, parks, public safety, and affordable housing subsidies, the Housing Mandates themselves are largely impractical and difficult to achieve. In addition, because of the financial infeasibility of building low-income housing without subsidies, cities must approve developments with higher density to pay for and meet the affordable housing requirements. As a result, local cities face mounting pressure to comply with requirements that often lack economic and logistical feasibility.

The dissolution of local redevelopment agencies in 2012 eliminated a primary mechanism for financing and managing affordable housing at the local level. In response, the State layered new housing requirements through the Housing Mandates onto cities and counties without restoring comparable funding tools or infrastructure support. Although these laws are framed as solutions to homelessness and affordability, they have in fact caused unintended consequences that have not produced incremental housing production. This is primarily due to regulatory complexity, limited subsidies, and heavy reliance on private market forces. Over time, repeated legislative interventions to solve these challenges have only expanded state authority. This leaves local governments with fewer resources and diminished control.

Housing Mandates have significantly eroded local land-use authority, supplanting community-based planning with rigid, top-down rules. Residents experience a loss of Item: 13
377

California State Housing Mandates

meaningful input; even as local officials remain legally responsible for compliance.

Streamlined approvals frequently bypass public hearings and local design standards, shift liability to cities, and prioritize building over neighborhood character. The practical elimination of traditional single-family zoning and the widespread upzoning of existing neighborhoods threaten longstanding community character while limiting local oversight of height, density, parking, and environmental resilience.

The Southern California Association of Governments (SCAG) determines the RHNA housing allocation for most of Southern California. Within this framework, the Orange County Council of Governments (OCCOG) serves as the County’s representative to SCAG in the RHNA process. The RHNA methodology and resulting allocations have been widely criticized as unrealistic, inequitable, and insufficiently transparent.1 OCCOG’s level of influence with SCAG is critical to regional planning outcomes.

OCCOG needs substantial funding increases to better advocate in Sacramento and within SCAG to support OC jurisdictions.

Given the significant challenges and inequitable housing allocations experienced during the current RHNA 6
th Cycle (2021-2029), it is imperative that Orange County begin strategic preparation for the upcoming 7th Cycle (2029-2037) process. Proactive planning will strengthen the County’s ability to advocate within SCAG for fair, data-driven, and achievable housing allocations in the next cycle.

This report examines how Housing Mandates operate in practice within Orange County, and how well-intended legislation has produced unintended consequences for cities, neighborhoods, and local governance. It evaluates the feasibility, effectiveness, and equity of current state policies, and highlights the growing disconnect between mandated housing goals and the capacity of communities to absorb them responsibly.

The report underscores the need for housing solutions that respect local conditions, restore meaningful public participation, and align development goals with infrastructure, funding, and community priorities.

BACKGROUND
California continues to experience some of the highest housing prices and rents in the nation, while some say housing production has not kept pace with population and employment growth

2. State policymakers have concluded that fragmented local decision-making, restrictive zoning practices, and lengthy approval processes, have

1 New-Pathways-to-Encourage-Housing-Production-Evaluating-Californias-Recent-Housing-Legislation- April-2023-Final.pdf
2 California Housing in 2025 - Advocacy - California Chamber of Commerce Item: 13
378

California State Housing Mandates

Orange County Grand Jury 2025-2026
contributed to this imbalance3. In response, the California Legislature has pursued a more centralized and enforceable approach to housing policy such as Senate Bill (SB)9, SB10, SB35, SB79, SB131, SB330, and Assembly Bill (AB)1050, AB2011(see Appendix A), shifting significant authority from local jurisdictions to the State. Since 2017, the California Legislature has enacted more than one hundred housing-related bills designed to establish clearer production expectations, reduce procedural delays, and strengthen enforcement mechanisms for jurisdictions that do not comply with state housing requirements.

The Housing Element Law (Government Code 65580-65589.11), originally adopted in 1969, remains the foundation of California’s housing policy. The law requires every city and county to prepare a Housing Element as part of its General Plan that identifies how the jurisdiction will meet the housing needs of all income groups.4 The RHNA process implements these Housing Mandates by assigning each jurisdiction a specified number of housing units—categorized by income level. Compliance is tied to eligibility for state housing and transportation funding, creating substantial financial implications for the County of Orange and its 34 municipalities.

Zoning has long been a cornerstone of local government authority, guiding development, and shaping the physical form of cities.

First introduced in the late nineteenth and early twentieth centuries to address public safety concerns, zoning has since expanded into a sophisticated regulatory system governing land use, building height, setbacks, lot coverage, density, and numerous other development standards. These tools enable local governments to align growth with infrastructure capacity, environmental constraints, and long-term planning objectives, while simultaneously delivering broad public benefits. In addition to protecting public health and safety by distancing residential areas from heavy industrial activities and ensuring reliable emergency access, zoning helps preserve neighborhood character and property values. It also supports community cohesion by balancing residential, commercial, and civic uses, and guides growth in ways that correspond with available public services and facilities. Moreover, zoning plays a vital role in safeguarding environmentally sensitive areas and reducing exposure to wildfire risks, underscoring its enduring importance as a foundational instrument of urban planning.

In recent years, traditional zoning practices have been subject to increasing scrutiny.

Critics argue that low-density zoning and land-use restrictions have contributed to housing shortages, affordability challenges, socioeconomic segregation,

3 In California, statewide housing reforms brush against local resistance | Brookings 4 New-Pathways-to-Encourage-Housing-Production-Evaluating-Californias-Recent-Housing-Legislation- April-2023-Final.pdf
Item: 13
379

California State Housing Mandates

automobile-dependent development, and exclusionary housing patterns.5 Housing advocates, civil rights organizations, and some policymakers have cited these concerns as justification for significant state intervention and reform of local land-use authority.6 State leaders have relied on these critiques to support a series of Housing Mandates that expand the State’s role in local planning decisions. These measures prioritize increased housing production as the central response to the State’s affordability challenges. The underlying assumption is that a significant increase in supply will help reduce housing costs. However, historical data reviewed by the 25-26 Orange County Grand Jury (OCGJ) indicate that periods of high housing production in Orange County, including during the 1990s, did not consistently result in improved affordability. 7 This
suggests that housing affordability is influenced by multiple factors other than housing supply, including land values, construction costs, wages, and regional economic conditions.

The dissolution of redevelopment agencies in 2012 further altered the local housing landscape. Redevelopment agencies had served as a significant source of financing for affordable housing and community revitalization projects through tax-increment financing and state-authorized planning powers. Their elimination removed a key funding mechanism for cities and counties.8 In subsequent years, the State imposed additional Housing Mandates without restoring revenue sources, leaving jurisdictions and builders responsible for meeting expanded obligations with reduced financial capacity.

The current generation of State Housing Mandates (6th Cycle) reflects multiple statewide policy objectives. Early legislative proposals referenced a goal of constructing approximately 3.5 million new housing units; later that figure was reduced to approximately 2.5 million units.9 Despite these goals, statewide production continues to fall short of identified need. To address this, state housing legislation has emphasized increased zoning density, reduced discretionary review, expanded ministerial approval pathways, strengthened density bonus incentives, and increased requirements for jurisdictions to facilitate affordable housing in lieu of government subsidies. Additional measures focus on locating new housing near employment centers and transit corridors to reduce commute times and greenhouse gas emissions.
10 5 National Low Income Housing Coalition - Land Use Restrictions and Affordable Housing 6 Fixing California’s housing shortage requires new policy and new politics - Berkeley Economy & Society Initiative
7 Court Agrees Anaheim Violated State Law. Decision is a Big Win for Fair Housing in California | California Department of Housing and Community Development 8 California Post-RDA Affordable Housing Developer Survey: Analysis of Results - San Francisco Fed 9 New-Pathways-to-Encourage-Housing-Production-Evaluating-Californias-Recent-Housing-Legislation- April-2023-Final.pdf
10 California State Senate Recent Legislative Actions
Item: 13
380

California State Housing Mandates

Orange County Grand Jury 2025-2026
Collectively, these policies mark a significant shift in California’s approach to land-use governance. While intended to address housing shortages and affordability concerns, they have also raised questions regarding feasibility, infrastructure capacity, public engagement, and the long-term effects on established communities. These issues are particularly relevant in Orange County, where many cities are fully built out, constrained by environmental concerns, geography, and infrastructure limitations, and seeking to balance statutory obligations with community priorities and public expectations. The impact on Orange County and its 34 cities in meeting these Housing Mandates deserves intense scrutiny.

REASON FOR STUDY
The expansion of Housing Mandates has provoked public awareness and challenged local governments. Media coverage has grown, reflecting divergent viewpoints regarding the Housing Mandates’ effectiveness, equity, and long-term consequences.

Cities across Orange County have responded in a variety of ways, adopting compliance strategies that differ widely in breadth, transparency, and community engagement.

Residents have expressed a similarly broad range of perspectives, from support for expanded housing opportunities to concerns regarding neighborhood impacts, infrastructure strain, loss of local control, and limitations on public participation in land-use decision-making.

Housing Mandates have the potential to significantly reshape the character of Orange County Communities.

Beyond requiring increased zoning density and higher residential densities, the Housing Mandates influence demographic patterns, neighborhood character, transportation systems, public services, and environmental concern. Local jurisdictions must absorb these impacts without corresponding state investment in infrastructure, affordable housing subsidies, or restoration of tools previously used to manage growth, such as redevelopment agency financing.

Given these conditions, this report attempts to evaluate both the intended and unintended consequences of Housing Mandates as they are applied within Orange County. It will identify where state requirements may conflict with local capacity and community needs and assess how recent legislative changes have shifted the balance between state authority and local governance. In addition, this report seeks to establish a strategic framework for influencing future housing allocations within SCAG by strengthening the role and effectiveness of OCCOG as we move into the next planning phase.

Item: 13
381

California State Housing Mandates

METHOD OF STUDY
In conducting this study, the OCGJ employed a multi-method approach designed to gather information from a broad range of governmental, professional, construction industry, and community perspectives. The methodology included research, interviews, observational site visits, document review, surveys, and participation in relevant public forums. This comprehensive approach allowed the OCGJ to evaluate how Housing Mandates are interpreted, implemented, and experienced across Orange County jurisdictions.

Research
The OCGJ conducted extensive background research using publicly available sources, including:
• Governmental and agency websites
• Online news and media sources
• Local and Community news outlets
Interviews
The OCGJ conducted interviews with representatives from the following organizations and groups:
• City leadership from multiple Orange County cities
• Sitting and former city officials
• Orange County Council of Governments (OCCOG)
• Orange County Public Works – Development Services
• Orange County Housing & Community Development
• Local housing program administrators
• American Institute of Certified Planners (AICP) – housing specialists • Private-sector builders and development professionals Observations and Site Visits
OCGJ members conducted guided site visits and observations of housing and mixed-use developments, including:

Multiple retail and housing developments (market rate, affordable and low income) in:
• Huntington Beach
• Midway City
• Anaheim
• Santa Ana
• Westminster
• Irvine
Item: 13
382

California State Housing Mandates

Orange County Grand Jury 2025-2026
• San Juan Capistrano
Public Forums and Events
The Members of the OCGJ attended:
• The 2025 Chapman Economic Forecast
• Newport Beach Community Forum
• Foothills Neighborhood Association Town Hall
Government Meetings
The Members of the OCGJ attended:
• Orange County Board of Supervisors
• Orange County Council of Governments (OCCOG)
• Technical Advisory Committee (TAC), a subcommittee of OCCOG • Monitored City Council meeting within the County
Document Review
• Complaints and correspondence submitted by Orange County residents. • Community Development Records from applicable jurisdictions City Survey
The OCGJ developed and distributed written survey questions to Orange County cities to gather information concerning:
• Housing Element compliance strategies
• Local responses to Housing Mandates
• Community engagement processes
• Infrastructure and resource constraints

INVESTIGATION AND ANALYSIS
State Housing Mandates and Local Implementation
The Housings Mandates, through the laws approved by the California Legislature, have pursued a more centralized and enforceable approach to housing policy (Appendix A), shifting significant authority from local jurisdictions to the State. Since 2017, the California Legislature has enacted more than one hundred housing related bills, designed to establish clearer production expectations, reduce procedural delays, and strengthen enforcement mechanisms for jurisdictions that do not comply with state housing requirements.

Item: 13
383

California State Housing Mandates

California’s housing statutes are not aspirational guidelines; they carry the force of law and impose affirmative legal obligations on local jurisdictions. Cities are therefore required to plan for, accommodate, and in many cases, approve housing development consistent with Housing Mandates, regardless of local political preferences, historic planning practices or public consensus.

According to California State policy guidance, the Housing Mandates are intended to address decades of housing underproduction that state policymakers identify as contributing to rising housing costs, overcrowding, displacement, reduced economic mobility and a lack of affordable housing.
11 From the State’s perspective, reliance on
regional and local discretion has not consistently generated housing at levels necessary to improve affordability, particularly for lower and moderate-income households.12 In response, the California Legislature and HCD have adopted a compliance driven model designed to ensure that every jurisdiction contributes to meeting statewide housing needs.

Orange County cities differ significantly. Th OCGJ’s investigation focused on areas where the state’s rapidly evolving legislative requirements conflicted with local zoning practices, infrastructure constraints, and past practices. It also examined how recent statutory reforms shifted authority away from local jurisdictions toward state oversight and enforcement, reshaping the governance methodology and altering both the practical and legal responsibilities of cities.

Within this context, this report does not question whether cities must comply with state housing law—they must—but rather this report’s objective is to assist Orange County jurisdictions and the public in understanding the framework within which they operate and enhance the possibility of good planning practices and design. During interviews, city officials and builders described to the OCGJ the benefits of citizen engagement, proactive and early coordination on planning, realistic site inventories, and timely engagement with state agencies to avoid punitive actions.

Public communication and civic education is essential. Several Orange County cities reported undertaking efforts to engage residents and explain how the Housing Mandates affect local decision-making authority, including reductions in traditional zoning discretion. Transparent public outreach was identified as an important practice for maintaining community trust and managing expectations in an era of constrained local control.

Through interviews, document review, site observations, and comparative analysis, several key themes emerged and are expanded on below:

11 Statewide Housing Plan
12 California Legislative Analyst's Office - California Housing Item: 13
384

California State Housing Mandates

Orange County Grand Jury 2025-2026
• Environmental Context and CEQA
• RHNA Process
• RHNA Challenges
• Penalties of Not Having an Approved HCA Housing Element • Penalties for Not meeting Approved Housing Plan
• Feasibility of Housing Mandate in Orange County
• One Size Does Not Fit All
• California and OC Population Trends
• 6th Cycle Housing Allocations in OC
• City Challenges
• 7th Cycle Concerns
Environmental Context and CEQA
In 1970, California enacted the California Environmental Quality Act (CEQA) with broad legislative support. These are the broad body of environment laws that attempt to protect California’s environment13. Its core purpose is to ensure that state and local government agencies identify and publicly disclose the environmental impacts of proposed projects before approving them.14 Importantly, CEQA does not prohibit development; it ensures development is done responsibly, with environmental protections, public notice, and accountability. It has played a key role in shaping California’s environmental standards for over five decades. Yet recent housing laws are chipping away at these hard-won environmental protections and may put our environment at risk.

Over time, the California Legislature has adopted amendments intended to streamline housing projects. Several interviewees asserted that recent statutes—including A130 and SB131—have the effect of narrowing CEQA’s environmental review for qualifying housing projects by expanding ministerial or exempt pathways15. Before CEQA and the Federal Clean Air Act, Southern California experienced severe air pollution, with the region enduring over 200 days each year of unhealthy ozone levels.16 In the 1970s, this led to frequent smog alerts and restrictions on outdoor activity for vulnerable residents17. Longtime residents recall this period as one when smog was so persistent it regularly obscured visibility and affected daily life. Today, air quality in Southern California is dramatically improved, with far fewer unhealthy-air days due to decades of

13 PPIC Statewide Survey: Californians and the Environment - Public Policy Institute of California 14 South Coast Air Quality Management District - CEQA
15 California Lawmakers Approve Major Overhaul of Landmark Environmental Law | KQED 16 How Los Angeles Began to Put its Smoggy Days Behind | History & Society | PBS SoCal 17 Los Angeles Historical Air Quality Analysis: AQI, PM, CO, SO2, NO2, O3 Item: 13
385

California State Housing Mandates

CEQA measures that have collectively transformed the air basin and made local conditions significantly cleaner and healthier than during the smog-filled 1970’s.18

A smoggy aerial view of downtown Los Angeles in January 1975.

Polling in California consistently shows strong public support for environmental protection, though some surveys also indicate support for regulatory changes aimed at increasing housing production and lowering costs.19
Recent laws have made it simpler to construct housing by scaling back environmental controls.20 While this may accelerate development, it also threatens to weaken important environmental protections that California has relied on for decades. And importantly, there is no guarantee that these streamlined projects will provide affordable homes or meaningfully improve the housing crisis.

18 How Los Angeles Began to Put its Smoggy Days Behind | History & Society | PBS SoCal 19 PPIC Statewide Survey: Californians and the Environment - Public Policy Institute of California 20 In California, statewide housing reforms brush against local resistance | Brookings Item: 13
386

California State Housing Mandates

Orange County Grand Jury 2025-2026
Regional Housing Needs Assessment Process
RHNA is the State mandated process that determines the number of new housing units across various income levels that each city and county must plan for each 8-year cycle.21 It requires local governments to zone adequate land to meet projected regional housing needs.22 RHNA is implemented through the HCD whose mission statement emphasizes safe, affordable homes and sustainable communities.23 The RHNA process begins with HCD’s review of household growth projections to estimate future housing needs by region. The California Department of Finance shares demographic projections with regional planning bodies known as Councils of Governments (COGs). These projections form the basis for RHNA determinations among California regions, and each COG then develops suballocations for counties and cities within its jurisdiction. Each city is required to update a Housing Element as part of its General Plan, describing objectives, programs, and housing sites consistent with RHNA goals. In recent years, the California Legislature has enacted statutes expanding HCD’s authority in reviewing and enforcing RHNA related plans. 24 SCAG is the largest COG in the State which includes Imperial, Los Angeles, Orange, Riverside, San Bernardino, and Ventura Counties. SCAG represents 197 jurisdictions across more than 38,000 square miles. SCAG develops RHNA allocations for its member jurisdictions and also engages at the state level on issues relevant to regional planning, including housing legislation.25
OCCOG, established as a joint power’s agency in 1996, serves as a representative of Orange County to SCAG on RHNA planning (and other issues, i.e., transportation). The organization emphasizes collaboration, transparency, and consistent advocacy to ensure Orange County’s interests are effectively represented in regional planning, areas where the OCGJ has identified deficiencies.
26 OCCOG’s charter describes it as a voluntary advisory association of local governments seeking sub regional and regional planning, coordination, and technical assistance on issues of mutual concern. OCCOG has an Executive Director and minimal staff. A member of the Orange County Board of Supervisors serves on the OCCOG Board and is the SCAG representative for the County of Orange.27

21 California Housing Element Law Explained – Legal Clarity 22 The California State of Real Estate - Realtor.com Economic Research 23 Welcome to HCD! | California Department of Housing and Community Development 24 Enforcement Authority | California Department of Housing and Community Development 25 About us | Southern California Association of Governments 26 Orange County Council of Governments
27 Orange County Council of Governments
Item: 13
387

California State Housing Mandates

SCAG adopted its 6th Cycle housing allocation plan for the period of October 2021 through October 2029. The plan assigns 1,341,827 additional housing units across the SCAG region—which includes most of Southern California—and distributes those units among cities and unincorporated areas, including those in Orange County. 28 Stakeholders reported that the 6th Cycle methodology resulted in a significant housing unit increase compared with the 5th Cycle allocation to SCAG of 411,953 units; representing approximately a 300% increase. The dramatic increase prompted the municipalities to request reviews and appeals of their assigned housing requirements.

In response, HCD cited multiple reasons for the regional increases including unit overcrowding, affordability indicators, the ongoing effects of previously unbuilt housing units during the 2008 recession and the statutory adjustment factors under California Government Code § 65584.01 (statutory formula)29

28 Southern California COG Regional Housing Need Determination 29 Southern California COG Regional Housing Need Determination Item: 13
388

California State Housing Mandates

Orange County Grand Jury 2025-2026
Summarized are the five objectives that the COGs (i.e. SCAG) must further in their allocation methodology (Gov. Code § 65584(d)):30
• Increasing the housing supply and the mix of housing types, tenure, and affordability in all cities and counties within the region in an equitable manner, resulting in allocations for low and very low-income households, and providing for extremely low and acutely low-income allocations within the range prescribed by statute
• Promoting infill development and socioeconomic equity, protecting environmental and agricultural resources, encouraging efficient development patterns, and achieving greenhouse gas reduction targets pursuant to Government Code section 65080.
• Improving the intraregional relationship between jobs and housing, including balance between low wage jobs and housing affordable to low wage workers. • Allocating a lower proportion of housing need to an income category where a jurisdiction already has a disproportionately high share of households in that category relative to the countywide distribution.
• Affirmatively furthering fair housing.

These objectives are intended to support more economically diverse communities by assigning housing to high resource, job rich areas and by encouraging infill development while protecting environmental resources (CEQA). 31 RHNA assigns
targets to each jurisdiction by income category. For the 6th Cycle, the four income categories are: Very Low (≤ 50% of county median income), Low (50–80%), Moderate (80–120%), and Above Moderate (≥ 120%)32. Through HCD and RHNA, California instructs and enforces compliance with specific housing targets.

Regional Housing Needs Analysis Challenges
The cities’ leadership in Orange County offered multiple critiques of RHNA, including:
(1) allocation methodology at SCAG does not reflect local housing need, (2) concerns of fairness in allocation across jurisdictions, (3) the appeal process to SCAG by local governments were consistently denied, and (4) assigned housing goals do not consistently translate into actual permitting, especially for lower income households.33 HCD has stated that RHNA goals should not be interpreted as a production forecast but

30 California Department of Housing and Community Development | 31 The 5 Statutory Objectives of the RHNA Methodology
32 State Housing Law Program | California Department of Housing and Community Development 33 Best Practices for Allocating & Evaluating RHNA
Item: 13
389

California State Housing Mandates

as a planning objective.34 Even with this planning objective, Orange County jurisdictions reported significant operational and fiscal challenges associated with implementation.

Jurisdictions described resource constraints that affect their ability to implement the Housing Mandates consistent with legislative intent, including staffing limitations, the need for specialized consultant support, and budget constraints. Several cities characterized RHNA determination and compliance as complex and costly. Some cities reported spending hundreds of thousands of dollars (sometimes reaching close to $1,000,000) to meet the reporting mandate. Taxpayer money spent on planning does not directly result in the construction of housing units.

Interviewees also reported that SCAG’s approved methodology is complex and difficult for elected officials to communicate their housing allocation and ultimate Housing Element to their constituents. HCD and SCAG should take steps to improve the RHNA processes, including enhancing communication transparency and simplifying data driven methodologies. Additionally, recognizing the compliance costs to taxpayers cannot be left unaddressed even as the 7th Cycle planning is currently underway.

In October 2021, the California State Joint Legislative Audit Committee approved an emergency audit of HCD’s regional determination process, citing limited public visibility of calculation methods and a need for independent review.35 Further, the audit identified errors in certain data calculations and raised concerns36. The California State Auditor subsequently issued findings that criticized aspects of HCD’s methodology indicating potential inflation of requirements by a substantial number of housing units. 37 Some of the cited errors included the use of very outdated and inaccurate vacancy factor rates38. One report even suggests base information used was from the 1980’s39.

Others reported that HCD relied on population projections that differed from California Department of Finance forecasts, which generally show relatively modest long-term growth, and instead used assumptions that resulted in significantly higher projected housing needs.40 HCD’s response, to the California State Auditor, and on their website, acknowledged there was room for improvement and addressed the allocation criticisms in very general terms but did not mention that the numbers had been or would be corrected.
41 34 New-Pathways-to-Encourage-Housing-Production-Evaluating-Californias-Recent-Housing-Legislation- April-2023-Final.pdf
35 California Auditor Report 2021-125
36 California Auditor Report 2021-125
37 More Homes, Hardly Any Population Growth—So Why Is California Still So Expensive? 38 CA Auditor Bashes State’s Mandated Housing Numbers, Says Process Is Flawed, Lacks Oversight 39 CA Auditor Bashes State’s Mandated Housing Numbers, Says Process Is Flawed, Lacks Oversight 40 Court: 'Regional Housing Need' Determinations Aren’t Judicially Reviewable - Davis Vanguard 41 California State Auditor - Report 2021-125 Recommendation 3 Responses Item: 13
390

California State Housing Mandates

Orange County Grand Jury 2025-2026
Separately, in June 2021, OCCOG, on behalf of the Orange County cities, filed a judicial challenge to HCD’s regional housing determination, arguing that HCD failed to follow statutory requirements in developing the RHNA allocation.42 The trial court dismissed the petition in November 2021, and the Second District Court of Appeal affirmed that dismissal in July 2023, holding that neither OCCOG nor its member cities could challenge HCD’s methodology.
43 On August 24, 2023, the OCCOG Board authorized
counsel to petition the California Supreme Court for review, but the Court denied the petition on October 11, 2023, effectively ending OCCOG’s legal challenge.44 During the 6th Cycle process, SCAG received 48 appeals from cities challenging their housing allocation within their 45-day appeal period. After SCAGs review, they quickly denied 47 of them.45 This demonstrates limited jurisdictional influence over the allocation and appeal process. This series of rulings confirms that HCD’s statutory authority has been upheld by the courts, and that any changes sought by local jurisdictions may be addressed better through the legislative process rather than litigation.

Penalties for Not Having an HCD-Approved Housing Element A city that fails to obtain certification of its Housing Element from the HCD is considered out of compliance with state Housing Element Law and becomes subject to a range of escalating enforcement actions.
46 HCD’s Housing Accountability Unit (HAU) has
authority to initiate enforcement, including referral to the California Attorney General for legal action when a jurisdiction does not meet statutory planning requirements. 47 When
a city is out of compliance, it can be exposed to severe statutory penalties, such as lawsuits by the Attorney General or outside entities, court-imposed fines ranging from $10,000 to $600,000 per month, and court orders that may mandate project approvals, require rezoning, suspend a city’s authority to issue building permits, or even strip the city council of land-use authority until compliance is achieved. 48 The most concerning and widely known consequence of noncompliance is the Builder’s Remedy, which restricts a city’s ability to deny qualifying housing projects even when they conflict with the city’s General Plan or zoning rules.49 Under this provision, developers may propose larger, denser projects that bypass local zoning controls if at least 20% of the units are affordable to low-income households or if the project is 100%

42 OCCOG Press Release HCD
43 Orange Cnty. Council of Gov'ts. v. Velasquez - vLex United States 44 Orange County Council of Governments
45 Orange County Council of Governments
46 Analysis Finds Davis Not on Track to Meet Housing Requirements without Approval of Two Voter Projects - Davis Vanguard
4747 Analysis Finds Davis Not on Track to Meet Housing Requirements without Approval of Two Voter Projects - Davis Vanguard
48 Housing Open Data Tools | California Department of Housing and Community Development 49 “Builder's Remedy" Reform Bill Approved by Governor Newsom | Allen Matkins Item: 13
391

California State Housing Mandates

moderate-income.50 Cities without a compliant Housing Element lose their ability to regulate these projects through their typical zoning constraints unless they can demonstrate specific, adverse health or safety impacts.51 Additional consequences include loss of access to key state funding sources and being placed on a shorter four-year Housing Element update cycle rather than the standard eight-year schedule.52 As of this writing, some Orange County cities—such as Huntington Beach and Seal Beach—have not yet obtained certification of their Housing Elements for the 6th Cycle or have been subject to enforcement actions related to noncompliance, while others, such as Costa Mesa, have only achieved compliance after delays and state intervention.53
Penalties for Not Meeting Housing-Plan Construction Goals While RHNA production targets are planning requirements, not actual construction mandates – cities may face meaningful consequences if they fail to implement the programs and rezoning commitments included in their certified Housing Elements.

HCD’s HAU monitors compliance with both Housing Element commitments and state housing laws, and violations may prompt enforcement letters, monitoring actions, or legal referrals to the Attorney General.
54 Courts have shown a willingness to override
local discretion when a city’s failure to implement its Housing Element prevents the jurisdiction from accommodating its assigned RHNA allocation.55 In some cases, courts may mandate rezoning, invalidate local development restrictions, or require approval of specific projects to ensure that adequate housing capacity is created.56 Feasibility of Housing Mandate in Orange County
The feasibility of California’s Housing Mandates in Orange County raises significant practical concerns. HCD, during the 6th Cycle, has allocated 183,161 housing units to Orange County to be constructed by 2029 with 30% being considered ‘affordable’.

However, according to the US Census Bureau, Orange County is only producing an average of 5,000 units a year over the past 5 years.57 Clearly this is a dilemma for the County. While it is relatively easy for the California Legislature to pass ambitious housing laws, the actual construction of these units is far more challenging. The Housing Mandates may be well-intentioned but translating them into real-world development is complex, due to constraints in land availability and costs, infrastructure

50 Builder's Remedy Primer
51 The Builder's Remedy and Housing Elements
52 Housing Elements | California Department of Housing and Community Development 53 Appeals Court Orders Huntington Beach to Comply with State Housing Law - Davis Vanguard 54 Enforcement Process | California Department of Housing and Community Development 55 Appeals Court Orders Huntington Beach to Comply with State Housing Law - Davis Vanguard 56 Appeals Court Orders Huntington Beach to Comply with State Housing Law - Davis Vanguard 57 Index of /programs-surveys/popest/tables
Item: 13
392

California State Housing Mandates

Orange County Grand Jury 2025-2026
capacity, high construction and labor costs, community acceptance, and capital formation.

Capital formation for housing development in Orange County faces significant challenges. The cost of capital remains high, and the long timeline required to entitle, build, and eventually generate revenue increases financial risk for developers.

Interest-rate volatility further complicates financing, affecting both equity investment and construction loan terms. At the same time, affordable housing projects often struggle to qualify for limited government subsidies, leaving many developments financially infeasible. These pressures are intensified in Orange County, which has some of the highest land and construction costs in California, making lower-income housing especially difficult to deliver without substantial public support. 58 59 60 61
Most parts of Orange County are already built out, leaving limited land available for new development. Substantial portions of the remaining undeveloped areas are further constrained by coastal regulations, floodplains, wildfire-prone zones, steep hillsides, protected open space, and other environmentally sensitive lands. These physical and regulatory barriers significantly reduce the amount of land that can realistically be developed. At the same time, the County faces substantial infrastructure limitations— including constraints on water and sewer systems, road capacity and traffic circulation, parking availability, schools, parks and recreation space, transit corridors, and even utilities such as electricity and natural gas. Taken together, these constraints sharply limit how much additional housing can be accommodated, even when zoning or Housing Mandates call for higher densities.

High construction costs remain a major obstacle to new housing production, driven by escalating prices for essential building materials such as lumber, steel, concrete, and electrical components. Persistent labor shortages across skilled trades further compound these costs, as limited labor supply leads to higher wages and project delays. Appliance costs have also risen significantly, especially for energy-efficient or higher-end models now commonly required by building codes or market expectations.

Additionally, the desired level of luxury or finish, such as premium flooring, countertops, fixtures, and community amenities, can substantially increase overall project budgets, making even modest housing developments expensive to deliver.

Reports indicate it cost approximately $500,000 to $800,000 to build a one-bedroom low-income rental unit in Orange County. Low Income units require rental subsidies.

58 Turner Center UC Berkeley Development Math
59 Interest Rates Impact Construction Project Funding
60 CHP State Housing Needs Report
61 The High Cost of Producing Multifamily Housing in California: Evidence and Policy Recommendations | RAND
Item: 13
393

California State Housing Mandates

With declining federal, state, and local funding subsidies, it is difficult to build affordable housing. Developer interest therefore is focused on market rate housing production.

In short, Housing Mandates are legally binding, yet remain extraordinarily difficult for many cities to achieve. While While RHNA serves a key role as a planning tool, requiring cities to zone for additional housing and align local policies with statewide objectives, meeting the full scale of assigned housing targets, especially for lower-income households, is often unrealistic without sustained public funding, expanded infrastructure, and ongoing State support. In practice, the Housing Mandates alone do not produce homes. Achieving HCD/SCAG goals in Orange County ultimately depends on market-responsive policies, and complementary funding strategies. It is not simply higher numerical requirements or punitive measures.

In practice, Housing Mandates alone do not build homes.

One Size Does Not Fit All
California’s statewide Housing Mandates are intended to address a persistent and perceived shortage of housing.62 However, the OCGJ found that the uniform statutory framework governing the RHNA process can function as a blunt instrument when applied across jurisdictions with widely differing conditions. City leadership consistently noted that a one-size-fits-all approach may not fully account for the unique character, environmental, infrastructural, economic, demographic, and geographic circumstances facing individual communities.

Several stakeholders noted that the RHNA process does not adequately differentiate among jurisdictions with varying levels of infrastructure capacity, longstanding physical or environmental constraints, or distinct development patterns. In particular, it fails to account for older, largely built-out cities—such as Garden Grove, Westminster, La Habra, and Fountain Valley, where available land is minimal and new housing can occur primarily through infill development. In these contexts, construction is typically more complex and costly, further challenging feasibility. As a result, some local governments face disproportionate burdens in accommodating housing allocations that do not fully reflect on-the-ground constraints and local conditions.

The OCGJ notes that perspectives on this issue varied considerably. Interviewees from fast-growing or infrastructure-rich areas were more likely to support uniform standards, arguing that consistent requirements prevent jurisdictions from avoiding their fair share of housing obligations. Others expressed the view that Housing Mandates are necessary to overcome decades of underproduction and local resistance to growth.

62 California Department of Housing and Community Development | California Department of Housing and Community Development
Item: 13
394

California State Housing Mandates

Orange County Grand Jury 2025-2026
Ultimately, comments on the adequacy and fairness of California’s uniform approach depended heavily on local context and a jurisdiction’s capacity to absorb additional housing.

Data source: Cities’ responses to the 2526 Grand Jury’s survey California and Orange County Population Trends
Over the past three decades, California has undergone a profound demographic shift.

After more than a century of rapid population expansion (growing from under 20 million in 1970 to nearly 40 million by 2020) the State’s growth has slowed dramatically, and in recent years has turned negative.
63 According to the Public Policy Institute of California, California lost 322,000 residents between July 2020 and July 2022 due largely to emigration, declining births, and reduced immigration.64 And although modest growth resumed between 2022 and 2025, the overall trend remains flat and well below historical norms. As previously noted, this validates the California State Auditor’s criticism of HCD, and its projections based on population.

63 CSUF - Center for Demographic Research
64 California's Population - Public Policy Institute of California Item: 13
395

California State Housing Mandates

Source Orange County Register 65
Historically, one of California’s fastest-growing regions, Orange County, exhibits similar trajectories – population stagnation and decline. The U.S. Census Bureau has documented recent population decreases, noting that Orange County's long-standing growth pattern began to reverse in the early 2020’s due in part, to an aging population, and reduced international migration and increased outmigration.66 These trends challenge long-held assumptions about continuous growth in Orange County and suggest that future planning should incorporate demographic stabilization rather than expansion.

Despite these emerging realities, population projections used during the 6th Cycle (2021–2029) relied on pre-pandemic models that assumed continued growth.67 HCD’s 6th Cycle regional determination began with population forecasts from the Department of Finance and applied upward adjustments for overcrowding, cost burden, and vacancy— factors that significantly inflated the region’s housing need calculation. However, by 2020–2025, many of these underlying drivers shifted in the opposite direction as

65 Infographic: Are people leaving California? Here’s what the numbers show us – Orange County Register
66 Infographic: Are people leaving California? Here’s what the numbers show us – Orange County Register

67 Presentation: Overview of Regional Growth Forecasting, Modeling Task Force May 25, 2022 Meeting Item: 13
396

California State Housing Mandates

Orange County Grand Jury 2025-2026
California entered a period of population decline, raising questions about the accuracy of the assumptions embedded in the 6th Cycle projections. SCAG has acknowledged concerns from stakeholders regarding the appropriateness of the population and household growth assumptions used during the 6th Cycle and has initiated discussions with HCD to reform the methodology.68
Looking ahead to the 7th Cycle, California’s demographic outlook is markedly different from the 6th Cycle. The Department of Finance’s newest long-range projections (2024 baseline) show significantly slower statewide and county-level growth through 2070, with some regions, including Orange County, projected to experience prolonged stagnation or decline.69 These updated projections, combined with post-2020 population losses, underscore the necessity for HCD and SCAG to recalibrate their methodologies so that the next RHNA Cycle reflects a more accurate and data-driven assessment of true housing need. Without incorporating the State’s new demographic trajectory, RHNA risks overestimating future household growth and imposing planning obligations disconnected from both California’s and Orange County’s actual population realities.

Data source: Orange County Progress Report 2025
Notes: This chart includes only cities, who responded to the 2526 Grand Jury’s survey. 6th Cycle (2021–2029) Housing Allocations in OC
California’s Housing Element Law requires every city and county to plan for its share of regional housing need. For the 6th Cycle (October 2021–October 2029), SCAG

68 PowerPoint Template for SCAG Presentations
69 Projections | California Department of Finance
Item: 13
397

California State Housing Mandates

assigned the Orange County subregion a total of 183,861 housing units, allocated across four income categories: Very Low, Low, Moderate, and Above Moderate.70 While RHNA establishes the minimum number of units each jurisdiction must plan for, this OCGJ finds that cities seeking to meaningfully expand affordable housing production must adopt local housing targets that exceed their RHNA assignment. This is largely because the cost of constructing deed-restricted affordable units—often approaching $700,000 per unit—is rarely economically feasible without substantial public subsidy, layered financing, and other creative development strategies. As a result, cities increasingly rely on density bonus incentives, allowing developers to build additional market-rate units in exchange for providing affordable units, to help close funding gaps and meet lower-income housing obligations.

The RHNA process begins with the HCD determining the amount of housing needed for each region, including affordability levels, and continues with a regional agency (here, SCAG) dividing that need among counties and cities. SCAG’s final 6th Cycle plan assigns Orange County jurisdictions a combined 183,861 total units for 2021–2029.71 SCAG’s allocation plan further distributes Orange County’s total to each city (and to the County’s unincorporated area). The largest allocations go to major employment and population centers, with substantial totals assigned to, among others:

City Units City Units
Irvine 23,610 Huntington Beach 13,368
Garden Grove 19,168 Costa Mesa 11,760
Anaheim 17,453 OC Unincorporated 10,340

These totals reflect the regional policy judgment—guided by state objectives—that jurisdictions must plan for additional housing capacity across income categories.

In summary, RHNA 6th Cycle allocations establish minimum planning obligations, but they do not, by themselves, overcome the structural feasibility barriers that constrain low-income housing delivery. This higher target is justified by (1) the anticipated attrition between zoning capacity and constructed projects, and (2) the necessity of leveraging private development to be incentivized to build affordable housing in a market where restricted rents cannot reliably support new construction without layered public assistance.

70 Regional Housing Needs Assessment | Southern California Association of Governments 71 Regional Housing Needs Assessment | Southern California Association of Governments Item: 13
398

California State Housing Mandates

Orange County Grand Jury 2025-2026
City Challenges
California’s increasingly prescriptive Housing Mandates have placed substantial pressure on local governments in Orange County, requiring cities to plan for significantly higher levels of housing capacity. The cumulative effect has been added local government costs, uncertainty in interpreting evolving state requirements, inequities among jurisdictions, and escalating tension between state directives and the longstanding expectation of local control over planning and zoning.

While the State has articulated policy goals and methodology behind its Housing Mandates, the top-down framework often overlooks the essential role of local communities in electing officials to ensure that planning and zoning decisions reflect the values and priorities of the electorate—the very reason most cities incorporated in the first place. This disconnect has contributed to considerable tension, community frustration, and political instability in many Orange County cities, not to mention the constituents’ lack of confidence that their elected officials are representing their interests.

To successfully meet the requirement of the Housing Mandates cities must file a Housing Element with HCD every eight years to meet the aggressive targets being mandated. Many local cities lack the internal expertise and staff time to draft such housing submissions and thus must hire costly external consultants to prepare appropriate legal documents. As previously noted, the costs to cities have been between $100,000 and over $1,000,000 for some of the larger cities. With 34 cities in Orange County and the County also required to provide a housing plan, the administrative costs are in the millions of dollars just to comply. With many local cities having budgetary challenges, this administrative burden is just another unfunded liability. These taxpayer dollars are spent to comply with the law and have no commensurate direct beneficial outcome for the community.

In Orange County, the Housing Mandates have substantially narrowed local land use discretion while increasing administrative, legal, and compliance risks for cities.

Although framed as a planning requirement, the Housing Mandates have expanded residential density and embedded enforceable state oversight into what were traditionally local planning functions. As a result, compliance and enforcement mechanisms have begun to reshape municipal governance and materially influenced developmental patterns across the county. The result of these impacts in Orange County includes but are not limited to the following:
• Reduced local land-use authority
• Administrative and staffing burdens
• Financial expense
• Infrastructure limitations
Item: 13
399

California State Housing Mandates

• Increased legal exposure
• Political and community conflict
• Unfair RHNA housing allocations across the cities
Each city in Orange County has had a variety of challenges based upon differences in geography, fiscal capacity, land availability, funding availability, development interest and conditions, local policy decisions and community responses. The impact of the Housing Mandates has had dramatic impacts and cannot be ignored.

For example:

Anaheim: As the largest (population) city in Orange County, Anaheim has a strong fiscal base, including significant tourist-based revenue, and has already permitted and constructed a large number of housing units especially in light of their massive OC Vibe residential, retail and entertainment district. This is not to say, however, that they do not have their challenges with developers pushing to increase density within Anaheim Hills and the City’s concern of density and building into a designated high-fire risk area. Due to its population of over 300,000, unlike most Orange County cities, Anaheim does have access to state and federal dollars, to assist in meeting the affordable housing requirements.

Costa Mesa: Costa Mesa is one of only three Orange County cities still without a compliant Housing Element. Its continued effort to defend local regulations on sober living homes—rules that HCD does not formally recognize—has already cost the city access to certain state low-income housing funding. The situation worsened when one of the City’s largest developers withdrew all of his properties from Costa Mesa’s Housing Element inventory, slashing projected housing capacity from roughly 17,000 units to the bare minimum of about 11,750 units needed to meet state requirements.72 This leaves the City with virtually no buffer to achieve compliance.

Fountain Valley: Fountain Valley is largely built out, with approximately 90% of its land already utilized. Limited available land and constrained financing capacity present major hurdles in Fountain Valley ever being able to meet the state requirements.

Huntington Beach: Huntington Beach has adopted a totally different strategy to address the Housing Mandates. They have aggressively pursued litigation in an effort as a "charter city" to preserve local land-use authority. This approach has resulted in substantial legal costs and financial exposure for the City for noncompliance. The City’s

72 Planning Commission Bombshell: Housing Element Update Crisis in Costa Mesa Item: 13
400

California State Housing Mandates

Orange County Grand Jury 2025-2026
legal challenges have all been denied including a final appeal to the US Supreme Court.73 Consequences for non-compliance are pending.

Irvine: Irvine's response to the Housing Mandates differs from other Orange County cities. Being very progressive with available land currently under development, and two major developers active, the master planned community of Irvine has substantial flexibility. They have submitted to the State committing to build 56,000 additional units even though their allocation is approximately 26,000 units, the highest in Orange County. The original vision of Irvine being a residential community with commercial and residential balance runs the risk of being seriously eroded with high density apartments being vigorously constructed. This suggests Irvine might ultimately be more of an urban versus suburban community in the future. Residents are starting to be concerned as to the impact on traffic, parks, and schools. Furthermore, the current City council's recent move to rezone past open space commitments has created voter activism and resistance.

Newport Beach: Newport Beach has faced difficulty implementing the Housing Mandates due the concerns regarding community character, coastal constraints, and local values, contributing to resistance to higher density residential development. While elected officials worked hard at engaging and educating the community on the Housing Mandates, as development projects started to come on-line, major public resistance ensued. A recent ballot initiative was just approved to push back on the City's approved Housing Element.
74 Mission Viejo: In March 2026, hundreds of Mission Viejo residents rallied in opposition to a proposed expansion of the Vista Del Lago apartment complex off Marguerite Parkway. The developer’s plan called for demolishing 68 existing units and replacing them with 418 new units, resulting in a net increase of 350 units, as well as constructing a new parking structure. The expansion would bring the total number of units on the 33-acre property to 958 units, dramatically increasing density in an area surrounded primarily by single-family homes.

After hours of heated public testimony and debate, the City Council voted 3–2 to advance the project. A majority of councilmembers stated they felt they had no choice but to approve the development due to the Housing Mandates, which require cities to zone and plan for significantly higher housing densities regardless of local neighborhood opposition.
75 73 Attorney General Bonta Celebrates U.S. Supreme Court’s Denial of Huntington Beach’s Challenge to State Housing Laws | State of California - Department of Justice - Office of the Attorney General 74 Newport Beach may dump state mandate as residents prep to vote on plan for far fewer housing units | LAist
75 Editorial: Mission Viejo’s needless angst over apartments – Orange County Register Item: 13
401

California State Housing Mandates

San Juan Capistrano: Due to its historical significance and geographic characteristics, the City has been challenged to meet the Housing Mandates. It is a tale of two communities – residents of great wealth and a large lower socioeconomic population requiring the need for more affordable housing. To date, City leadership appear to have built partnerships with low-income developers to build projects that maintain the community’s heritage and meet the needs of the City. As high-end development takes place, a "fee in lieu" is assessed that generates funds for affordable housing. Superb planning and design have led to across-the-board community support for well designed, low-income redevelopment projects completed or underway.

Santa Ana: Santa Ana is already considered by HCDs’ RHNA process to be a densely populated, lower socioeconomic community, and it has the lowest housing target in Orange County with only 3,137 units. Like Anaheim due to its population size, it has access to more federal and state housing dollars to meet its low-income housing compliance obligations.

The County of Orange: The County also has a RHNA requirement for its unincorporated areas. The County struggled to obtain certification of its Housing Element in 2025; it required multiple revisions due to the nature of small pockets of unincorporated areas it serves. Its largest development area in South Orange County, Rancho Mission Viejo of over 6,000 acres was entitled by the County before the Housing Mandates became law – few were affordable units. In addition, the largest track of undeveloped land is owned by the Federal Government (Cleveland National Forest) and not available for development.

The impacts of the Housing Mandates have disrupted governance and local control. In some communities it has created fierce resistance. The loss of local control impacts the traditions and norms within many Orange County cities. Community heritage, rightly or wrongly, is being seriously eroded.

The one-size-fits-all Housing Mandates has serious repercussions economically and politically only now coming into focus for the voters of Orange County as the implementation goes forward.

Community political activism has increased as housing projects move from approval to construction, but this engagement is often narrowly focused on individual developments rather than broader policy impacts. Cities should take a more proactive role in engaging residents in a comprehensive discussion about how RHNA implementation is affecting neighborhood character, infrastructure, and social cohesion. In addition, local elected officials have a responsibility to clearly communicate how state
-directed housing policies, originating in
Sacramento, shape local land-use decisions and limit municipal discretion.

Item: 13
402

California State Housing Mandates

Orange County Grand Jury 2025-2026
7th Cycle (2029-2037) Concerns
The 7th Cycle of the RHNA planning process has already started, addressing the period from 2029-2037. The OCGJ identified significant concerns related to transparency, data integrity, governance, and Orange County’s ability to competitively represent itself within the broader SCAG region. These concerns stem from documented issues in the 6th Cycle, particularly the lack of clarity of the allocation methodology, the complexity of the decision-making structure, and inadequate procedural safeguards to ensure that Orange County’s unique conditions are fully acknowledged.

The 6th Cycle methodology relied on numerous questionable inputs—including projected population, transit accessibility, job growth, vacancy adjustments, cost burden, and subjective social equity factors—derived from HCD and SCAG’s adopted methodology.76 These inputs were published but remained difficult for local jurisdictions to interpret due to their subjectivity, complexity and technical nature and the failure of HCD to clearly identify their methodology.77
Given these findings, Orange County cities face a recurring risk, because the statewide RHNA determination feeds directly into SCAG allocations, any methodological deficiencies at the state level immediately cascade into subregional planning and ultimately influence the allocations assigned to Orange County jurisdictions.

Experiences from the 6
th Cycle highlight several issues that continue to shape Orange County’s concerns heading into the 7th Cycle. The previous allocation process was marked by complexity, questionable data, late-stage modifications, and an overall lack of transparency. For example, SCAG’s 6th Cycle allocation was adopted in March 2021 and then modified only a few months later78, fueling confusion about how final numbers were determined. The process felt unfair to many local jurisdictions because the appeals window was extremely compressed, the methodology was difficult to replicate, and the relationship between data inputs—such as overcrowding, cost burden, or future transit accessibility—and final allocations was not easily understood. The appeals process was also futile and was not open to cities concerns.

Governance also played a role. SCAG and OCCOG rely on a large network of committees, working groups, and advisory bodies, which ensures broad participation but diffuses responsibility. With so many entities involved, accountability for data accuracy, timely inputs, and interpretation of the methodology becomes fragmented, making it difficult for any single entity to ensure the process is both rigorous and transparent.

76 SCAG Final RHNA Methodology, March 5, 2020
77 Best Practices for Allocating & Evaluating RHNA
78 Regional Housing Needs Assessment | Southern California Association of Governments Item: 13
403

California State Housing Mandates

The upcoming 7th Cycle is expected to be even more data-intensive.79 New state guidance calls for clearer and more prescriptive methodology factors, improved appeals procedures, new income categories, and stronger alignment with greenhouse-gas and transportation planning.80 Transit definitions are also being standardized statewide, meaning all Orange County Transportation Authority (OCTA) transit routes, frequencies, and hub locations must be fully validated and published early in the process. Without early coordination, the County risks being disadvantaged compared with regions that already have well-organized transit datasets.

Transparency remains a central concern. Orange County jurisdictions need access to all datasets used to calculate their allocations, ranging from growth projections to transit accessibility metrics, and must be able to replicate the calculations that lead to their assigned numbers. The California State Auditor has previously flagged gaps in how HCD documented its factors, reinforcing the need for a system that jurisdictions can audit and verify.

CONCLUSION
“We shape our buildings; thereafter they shape us.” (Winston Churchill) Housing Mandates and the RHNA allocation process are highly consequential for Orange County jurisdictions, particularly because the construction of low-income housing is rarely feasible without substantial subsidy. Interviewees consistently reported that funding streams to support deed-restricted housing remain limited, leaving cities responsible for planning large numbers of units that may never be financially viable without additional state or federal assistance. This gap between planning obligations and realistic development capacity has heightened local concern about the fairness and practicality of the current RHNA framework not to mention wasted tax dollars.

Against this backdrop, a recurring theme in interviews was the need for stronger regional coordination. Per the Joint Powers Agreement, OCCOG members pay dues to support operations, based on a 2009 adopted formula tied partly to each city’s share of the county population. However, dues have not been adjusted in many years, leading several stakeholders to question whether current funding levels adequately support OCCOG’s ability to coordinate subregional planning, respond to SCAG, and represent Orange County interests on matters as significant as RHNA. SCAG likewise uses population factors in its own dues structure, meaning jurisdictions with growing populations carry greater financial responsibility. Stakeholders noted that the overall

79 California’s Housing Future 2040: The Next Regional Housing Needs Allocation | California Department of Housing and Community Development
80 California’s Housing Future 2040: The Next Regional Housing Needs Allocation | California Department of Housing and Community Development
Item: 13
404

California State Housing Mandates

Orange County Grand Jury 2025-2026
resource base may still be insufficient for the level of technical engagement required.

Many jurisdictions expressed that increased support for OCCOG, both financial and participatory, would improve transparency around RHNA inputs and allow for more robust review of the assumptions that drive housing allocations.

The OCGJ believes that OCCOG is an underutilized regional asset that could play a significantly larger role in promoting equity, transparency, and public understanding of the RHNA process. Interviewees emphasized that consistent, proactive participation by city and county representatives in OCCOG and SCAG meetings is critical, especially early in the methodology-setting phase, when data inputs, assumptions, and distribution formulas are still in development. Without regular engagement, jurisdictions risk losing opportunities to influence decisions that later become binding obligations. Several interviewees suggested that cities consider enhancing their financial contributions so OCCOG can expand its analytical capacity, conduct independent research, and engage more effectively in SCAG’s technical and policy committees and at the state level.

As work begins on the 7
th Cycle, the need for collaboration is more urgent than ever.

Cities cannot afford to be passive observers. Even if cities cannot directly change the final numbers issued by HCD or SCAG, their active involvement is essential to ensuring that Orange County’s unique circumstances are understood and represented.

Meaningful engagement can also help jurisdictions align their local planning strategies, clarify shared concerns, and coordinate responses to proposed methodological changes before they become final. A more empowered and better-resourced OCCOG would strengthen Orange County’s collective voice, improve regional planning outcomes, and ensure local governments are not navigating the California’s housing requirements in isolation.

Finally, the OCGJ notes that collaboration must extend beyond government agencies to the residents they serve. As Sacramento lawmakers continue to enact significant housing legislation, much of it with direct consequences for zoning, density, local control and neighborhood character development standards, the public must be informed and involved. Cities, working through OCCOG and SCAG, have an important role in educating residents about new laws, explaining their local impacts, and encouraging constituents to register their views with State Representatives. Improving public awareness not only strengthens transparency and trust but also ensures that community perspectives are included in shaping future housing policy.

By working together, jurisdictions, regional agencies, and the public, Orange County can more effectively navigate the challenges of Housing Mandates and advocate for a clearer, more equitable, and more locally responsive RHNA process.

Item: 13
405

California State Housing Mandates

FINDINGS
In accordance with California Penal Code §933 and §933.05, the 2025-2026 Orange County Grand Jury requires (or, as noted, requests) responses from each agency and city affected by the “Findings” presented in this section. Responses are to be submitted to the Presiding Judge of the Superior Court.

Based on its investigation “California Housing Mandates” the 2025-2026 Orange County Grand Jury has arrived at 22 findings as follows:

F1 In recent years, the California Legislature has enacted an unusually large and burdensome volume of housing-related laws intended to strengthen compliance with State Housing Mandates.

F2 Housing Mandates are implemented through a RHNA process that often lacks transparency and relies on complex methodologies that are difficult for local officials and the public to understand or meaningfully challenge.

F3 OCCOG coordinates RHNA regional planning in partnership with the SCAG for Orange County. OCCOG lacks adequate influence with SCAG.

F4 Meaningful participation by Orange County cities in both OCCOG and SCAG meetings is critical to ensuring that local perspectives are represented during the development and implementation of Housing Mandates policies.

F5 SCAG’s 6
th Cycle RHNA assigned Orange County a questionable total of 183,861 housing units for the 2021–2029 planning period, with higher allocations concentrated in cities with major population and employment centers.

F6 RHNA allocations are unrealistic and not attainable within the current planning cycle due to limited available land, built-out urban conditions, infrastructure constraints, environmental factors, and public health and safety requirements.

F7 Residents in Orange County consistently express a desire for local planning decisions to reflect community priorities, including but not limited to neighborhood character, safety considerations, the environment and open-space preservation.

F8 California’s regulatory construction costs (i.e. permitting fees) present substantial challenges for private housing developers—particularly those delivering affordable units.

Item: 13
406

California State Housing Mandates

Orange County Grand Jury 2025-2026
F9 The cost of constructing a single affordable housing unit in California typically ranges from approximately $500,000 to $800,000 per unit when fully complying with current state regulations. New low-income housing is generally not financially feasible without public subsidy.

F10 Prior to their dissolution in 2012, redevelopment agencies served as a primary mechanism for cities and counties to finance affordable housing and related infrastructure. The loss of redevelopment has reduced cities’ ability to support construction of affordable units.

F11 Because public subsidy is limited and highly competitive, cities seeking to produce meaningful quantities of low-income housing must rely in part on private development incentives, often resulting in higher overall development densities and unit counts than the RHNA allocation.

F12 The 6th Cycle RHNA methodology included numerous technical inputs published by SCAG and HCD; however, these inputs were highly complex and difficult for cities to interpret or independently verify.

F13 The California State Auditor’s 2022 review found significant deficiencies in HCD’s regional determination process—including inadequate documentation, data-entry errors, and insufficient justification for key assumptions—raising concerns that similar issues may affect the 7 th Cycle
process.

F14 OCCOG’s current resources and organizational structure are insufficient to fully advocate for Orange County jurisdictions during RHNA methodology development, especially when compared with larger or more heavily resourced regional councils of governments that also influence SCAG.

F15 Demands on HCD are anticipated to materially alter methodology for the 7th Cycle, but Orange County jurisdictions have not yet received clear guidance on how these allocations will be translated into SCAG policy or local impacts.

F16 The reliance on transit accessibility as a major RHNA consideration requires high-quality, early-released datasets from OCTA; however, these datasets are not currently consolidated or formally adopted for use in the 7th Cycle methodology.

F17 The large number of committees, subcommittees, and advisory groups involved in SCAG and OCCOG’s RHNA processes promotes broad participation but diffuses accountability, making it difficult to determine who is responsible for specific analytic inputs or process decisions.

Item: 13
407

California State Housing Mandates

F18 The City of Huntington Beach has been unsuccessful in its attempts to contest Housing Mandates. To date, Huntington Beach lacks an approved General Plan Housing Element related to RHNA Allocation.

F19 The City of Irvine has been progressive in submitting a housing plan that calls for twice the number of units mandated (56,000). However, this threatens the historical nature of a master plan community with substantial infrastructure challenges.

F20 Cities and other stakeholders encounter difficulty explaining RHNA outcomes to elected officials and the public due to a lack of clear, consolidated documentation describing how allocation decisions are derived from the underlying data.

F21 The absence of a clearly articulated and easily understandable description of the RHNA allocation algorithm contributes to perceptions that discretionary or political considerations may influence outcomes, even when allocations are made in compliance with state housing laws.

F22 Improved transparency and communication regarding RHNA methodology would enhance public confidence in the process and reduce misunderstandings among member jurisdictions.

RECOMMENDATIONS
In accordance with California Penal Code §933 and §933.05, the 2025-2026 Orange County Grand Jury requires (or, as noted, requests) responses from each agency and city affected by the “Recommendations” presented in this section. Responses are to be submitted to the Presiding Judge of the Superior Court.

Based on its investigation described herein, the 2025-2026 Orange County Grand Jury makes the following 20 recommendations:

R1 OCCOG should expand its technical-assistance and training programs, by September 30, 2026, to ensure that all Orange County jurisdictions understand RHNA methodology, statutory obligations, and the implications of noncompliance. (F1, F2, F3, F4)
R2 OCCOG should coordinate a countywide review of sites identified in local Housing Elements, by December 31, 2026, to evaluate whether each site meets state requirements for realistic capacity and development feasibility, supported by a standardized, version-controlled change log. (F3, F4) Item: 13
408

California State Housing Mandates

Orange County Grand Jury 2025-2026
R3 OCCOG should develop and publish a comprehensive RHNA Inputs Catalog, by April 30, 2027, prior to drafting the 7th Cycle methodology, documenting all datasets used, their sources, methodological assumptions, and a version-controlled record of changes. (F3, F4) R4 OCCOG should create a public-facing RHNA Accountability Dashboard, by April 30, 2027, displaying deadlines, responsible agencies, dataset readiness, and upcoming SCAG decision points, to ensure transparency and timely action by jurisdictions. (F16)
R5 OCCOG should request that SCAG and HCD, by December 31, 2026, provide written guidance explaining how HCD’s recommendations will be applied in shaping the 7th Cycle RHNA methodology so that jurisdictions can prepare proactively. (F16)
R6 OCCOG should convene a 7th Cycle Technical Working Group, by December 31, 2026, composed of planners, data analysts, and transit experts to pre-evaluate methodology scenarios and deliver unified, countywide recommendations to SCAG. (F3, F6, F15)
R7 OCCOG, all Orange County cities and the County of Orange should reassess the current dues structure, by September 30, 2026, to ensure that OCCOG has the resources necessary to effectively represent Orange County jurisdictions in SCAG processes, including RHNA methodology development and appeals. (F3, F15)
R8 By December 31, 2026, the Orange County Board of Supervisors should partner with cities to evaluate countywide infrastructure capacity— including water, wastewater, flood control, transportation, and public-safety systems—and develop a coordinated regional plan capable of supporting the level of housing growth required under state law. (F6) R9 By September 30, 2026, the Orange County Board of Supervisors should strengthen its engagement with OCCOG and increase staff support to develop a shared, countywide database of potential housing sites and key development-feasibility factors. (F15)
R10 By June 30, 2027, the Orange County Board of Supervisors should evaluate whether the County should pursue its own independent Metropolitan Planning Organization (MPO) designation for purposes of regional housing planning. (F5, F6, F7, F15)
Item: 13
409

California State Housing Mandates

R11 The County of Orange and each city should ensure consistent participation in SCAG and OCCOG committees by September 30, 2026, including the Technical Advisory Committee (TAC), to strengthen regional representation during RHNA-methodology development. (F3, F4, F15) R12 The County of Orange and each city should designate a single technical representative, by September 30, 2026, along with an alternate, for all RHNA-related SCAG and OCCOG committees to ensure continuity of participation and eliminate gaps in representation across multiple decision-making bodies. (F4)
R13 OCTA should provide an official, data-frozen countywide transit dataset (GTFS + GIS), by September 30, 2026, to meet OCCOG’s analytical needs for 7th Cycle RHNA planning. (F17)
R14 By April 30, 2027, the County of Orange and each city should publish annual monitoring dashboards showing (a) entitlement pipeline conditions, (b) realistic site yield, (c) assembled funding sources for affordable units, and (d) conversion rates from planned capacity to issued permits and completed units, ensuring that County and city-determined capacity assumptions remain aligned with actual production. (F13) R15 By September 30, 2026, and ongoing, the County Board of Supervisors and all city councils should make a coordinated and sustained effort to educate their constituents about the RHNA process—its requirements, its impact on local planning and community character, and the role residents can play in shaping outcomes. Public education efforts should also include guidance on how community members can effectively engage with the California Legislature and advocate for more realistic, data-driven housing policies. (F1, F7)
R16 By December 31, 2026, all cities should look to enhance their relationships with not-for-profit affordable housing developers to increase the opportunity to develop more affordable housing. (F8, F10, F12) R17 By September 1, 2026, the City of Huntington Beach should evaluate submitting an appropriate Housing Element to reduce potential exposure to HCD penalties. (F18)
R18 By September 1, 2026, the City of Irvine should ascertain the level of community support for its housing element submission and its impact on the character of its master plan. (F19)
Item: 13
410

California State Housing Mandates

Orange County Grand Jury 2025-2026
R19 By September 1, 2026, SCAG should conduct a formal review of its RHNA allocation methodology and clearly document, in understandable language, the inputs, assumptions, weighting, and decision points used in the allocation algorithm. This documentation should be publicly released and designed to improve transparency, reduce perceptions of political influence, and enhance public understanding of how allocations are determined. (F21)
R20 By September 1, 2026, SCAG should revise its RHNA appeals process to improve procedural transparency and responsiveness by clearly defining appeal criteria, documenting staff analyses and recommendations, providing written explanations for appeal decisions, and ensuring jurisdictions have meaningful opportunities to present and respond to staff findings. (F22)

Item: 13
411

California State Housing Mandates

RESPONSES CODE
The following excerpts from California Penal Code provide the requirements for public agencies to respond to the Findings and Recommendations of this Grand Jury’s report:

Penal Code §933
(c) No later than 90 days after the grand jury submits a final report on the operations of any public agency subject to its reviewing authority, the governing body of the public agency shall comment to the presiding judge of the superior court on the findings and recommendations pertaining to matters under the control of the governing body, and every elected county officer or agency head for which the grand jury has responsibility pursuant to Section 914.1 shall comment within 60 days to the presiding judge of the superior court, with an information copy sent to the board of supervisors, on the findings and recommendations pertaining to matters under the control of that county officer or agency head and any agency or agencies which that officer or agency head supervises or controls. In any city and county, the mayor shall also comment on the findings and recommendations. All these comments and reports shall forthwith be submitted to the presiding judge of the superior court who impaneled the grand jury. A copy of all responses to grand jury reports shall be placed on file with the clerk of the public agency and the office of the county clerk, or the mayor when applicable, and shall remain on file in those offices. One copy shall be placed on file with the applicable grand jury final report by, and in the control of the currently impaneled grand jury, where it shall be maintained for a minimum of five years.

Penal Code §933.05.
(a) For purposes of subdivision (b) of Section 933, as to each grand jury finding, the responding person or entity shall indicate one of the following:
(1) The respondent agrees with the finding.
(2) The respondent disagrees wholly or partially with the finding; in which case the response shall specify the portion of the finding that is disputed and shall include an explanation of the reasons therefor.
(b) For purposes of subdivision (b) of Section 933, as to each grand jury recommendation, the responding person or entity shall report one of the following actions:
(1) The recommendation has been implemented, with a summary regarding the implemented action.
(2) The recommendation has not yet been implemented, but will be implemented in the future, with a timeframe for implementation.
(3) The recommendation requires further analysis, with an explanation and the scope and parameters of an analysis or study, and a timeframe for the matter to be prepared for discussion by the officer or head of the agency or department being investigated or reviewed, including the governing body of Item: 13
412

California State Housing Mandates

Orange County Grand Jury 2025-2026
the public agency when applicable. This timeframe shall not exceed six months from the date of publication of the grand jury report. (4) The recommendation will not be implemented because it is not warranted or is not reasonable, with an explanation therefor.
(c) However, if a finding or recommendation of the grand jury addresses budgetary or personnel matters of a county agency or department headed by an elected officer, both the agency or department head and the board of supervisors shall respond if requested by the grand jury, but the response of the board of supervisors shall address only those budgetary or personnel matters over which it has some decision- making authority. The response of the elected agency or department head shall address all aspects of the findings or recommendations affecting his or her agency or department.

RESPONSES
The Orange County Grand Jury requires (or, as noted, requests) the following responses:

OCCOG 90 Day Response Required
Findings F3, F4, F5, F12, F13, F14, F15, F17
Recommendations R1, R2, R3, R4, R5, R6, R7, R9, R11, R13

County of Orange, 90 Day Response Required
Board of Supervisors
Findings F1, F2, F4, F5, F6, F7, F8, F9, F10, F11, F12 Recommendations R7, R8, R9, R10, R11, R12, R14, R15, R16

OCTA 90 Day Response Required
Findings F16
Recommendations R13

SCAG 90 Day Response Required
Findings F3, F4, F5, F12, F13, F14, F15, F17, F20, F21, F22 Recommendations R5, R11, R19, R20

City of Aliso Viejo 90 Day Response Required
Findings: F1, F2, F4, F5, F6, F7, F8, F9, F10, F11, F12 Recommendations: R7, R8, R9, R11, R12, R14, R15, R16

City of Anaheim 90 Day Response Required
Findings: F1, F2, F4, F5, F6, F7, F8, F9, F10, F11, F12 Recommendations: R7, R8, R9, R11, R12, R14, R15, R16

City of Brea 90 Day Response Required
Item: 13
413

California State Housing Mandates

Findings: F1, F2, F4, F5, F6, F7, F8, F9, F10, F11, F12 Recommendations: R7, R8, R9, R11, R12, R14, R15, R16
City of Buena Park 90 Day Response Required
Findings: F1, F2, F4, F5, F6, F7, F8, F9, F10, F11, F12 Recommendations: R7, R8, R9, R11, R12, R14, R15, R16

City of Costa Mesa 90 Day Response Requested
Findings: F1, F2, F4, F5, F6, F7, F8, F9, F10, F11, F12 Recommendations: R7, R8, R9, R11, R12, R14, R15, R16

City of Cypress 90 Day Response Requested
Findings: F1, F2, F4, F5, F6, F7, F8, F9, F10, F11, F12 Recommendations: R7, R8, R9, R11, R12, R14, R15, R16

City of Dana Point 90 Day Response Requested
Findings: F1, F2, F4, F5, F6, F7, F8, F9, F10, F11, F12 Recommendations: R7, R8, R9, R11, R12, R14, R15, R16

City of Fountain Valley 90 Day Response Requested
Findings: F1, F2, F4, F5, F6, F7, F8, F9, F10, F11, F12 Recommendations: R7, R8, R9, R11, R12, R14, R15, R16

City of Fullerton 90 Day Response Requested
Findings: F1, F2, F4, F5, F6, F7, F8, F9, F10, F11, F12 Recommendations: R7, R8, R9, R11, R12, R14, R15, R16

City of Garden Grove 90 Day Response Requested
Findings: F1, F2, F4, F5, F6, F7, F8, F9, F10, F11, F12 Recommendations: R7, R8, R9, R11, R12, R14, R15, R16

City of Huntington Beach 90 Day Response Requested
Findings: F1, F2, F4, F5, F6, F7, F8, F9, F10, F11, F12, F18 Recommendations: R7, R8, R9, R11, R12, R14, R15, R16, R17

City of Irvine 90 Day Response Required
Findings: F1, F2, F4, F5, F6, F7, F8, F9, F10, F11, F12, F19 Recommendations: R7, R8, R9, R11, R12, R14, R15, R16, R18

City of La Habra 90 Day Response Required
Findings: F1, F2, F4, F5, F6, F7, F8, F9, F10, F11, F12 Recommendations: R7, R8, R9, R11, R12, R14, R15, R16

City of La Palma 90 Day Response Requested
Findings: F1, F2, F4, F5, F6, F7, F8, F9, F10, F11, F12 Recommendations: R7, R8, R9, R11, R12, R14, R15, R16

Item: 13
414

California State Housing Mandates

Orange County Grand Jury 2025-2026

City of Laguna Beach 90 Day Response Required
Findings: F1, F2, F4, F5, F6, F7, F8, F9, F10, F11, F12 Recommendations: R7, R8, R9, R11, R12, R14, R15, R16

City of Laguna Hills 90 Day Response Required
Findings: F1, F2, F4, F5, F6, F7, F8, F9, F10, F11, F12 Recommendations: R7, R8, R9, R11, R12, R14, R15, R16

City of Laguna Niguel 90 Day Response Required
Findings: F1, F2, F4, F5, F6, F7, F8, F9, F10, F11, F12 Recommendations: R7, R8, R9, R11, R12, R14, R15, R16

City of Laguna Woods 90 Day Response Required
Findings: F1, F2, F4, F5, F6, F7, F8, F9, F10, F11, F12 Recommendations: R7, R8, R9, R11, R12, R14, R15, R16

City of Lake Forest 90 Day Response Required
Findings: F1, F2, F4, F5, F6, F7, F8, F9, F10, F11, F12 Recommendations: R7, R8, R9, R11, R12, R14, R15, R16

City of Los Alamitos 90 Day Response Requested
Findings: F1, F2, F4, F5, F6, F7, F8, F9, F10, F11, F12 Recommendations: R7, R8, R9, R11, R12, R14, R15, R16

City of Mission Viejo 90 Day Response Required
Findings: F1, F2, F4, F5, F6, F7, F8, F9, F10, F11, F12 Recommendations: R7, R8, R9, R11, R12, R14, R15, R16

City of Newport Beach 90 Day Response Required
Findings: F1, F2, F4, F5, F6, F7, F8, F9, F10, F11, F12 Recommendations: R7, R8, R9, R11, R12, R14, R15, R16

City of Orange 90 Day Response Required
Findings: F1, F2, F4, F5, F6, F7, F8, F9, F10, F11, F12 Recommendations: R7, R8, R9, R11, R12, R14, R15, R16

City of Placentia 90 Day Response Requested
Findings: F1, F2, F4, F5, F6, F7, F8, F9, F10, F11, F12 Recommendations: R7, R8, R9, R11, R12, R14, R15, R16

City of Rancho Santa Margarita 90 Day Response Required Findings: F1, F2, F4, F5, F6, F7, F8, F9, F10, F11, F12 Recommendations: R7, R8, R9, R11, R12, R14, R15, R16

Item: 13
415

California State Housing Mandates

City of San Clemente 90 Day Response Required
Findings: F1, F2, F4, F5, F6, F7, F8, F9, F10, F11, F12 Recommendations: R7, R8, R9, R11, R12, R14, R15, R16

City of San Juan Capistrano 90 Day Response Required
Findings: F1, F2, F4, F5, F6, F7, F8, F9, F10, F11, F12 Recommendations: R7, R8, R9, R11, R12, R14, R15, R16

City of Santa Ana 90 Day Response Required
Findings: F1, F2, F4, F5, F6, F7, F8, F9, F10, F11, F12 Recommendations: R7, R8, R9, R11, R12, R14, R15, R16

City of Seal Beach 90 Day Response Requested
Findings: F1, F2, F4, F5, F6, F7, F8, F9, F10, F11, F12 Recommendations: R7, R8, R9, R11, R12, R14, R15, R16

City of Stanton 90 Day Response Requested
Findings: F1, F2, F4, F5, F6, F7, F8, F9, F10, F11, F12 Recommendations: R7, R8, R9, R11, R12, R14, R15, R16

City of Tustin 90 Day Response Required
Findings: F1, F2, F4, F5, F6, F7, F8, F9, F10, F11, F12 Recommendations: R7, R8, R9, R11, R12, R14, R15, R16

City of Villa Park 90 Day Response Required
Findings: F1, F2, F4, F5, F6, F7, F8, F9, F10, F11, F12 Recommendations: R7, R8, R9, R11, R12, R14, R15, R16

City of Westminster 90 Day Response Requested
Findings: F1, F2, F4, F5, F6, F7, F8, F9, F10, F11, F12 Recommendations: R7, R8, R9, R11, R12, R14, R15, R16

City of Yorba Linda 90 Day Response Required
Findings: F1, F2, F4, F5, F6, F7, F8, F9, F10, F11, F12 Recommendations: R7, R8, R9, R11, R12, R14, R15, R16

Item: 13
416

California State Housing Mandates

Orange County Grand Jury 2025-2026

GLOSSARY AND ACRONYMS
ADU Accessory Dwelling Unit (ADU) is a secondary, independent housing unit located on the same lot as a primary residence. ADUs are sometimes called granny flats, in-law units, casitas, or backyard homes.

Builder’s
Remedy
Builder’s Remedy is a provision in California’s Housing Accountability Act (HAA) that limits a city or county’s ability to deny certain housing projects when the jurisdiction does not have a State-compliant Housing Element.

Charter City Charter City is a city governed by its own locally adopted charter rather than solely by California general law. Under the California Constitution, charter cities have greater authority over municipal affairs, including land use and zoning. However, this authority may be limited when the State determines that a matter, such as housing, is of statewide concern and subject to state law.

COG Council of Governments (COG) is a regional planning body made up of elected officials from cities and counties within a defined geographic area.

Deed-Restricted Deed-Restricted refers to a property that is subject to legally recorded limitations or conditions placed on its use, occupancy, or resale. In the housing context, deed restrictions are commonly used to ensure long-term affordability by limiting resale prices, rental rates, or eligible occupants based on income thresholds for a specified period, often several decades or longer.

Deed-in-Lieu Deed-in-Lieu (of foreclosure) is a voluntary transaction in which a property owner transfers ownership of a property to a lender to satisfy a mortgage debt and avoid foreclosure. While commonly used in the private lending context, the term may appear in discussions of property disposition, distressed assets, or redevelopment-related transactions.

Density Bonus
Incentives
Density Bonus Incentives are benefitting that California law (primarily Government Code § 65915) provides to housing developers in exchange for including affordable housing units within a residential or mixed-use project. These incentives make it easier and financially feasible to build affordable housing by allowing developers flexibility beyond local zoning limits.

Equity
Component
Equity Component is the requirement that housing need to be allocated in a way that promotes socioeconomic equity, reduces Item: 13
417

California State Housing Mandates

segregation, and balances disproportionate household income distributions across jurisdictions.

Fee-in-Lieu Fee-in-Lieu refers to a payment made as an alternative to fulfilling a low income housing requirements.

Federal Clean
Air Act
Federal Clean Air Act (CAA) is the primary U.S. federal law that regulates air pollution to protect public health and the environment. It authorizes the federal government, principally the U.S. Environmental Protection Agency (EPA), to set and enforce standards that limit harmful air pollutants from industrial facilities, power plants, and motor vehicles.

GIS Geographic Information System (GIS) is a type of software and data system used to map, analyze, and visualize geographic information.

Examples: ArcGIS, QGIS which integrates layers of spatial information such as: Parcels, Zoning maps, Transit lines (often imported from GTFS), Flood zones, Environmental constraints, Income and demographic data, RHNA site inventories.

Grand Jury Grand Jury (GJ) is a legal body empowered to conduct official proceedings to investigate potential criminal conduct and determine whether criminal charges should be brought.

Green State Green State generally refers to a government or jurisdiction, often a U.S. state, that prioritizes environmental protection, sustainability policies, and climate-focused governance. The term is descriptive, not legal.

GTFS General Transit Feed Specification (GTFS) is a standardized, machine-readable data format used to describe public transit systems, including Bus routes, Rail lines, Station and stop locations, Service schedules.

General Plan In California, a city General Plan is a comprehensive, long-term policy document that serves as the legal and policy foundation for all local land-use and development decisions within a city. Adopted by the city council pursuant to California Government Code § 65300 et seq., the General Plan expresses the community’s vision for physical development and conservation over time and guides zoning, public investment, and regulatory actions.

HAU Housing Accountability Unit (HAU) is a specialized enforcement and oversight unit within the California Department of Housing and Community Development created to ensure local governments comply with state housing and homelessness laws and to hold Item: 13
418

California State Housing Mandates

Orange County Grand Jury 2025-2026
jurisdictions accountable for meeting their Husing Element commitments.

HCD Housing and Community Development (HCD) is California state agency responsible for housing policy, building standards, and the administration of affordable housing and community development programs. It operates under the California Business, Consumer Services and Housing Agency (BCSH).

Housing
Element Law
(65580-65589.11)
Housing Element Law is California’s foundational land-use law requiring every city and county to plan for the housing needs of all economic segments of the community. It is part of each jurisdiction’s General Plan and must be regularly updated on a state-mandated cycle.

Joint Powers
Authority
A Joint Powers Authority (JPA) is a legal structure used in California (and some other states) that allows two or more public agencies to jointly exercise their powers through a separate, shared entity.

Layered
Financing
Layered Financing (sometimes called capital stacking) is a funding approach in which a project—most commonly a real estate or affordable housing development—is financed through multiple sources of capital, each with different requirements, risk levels, repayment terms, and priorities.

Ministerial
approval
Ministerial approvals are a type of land-use or development approval in which a government agency must issue the permit automatically once an application meets all the objective, pre-established standards. Because the approval is non-discretionary, officials do not exercise judgment or interpretation, hold public hearings, or evaluate subjective criteria such as neighborhood character or compatibility.

MPO Metropolitan Planning Organization (MPO) is a regional transportation-planning agency required by federal law in every urbanized area with 50,000 or more people.

OCGJ Orange County Grand Jury (OCGJ) refers 2025-2026 Orange County Grand Jury.

OCTA Orange County Transportation Authority (OCTA) is the county transportation planning commission, responsible for funding and implementing transit and capital projects for a balanced and sustainable transportation system.

RHNA Regional Housing Needs Allocations (RHNA) works with the California Department of Housing & Community Development (HCD) to allocate each jurisdiction’s share of required housing across income levels.

Item: 13
419

California State Housing Mandates

RTP Regional Transportation Plans (RTP) are utilized to coordinate regional transportation, land-use planning, and climate-related planning (e.g., reducing vehicle miles traveled). Data, forecasts, and long-range planning. They provide demographic forecasts, economic analyses, and collaborative regional policies.

State Housing
Mandates
State Housing Mandates (Housing Mandates) are legal requirements specifically the Housing Element Law in California, obligating local governments (cities/counites) to adopt plans facilitating the construction of housing across all income levels. These mandates require compliance with Regional Housing Needs Allocation (RNHA) targets forcing localities to zone for rather than necessarily build.

SCS In California, a Sustainable Communities Strategy (SCS) is a regional land-use, housing, and transportation planning framework prepared by a Metropolitan Planning Organization as part of its Regional Transportation Plan. Required by Senate Bill 375 (2008), the SCS is designed to integrate transportation investments, housing patterns, and land-use policies in a way that reduces greenhouse gas emissions from passenger vehicles while supporting economic development and public health.

Vacancy Factor
Rates
Vacancy Factor Rates refer to the percentage of housing units within a defined geographic area that are assumed to be vacant at any given time. In state housing planning, vacancy rates are used as an analytical adjustment to account for normal turnover in the housing market and to ensure availability for new households. Assumed vacancy rates directly affect housing need calculations and can influence required housing production targets.
5th Cycle,
6th Cycle,
7th Cycle
The 5th, 6th, and 7th Cycles refer to sequential eight-year planning periods of the Regional Housing Needs Allocation (RHNA) process mandated by California housing law.
• The 5th Cycle generally covered the period from 2013 to 2021 (with timing varying by region).
• The 6th Cycle generally covers the period from 2021 to 2029 and includes significantly higher housing allocations statewide. • The 7th Cycle will be the next allocation period following the 6th Cycle and is expected to further shape long-term housing planning requirements for cities and counties.

Each cycle establishes projected housing needs that jurisdictions must plan for through their Housing Elements.

Item: 13
420

California State Housing Mandates

Orange County Grand Jury 2025-2026

BIBLIOGRAPHY
ABAG. “The “Builder’s Remedy” and Housing Elements”. Association of Bay Area Governments – Technical Assistance for Local Planning Housing, accessed on May 14, 2026. The Builder's Remedy and Housing Elements
Alameldin, Muhammad. “California Housing Laws That Go into Effect in 2025”. Terner Center for Housing Innovation – UC Berkeley, October 29, 2024. California Housing Laws That Go into Effect in 2025 - Terner Center
Biesiada, Noah. “CA Auditor Bashes State’s Mandated Housing Numbers, Says Process Is Flawed, Lacks Oversight”. Voice of OC, April 25, 2022. CA Auditor Bashes State’s Mandated Housing Numbers, Says Process Is Flawed, Lacks Oversight Biesiada, Noah. “Huntington Beach Reignites Fight Against State Housing Law”. Voice of OC, January 11, 2024. Huntington Beach Reignites Fight Against State Housing Law Biesiada, Noah. “How Are Orange County’s Cities Doing At Building Affordable Housing?”. Voice of OC, April 2, 2024. How Are Orange County’s Cities Doing At Building Affordable Housing?
Biesiada, Noah. “Irvine Grapples With Nearly 60,000 New Housing Unites in General Plan Proposal”. Voice of OC, May 21, 2024. Irvine Grapples With Nearly 60,000 New Housing Units in General Plan Proposal
Biesiada, Noah. “Federal Appeals Court Slaps Down Huntington Beach’s Anti Housing Lawsuit”. Voice of OC, October 30, 2024. Federal Appeals Court Slaps Down Huntington Beach’s Anti Housing Lawsuit
Bonta, Rob. “Attorney General Bonta Celebrates U.S. Supreme Court’s Denial of Huntington Beach’s Challenge to State Housing Laws”. State of California – Department of Justice, February 23, 2026. Attorney General Bonta Celebrates U.S. Supreme Court’s Denial of Huntington Beach’s Challenge to State Housing Laws | State of California - Department of Justice - Office of the Attorney General Business issues and Legislative Guide. “Leading the Way to a More Prosperous California”. Advocacy, accessed on May 14, 2026. California Housing in 2025 - Advocacy - California Chamber of Commerce
CA DOF. “Population Projections (Baseline 2024)”. State of California Department of Finance, accessed on May 14, 2026. Projections | California Department of Finance CALCOG. “What Regions Do”. California Association of Councils of Governments, 2026. Home - California Association of Councils of Governments Item: 13
421

California State Housing Mandates

CALCOG. “Housing Implementation Programs Exchange”. California Association of Councils of Governments, accessed in January 2026. Housing Exchange - California Association of Councils of Governments
California Department of Housing and Community Development. “Home Page”.

California HCD, 2026. California Department of Housing and Community Development | California Department of Housing and Community Development California Department of Housing and Community Development. “State Housing Law Program”. California HCD, 2026. State Housing Law Program | California Department of Housing and Community Development
California Department of Housing and Community Development. “California Reaches Settlement with City of Fullerton over Violations of Housing Element Law”. California HCD, January 18, 2024. California Reaches Settlement with City of Fullerton over Violations of Housing Element Law | California Department of Housing and Community Development
California Government Code §65584.01(b). California Government Code section 65584.01 (2025)
California State Senate. “Recent Legislative Actions to Increase Housing production in California”. Shou Senate California Government, February 2025. California State Senate Recent Legislative Actions
Case-Law. “Orange Cnty. Council of Gov’ts. v. Velasquez”. vlex, accessed on May 14, 2026. Orange Cnty. Council of Gov'ts. v. Velasquez - vLex United States CDHC. “A Home for Every Californian”, Statewide Housing Plan, accessed on May 14, 2026. Statewide Housing Plan
CDHCD. “California’s Housing Future 2040: The Next Regional Housing Needs Allocation”. California Department of Housing and Community Development, accessed on May 14, 2026. California’s Housing Future 2040: The Next Regional Housing Needs Allocation | California Department of Housing and Community Development CDHCD. “Enforcement Authority”. California Department of Housing and Community Development, accessed on May 14, 2026. Enforcement Authority | California Department of Housing and Community Development
CDHCD. “Housing Open Data Tools”. California Department of Housing and Community Development, accessed on May 14, 2026. Housing Open Data Tools | California Department of Housing and Community Development
Center for Demographic Research. “Orange County Progress Report”. Cal State Fullerton, April 9, 2026. products | CSUF - Center for Demographic Research Item: 13
422

California State Housing Mandates

Orange County Grand Jury 2025-2026
Chase, Caroline Guibert. ““Builder’s Remedy” Reform Bill Approved by Governor Newsom”. Allen Matkins, September 19, 2024. “Builder's Remedy" Reform Bill Approved by Governor Newsom | Allen Matkins
Chief Financial Officer. “FY 2024-2025 Adopted Budget with NCC Summary”. County of Orange, 2024-2025. FY 2024-25 Final Budget Summary
Christopher, Ben. “Gavin Newsom signs law overhauling local zoning to build more housing”. Cal Matters, October 10, 2025. New California law overrules local zoning to boost housing - CalMatters
Christopher, Ben. (2025, September 28). Why the housing shortage is so hard to quantify. Los Angeles Times (Sunday). PressReader.com | Why the housing shortage is so hard to quantify
Conte, Allaire. “California Added More Homes Than People – but Buyers and Renters Still Aren’t Getting Relief”. realtor.com, April 17, 2026. More Homes, Hardly Any Population Growth—So Why Is California Still So Expensive? Elmendorf, Christopher S. “A Primer on California’s “Builder Remedy” for Housing- Element Noncompliance”. UCDavid School of Law, March 29, 2022. Builder's Remedy Primer
Espinoza, Pablo “Court Agrees Anaheim Violated State Law. Decision is a Big Win for Fair Housing in California”. California Department of Housing and Community Development, February 2, 2024. Court Agrees Anaheim Violated State Law. Decision is a Big Win for Fair Housing in California | California Department of Housing and Community Development
Farzan, Yusra. “Irvine considers waiving affordable housing requirements for developer in land swap deal”. LAist, December 8, 2025. Irvine considers waiving affordable housing requirements for developer in land swap deal | LAist Farzan, Yusra. “Major OC developer can skip affordable housing requirements after Irvine land swap approval”. LAist, December 11, 2025. Major OC developer can skip affordable housing requirements after Irvine land swap approval | LAist FRBSF, “California Post-RDA Affordable Housing Developer Survey: Analysis of Results”. Federal Reserve Bank of San Francisco, accessed on May 14, 2026.

California Post-RDA Affordable Housing Developer Survey: Analysis of Results - San Francisco Fed
Fulton, Bill. “New Pathways to Encourage Housing Production: A Review of California’s Recent Housing Legislation”. Terner Center for Housing Innovation – UC Berkeley, April Item: 13
423

California State Housing Mandates

2023. New-Pathways-to-Encourage-Housing-Production-Evaluating-Californias- Recent-Housing-Legislation-April-2023-Final.pdf
Fulton, William. “Steps Local Governments Can Take to Unlock More Housing: Lessons from San Diego”. Terner Center for Housing Innovation – UC Berkeley, October 8, 2025. Steps Local Governments Can Take to Unlock More Housing: Lessons from San Diego - Terner Center
Garcia, David. “Making It Pencil: The Math Behind Housing Development (2023 Update)”. Terne Center for Housing Innovation – UC Berkeley, December 2023. Turner Center UC Berkeley Development Math
Goertzen, Jeff and Lansner, Jonathan. (2026, April 4) Infographic: Are people leaving California? Here’s what the numbers show us. The Orange County Register, online.

Infographic: Are people leaving California? Here’s what the numbers show us – Orange County Register
Greenwald, David. “Court: ‘Regional Housing Need’ Determinations Aren’t Judicially Reviewable”. Vanguard News Group, July 28, 2023. Court: 'Regional Housing Need' Determinations Aren’t Judicially Reviewable - Davis Vanguard Hale, Danielle and others. “The California State of Real State”. realtor.com, January 29, 2026. The California State of Real Estate - Realtor.com Economic Research Hicks, Angelina. “San Juan Capistrano With Mandated Housing Numbers”. Voice of OC, August 26, 2025. San Juan Capistrano Grapples With Mandated Housing Numbers Johnson, Hans and Mejia, Marisol Cuellar and McGhee, Eric. “California’s Population”.

PPIC, January 2026. California's Population - Public Policy Institute of California Johnson, Nikie and Collins, Jeff. (2021, January 31). Report Card: California cities, counties failing again on affordable housing goals. The Orange County Register, online.

Report card: California cities, counties failing again on affordable housing goals – Orange County Register
Julia Gill and Schuetz, Jenny. “In California, statewide housing reforms brush against local resistance”. Brookings, June 28, 2023. In California, statewide housing reforms brush against local resistance | Brookings
LegalClarity California. “California Housing Element Law Explained”. Search LegalClarity, December 14, 2025. California Housing Element Law Explained – Legal Clarity
LegiScan LLC. “California Legislature | 2025-2026 | Regular Session”. LigiScan – Bringing People to the Process, 2025-2026. California Legislature | 2025-2026 | Regular Session | LegiScan
Item: 13
424

California State Housing Mandates

Orange County Grand Jury 2025-2026
Mazzella, Danielle M. “California Affordable Housing Needs Report 2025”. California Housing Partnership, 2025. CHP State Housing Needs Report McDonald, Cynthia. “Planning Commission Meeting Bombshell!”. Costa Mesa First, February 13. Planning Commission Bombshell: Housing Element Update Crisis in Costa Mesa
Metcalf, Ben. “Testimony to the Select Committee on Housing Construction Innovation”.

Terner Center for Housing Innovation – UC Berkeley, January 6, 2026. Testimony to the Select Committee on Housing Construction Innovation - Terner Center Newsom, Garvin. “Final Regional Housing Need Assessment”. State of California – Department of Housing and Community Development, October 15, 2019. Southern California COG Regional Housing Need Determination
OCCOC. “Press Release June 1, 2021”. Orange County Council of Governments, June 1, 2021. OCCOG Press Release HCD
OCCOG. “We lead Orange County’s subregional planning”. Orange County Council of Governments, accessed in January 2026. Orange County Council of Governments Orange County Community. “Orange County Community Indicators - 25th Anniversary Report”. Orange County Business Council, 2024-2025. 1-150.

CommnityIndicators24_digital.pdf
Osterberg, Annelise. “Best Practices for Allocating and Evaluating RHNA”. Goldman School of UC, Spring 2020. Best Practices for Allocating & Evaluating RHNA Press Release. “California State Auditor Releases Scathing Report on RNA Process, Report Finds Housing Goals are Not Supported by Evidence”. Voice of OC, April 8, 2022. California State Auditor Releases Scathing Report on RHNA Process, Report Finds Housing Goals are Not Supported by Evidence
SCAG. “About Us”. Southern California Association of Governments, accessed on January 14, 2026. About us | Southern California Association of Governments SCAG. “Regional Housing Needs Assessment”. Southern California Association of Governments, accessed in January 2026. Regional Housing Needs Assessment | Southern California Association of Governments
South Coast AQMD. “Frequently Asked CEQA Questions”. South Coast Air Quality Management District, accessed on May 14, 2026. South Coast Air Quality Management District - CEQA
Tilden, Michael S. “Regional Housing Needs Assessments”. Auditor of the State of California, March 17, 2022. Report 2021-125
Item: 13
425

California State Housing Mandates

The Editorial Board (2026, March 11). Editorial: Mission Viejo’s needless angst over apartments. The Orange County Register, online. Editorial: Mission Viejo’s needless angst over apartments – Orange County Register
Trachtman, Samuel. “Fixing California’s housing shortage requires new policy and new politics”. BESI – Berkeley Economy & Society Initiative, April 22, 2025. Fixing California’s housing shortage requires new policy and new politics - Berkeley Economy & Society Initiative
Uhler, Brian. “LAO Housing Publications”. Legislative Analyst’s Office – The California Legislature’s Nonpartisan Fiscal and Policy Advisor, accessed on May 14, 2026.

California Legislative Analyst's Office - California Housing United States Census Bureau. “Parent Directory”. United States Government, accessed in April 2026. Index of /programs-surveys/popest/tables Varian, Ethan. (2023, June 25). Nuclear option’? Supersized housing projects are planned for Bay Area’s wealthiest cities. Is one coming to your neighborhood? The Mercury News, online. Is a supersized housing project coming to your Bay Area neighborhood?
Ward, Jason M. and Schlake, Luke. “The High Cost of Producing Multifamily Housing in California”. Rand, April 2, 2025. The High Cost of Producing Multifamily Housing in California: Evidence and Policy Recommendations | RAND
2024 Advocates Guide. “Land Use Restrictions and Affordable Housing”. National Low Income Housing Coalition, accessed on May 14, 2026. National Low Income Housing Coalition - Land Use Restrictions and Affordable Housing

Item: 13
426

California State Housing Mandates

Orange County Grand Jury 2025-2026

APPENDIX
APPENDIX A: Major Housing Laws & What They Tried to Do81 Surplus Land Act (1968; strengthened by AB 1486 in 2019) Problem addressed: Local agencies often disposed of valuable public land without prioritizing affordable housing.

Solution: The Surplus Land Act requires local agencies to offer surplus sites to affordable housing developers first; AB 1486 (2019) expanded who must comply, added reporting, and created enforceable penalties. HCD now issues binding guidelines and may impose fines.

Role: A siting tool that converts public land near jobs/transit into affordable housing at scale (HCD reports thousands of units proposed/approved under SLA).

Housing Element Law & RHNA (1969; RHNA made mandatory by 1980 AB 2853; repeatedly strengthened)
Problem addressed: Cities historically under-planned for growth or zoned exclusionary, constraining supply across income levels.

Solution: Every city/county must adopt an 8-year Housing Element showing adequate, zoned sites to meet its RHNA allocation by income tier; HCD issues regional need determinations and certifies elements. Enforcement has tightened (HCD’s Housing Accountability Unit; fines; referrals to the AG).

Role: The spine of California housing policy—other laws (HAA, SB 35, SB 330, AFFH) enforce or operationalize these plans.

Density Bonus Law (1979; expanded often, incl. AB 1287 in 2023) Problem addressed: Mixed-income projects often do not pencil without zoning flexibility.

Solution: Grants extra units, incentives/waivers, and reduced parking in exchange for deed- restricted affordable homes; AB 1287 (2023) added a “stackable” bonus on top of the 50% base, enabling up to ~100% bonus with additional very-low/moderate units.

Role: A ubiquitous feasibility lever to deliver affordability in market-rate projects.

Housing Accountability Act (HAA) (1982; strengthened 2017–2019) Problem addressed: Cities used subjective discretion (e.g., “neighborhood character”) to deny otherwise compliant housing.

Solution: Limits denial, density reduction, or infeasible conditions for projects meeting objective standards, unless the city makes specific, evidence-based health/safety findings. 2017–2019 updates raised the burden of proof, added fees/attorney’s fees, and clarified “objective standards.” Role: A litigation-backed guardrail ensuring code-compliant housing moves forward—the State’s classic “anti-NIMBY” tool.

Redevelopment Agencies (RDAs): Termination and Loss of Local Affordable Housing Funds (2011–2012)
Problem addressed (pre-2012): RDAs used tax-increment financing with a 20% housing set-aside to fund affordable housing; the State later sought budget relief.

Solution: The Legislature passed ABx1 26 (2011); the California Supreme Court affirmed dissolution

81 Housing Statutes were summarized Microsoft Co-Pilot May 2025 version Item: 13
427

California State Housing Mandates

effective Feb 1, 2012, shifting property-tax increment, and creating successor agencies to wind down obligations.

Role: Ended a major local funding stream, increasing reliance on density bonus, public land, tax credits, and state programs.

SB 375 (2008) & SB 743 (2013; statewide VMT implementation 2020) Problem addressed: Sprawl drove VMT and GHGs; CEQA’s Level of Service (LOS) metric discouraged infill.

Solution: SB 375 requires Sustainable Communities Strategies (SCS) aligning land use and transportation to cut GHGs; SB 743 replaced LOS with VMT in CEQA, favoring infill and multimodal access, with statewide implementation by 2020.

Role: Climate + housing siting framework; housing near jobs/transit faces fewer CEQA hurdles than sprawl.

ADUs (2016–2025 waves): Legalizing “Gentle Density”
Problem addressed: Single-family-only rules and local barriers (parking, minimums) impeded backyard cottages/garage conversions near jobs.

Solution: Successive bills created 60-day ministerial approval, broad parking relief, and standardized rules; HCD’s 2025 ADU Handbook consolidates guidance and updates.

Role: A distributed, lower-cost production engine—large, scalable homeowner-led supply statewide.

HCD Law §16884.01 (2017): Establishes Housing Element Compliance Consequences and State Enforcement Authority
Problem addressed: For decades, many cities and counties failed to adopt or maintain HCD-compliant Housing Elements, resulting in chronic under-production of housing, exclusionary zoning practices, and resistance to RHNA obligations. Prior housing law lacked clear, enforceable consequences for noncompliance, allowing jurisdictions to delay, obstruct, or ignore housing planning requirements with minimal risk. This undermined statewide housing policy, fair housing objectives, and public accountability.

Solution: HCD Law §16884.01 clarifies and operationalizes the legal consequences of H ousing Element non-compliance, explicitly linking failure to adopt or implement a compliant H ousing Element to loss of local land-use discretion and enhanced state oversight. The law affirms HCD’s authority to make formal findings of noncompliance and triggers statutory remedies under related housing laws, including limits on down-zoning, exposure to the Housing Accountability Act, and eligibility for “builder’s remedy” projects when required conditions are met. It strengthens the enforceability of Housing Element Law by making compliance legally consequential rather than aspirational.

Role: A state enforcement backbone for California’s housing planning system, §16884.01 functions as a compliance-triggering provision that gives real effect to RHNA and Housing Element Law. It shifts housing policy from a negotiation-based model to a rule-of-law framework, ensuring that local governments that refuse to plan for housing face predictable, uniform consequences while compliant jurisdictions retain local control. The statute is central to California’s modern “Yes In My Backyard” enforcement regime.

SB 35 (2017): Streamlined Ministerial Approval
Problem addressed: Lengthy discretionary review and CEQA litigation stalled production, especially where jurisdictions lagged RHNA.

Solution: Creates a ministerial (CEQA-exempt) pathway in cities not meeting RHNA progress for qualifying infill projects that meet objective standards, affordability, and labor provisions; HCD issued binding guidelines.

Item: 13
428

California State Housing Mandates

Orange County Grand Jury 2025-2026
Role: A fast lane that translates zoning into approvals within 90–180 days; HCD publishes which jurisdictions are subject.

AB 686 (2018): Affirmatively Furthering Fair Housing (AFFH) Problem addressed: Persistent segregation and unequal access to opportunity despite fair-housing statutes.

Solution: Requires all public agencies to affirmatively further fair housing and adds new Housing Element duties (analysis of segregation, access to opportunity, displacement risk, equitable siting).

Role: Embeds civil-rights obligations into RHNA/Housing Elements, pushing lower-income housing into high-opportunity areas.

SB 330 (2019; extended by SB 8 to 2030): Housing Crisis Act Problem addressed: Moving goalposts (new subjective standards), downzoning, unlimited hearings, and loss of protected units increased entitlement risk.

Solution: Freezes new subjective design rules, caps hearings, creates preliminary application vesting, and requires replacement/relocation when protected units are impacted.

Role: Stabilizes entitlements, preserves capacity, and protects renters.

SB 9 (2021): Duplexes & Urban Lot Splits
Problem addressed: Large single-family parcels constrained capacity; owners lacked simple legal paths to add units.

Solution: Requires ministerial approval of up to two units on most single-family lots and allows urban lot splits (with guardrails). Implementation and litigation have been mixed, but SB 9 continues to operate statewide.

Role: Incremental densification in high-opportunity areas (uptake has been modest vs. ADUs).

SB 10 (2021): Local Rezoning for “Missing Middle” Housing Problem addressed: CEQA-exposed rezonings and voter-approved limits made modest upzoning slow and risky.

Solution: Voluntary tool letting cities zone up to 10 units/parcel on transit-rich or urban infill sites with the rezoning action itself exempt from CEQA; may override local initiative restrictions with a 2/3 council vote.

Role: A local-option upzoning mechanism; note it does not streamline the project approvals that follow.

AB 2011 (2022): Affordable Housing and High Road Jobs Act Problem addressed: Vast commercially-zoned land sat underused while housing faced discretionary review and CEQA.

Solution: Creates ministerial, CEQA-exempt approvals for qualifying multifamily on commercial corridors via two paths: 100% affordable or mixed-income meeting corridor, site, and labor standards. Effective July 1, 2023.

Role: A production-focused pathway converting retail/office/parking sites into housing statewide.

SB 6 (2022): Middle Class Housing Act (Companion to AB 2011) Problem addressed: Housing often not allowed on commercial parcels absent a rezoning.

Solution: Allows residential use in many commercial zones (by right as a permitted use) with labor standards; not ministerial/CEQA-exempt on its own (but can combine with other tools). Effective July 1, 2023.

Role: Opens more sites to housing when AB 2011 is not available.

Item: 13
429

California State Housing Mandates

AB 2097 (2022): Eliminating Parking Minimums Near Transit Problem addressed: Mandatory parking minimums near transit raised costs and reduced housing feasibility.

Solution: Prohibits minimum parking requirements for most projects within ½ mile of a major transit stop (with narrow exceptions); HCD issued a 2025 Technical Advisory for implementation.

Role: Lowers costs and removes a common barrier to infill housing.

SB 423 (2023): Extends & Expands SB 35 Through 2036
Problem addressed: SB 35’s 2026 sunset and exclusions (e.g., much of the Coastal Zone) limited reach; many cities still failed RHNA or lacked certified elements.

Solution: Extends SB 35 to 2036, applies streamlining to more jurisdictions and sites (incl. parts of the Coastal Zone), ties eligibility to Housing-Element compliance, and updates affordability/labor standards; allows DGS to administer on State-owned land.

Role: A statewide production accelerator, making the SB 35 fast lane broader and longer-lived.

SB 131 + AB 130 (2025): CEQA & Housing Streamlining (Budget Trailer Bills) Problem addressed: Infill housing still faced CEQA delays, litigation risk, and inconsistent timelines.

Solution: Establishes new CEQA exemptions for qualifying infill housing (e.g., up to 20 acres, or 5 acres for builder’s-remedy sites), streamlined review, and—via the broader package—a temporary freeze on code updates to improve predictability. Effective June 30, 2025.

Role: A modernized CEQA framework that complements HAA/SB 330/SB 35 to speed compliant housing.

Builder’s Remedy under HAA (codified/updated 2024–2025) Problem addressed: Some cities delayed or adopted non-compliant Housing Elements to preserve restrictive zoning.

Solution: AB 1893 (2024) and AB 1886 (2024) formalize and clarify the Builder’s Remedy: where a jurisdiction lacks a certified element, qualifying projects with required affordability may proceed (with new standards and protections effective Jan 1, 2025).

Role: A blunt enforcement backstop—if a city does not plan properly, it loses discretion to reject compliant affordable projects.

SB 79 (2025): Overrides Local Zoning to Enable Higher-Density Housing Near Transit Problem addressed: Local zoning caps on height and density near transit stops prevented production of transit-oriented housing even in regions with extensive rail and bus networks.

Solution: Preempts local zoning within ½ mile of qualifying transit stops to legalize multi -story multifamily housing, allowing substantially greater height and density. Creates a statewide TOD framework that can be combined with SB 35, SB 330, the Housing Accountability Act, and the State Density Bonus Law to streamline approvals at lower affordability thresholds.

Role: A land-use preemption tool establishing “as-of-right” higher density near transit so state streamlining laws (e.g., SB 35) can actually deliver buildable transit-oriented projects. It operationalizes California’s TOD objectives and supports pro-housing production goals.

AB 507 (2025): Establishes Adaptive Reuse as Use-by-Right With Streamlined Approval Problem addressed: High commercial vacancy rates and slow, discretionary local approval processes made it difficult to convert underutilized office/retail buildings into housing—despite acute statewide housing shortages.

Item: 13
430

California State Housing Mandates

Orange County Grand Jury 2025-2026
Solution: Declares adaptive reuse a use-by-right in all zones except non-residential industrial areas and provides ministerial, streamlined approval for eligible projects in existing buildings (generally <50 years old or meeting historic-preservation requirements). Requires income-restricted units (e.g., 8% very low + 5% extremely low, or 15% lower-income for rentals) and allows mixed-use conversions if ≥50% of floor area is residential. Waives parking for portions of buildings without existing on-site parking.

Role: A conversion-focused production tool enabling rapid, CEQA-bypassed adaptive reuse of commercial buildings into housing. Pairs with local incentive programs (e.g., tax-increment-funded Adaptive Reuse Investment Funds starting FY 26-27) to subsidize affordability and unlock large-scale urban reuse.

AB 648 (2025): Exempts Community College Housing from Local Zoning Problem addressed: Community college districts (CCDs) face severe barriers building student, faculty, and staff housing because local zoning ordinances—unlike UC/CSU—block or delay projects, worsening housing insecurity for the 2M+ community college students, over half of whom experience housing instability.

Solution: Exempts CCD-built student, faculty/staff, and university housing projects on CCD-owned or leased property from local city/county zoning regulations. Requires certain projects with faculty/staff units to include extremely low- and lower-income affordable units. Declares the exemption a matter of statewide concern applying to all cities, including charter cities.

Role: A state-level preemption tool enabling rapid production of student and workforce housing on community college land, eliminating local zoning barriers and aligning CCD authority with UC/CSU to address student homelessness and workforce affordability.

AB 1021 (2025): Expands and Streamlines Workforce Housing on School District Property Problem addressed: High housing costs prevent school districts from recruiting and retaining teachers and staff; thousands of acres of school-owned land remain underutilized due to zoning barriers, procedural hurdles, and limits on allowable uses.

Solution: Revises and expands the law deeming workforce housing an allowable use on any property owned by a local educational agency (LEA). Requires qualifying projects (≥10 units) to prioritize renting to school employees and the public under a set hierarchy, with a majority of units deed-restricted for lower- or moderate-income households. Applies Housing Accountability Act protections, enables density bonuses, and extends the program to 2036.

Role: A major workforce-housing production tool that cuts red tape, activates school district land for affordable educator housing, and strengthens school staffing stability—particularly in high-need communities where housing costs drive turnover.

AB 253 (2025): Creates a Private Pathway to Speed Up Residential Permit Plan -Checking Problem addressed: Local building departments often take more than 30 days to complete residential plan checks, creating permitting backlogs that slow housing production, increase project costs, and leave small-scale infill projects stalled.

Solution: Establishes the California Residential Private Permitting Review Act, requiring cities/counties to publish residential permit fee schedules and provide applicants with estimated plan -check timelines. If the estimated timeframe exceeds 30 business days (or if no determination is provided within 30 days), applicants may hire a licensed private professional (“private professional provider”) to perform the plan check. Applies to 1–10 unit projects ≤40 ft tall and allows private reviewers to certify compliance via affidavit.

Item: 13
431

California State Housing Mandates

Role: A post-entitlement acceleration tool that cuts through municipal bottlenecks by letting homeowners and builders use certified private reviewers, moving small-scale housing through permitting faster while maintaining local agency oversight.

AB 1308 (2025): Imposes an Inspection “Shot Clock” and Allows Private Inspectors Problem addressed: Unpredictable and months-long delays in final inspections—framing, electrical, plumbing, final occupancy sign-off—prevent newly built or renovated homes from being occupied, increasing holding costs and slowing the delivery of small-scale housing.

Solution: Requires local building departments to conduct inspections for 1–10-unit projects (≤40 ft) within 10 business days after receiving notice of completion. If the estimated inspection window exceeds 30 days—or no inspection occurs within 30 days—applicants may hire a licensed private professional inspector to complete the inspection and submit an affidavit attesting to code compliance. Also requires cities/counties to post residential permit fee schedules.

Role: A post-entitlement enforcement and delivery tool that ensures housing is not delayed at the final inspection stage. Speeds up occupancy, adds accountability to local inspection offices, and allows builders to default to vetted third-party inspectors when jurisdictions are too slow.

AB 712 (2025): Strengthens Enforcement of State Housing Laws Against Noncompliant Cities Problem addressed: Local agencies routinely delay, obstruct, or illegally deny housing projects despite state housing reform laws; enforcement is weak, costly for applicants, and slow, enabling jurisdictions to continue violating State Mandates without consequence.

Solution: Creates a robust enforcement framework requiring courts to award attorney’s fees and costs to prevailing housing applicants and to impose mandatory fines on violating local agencies. Extends statutes of limitation by 60 days when applicants issue a notice of intent to sue, and bars agencies from requiring applicants to indemnify them for litigation arising from the agency’s own violations. Defines “housing reform law” broadly to cover laws protecting housing applicants or limiting local discretion.

Role: A statewide compliance tool that finally gives housing applicants meaningful remedies—and gives local governments financial and legal consequences for ignoring state housing law, thereby enabling real enforcement of the State’s pro-housing framework.

SB 808 (2025): Fast-Tracks Judicial Review of Housing Permit Denials Problem addressed: Cities continue denying compliant housing projects, forcing applicants into a slow judicial review process where litigation delays—often lasting years—kill projects, escalate costs, or allow permits to expire.

Solution: Establishes an expedited writ-of-mandate process for housing permit denials. Requires:
• Local agencies to compile and certify the administrative record within 15 days. • Courts to set hearings within 45 days and issue decisions within 30 days of submission (or 75 days from filing, whichever comes first).
• Priority scheduling for appeals.

Allows the applicant, Attorney General, or HCD to file the petition; authorizes temporary judicial assignments to meet deadlines.

Role: A litigation-acceleration tool that prevents local agencies from using procedural delay to kill housing projects, ensuring that California housing laws have immediate, enforceable consequences.

Complements AB 712 by enforcing housing rights on the judicial side.

Item: 13
432

California State Housing Mandates

Orange County Grand Jury 2025-2026
SB 786 (2025): Clarifies Housing Element Law and Strengthens Court Remedies Against Noncompliant Cities
Problem addressed: Conflicts between General Plan elements, vague housing-element rules, and slow litigation processes create uncertainty for cities, courts, and developers—leading to delays, stalled rezoning, and litigation bottlenecks that block housing production.

Solution: Establishes clear hierarchy rules: when General Plan elements conflict—including quantified development standards—the most recently adopted, HCD-certified Housing Element controls. Tightens judicial timelines in Housing-Element challenges:
• Limits continuances to 60 days,
• Requires temporary relief whenever continuances occur, • Requires HCD to conduct substantial-compliance reviews when local jurisdictions miss required Housing-Element deadlines,
• Extends rezoning compliance timelines to 120 days and mandates sanctions if jurisdictions fail to comply.

Applies general-plan challenge rules to charter cities.

Role: A statewide governance-and-compliance tool ensuring that Housing Elements actually function as the controlling document, reducing litigation gamesmanship, and compelling jurisdictions to implement rezoning and Housing-Element obligations on enforceable timelines. Complements AB 712 and SB 808 as part of the Attorney General’s statewide enforcement strategy.

SB 340 (2025): Expands Emergency Shelter Requirements in Housing Elements Problem addressed: Emergency shelter planning requirements were outdated and limited, failing to reflect modern shelter models (e.g., navigation centers, recuperative care) and the full range of onsite supportive services needed for effective homelessness response.

Solution: Updates the definition of “emergency shelter” to require housing with supportive services (not minimal services) and requires Housing Elements to account for all onsite services consistent with written, objective standards. Imposes new obligations on cities/counties in shelter planning and broadens the Emergency Housing and Assistance Program definition.

Role: A homelessness-response modernization tool ensuring jurisdictions plan realistically for service- rich shelter models within their Housing Elements and zoning designations.

AB 610 (2025): Requires Disclosure of New Local Governmental Constraints in Housing Elements Problem addressed: Cities and counties were adopting new land-use constraints (fees, ordinances, zoning rules) during Housing-Element cycles without disclosure, undermining RHNA compliance and increasing barriers to housing production.

Solution: Requires a governmental constraints disclosure statement in each H ousing Element (7th Cycle onward), identifying all new or amended constraints adopted since the last Housing Element. Prohibits adoption of new constraints unless they were disclosed and the jurisdiction has completed all required programs to remove past constraints (except when mandated by state/federal law). Applies to charter cities.

Role: A transparency and anti-backsliding tool ensuring local governments cannot quietly increase barriers to housing once RHNA obligations are set.

AB 670 (2025): Allows Converted Affordable Units to Count Toward RHNA Reporting Problem addressed: Cities lacked credit in their Annual Progress Reports (APRs) for preserving or converting multifamily buildings into long-term deed-restricted affordable housing, despite this being a major preservation strategy.

Item: 13
433

California State Housing Mandates

Solution: Expands APR reporting starting in 2027 to allow units converted to affordable housing—with 55-year covenants for low, very low, extremely low, or acutely low income households—to count toward a jurisdiction’s RHNA-creditable progress, if they meet specified criteria. Includes detailed new reporting requirements for demolitions, replacement units, and affordable conversions.

Role: A preservation-credit tool aligning RHNA reporting with long-term affordable housing conversion strategies, encouraging cities to preserve expiring-affordability stock.

AB 726 (2025): Allows Cities to Count Substantial Rehabilitation of Affordable Units in APRs Problem addressed: Deeply affordable older units (often 15+ years old) need major rehabilitation but cities receive zero RHNA/APR credit for investing in repairs—causing cities to prioritize new construction instead of preserving aging stock.

Solution: Allows jurisdictions to include substantially rehabilitated deed-restricted affordable units (≥15 years old, ≤45% AMI average affordability, ≥$60k local investment per unit) in APRs. These units cannot be counted toward eligibility for streamlining under SB 35. Updates references to the Office of Land Use and Climate Innovation.

Role: A preservation-incentive tool enabling cities to earn APR credit for rehabilitating deeply affordable units, helping maintain long-term housing quality and prevent affordable-stock losses.

AB 1275 (2025): Extends RHNA Timelines and Aligns Housing Needs with Transportation Plans Problem addressed: Regional Housing Needs Determinations (RHND) were rushed due to tight timelines (2-year lead time), leading to disputes, insufficient data review, and disconnects between transportation planning and housing allocations.

Solution: Extends RHND timeline from 2 to 3 years before a Housing-Element update (with special rules for 2027–2029 cycles), requires earlier consultation between HCD and councils of governments (COGs), and mandates that RHNA methodology be informed by Sustainable Communities Strategy (SCS) patterns in regional transportation plans. Strengthens integration of job-housing balance, mobility patterns, and fair housing objectives.

Role: A regional-planning alignment tool ensuring RHNA allocations better reflect transportation, climate, and job-housing realities, improving the planning accuracy of future housing cycles.

SB 233 (2025): Requires Earlier State–Regional Consultation for RHNA Determinations Problem addressed: During prior RHNA cycles, HCD provided regional housing need numbers too late (26-month timeline), leaving councils of governments (COGs) and cities with insufficient time to plan, contributing to widespread late Housing-Element adoption.

Solution: Requires HCD to meet and consult with each COG at least 38 months before a Housing-Element revision (one year earlier than prior law), with special rules for the 7 th Cycle. Ensures
earlier agreement on RHNA assumptions, methodologies, and data inputs.

Role: A regional-planning coordination tool that expands the planning window for local governments, reducing delays, improving RHNA accuracy, and increasing likelihood of timely Housing-Element compliance.

AB 920 (2025): Requires Centralized Online Portals for Housing Permit Applications Problem addressed: Local permitting processes were opaque, slow, and inconsistent across cities; applicants could not easily track housing development permits, resulting in delays, confusion, and high administrative burdens.

Solution: Requires cities/counties with populations ≥150,000 to create a centralized online application portal for housing development projects, allowing electronic submissions and real -time status tracking.

Item: 13
434

California State Housing Mandates

Orange County Grand Jury 2025-2026
Jurisdictions may delay implementation until 2030 only if they begin procurement by 2028. Applies to charter cities.

Role: A statewide digital-permit modernization tool that increases transparency, reduces processing delays, and standardizes how applicants navigate housing approvals.

SB 358 (2025): Reduces Traffic Impact Fees for Transit-Oriented Housing Problem addressed: Traffic impact fees—often 20% of project cost—were applied using outdated auto-trip assumptions, inflating costs for infill and transit-oriented housing that generates fewer vehicle trips.

Solution: Reforms the Mitigation Fee Act to:
• Require at least 50% fee reductions for qualifying transit-oriented housing, • Update eligibility criteria (parking maximums, proximity to ≥3 amenities, transit-priority locations), • Require fee-denial findings to be supported by substantial evidence, • Remove outdated convenience-retail requirements and proportional-fee provisions.

Role: A cost-reduction and TOD-incentive tool that aligns traffic fees with actual impacts, supporting infill and climate-oriented housing production.

AB 752 (2025): Makes Child Daycare Centers in Multifamily Housing a Use-by-Right Problem addressed: Cities treated daycare centers co-located with multifamily housing as commercial uses—triggering zoning barriers, business license fees, CEQA review, and inconsistent local requirements, reducing childcare capacity near where families live.

Solution: Makes daycare centers co-located with multifamily housing or community amenities a residential use by right; prohibits business license fees; exempts such centers from CEQA; bars stricter standards on them than those applied to the co-located housing or amenity. Maintains all California licensing and safety requirements.

Role: A childcare-access and land-use integration tool that reduces barriers to collocated daycare centers, supporting housing-adjacent amenities and family-serving communities.

SB 415 (2025): Refines Statewide Warehouse & Logistics Development Standards (Not a housing production bill but affects land-use and zoning environments related to freight-adjacent communities.)
Problem addressed: AB 98 (2024) established statewide warehouse standards but included ambiguous definitions and inconsistent requirements, creating confusion for local governments, developers, and environmental-justice communities in logistics-heavy regions.

Solution: SB 415 clarifies key definitions (“logistics use development,” “sensitive receptor”), narrows exemptions, updates siting and truck-route standards, refines buffer requirements, and ensures 21st-century warehouses meet applicable sustainable-design standards at permit issuance. Also clarifies where warehouse concentration regions apply.

Role: A land-use-governance and environmental-mitigation tool improving clarity and enforceability of statewide logistics-facility regulations—reducing conflicts between freight operations, housing, and community health.

AB 98 (2024–2025): Establishes Statewide Design, Siting & Environmental Standards for Logistics Facilities
Problem addressed: Warehouse and logistics developments—especially in the Inland Empire—were producing severe air-quality, noise, traffic, and public-health impacts on nearby residential areas, schools, and other sensitive receptors, while local regulations were inconsistent or ineffective.

Item: 13
435

California State Housing Mandates

Solution: Creates California’s first statewide design, siting, and operational standards for logistics facilities, including:
• Mandatory buffers (500–900 feet) from sensitive receptors, • Truck-route and loading-bay orientation requirements, • Anti-idling measures and cold-storage plug-ins,
• Title 24–level building efficiency standards (solar, EV-readiness), • 2:1 replacement requirement for recently occupied affordable units demolished, • Applicability to large new facilities and expansions ≥20% of floor area.

Compliance required for applications submitted after Sept. 30, 2024, with most standards fully effective Jan. 1, 2026.

Role: A statewide environmental-mitigation and freight-land-use tool aimed at protecting communities while aligning logistics growth with sustainability and public-health goals. AB 98 is foundational to later cleanup legislation (SB 415).

AB 1007 (2025): Cuts Responsible-Agency Permit Deadlines in Half Problem addressed: Even after cities approved housing projects, state and regional “responsible agencies” (e.g., air districts, water boards) could take months to issue secondary permits, causing ballooning timelines and costs. Shot-clocks for these agencies (90 days) were much longer than those for lead agencies.

Solution: Amends the Permit Streamlining Act to require responsible agencies to approve/disapprove residential, mixed-use, supportive, or farmworker housing permits within 45 days of project approval or application completeness—cutting the prior 90-day deadline in half. Applies statewide, including charter cities.

Role: A permitting-acceleration tool ensuring faster post-entitlement approvals and reducing interagency delays that frequently stall housing construction.

AB 1050 (2025): Allows Removal of Private Covenants Blocking Housing on Commercial Properties
Problem addressed: Commercial parcels often have old CC&Rs and reciprocal easement agreements (REAs) that prohibit residential uses or limit density, preventing commercial-to-housing adaptive-reuse projects—even when allowed under State housing laws like AB 2011.

Solution: Expands existing restrictive-covenant-modification law (previously limited to affordable housing) to all qualifying housing developments located on commercial sites, allowing developers to:
• Invalidate covenants that restrict residential use, density, unit count, or occupancy, • Apply the process to REAs as well as CC&Rs,
• Record a Restrictive Covenant Modification Document after county counsel review.

Does not authorize projects inconsistent with state housing laws.

Role: A statewide barrier-removal tool enabling adaptive reuse of commercial corridors and shopping centers into housing by preempting private land-use restrictions.

SB 92 (2025): Closes Loopholes in the Density Bonus Law for Mixed-Use Projects Problem addressed: Developers exploited the Density Bonus Law to exceed commercial FAR and build oversized hotel-heavy or visitor-serving mixed-use projects with minimal housing (e.g., San Diego “Project Vela”).

Solution: Reforms Density Bonus Law by:
• Limiting commercial FAR increases under DBL to ≤2.5× base zoning, • Prohibiting incentives/waivers for transient lodging (hotels, motels, B&Bs) except residential hotels,
Item: 13
436

California State Housing Mandates

Orange County Grand Jury 2025-2026
• Requiring ≥2/3 of mixed-use square footage to be residential to qualify, • Maintaining full affordability thresholds for bonus eligibility.

Effective Jan. 1, 2026 (with grandfathering for pre-application projects).

Role: A guardrail tool ensuring Density Bonus Law is used to build actual housing—not oversized hotel or commercial space leveraged through affordable-unit “tokenism.”

AB 87 (2025): Prevents Density Bonus Incentives for Hotel Components of Mixed-Use Projects Problem addressed: Developers were using DBL concessions (height, FAR, parking waivers) to benefit hotel components of mixed-use projects, diluting the State’s housing incentives and enabling visitor-serving developments that undermined local zoning.

Solution: Clarifies that DBL incentives may not be applied to hotel/motel/visitor-serving portions of a mixed-use project. Makes parallel conforming amendments to align with SB 92 if both bills are enacted.

Applies statewide, including charter cities.

Role: A housing-priority tool reinforcing that density bonuses are for residential production—not for hospitality or tourism development.

APPENDIX B: Orange County Housing Mandate Survey Questions Q1 What is your city’s 6th-cycle RHNA allocation, and does your Housing Element plan exceed that number? If so, by how much, and what factors influenced the decision to exceed the allocation? Q2 If the RHNA mandate were not in place, how would your housing plan differ? Would it still meet the demand for low-income housing?
Q3 What strategies has your city used to inform and engage residents about the state housing mandate? How do you measure the effectiveness of these outreach efforts? Q4 What are the implications of recent state legislation on R-1 single-family zoning for your city’s land-use policies and community character?
Q5 What are the most significant challenges your city faces in meeting RHNA requirements? In what ways has OCCOG supported your efforts to overcome these challenges? Q6 Do you anticipate achieving your approved Housing Element goals by the end of the 6th cycle in 2030? What factors will most influence your success or shortfall? Q7 What additional information would you like to provide us regarding this topic?

APPENDIX C: Responsibilities
Responsibilities of OCCOG
Mission Statement:

The Orange County Council of Governments (OCCOG) convenes jurisdictions throughout Orange County to collaboratively address land use, housing, mobility, energy, air quality, and water issues, and to ensure that Orange County is effectively represented in regional and state decision-making. Through sound governance, impartial analysis, and regional coordination, OCCOG delivers value to its member agencies and the residents of Orange County.

Core Responsibilities:

1. Sub-Regional Planning and Coordination
a. Serves as Orange County’s official sub-regional planning organization within the six-county SCAG region.

Item: 13
437

California State Housing Mandates

b. Leads the preparation of required regional and sub-regional planning documents that allow Orange County jurisdictions to compete for state and federal funding. [occog.com], [occog.com]

2. Regional Representation and Advocacy
a. Ensures Orange County’s interests are represented in regional policy development by coordinating the county’s representation on the SCAG Regional Council and committees. b. Works to align countywide perspectives on policy issues affecting transportation, housing, sustainability, and infrastructure.

3. Housing, Transportation, and Sustainable Communities Planning a. Supports housing and transportation planning coordination, including RHNA -related activities and implementation discussions.
b. May serve as the lead agency for a sub-regional Sustainable Communities Strategy if Orange County elects to pursue one under SB 375, consistent with SCAG’s Regional Transportation Plan.

4. Technical Analysis, Studies, and Data Support
a. Conducts countywide and sub-regional studies, prepares technical reports, and provides data-driven analysis to support policymaking by member agencies. b. Develops best-practice guidance (e.g., Complete Streets, mobility and infrastructure tools) for voluntary adoption by cities and the County.

5. Intergovernmental Collaboration and Consensus-Building a. Functions as a forum for cooperation among cities, the County, and special districts on issues of shared concern.
b. Facilitates coordination on funding strategies, infrastructure planning, and policy alignment without supplanting local land-use authority.
82 Responsibilities of SCAG
Mission Statement
The Southern California Association of Governments (SCAG) serves as the regional planning agency for Southern California, coordinating among local, regional, state, and federal partners to advance transportation, housing, land-use, and environmental planning that supports sustainable growth, economic vitality, social equity, and improved quality of life for the region’s diverse communities.

SCAG’s mission is to lead collaborative regional planning by developing and implementing integrated transportation, housing, and sustainability strategies; allocating regional housing needs; ensuring compliance with state and federal planning requirements; and providing data, technical assistance, and policy guidance to its member jurisdictions to address Southern California’s long-term growth challenges.83
Responsibilities of HCD
Mission Statement (Primary)
The California Department of Housing and Community Development (HCD) works to ensure safe, affordable, and sustainable housing opportunities for Californians by administering housing programs,

82 Orange County Council of Governments
83 Home | Southern California Association of Governments Item: 13
438

California State Housing Mandates

Orange County Grand Jury 2025-2026
shaping statewide housing policy, and enforcing housing laws to promote equity, environmental quality, and community stability across the state.

HCD’s mission is to lead and implement California’s housing policy by determining regional housing needs, reviewing and enforcing Housing Element compliance, administering state and federal housing funds, and holding local jurisdictions accountable for fulfilling their obligations under state housing law. 84

84 California Department of Housing and Community Development Item: 13
439

ATTACHMENT 3
Item: 13
440

[email protected] (949)461-3400 lakeforestca.gov 100 Civic Center Drive
Lake Forest, CA 92630
Mayor
Robert Pequeño
Mayor Pro Tem
Doug Cirbo
Council Members
Mark Tettemer
Scott Voigts
Benjamin Yu
July 22, 2026
Sheila F. Hanson
Presiding Judge of the Superior Court
700 Civic Center Drive West
Santa Ana, CA 9270I
SUBJECT: GRAND JURY REPORT, CALIFORNIA HOUSING
MANDATES – CITY OF LAKE FOREST RESPONSE
Dear Judge Hanson:

This response to the Orange County Grand Jury’s (OCGJ) Report titled “California Housing Mandates – The Unintended Reshaping of Orange County Neighborhoods” is submitted on behalf of Lake Forest Mayor Robert Pequeno and the City Council. The City Council reviewed and approved the response at its July 21, 2026, City Council meeting.

The findings and recommendations of the OCGJ report are reprinted below in italics, followed by the City’s responses in bold and additional explanation or commentary in regular typeface. “City”, as used herein throughout, means City of Lake Forest. Findings and Recommendations for which no response was required have been omitted.

FINDINGS
F1In recent years, the California Legislature has enacted an unusually large and burdensome volume of housing-related laws intended to strengthen compliance with State Housing Mandates.

The City agrees with this finding.

F2Housing Mandates are implemented through a RHNA process that often lacks transparency and relies on complex methodologies that are difficult for local officials and the public to understand or meaningfully challenge.

The City agrees with this finding.

F4Meaningful participation by Orange County cities in both OCCOG and SCAG meetings is critical to ensuring that local perspectives are represented during the development and implementation of Housing Mandates policies.

The City is unable to fully affirm this finding as stated.

The City agrees that participation in regional organizations addressing housing policy is important to ensuring that local perspectives are considered during the development and implementation of housing policies.

Item: 13
441

[email protected] (949)461-3400 lakeforestca.gov 5 7
0 7
8 However, meaningful participation does not necessarily require direct attendance or participation by every city at OCCOG and SCAG meetings. Both OCCOG and SCAG utilize representative governance structures in which appointed elected officials serve on boards and committees and may represent multiple jurisdictions or geographic areas. As a result, a city's interests may be represented through an appointed official who is a council member from another city.

The City believes that this representative governance structure provides an effective means of ensuring that local perspectives are considered in regional policy discussions. In addition, the City remains informed of OCCOG and SCAG activities through staff participation in the OCCOG Technical Advisory Committee, regional coordination, meeting materials, and communication with its regional representatives. While direct participation may be beneficial on particular issues, it is not the only means by which a city's interests may be effectively represented.

F5SCAG’s 6th Cycle RHNA assigned Orange County a questionable total of 183,861 housing units for the 2021–2029 planning period, with higher allocations concentrated in cities with major population and employment centers.

The City is unable to fully affirm this finding as stated.

The City agrees that SCAG assigned Orange County a Regional Housing Needs Allocation of 183,861 housing units for the 2021–2029 planning period and that larger allocations were generally assigned to jurisdictions with significant population and employment centers.

However, the finding characterizes the overall allocation as "questionable." The 6th Cycle RHNA allocation was adopted by SCAG pursuant to state law and approved through the applicable regional and state review processes. While some jurisdictions and stakeholders have expressed concerns regarding aspects of the RHNA methodology and allocation process, others have not, and the City is not in a position to characterize the adopted Orange County allocation as "questionable."
Accordingly, the City acknowledges that concerns have been raised regarding elements of the RHNA methodology but is unable to affirm the finding as stated.

F6RHNA allocations are unrealistic and not attainable within the current planning cycle due to limited available land, built-out urban conditions, infrastructure constraints, environmental factors, and public health and safety requirements.

The City is unable to fully affirm this finding as stated.

The City has met its obligations under state housing law by adopting a certified Housing Element and providing sufficient sites and zoning capacity to accommodate its assigned RHNA allocation. Accordingly, the City has demonstrated that the planning and zoning requirements associated with its RHNA allocation are attainable.

Item: 13
442

[email protected] (949)461-3400 lakeforestca.gov 5 7
0 7
8 The City also recognizes that actual housing production is influenced by numerous factors outside local government control, including land availability, market conditions, infrastructure capacity, environmental constraints, development costs, financing, and public health and safety requirements. As a result, the pace of housing construction in some jurisdictions may make production of all assigned housing units during the current planning cycle challenging.

Accordingly, the City believes it is important to distinguish between a jurisdiction's ability to satisfy its statutory RHNA planning obligations and the actual construction of housing units, which depends on a variety of factors beyond the City's control.

F7Residents in Orange County consistently express a desire for local planning decisions to reflect community priorities, including but not limited to neighborhood character, safety considerations, the environment and open-space preservation.

The City is unable to verify this finding as stated.

The City acknowledges that issues such as neighborhood character, public safety, environmental protection, and open-space preservation are frequently raised during local planning and land use discussions. These considerations are among the many factors evaluated by local agencies when making planning decisions.

However, the finding makes a countywide assertion regarding the views of Orange County residents that the City cannot independently verify. Resident opinions vary among communities and individuals, and the City cannot conclude that these priorities are consistently expressed throughout Orange County.

Accordingly, while the City recognizes that these issues are important to many residents and are regularly considered in local planning decisions, it cannot affirm the finding as stated.

F8California’s regulatory construction costs (i.e. permitting fees) present substantial challenges for private housing developers—particularly those delivering affordable units.

The City is unable to fully affirm this finding as stated.

The City recognizes that regulatory requirements and associated development costs, including local permitting fees and other locally imposed development impact requirements, can present financial and procedural challenges for private housing developers. These challenges can be more pronounced in the context of affordable housing projects, where funding constraints and pro forma limitations reduce flexibility to absorb additional costs.

At the same time, the finding broadly characterizes "California's regulatory construction costs" as permitting fees, which oversimplifies a complex framework that includes a range of state and local requirements, such as development Item: 13
443

[email protected] (949)461-3400 lakeforestca.gov 5 7
0 7
8 impact fees, utility connection fees, environmental review compliance, and applicable design and building standards. The magnitude and significance of these costs vary considerably depending on project type, location, financing structure, and other project-specific factors.

Accordingly, while the City acknowledges that regulatory costs are an important consideration in housing development and affordability, it is not in a position to conclude that permitting fees alone uniformly constitute substantial challenges across all housing development contexts.

F9The cost of constructing a single affordable housing unit in California typically ranges from approximately $500,000 to $800,000 per unit when fully complying with current state regulations. New low-income housing is generally not financially feasible without public subsidy.

The City is unable to fully verify this finding as stated.

The City recognizes that the cost of constructing affordable housing in California is high and that such projects often present significant financial challenges.

Affordable housing developments frequently require a combination of public and private financing sources, including local, state, and federal funding, to achieve financial feasibility. These challenges may be compounded by site conditions, construction costs, labor requirements, environmental review, and applicable regulatory standards.

The City does not have independent statewide data to verify a typical per-unit construction cost range for affordable housing in California. Construction costs vary considerably depending on project location, design, financing structure, and other project-specific factors.

The City also notes that affordable housing projects have been successfully completed within the City, demonstrating that affordable housing can be developed under current regulatory and financing frameworks, while recognizing that assembling financing and delivering such projects is often complex and resource-intensive.

Accordingly, while the City acknowledges that public subsidy is frequently an important component of affordable housing development, it is not in a position to verify the statewide cost range or generalize regarding the financial feasibility of affordable housing projects as stated in the finding.

F10Prior to their dissolution in 2012, redevelopment agencies served as a primary mechanism for cities and counties to finance affordable housing and related infrastructure. The loss of redevelopment has reduced cities’ ability to support construction of affordable units.

The City agrees with this finding.

Prior to their dissolution, redevelopment agencies provided cities and counties with a significant source of funding for affordable housing and related Item: 13
444

[email protected] (949)461-3400 lakeforestca.gov 5 7
0 7
8 infrastructure improvements. The elimination of redevelopment agencies reduced the financial resources available to local governments to support affordable housing development and other community investment activities.

The City also recognizes that redevelopment programs were subject to statutory restrictions, administrative requirements, and implementation challenges.

F11Because public subsidy is limited and highly competitive, cities seeking to produce meaningful quantities of low-income housing must rely in part on private development incentives, often resulting in higher overall development densities and unit counts than the RHNA allocation.

The City is unable to fully verify this finding as stated.

The City recognizes that public funding for affordable housing is limited and highly competitive, and that local governments frequently rely on development incentives, including those established by state law, to facilitate the production of affordable housing.

The City also recognizes that development incentives may, in some circumstances, result in increased development densities or unit counts.

However, development intensity is influenced by numerous factors, including market conditions, site constraints, financing considerations, construction costs, and developer objectives. In some cases, developers may pursue projects at densities below those permitted or encouraged by applicable regulations.

Accordingly, while development incentives can support affordable housing production, the relationship between such incentives, development density, and RHNA allocations varies by jurisdiction and by project. The City is therefore unable to affirm the finding as a general statement applicable to all jurisdictions.

F12The 6th Cycle RHNA methodology included numerous technical inputs published by SCAG and HCD; however, these inputs were highly complex and difficult for cities to interpret or independently verify.

The City agrees with this finding.

RECOMMENDATIONS
R7OCCOG, all Orange County cities and the County of Orange should reassess the current dues structure, by September 30, 2026, to ensure that OCCOG has the resources necessary to effectively represent Orange County jurisdictions in SCAG processes, including RHNA methodology development and appeals. (F3, F15)
Status: Partially Agree | Not Implemented (Not within City control) The City partially agrees with this recommendation to the extent it encourages evaluation of regional governance resources.

Item: 13
445

[email protected] (949)461-3400 lakeforestca.gov 5 7
0 7
8 However, the establishment and modification of OCCOG dues are governed through OCCOG’s own board and member agency processes and are not actions independently initiated or implemented by individual cities. Any reassessment of the dues structure would need to occur through OCCOG governance and would depend on the scope of services, responsibilities, and regional roles expected of OCCOG.

The City will participate in OCCOG-led discussions regarding funding and resource needs; however, implementation of any revised dues structure is not solely within the City’s control.

R8By December 31, 2026, the Orange County Board of Supervisors should partner with cities to evaluate countywide infrastructure capacity—including water, wastewater, flood control, transportation, and public-safety systems—and develop a coordinated regional plan capable of supporting the level of housing growth required under state law. (F6)
Status: Partially Agree | Not Implemented (County-led / multi-agency) The City partially agrees with the intent of this recommendation to promote regional coordination in evaluating infrastructure capacity in relation to housing growth.

However, the recommendation is directed to the Orange County Board of Supervisors as the lead agency. Many of the infrastructure systems identified— including water, wastewater, transportation, and other services—are planned, operated, or regulated by a range of agencies, including special districts and regional transportation entities such as the Orange County Transportation Authority.

The City participates in infrastructure planning through applicable responsible agencies. Implementation of a comprehensive countywide infrastructure evaluation would require multi-agency coordination led by the County and is not solely within the City’s control.

R9By September 30, 2026, the Orange County Board of Supervisors should strengthen its engagement with OCCOG and increase staff support to develop a shared, countywide database of potential housing sites and key development- feasibility factors. (F15)
Status: Not Directed to City | Not Applicable
This recommendation is directed to the Orange County Board of Supervisors and not to the City. Accordingly, no implementation action by the City is required.

The City maintains and updates its own housing and land use data through its Housing Element and planning processes and participates in regional data efforts as appropriate.

Item: 13
446

[email protected] (949)461-3400 lakeforestca.gov 5 7
0 7
8 R11The County of Orange and each city should ensure consistent participation in SCAG and OCCOG committees by September 30, 2026, including the Technical Advisory Committee (TAC), to strengthen regional representation during RHNA- methodology development. (F3, F4, F15)
Status: Implemented (Ongoing Practice) | Implemented
The City agrees with this recommendation and confirms that it is already being implemented.

The City maintains ongoing participation in regional planning processes, including involvement in SCAG and OCCOG committee activities as applicable.

City staff actively participates in OCCOG Technical Advisory Committee (TAC) meetings. The City is also represented on OCCOG through appointed board members serving in regional capacities, including representation through the Orange County Transportation Authority and the Transportation Corridor Agencies.

The City will continue its existing practice of consistent participation in relevant regional committees to support coordination in RHNA methodology development and related planning efforts.

R12The County of Orange and each city should designate a single technical representative, by September 30, 2026, along with an alternate, for all RHNA- related SCAG and OCCOG committees to ensure continuity of participation and eliminate gaps in representation across multiple decision-making bodies. (F4) Status: Agree | Implemented (Ongoing Practice) | City Responsibility The City agrees with this recommendation and confirms that it is already being implemented.

The City has designated two senior planners as the primary staff technical representative for RHNA-related SCAG and OCCOG committees, with an alternate designated to ensure continuity of participation. This designation is intended to support consistent representation and coordination across relevant regional planning and technical advisory forums.

City staff continues to actively participate in RHNA-related committee processes, including OCCOG Technical Advisory Committee (TAC) meetings, and the City is also represented on OCCOG through appointed board members serving in regional capacities, including representation through the Orange County Transportation Authority and the Transportation Corridor Agencies.

R14By April 30, 2027, the County of Orange and each city should publish annual monitoring dashboards showing (a) entitlement pipeline conditions, (b) realistic site yield, (c) assembled funding sources for affordable units, and (d) conversion rates from planned capacity to issued permits and completed units, ensuring that County and city-determined capacity assumptions remain aligned with actual production. (F13)
Item: 13
447

[email protected] (949)461-3400 lakeforestca.gov 5 7
0 7
8 Status: Agree | Will Be Implemented | City Responsibility The City agrees with this recommendation.

By April 30, 2027, the City will evaluate opportunities to consolidate existing housing planning and development information into an annual monitoring summary or similar publicly accessible format. Existing City information already includes development entitlement applications and Housing Element sites inventory information identifying sites designated to accommodate the City's RHNA allocation.

The City anticipates expanding this information, as appropriate, to identify housing opportunity sites that have received development approvals, building permits, or completed construction.

With respect to affordable housing funding, the City has limited available local funding sources. Existing affordable housing funding primarily consists of Affordable Housing In-Lieu Fees, which are collected from market-rate residential developers when affordable units are not constructed on-site, as well as the Low and Moderate Income Housing Asset Fund, which contains remaining former redevelopment housing funds. These funding sources are limited and continue to decline over time.

The City intends that these efforts will improve public understanding of housing production, development activity, and Housing Element implementation while utilizing existing planning and reporting resources.

R15By September 30, 2026, and ongoing, the County Board of Supervisors and all city councils should make a coordinated and sustained effort to educate their constituents about the RHNA process—its requirements, its impact on local planning and community character, and the role residents can play in shaping outcomes. Public education efforts should also include guidance on how community members can effectively engage with the California Legislature and advocate for more realistic, data-driven housing policies. (F1, F7) Status: Agree | Implemented (Ongoing Practice) | Shared Responsibility The City agrees with this recommendation and confirms that it is being implemented through ongoing local and regional efforts.

As a member agency of OCCOG, the City participates in regional coordination regarding housing issues and RHNA implementation. OCCOG maintains publicly accessible housing information and educational resources through its Housing Orange County program, which provides information regarding RHNA, housing planning requirements, and related housing issues.

In addition, the City provides opportunities for public participation through Housing Element updates, housing-related planning activities, and public hearings. The City will continue to support public awareness regarding state Item: 13
448

[email protected] (949)461-3400 lakeforestca.gov 5 7
0 7
8 housing requirements, local planning processes, and opportunities for community participation through both local and regional efforts.

R16By December 31, 2026, all cities should look to enhance their relationships with not-for-profit affordable housing developers to increase the opportunity to develop more affordable housing. (F8, F10, F12)
Status: Agree | Implemented (Ongoing Practice) | City Responsibility The City agrees with this recommendation and confirms that it is being implemented through ongoing housing planning and development activities.

The City recognizes the important role that not-for-profit affordable housing developers can play in the production of affordable housing. The City has previously facilitated the development of affordable housing projects within the community and remains receptive to opportunities to work with qualified affordable housing developers, including not-for-profit organizations.

The City has already established practices that support and maintain relationships with affordable housing developers and will continue those efforts moving forward.

When funding for an affordable housing project becomes available, City staff issues a Notice of Funding Availability (NOFA) to interested parties, including not-for-profit affordable housing developers, to ensure qualified organizations have the opportunity to apply for available funding resources.

Additionally, the City maintains ongoing relationships with existing affordable housing operators within the community and engages in regular communication with these organizations on an annual basis. These existing partnerships allow the City to remain informed of affordable housing needs, development opportunities, and potential future collaboration.

The City will continue fostering relationships with affordable housing developers and supporting opportunities for future affordable housing development as funding and development opportunities become available.

If you have any questions, please contact Ron Santos – Senior Planner at [email protected] or (949) 461-3449.

Sincerely
Debra D. Rose
City Manager
cc: Orange County Grand Jury
Item: 13
449

[email protected] (949)461-3400 lakeforestca.gov 5 7
0 7
8 700 Civic Center Drive West
Santa Ana, CA 92701
Item: 13
450

CITY COUNCIL AGENDA REPORT
MEETING DATE: 7/21/2026
DEPARTMENT: City Manager
SUBJECT:

CONSIDERATION OF FOURTH AMENDMENT TO 2022-2025 AGREEMENT

WITH AMERINAT FOR HOUSING REHABILITATION LOAN AND PAINT

GRANT PROGRAM PORTFOLIO MANAGEMENT SERVICES AND

PROFESSIONAL CONSULTANT SERVICES AGREEMENT WITH AMERICAN

DEPOSIT MANAGEMENT, LLC, FOR LOAN DOCUMENT PREPARATION

SERVICES
RECOMMENDED ACTION(S):

1. Approve the proposed Fourth Amendment to the Agreement with AmeriNat, for loan portfolio management services to the City of Lake Forest and Lake Forest Housing Authority.

2. Authorize the Mayor to sign, and the City Clerk to attest the Fourth Amendment to the Agreement with AmeriNat, substantially in the form attached.

3. Approve the proposed Professional Services Agreement with American Deposit Management, LLC, for loan document preparation services to the City of Lake Forest and Lake Forest Housing Authority.

4. Authorize the Mayor to sign, and the City Clerk to attest the Professional Consultant Services Agreement with American Deposit Management, LLC, substantially in the form attached.

EXECUTIVE SUMMARY:

Since 1994, the City of Lake Forest (“City”) has received annual Community Development Block Grant (“CDBG”) funding from the Department of Housing and Urban Development (“HUD”) to promote the development of viable urban communities through decent housing, suitable living environments, and expanded economic opportunities for low- and moderate-income individuals.

A significant portion of these funds supports the City’s Housing Rehabilitation Loan and Paint Grant Program (“Program”), which provides loans and grants to income-eligible owners of mobile homes, condominiums, and single-family residential homes to address housing conditions in need of repair (e.g., Item: 14
451

roofing, painting, plumbing, flooring, and electrical), with particular emphasis on Health and Safety Code violations.

The City currently contracts with AmeriNat to administer Program loans and grants, providing services such as loan documentation, loan servicing, insurance management, and portfolio oversight. The 2022 Professional Services Agreement (“Agreement”) with AmeriNat was approved with a two- year term, set to expire on June 30, 2025, with the option for up to two one- year extensions and a total not-to-exceed compensation amount of $45,000 (Attachment 1).

Since its approval, the Agreement has been amended to extend the term, increase compensation, and most recently, acknowledge the planned transition of loan document preparation services effective July 31, 2026. The current Agreement and subsequent amendments are summarized in Table 1.

Table 1: AmeriNat Agreement and Subsequent Amendments
Agreement/
Amendment
Approval Date Term End Date Total
Compensation
Agreement June 23, 2022 June 30, 2025 $45,000
First
Amendment
December 17, 2024, June 30, 2026 $70,000
Second
Amendment
December 16, 2025 June 30, 2026 $110,000
Third
Amendment
June 16, 2026, June 30, 2027 $110,000
As part of AmeriNat's organizational realignment, loan document preparation services will no longer be provided by AmeriNat effective July 31, 2026.

Instead, these services will be performed by American Deposit Management, LLC ("ADM"), an affiliated entity specializing in loan document preparation.

Accordingly, staff recommend approval of a proposed Fourth Amendment to the Agreement to remove loan document preparation services from AmeriNat's Scope of Work and revise the Compensation Schedule to reflect the revised Scope of Work (Attachment 5). The Agreement term and total not-to-exceed compensation would remain unchanged.

To ensure the continued administration of the Program without interruption, staff also recommend approval of a Professional Consultant Services Agreement with ADM ("proposed ADM Agreement") for loan document preparation services. The proposed ADM Agreement would become effective August 1, 2026, remain in effect through June 30, 2027, and include a total not-to-exceed compensation amount of $10,000 (Attachment 6). The proposed Fourth Amendment and proposed ADM Agreement were prepared Item: 14
452

by the Economic Development and Housing Division and approved as to form by the City Attorney.

If approved, both the proposed Fourth Amendment and proposed ADM Agreement would remain in effect through June 30, 2027. At that time, the AmeriNat Agreement would reach its final allowable extension, and no additional extension options remain. Prior to the expiration of both agreements, staff intend to initiate a Request for Proposals ("RFP") process for Program portfolio management services to ensure the continued administration of the Program beyond June 30, 2027.

BACKGROUND:

CDBG
Since 1994, the City has received annual CDBG funding from HUD. CDBG is a formula grant allocated to city and county governments to develop viable urban communities by providing decent housing, a suitable living environment, and expanding economic opportunities for low- and moderate-income persons. The Program is funded through CDBG and provides loans and grants to income- eligible owners of mobile homes, condominiums, and single-family residential homes to address housing conditions in need of repair (e.g., roofing, plumbing, flooring, and electrical), with particular emphasis on Health and Safety Code violations. The Program is a key component of the City’s neighborhood preservation efforts, contributes to the overall aesthetics of Lake Forest’s neighborhoods, and assists the City in improving the housing stock, which is one of the goals of the City’s Housing Element and Five-Year CDBG Consolidated Plan.

To administer the program, the City contracts with AmeriNat to provide loan and administration services. The Agreement was approved on June 23, 2022, with a two-year term ending June 30, 2025, and a total not-to-exceed compensation amount of $45,000. Since its approval, the Agreement has been amended to extend the term, increase compensation, and most recently, acknowledge the planned transition of loan document preparation services effective July 31, 2026. The current Agreement and subsequent amendments are summarized in Table 2.

Item: 14
453

Table 2: AmeriNat Agreement and Subsequent Amendments
Agreement/
Amendment
Approval Date Term End Date Total
Compensation
Agreement June 23, 2022 June 30, 2025 $45,000
First
Amendment
December 17, 2024, June 30, 2026 $70,000
Second
Amendment
December 16, 2025 June 30, 2026 $110,000
Third
Amendment
June 16, 2026, June 30, 2027 $110,000
ADM
AmeriNat notified staff that, as part of an organizational realignment, it will no longer provide loan document preparation services under the Agreement effective July 31, 2026. Beginning August 1, 2026, these services will instead be provided by ADM, an affiliated entity specializing in loan document preparation.

AmeriNat has advised staff that this organizational change is administrative in nature and is not expected to affect the quality of services provided to the City, as the same personnel, operational processes, technology platforms, and service standards will continue to be utilized.

DISCUSSION:

Proposed Fourth Amendment
Effective July 31, 2026, loan document preparation services currently provided by AmeriNat under the Agreement will transition to ADM. To reflect this organizational change, staff recommend approval of the proposed Fourth Amendment to the Agreement with AmeriNat. The proposed Fourth Amendment removes loan document preparation services from the Agreement's Scope of Work and revises the Compensation Schedule to reflect the reduced services provided under the Agreement. The proposed Fourth Amendment does not modify the Agreement term or total not-to-exceed compensation.

Loan document preparation services, outlined in the Scope of Work, that will transition from AmeriNat to ADM include:
Consultant shall prepare and forward the following documents within five (5) business days for the City's execution:
oDeed of Trust
oPromissory Note
oTruth in Lending Disclosure Statement
Item: 14
454

oRequest for Notice of Default and Sale
oNotice of Right to Cancel
oControl Instructions
oDeclaration of Covenants, Conditions, and Restrictions (CC&Rs) oOther documents as agreed to with the City
Once the documents are executed by the borrower, the Deed of Trust and Request for Notice are returned to Consultant for recordation with the County Recorder. Following the recording of the Deed of Trust, Consultant shall confirm that the City's lien position is secure by updating title (when approved by the City).

To align with the reduction in the Scope of Work, the proposed Fourth Amendment also removes the associated fees from the Compensation Schedule.

Table 3 identifies the existing fee schedule, with the loan document preparation fees proposed for removal highlighted in red.

Table 3 – AmeriNat Fee Schedule
FEE TYPE 2022-2025

AGREEMENT FEES
Loan Document Preparation $295.00
Loan Document Preparation Cancellation Fee $90.00
Laon Document Re-Draft Free (due to actions by the
City)
$30.00
Flow Loan Set-Up Fee $55.00
Monthly Service Fee for Amortized Loans $16.58/loan/mo.

Credit Reporting $0
Warehouse $2.35
Warehouse and monitor of taxes and/or insurance $6.05/loan/mo.

Warehouse and escrow of taxes and/or insurance $16.58/mo.

Flat fee for receiving occasional payments on deferred
loans
$16.58/payment
One-time tax service fee $80.00
Tickler Notifications $15.00
Loan Transfer Fee $75.00
Check by Phone Service $10.00
Due to the amount of funds remaining in the budget (approximately $36,285.50) and the reduced fee schedule for Fiscal Year (“FY”) 2026-27, staff do not anticipate a need to increase compensation.

Item: 14
455

Vendor Performance Assessment
Pursuant to the City’s Purchasing and Contracting Guidelines, staff are required to complete a vendor performance assessment in conjunction with a proposed contract amendment. This assessment informs whether a contract should be amended, renewed, or terminated based on performance in the following categories: performance of services, timeliness, budget performance, and customer service. To date, staff have determined the professional services of AmeriNat to be satisfactory, as indicated in the Performance Review table below.

Table 4: AmeriNat Performance Review
AmeriNat – July 1, 2022 – July 1, 2026
Rating Category Unsatisfied – Very Satisfied
Performance of Scope of
Services: ☐Unsatisfied ☐Satisfied ☒Very Satisfied ☐N/A Timeliness: ☐Unsatisfied ☒Satisfied ☐Very Satisfied ☐N/A Budget Performance: ☐Unsatisfied ☐Satisfied ☒Very Satisfied ☐N/A Customer Service: ☐Unsatisfied ☒Satisfied ☐Very Satisfied ☐ N/A AmeriNat has consistently delivered satisfactory services in administering the Program. To ensure alignment with AmeriNat’s organizational restructuring, staff recommend approval of the proposed Fourth Amendment to the Agreement with AmeriNat. The proposed Fourth Amendment was prepared by the Economic Development and Housing Division and approved as to form by the City Attorney.

Proposed ADM Agreement
To ensure the continued implementation of the Program without interruption, staff recommend approval of the proposed ADM Agreement for loan document preparation services. Entering into a separate agreement with ADM would ensure the City remains under contract for these services, following AmeriNat's organizational realignment, and allow the continued administration of the Program without disruption.

The proposed ADM Agreement would become effective August 1, 2026, and remain in effect through June 30, 2027, consistent with the remaining term of the AmeriNat Agreement. The proposed ADM Agreement would include a total not- to-exceed compensation amount of $10,000, which staff anticipate would be sufficient to provide loan document preparation services through the remainder of the contract term.

The proposed ADM Agreement includes two notable differences from AmeriNat's current fee schedule. First, ADM proposes a new fee of $50 per order for obtaining credit reports, title reports, or appraisals, as needed during loan Item: 14
456

document preparation. Second, the proposed Compensation Schedule establishes a non-refundable annual minimum fee of $4,500 for loan document preparation services. Unlike AmeriNat's current fee structure, under which the City pays for loan document preparation only as loans are processed, the proposed ADM Agreement requires payment of the annual minimum upon execution of the proposed ADM Agreement regardless of the number of loans processed during the contract term.

Table 5 compares AmeriNat's current loan document preparation services and associated fees, with those proposed by ADM.

Table 5: AmeriNat Services and Associated Fees and Proposed ADM Services and Associated Fees
AmeriNat ADM
Loan Document
Preparation
$295.00 Loan Document
Preparation
$375.00
Loan Document
Preparation
Cancellation Fee
$90.00 Loan Document
Preparation
Cancellation Fee
$95.00
Laon Document
Re-Draft Free
(due to actions by
the City)
$30.00 Loann Document
Re-Draft Free
(due to actions by
the City)
$55.00
Ordering credit,
title or appraisal
$50/per
Based on anticipated Program activity, staff believe the total not-to-exceed compensation of $10,000 would be sufficient to cover the remaining loan document preparation services through June 30, 2027.

Future Procurement
The Agreement with AmeriNat expires on June 30, 2027. Pursuant to the Agreement, the Third Amendment exercised the final one-year extension available under the original contract. Accordingly, no additional extensions remain. Staff recommend that the proposed ADM Agreement expire concurrently with the AmeriNat Agreement to maintain consistent contract terms during this administrative transition. Prior to June 30, 2027, staff would initiate an RFP for loan document consulting services for the Program.

Item: 14
457

FISCAL IMPACT:

Consulting services provided under the proposed Fourth Amendment and proposed ADM Agreement are paid for with Federal CDBG funds, and the Low/Moderate Income Housing Asset Fund. The proposed ADM Agreement includes a total not-to-exceed compensation amount of $10,000. Sufficient funds are included in the 2025-2027 Operating Budget to cover the costs of the recommended action.

ATTACHMENTS:

1. Attachment 1 - Agreement with AmeriNat

2. Attachment 2 - First Amendment to Agreement with AmeriNat

3. Attachment 3 - Second Amendment to Agreement with AmeriNat

4. Attachment 4 - Third Amendment to Agreement with AmeriNat

5. Attachment 5 - Proposed Fourth Amendment to Agreement with AmeriNat

6. Attachment 6 - Proposed ADM Agreement
Initiated By: Hope Hairrell, Management Assistant
Submitted By: Keith Neves, Assistant City Manager
Approved By: Debra Rose, City Manager
Item: 14
458

ATTACHMENT 1
Item: 14
459

Item: 14
460

Item: 14
461

Item: 14
462

Item: 14
463

Item: 14
464

Item: 14
465

Item: 14
466

Item: 14
467

Item: 14
468

Item: 14
469

Item: 14
470

Item: 14
471

Item: 14
472

Item: 14
473

Item: 14
474

Item: 14
475

Item: 14
476

Item: 14
477

Item: 14
478

Item: 14
479

Item: 14
480

Item: 14
481

Item: 14
482

Item: 14
483

Item: 14
484

Item: 14
485

Item: 14
486

ATTACHMENT 2
Item: 14
487

HOUSING REHABILITATION LOAN PORTFOLIO MANAGEMENT
(2022-044.1)

City of Lake Forest
100 Civic Center Dr.

Lake Forest, CA 92630

Docusign Envelope ID: BD229AD1-61D2-4F53-B499-B3C0287C0F28 Item: 14
488

City of Lake Forest
First Amendment to Professional Consultant Services Agreement Housing Rehabilitation Loan Portfolio Management
I. PARTIES AND DATE. ................................ ................................ ..............

II. RECITALS. ................................ ................................ ..............................

III. TERMS................................. ................................ ................................ ..

IV. SIGNATURES. ................................ ................................ ........................

V. EXHIBIT "C" - COMPENSATION ................................ ..............................

Docusign Envelope ID: BD229AD1-61D2-4F53-B499-B3C0287C0F28 Item: 14
489

Title: Housing Rehabilitation Loan Portfolio Management 3 1. PARTIES AND DATE.

This First Amendment to the Agreement for Professional Consultant Services ("First Amendment") is entered into the [***INSERT DAY***] day of [***INSERT MONTH***], [***INSERT YEAR***], by and between the City of Lake Forest, a municipal corporation, organized under the laws of the State of California, with its principal place of business at 100 Civic Center Drive, Lake Forest, California 92630 (“City”) and AmeriNational Community Services, LLC dba AmeriNat, a Minnesota Limited Liability Company (LLC), with its principal place of business at 8121 E. Florence Avenue, Downey, CA 90240 (“Consultant”). City and Consultant are sometimes individually referred to herein as “Party” and collectively as “Parties.” Docusign Envelope ID: BD229AD1-61D2-4F53-B499-B3C0287C0F28 19 2024December
Item: 14
490

Title: Housing Rehabilitation Loan Portfolio Management 4 2. RECITALS.

2.1. Agreement
The Parties entered into that certain Agreement for Loan Portfolio Management dated June 23, 2022 (“Agreement”).

2.2. First Amendment
The Parties now desire to amend the Agreement in order to extend the term of the Agreement, increase the total amount of compensation under the Agreement, and update the City's Representative.

Docusign Envelope ID: BD229AD1-61D2-4F53-B499-B3C0287C0F28 Item: 14
491

Title: Housing Rehabilitation Loan Portfolio Management 5 3. TERMS.

3.1. Term.

Section 3.1.2 of the Agreement is hereby amended in its entirety to read as follows:

The term of this Agreement shall be from July 1, 2022 to June 30, 2026, unless earlier terminated as provided herein. The City shall have the unilateral option, at its sole discretion, to renew this Agreement annually for no more than one (1) additional one-year terms. Consultant shall complete the Services within the term of this Agreement, and shall meet any other established schedules and deadlines.

3.2. Compensation.

Section 3.3.1 of the Agreement is hereby amended in its entirety to read as follows:

Consultant shall receive compensation, including authorized reimbursements, for all Services rendered under this Agreement at the rates set forth in Exhibit “C” attached hereto and incorporated herein by reference. The total compensation shall not e xceed SEVENTY THOUSAND DOLLARS ($70,000) without written approval of the City Council or City Manager as applicable. Extra Work may be authorized, as described below, and if authorized, will be compensated at the rates and manner set forth in this Agreement.

3.3. City's Representative.

Section 3.2.5 of the Agreement is hereby amended as follows:

The City hereby designates Keith Neves, Assistant City Manager, or his/her designee, to act as its representative in all matters pertaining to the administration and performance of this Agreement ("City's Representative"). City's Representative shall have the power to act on behalf of the City for review and approval of all products submitted by Consultant but not the authority to enlarge the Scope of Wo rk or change the total compensation due to Consultant under this Agreement. The City Manager shall be authorized to act on City's behalf and to execute all necessary documents which enlarge the Scope of Work or change the Consultant's total compensation s ubject to the provisions contained in Section 3.3 of this Agreement. Consultant shall not accept direction or orders from any person other than the City Manager, City's Representative or his/her designee.

3.4. Remaining Provisions of Agreement.

Except as otherwise specifically set forth in this First Amendment, the remaining provisions of the Agreement shall remain in full force and effect.

Docusign Envelope ID: BD229AD1-61D2-4F53-B499-B3C0287C0F28 Item: 14
492

Title: Housing Rehabilitation Loan Portfolio Management 6 4. SIGNATURES.

4.1. SIGNATURES.

CITY OF LAKE FOREST AmeriNational Community Services, LLC dba AmeriNat
By: [AUTHORIZED CITY SIGNATURE]

Mark Tettemer
Mayor
By: [VENDOR SIGNATURE 1]

Adrienne Thorson
Chairman of the Board
[If Corporation, TWO SIGNATURES,
President OR Vice President AND Secretary
OR Treasurer REQUIRED]
ATTEST:

By: [CITY CLERK SIGNATURE]

Lisa Berglund
City Clerk
By: [VENDOR SIGNATURE 2]

Michael Torres
Chief Financial Officer (Corporation or LLC)
APPROVED AS TO FORM:

By: [CITY ATTORNEY SIGNATURE]

Best Best & Krieger LLP
City Attorney

[CONTRACT ADMINISTRATOR APPROVAL]
[PRO

JECT MANAGER APPROVAL]
[CITY CLERK - INSURANCE APPROVAL]
Docusign Envelope ID: BD229AD1-61D2-4F53-B499-B3C0287C0F28 Product_______
Item: 14
493

Title: Housing Rehabilitation Loan Portfolio Management 7 4.2. LAKE FOREST HOUSING AUTHORITY

CITY OF LAKE FOREST
By: [AUTHORIZED CITY SIGNATURE]

Mark Tettemer
Mayor

ATTEST:

By: [CITY CLERK SIGNATURE]

Lisa Berglund
City Clerk

APPROVED AS TO FORM:

By: [CITY ATTORNEY SIGNATURE]

Best Best & Krieger LLP
City Attorney

[CONTRACT ADMINISTRATOR APPROVAL]
[PROJECT MANAGER APPROVAL]
[CITY CLERK - INSURANCE APPROVAL]
Docusign Envelope ID: BD229AD1-61D2-4F53-B499-B3C0287C0F28 Chair
Authority Counsel____________
________ Authority Secretary
______
Item: 14
494

Title: Housing Rehabilitation Loan Portfolio Management 8 5. EXHIBIT "C" - COMPENSATION

5.1. EXHIBIT "C" - COMPENSATION
Consultant shall be paid for services rendered in accordance with Section 3.3 of the Agreement and as described above under Exhibit "A" Scope of Services the not to exceed fee of SEVENTY THOUSAND DOLLARS ($70,000) billed on a time and materials basis according to the following schedule:

Loan Documentation Preparation Services

1. A fee of $295.00 plus pass-through costs is charged for loan document preparation.

2. A project for which credit, title, or appraisals have been supplied by AmeriNat, but which is thereafter canceled without performance of loan document preparations, a cancellation fee of $90.00 plus outside costs applies. A project will be considered cancelled if a Loan Documents Request is not received within sixty (60) days of ordering the aforementioned services.

3. A fee of $30.00 will be charged for a document that is re-drafted at the request of the City due to actions by the City.

Loan Portfolio Management
Flow Loan Set-Up Fee: $55.00 per loan
Monthly Service Fee for Amortized Loans: $16.58 per loan per monthy Escrowing and/or monitoring of taxes and insurance are included with the service at no additional cost except for a one-time tax service vendor fee if applicable transferable tax contracts are not already in place.

Monthly Service for Deferred Loans:
a. Warehouse: $2.35 per loan per month
b. Warehouse and monitor of taxes and/or insurance: $6.05 per loan per month plus one­ time tax service vendor fee.
c. Warehouse and escrow of taxes and/or insurance: $16.58 per loan per month plus a one-time tax service vendor fee.
d. Flat fee for receiving occasional payments on deferred loans: $16.58 per payment Tax-Service Pass-Through Cost
If it is determined that Tax Service is needed, then a one-time fee of $80.00 per loan upfront at time of servicing commencement will be charged (may be assessable to borrower) for loan amounts up to $500,000. For loan amounts over $500,000, there is an additional charge of $10 per $100,000. Future charges may vary based on outside vendor pricing.

Docusign Envelope ID: BD229AD1-61D2-4F53-B499-B3C0287C0F28 Item: 14
495

Title: Housing Rehabilitation Loan Portfolio Management 9 Please note: Additional or supplemental charges that may be imposed by the respective taxing authority for procurement of duplicate tax bills will be directly passed through to the City.

Forbearance Plans
If requested by the City, AmeriNat will charge a flat fee of $395.00 per loan per occurrence to institute a formal forbearance plan (usually in excess of 6 months in duration and with approval of the City). The City may require the borrower to pay this fee. Informal forbearances (usually less than 6 months in duration) to allow a delinquent borrower to catch up and bring their loan current are performance at no charge to the borrower or the City.

Per-Event Fees
Tickler Notifications: A $15.00 per notification may be charged Check by Phone Service: $10.00 per loan per occurrence.

Loan Transfer Fee: $75.00 per loan one-time if transferred from AmeriNat Note: Pass-through (reimbursable) expenses not reimbursed monthly, will be considered servicer advances and will be subject to an interest charge at a rate of 1% per month compounded. A finance charge of 1% per month compounded will be applied to invoices outstanding and unpaid for more than 60 days. Pass-through (reimbursable) expenses, including but not limited to postage costs for statements, letters, and other notifications to borrowers, advances necessary for principal and interest payments, tax and insurance payments, legal and other professional fees for loss mitigation activities, costs of tax contracts, and other out of pocket costs necessary for performance of the scope of service tasks, will be reimbursed by the City monthly.

Extraordinary Account Research and/or Loan Reconstruction AmeriNat will conduct ongoing routine maintenance and general customer service activities on borrower information and balances as part of the servicing duties at no additional cost.

Should the City request additional research to be conducted, or if the City engages AmeriNat to conduct a Loan Reconstruction Service on its portfolio, an extraordinary research fee of $150.00 per hour will be charged, with a minimum one hour per occurrence. Such fee will be approved by the City before the research is conducted.

When research is conducted at the request of the City because of a discrepancy between the City's records and AmeriNat's records relating to the principal balance or other loan information, and the result of the research determines that the discrepancy was the results of activity being posted at the City and not forwarded to AmeriNat for updating its records, the extraordinary research fee will be charged for the time spent on the research.

For services or loans with unique servicing characteristics that are not shown above, the City and AmeriNat acknowledge that additional and/or different servicing requirements may be appropriate. AmeriNat will work with the City in good faith to establish written terms for the servicing of these types of loans or additional services requested. Any agreement on the servicing provisions for any non-standard portfolio or additional services, including pricing for said services, shall be memorialized in a Statement of Work (“SOW”).

Docusign Envelope ID: BD229AD1-61D2-4F53-B499-B3C0287C0F28 Item: 14
496

Title: Housing Rehabilitation Loan Portfolio Management 10 Minimum Monthly Fees
Fees are subject to a minimum monthly amount of $1,000 per month. The minimum is applicable to City-wide services, including fees for all services provided and including work provided to other departments or loan portfolios of the City.

Each monthly invoice shall identify services rendered and corresponding fees. In the event that the cost of services in any month is less than the $1,000 minimum monthly fee, the invoice shall clearly and separately identify any charges not corresponding to services rendered as "Non­ ascribed minimum monthly fee" or similar.

In the event that this Agreement is renewed pursuant to Section 3.1.2, the rates set forth above may be increased or reduced each year at the time of renewal, but any increase shall not exceed the Consumer Price Index, All Urban Consumers, Los Angeles-Long Beach-Anaheim.

Docusign Envelope ID: BD229AD1-61D2-4F53-B499-B3C0287C0F28 Item: 14
497

ATTACHMENT 3
Item: 14
498

HOUSING REHABILITATION LOAN PORTFOLIO MANAGEMENT
(2022-044.2)

City of Lake Forest
100 Civic Center Dr.

Lake Forest, CA 92630

Docusign Envelope ID: 31B8785E-916C-41EA-863F-D81FBCD14940 Item: 14
499

City of Lake Forest
Second Amendment to Professional Consultant Services Agreement Housing Rehabilitation Loan Portfolio Management
I. PARTIES AND DATE. ................................ ................................ ..............

II. RECITALS. ................................ ................................ ..............................

III. TERMS................................. ................................ ................................ ..

IV. SIGNATURES. ................................ ................................ ........................

V. EXHIBIT "C" - COMPENSATION ................................ ..............................

Docusign Envelope ID: 31B8785E-916C-41EA-863F-D81FBCD14940 Item: 14
500

Title: Housing Rehabilitation Loan Portfolio Management 3 1. PARTIES AND DATE.

This Agreement is made and entered into this [***INSERT DAY***] day of [***INSERT MONTH***], [***INSERT YEAR***], by and between the City of Lake Forest, a municipal corporation, organized under the laws of the State of California, with its principal place of business at 100 Civic Center Drive, Lake Forest, California 92630 (“City”) and AmeriNational Community Services, LLC dba AmeriNat, a Minnesota Limited Liability Company (LLC), with its principal place of business at 8121 E. Florence Avenue, Downey, CA 90240 (“Consultant”). City and Consultant are sometimes individually referred to herein as “Party” and collectively as “Parties.”
Docusign Envelope ID: 31B8785E-916C-41EA-863F-D81FBCD14940 December
2025
16th
Item: 14
501

Title: Housing Rehabilitation Loan Portfolio Management 4 2. RECITALS.

2.1. Agreement
The Parties entered into that certain Agreement for Loan Portfolio Management Consulting Services dated June 23, 2022 (“Agreement”).

2.2. First Amendment
The Parties entered into that certain First Amendment the Agreement to extend the term of the Agreement, increase the total amount of compensation under the Agreement, and update the City's Representative Agreement dated December 19, 2024 ("First Amendment").

2.3. Second Amendment
The Parties now desire to amend the Agreement in order to increase the total amount of compensation under the Agreement.

Docusign Envelope ID: 31B8785E-916C-41EA-863F-D81FBCD14940 Item: 14
502

Title: Housing Rehabilitation Loan Portfolio Management 5 3. TERMS.

3.1. Compensation.

Section 3.3.1 of the Agreement is hereby amended in its entirety to read as follows:

Consultant shall receive compensation, including authorized reimbursements, for all Services rendered under this Agreement at the rates set forth in Exhibit “C” attached hereto and incorporated herein by reference. The total compensation shall not exceed ONE HUNDRED TEN THOUSAND DOLLARS ($110,000.00) without written approval of the City Council or City Manager as applicable. Extra Work may be authorized, as described below, and if authorized, will be compensated at the rates and manner set forth in this Agreement.

3.2. Scope of Services.

The Scope of Services as set forth in Exhibit “A” of the Agreement is hereby amended to include the Services set forth in EXHIBIT "A" SCOPE OF SERVICES to this Amendment, attached hereto and incorporated herein.

3.3. Remaining Provisions of Agreement.

Except as otherwise specifically set forth in this Second Amendment, the remaining provisions of the Agreement shall remain in full force and effect.

Docusign Envelope ID: 31B8785E-916C-41EA-863F-D81FBCD14940 Item: 14
503

Title: Housing Rehabilitation Loan Portfolio Management 6 4. SIGNATURES.

4.1. SIGNATURES.

CITY OF LAKE FOREST AmeriNational Community Services, LLC dba AmeriNat
By: [AUTHORIZED CITY SIGNATURE]

Scott Voigts
Mayor
By: [VENDOR SIGNATURE 1]

Adrienne Thorson
Chairman of the Board
[If Corporation, TWO SIGNATURES,
President OR Vice President AND Secretary
OR Treasurer REQUIRED]
ATTEST:

By: [CITY CLERK SIGNATURE]

Thy Merritt
City Clerk
By: [VENDOR SIGNATURE 2]

Mark Fredericks
Chief Financial Officer (Corporation or LLC)
APPROVED AS TO FORM:

By: [CITY ATTORNEY SIGNATURE]

Best Best & Krieger LLP
City Attorney

[CONTRACT ADMINISTRATOR APPROVAL]
[PROJECT MANAGER APPROVAL]
[CITY CL

ERK - INSURANCE APPROVAL]
Docusign Envelope ID: 31B8785E-916C-41EA-863F-D81FBCD14940 Item: 14
504

Title: Housing Rehabilitation Loan Portfolio Management 7 4.2. LAKE FOREST HOUSING AUTHORITY

CITY OF LAKE FOREST AmeriNational Community Services, LLC dba AmeriNat
By: [AUTHORIZED CITY SIGNATURE]

Scott Voigts
Chair
By: [VENDOR SIGNATURE 1]

Adrienne Thorson
Chairman of the Board
[If Corporation, TWO SIGNATURES,
President OR Vice President AND Secretary
OR Treasurer REQUIRED]
ATTEST:

By: [CITY CLERK SIGNATURE]

Thy Merritt
Authority Secretary
By: [VENDOR SIGNATURE 2]

Mark Fredericks
Chief Financial Officer (Corporation or LLC)
APPROVED AS TO FORM:

By: [CITY ATTORNEY SIGNATURE]

Best Best & Krieger LLP
Authority Counsel

[CONTRACT ADMINISTRATOR APPROVAL]
[PROJECT MANAGER APPROVAL]
[CITY CLERK - INSURANCE APPROVAL]
Docusign Envelope ID: 31B8785E-916C-41EA-863F-D81FBCD14940 Item: 14
505

Title: Housing Rehabilitation Loan Portfolio Management 8 5. EXHIBIT "C" - COMPENSATION

5.1. EXHIBIT "C" - COMPENSATION
Consultant shall be paid for services in accordance with Section 3.3 of the Agreement and as described above under Exhibit “A” Scope of Services and the not to exceed fee of ONE HUNDRED TEN THOUSAND DOLLARS ($110,000.00) billed on a time and materials basis according to the following schedule:

Loan Documentation Preparation Services

1. A fee of $295.00 plus pass-through costs is charged for loan document preparation.

2. A project for which credit, title, or appraisals have been supplied by AmeriNat, but which is thereafter canceled without performance of loan document preparations, a cancellation fee of $90.00 plus outside costs applies. A project will be considered cancelled if a Loan Documents Request is not received within sixty (60) days of ordering the aforementioned services.

3. A fee of $30.00 will be charged for a document that is re-drafted at the request of the City due to actions by the City.

Loan Portfolio Management
Flow Loan Set-Up Fee: $55.00 per loan
Monthly Service Fee for Amortized Loans: $16.58 per loan per monthly Escrowing and/or monitoring of taxes and insurance are included with the service at no additional cost except for a one-time tax service vendor fee if applicable transferable tax contracts are not already in place.

Monthly Service for Deferred Loans:

Warehouse: $2.35 per loan per month

1. Warehouse and monitor of taxes and/or insurance: $6.05 per loan per month plus one- time tax service vendor fee.

2. Warehouse and escrow of taxes and/or insurance: $16.58 per loan per month plus a one-time tax service vendor fee.

3. Flat fee for receiving occasional payments on deferred loans: $16.58 per payment Tax-Service Pass-Through Cost
If it is determined that Tax Service is needed, then a one-time fee of $80.00 per loan upfront at time of servicing commencement will be charged (may be assessable to borrower) for loan amounts up to $500,000. For loan amounts over $500,000, there is an additional charge of $10 per $100,000. Future charges may vary based on outside vendor pricing.

Docusign Envelope ID: 31B8785E-916C-41EA-863F-D81FBCD14940 Item: 14
506

Title: Housing Rehabilitation Loan Portfolio Management 9 Please note: Additional or supplemental charges that may be imposed by the respective taxing authority for procurement of duplicate tax bills will be directly passed through to the City.

Forbearance Plans
If requested by the City, AmeriNat will charge a flat fee of $395.00 per loan per occurrence to institute a formal forbearance plan (usually in excess of 6 months in duration and with approval of the City). The City may require the borrower to pay this fee. Informal forbearances (usually less than 6 months in duration) to allow a delinquent borrower to catch up and bring their loan current are performance at no charge to the borrower or the City.

Per-Event Fees
Tickler Notifications: A $15.00 per notification may be charged Check by Phone Service: $10.00 per loan per occurrence.

Loan Transfer Fee: $75.00 per loan one-time if transferred from AmeriNat Note: Pass-through (reimbursable) expenses not reimbursed monthly, will be considered servicer advances and will be subject to an interest charge at a rate of 1% per month compounded. A finance charge of 1% per month compounded will be applied to invoices outstanding and unpaid for more than 60 days. Pass-through (reimbursable) expenses, including but not limited to postage costs for statements, letters, and other notifications to borrowers, advances necessary for principal and interest payments, tax and insurance payments, legal and other professional fees for loss mitigation activities, costs of tax contracts, and other out of pocket costs necessary for performance of the scope of service tasks, will be reimbursed by the City monthly.

Extraordinary Account Research and/or Loan Reconstruction AmeriNat will conduct ongoing routine maintenance and general customer service activities on borrower information and balances as part of the servicing duties at no additional cost.

Should the City request additional research to be conducted, or if the City engages AmeriNat to conduct a Loan Reconstruction Service on its portfolio, an extraordinary research fee of $150.00 per hour will be charged, with a minimum one hour per occurrence. Such fee will be approved by the City before the research is conducted.

When research is conducted at the request of the City because of a discrepancy between the City's records and AmeriNat's records relating to the principal balance or other loan information, and the result of the research determines that the discrepancy was the results of activity being posted at the City and not forwarded to AmeriNat for updating its records, the extraordinary research fee will be charged for the time spent on the research.

For services or loans with unique servicing characteristics that are not shown above, the City and AmeriNat acknowledge that additional and/or different servicing requirements may be appropriate. AmeriNat will work with the City in good faith to establish written terms for the servicing of these types of loans or additional services requested. Any agreement on the servicing provisions for any non-standard portfolio or additional services, including pricing for said services, shall be memorialized in a Statement of Work (“SOW”).

Docusign Envelope ID: 31B8785E-916C-41EA-863F-D81FBCD14940 Item: 14
507

Title: Housing Rehabilitation Loan Portfolio Management 10 Minimum Monthly Fees
Fees are subject to a minimum monthly amount of $1,000 per month. The minimum is applicable to City-wide services, including fees for all services provided and including work provided to other departments or loan portfolios of the City.

Each monthly invoice shall identify services rendered and corresponding fees. In the event that the cost of services in any month is less than the $1,000 minimum monthly fee, the invoice shall clearly and separately identify any charges not corresponding to services rendered as "Non- ascribed minimum monthly fee" or similar.

In the event that this Agreement is renewed pursuant to Section 3.1.2, the rates set forth above may be increased or reduced each year at the time of renewal, but any increase shall not exceed the Consumer Price Index, All Urban Consumers, Los Angeles-Long Beach-Anaheim.

Docusign Envelope ID: 31B8785E-916C-41EA-863F-D81FBCD14940 Item: 14
508

ATTACHMENT 4
Item: 14
509

HOUSING REHABILITATION LOAN PORTFOLIO MANAGEMENT
(2022-044.3)

City of Lake Forest
100 Civic Center Dr.

Lake Forest, CA 92630

Docusign Envelope ID: CB1AE30C-33F6-858A-8185-C7D37D5B7A03 Item: 14
510

City of Lake Forest
Third Amendment to Professional Consultant Services Agreement Housing Rehabilitation Loan Portfolio Management
I. PARTIES AND DATE. ................................ ................................ ..............

II. RECITALS. ................................ ................................ ..............................

III. TERMS................................. ................................ ................................ ..

IV. SIGNATURES. ................................ ................................ ........................

Docusign Envelope ID: CB1AE30C-33F6-858A-8185-C7D37D5B7A03 Item: 14
511

Title: Housing Rehabilitation Loan Portfolio Management 3 1. PARTIES AND DATE.

This Agreement is made and entered into this [***INSERT DAY***] day of [***INSERT MONTH***], [***INSERT YEAR***], by and between the City of Lake Forest, a municipal corporation, organized under the laws of the State of California, with its principal place of business at 100 Civic Center Drive, Lake Forest, California 92630 (“City”) and AmeriNational Community Services, LLC dba AmeriNat, a Minnesota Limited Liability Company (LLC), with its principal place of business at 8121 E. Florence Avenue, Downey, CA 90240 (“Consultant”). City and Consultant are sometimes individually referred to herein as “Party” and collectively as “Parties.”
Docusign Envelope ID: CB1AE30C-33F6-858A-8185-C7D37D5B7A03 2026
16th June
Item: 14
512

Title: Housing Rehabilitation Loan Portfolio Management 4 2. RECITALS.

2.1. Agreement
The Parties entered into that certain Agreement for Housing Rehabilitation Loan Portfolio Management Services dated June 23, 2022 (“Agreement”).

2.2. First Amendment
The Parties entered into that certain First Amendment to the Agreement to extend the term of the Agreement, increase the total amount of compensation under the Agreement, and update the City's Representative Agreement dated December 19, 2024 ("First Amendment").

2.3. Second Amendment
The Parties entered into that certain Second Amendment to the Agreement to increase the total amount of compensation under the Agreement dated December 16, 2025 ("Second Amendment")

2.4. Third Amendment
The Parties now desire to amend the Agreement in order to extend the term of the Agreement and update the compensation table.

Docusign Envelope ID: CB1AE30C-33F6-858A-8185-C7D37D5B7A03 Item: 14
513

Title: Housing Rehabilitation Loan Portfolio Management 5 3. TERMS.

3.1. Term.

Section 3.1.2 of the Agreement is hereby amended in its entirety to read as follows:

The term of this Agreement shall be from July 1, 2022 to June 30, 2027, unless earlier terminated as provided herein. Consultant shall complete the Services within the term of this Agreement, and shall meet any other established schedules and deadlines.

3.2. Compensation
Section 3.3.1 of the Agreement is hereby amended in its entirety to read as follows:

Consultant shall receive compensation, including authorized reimbursements, for all Services rendered under this Agreement at the rates set forth in Exhibit “C” attached hereto and incorporated herein by reference. The total compensation shall not exceed ONE HUNDRED TEN THOUSAND DOLLARS ($110,000.00) without written approval of the City Council or City Manager as applicable. Extra Work may be authorized, as described below, and if authorized, will be compensated at the rates and manner set forth in this Agreement.

Remaining Provisions of Agreement.

Except as otherwise specifically set forth in this Third Amendment, the remaining provisions of the Agreement shall remain in full force and effect.

Docusign Envelope ID: CB1AE30C-33F6-858A-8185-C7D37D5B7A03 Item: 14
514

Title: Housing Rehabilitation Loan Portfolio Management 6 4. SIGNATURES.

4.1. SIGNATURES.

CITY OF LAKE FOREST AmeriNational Community Services, LLC dba AmeriNat
By: [AUTHORIZED CITY SIGNATURE]

Debra Rose
City Manager
By: [VENDOR SIGNATURE 1]

Adrienne Thorson
Chairman of the Board
[If Corporation, TWO SIGNATURES,
President OR Vice President AND Secretary
OR Treasurer REQUIRED]
ATTEST:

By: [CITY CLERK SIGNATURE]

Thy Merritt
City Clerk
By: [VENDOR SIGNATURE 2]

Mark Fredericks
Chief Financial Officer (Corporation or LLC)

APPROVED AS TO FORM:

By: [CITY ATTORNEY SIGNATURE]

Best Best & Krieger LLP
City Attorney

[CONTRACT ADMINISTRATOR APPROVAL]
[P

ROJECT MANAGER APPROVAL]
[CITY CLERK - INSURANCE APPROVAL]
Docusign Envelope ID: CB1AE30C-33F6-858A-8185-C7D37D5B7A03 Item: 14
515

Title: Housing Rehabilitation Loan Portfolio Management 7 4.2. LAKE FOREST HOUSING AUTHORITY

CITY OF LAKE FOREST AmeriNational Community Services, LLC dba AmeriNat
By: [AUTHORIZED CITY SIGNATURE]

Debra Rose
City Manager
By: [VENDOR SIGNATURE 1]

Adrienne Thorson
Chairman of the Board
[If Corporation, TWO SIGNATURES,
President OR Vice President AND Secretary
OR Treasurer REQUIRED]
ATTEST:

By: [CITY CLERK SIGNATURE]

Thy Merritt
Authority Secretary
By: [VENDOR SIGNATURE 2]

Mark Fredericks
Chief Financial Officer (Corporation or LLC)

APPROVED AS TO FORM:

By: [CITY ATTORNEY SIGNATURE]

Best Best & Krieger LLP
Authority Counsel

[CONTRACT ADMINISTRATOR APPROVAL]
[PROJECT MANAGER APPROVAL]
[CITY CLERK - INSURANCE APPROVAL]

Docusign Envelope ID: CB1AE30C-33F6-858A-8185-C7D37D5B7A03 Item: 14
516

Title: Housing Rehabilitation Loan Portfolio Management 8 5. EXHIBIT "C" - COMPENSATION

5.1. EXHIBIT "C" - COMPENSATION
Consultant shall be paid for services in accordance with Section 3.3 of the Agreement and as described above under Exhibit “A” Scope of Services and the not to exceed fee of ONE HUNDRED TEN THOUSAND DOLLARS ($110,000.00) billed on a time and materials basis according to the following schedule:

Loan Documentation Preparation Services

1. A fee of $295.00 plus pass-through costs is charged for loan document preparation.

2. A project for which credit, title, or appraisals have been supplied by AmeriNat, but which is thereafter canceled without performance of loan document preparations, a cancellation fee of $90.00 plus outside costs applies. A project will be considered cancelled if a Loan Documents Request is not received within sixty (60) days of ordering the aforementioned services.

3. A fee of $30.00 will be charged for a document that is re-drafted at the request of the City due to actions by the City.

Effective July 31, 2026, AmeriNat will discontinue providing loan document preparation services.

Loan Portfolio Management
Flow Loan Set-Up Fee: $55.00 per loan
Monthly Service Fee for Amortized Loans: $16.58 per loan per monthly Escrowing and/or monitoring of taxes and insurance are included with the service at no additional cost except for a one-time tax service vendor fee if applicable transferable tax contracts are not already in place.

Monthly Service for Deferred Loans:

Warehouse: $2.35 per loan per month

1. Warehouse and monitor of taxes and/or insurance: $6.05 per loan per month plus one- time tax service vendor fee.

2. Warehouse and escrow of taxes and/or insurance: $16.58 per loan per month plus a one-time tax service vendor fee.

3. Flat fee for receiving occasional payments on deferred loans: $16.58 per payment Tax-Service Pass-Through Cost
If it is determined that Tax Service is needed, then a one-time fee of $80.00 per loan upfront at time of servicing commencement will be charged (may be assessable to borrower) for loan amounts up to $500,000. For loan amounts over $500,000, there is an additional charge of $10 per $100,000. Future charges may vary based on outside vendor pricing.

Docusign Envelope ID: CB1AE30C-33F6-858A-8185-C7D37D5B7A03 Item: 14
517

Title: Housing Rehabilitation Loan Portfolio Management 9 Please note: Additional or supplemental charges that may be imposed by the respective taxing authority for procurement of duplicate tax bills will be directly passed through to the City.

Forbearance Plans
If requested by the City, AmeriNat will charge a flat fee of $395.00 per loan per occurrence to institute a formal forbearance plan (usually in excess of 6 months in duration and with approval of the City). The City may require the borrower to pay this fee. Informal forbearances (usually less than 6 months in duration) to allow a delinquent borrower to catch up and bring their loan current are performance at no charge to the borrower or the City.

Per-Event Fees
Tickler Notifications: A $15.00 per notification may be charged Check by Phone Service: $10.00 per loan per occurrence.

Loan Transfer Fee: $75.00 per loan one-time if transferred from AmeriNat Note: Pass-through (reimbursable) expenses not reimbursed monthly, will be considered servicer advances and will be subject to an interest charge at a rate of 1% per month compounded. A finance charge of 1% per month compounded will be applied to invoices outstanding and unpaid for more than 60 days. Pass-through (reimbursable) expenses, including but not limited to postage costs for statements, letters, and other notifications to borrowers, advances necessary for principal and interest payments, tax and insurance payments, legal and other professional fees for loss mitigation activities, costs of tax contracts, and other out of pocket costs necessary for performance of the scope of service tasks, will be reimbursed by the City monthly.

Extraordinary Account Research and/or Loan Reconstruction AmeriNat will conduct ongoing routine maintenance and general customer service activities on borrower information and balances as part of the servicing duties at no additional cost.

Should the City request additional research to be conducted, or if the City engages AmeriNat to conduct a Loan Reconstruction Service on its portfolio, an extraordinary research fee of $150.00 per hour will be charged, with a minimum one hour per occurrence. Such fee will be approved by the City before the research is conducted.

When research is conducted at the request of the City because of a discrepancy between the City's records and AmeriNat's records relating to the principal balance or other loan information, and the result of the research determines that the discrepancy was the results of activity being posted at the City and not forwarded to AmeriNat for updating its records, the extraordinary research fee will be charged for the time spent on the research.

For services or loans with unique servicing characteristics that are not shown above, the City and AmeriNat acknowledge that additional and/or different servicing requirements may be appropriate. AmeriNat will work with the City in good faith to establish written terms for the servicing of these types of loans or additional services requested. Any agreement on the servicing provisions for any non-standard portfolio or additional services, including pricing for said services, shall be memorialized in a Statement of Work (“SOW”).

Docusign Envelope ID: CB1AE30C-33F6-858A-8185-C7D37D5B7A03 Item: 14
518

Title: Housing Rehabilitation Loan Portfolio Management 10 Minimum Monthly Fees
Fees are subject to a minimum monthly amount of $1,000 per month. The minimum is applicable to City-wide services, including fees for all services provided and including work provided to other departments or loan portfolios of the City.

Each monthly invoice shall identify services rendered and corresponding fees. In the event that the cost of services in any month is less than the $1,000 minimum monthly fee, the invoice shall clearly and separately identify any charges not corresponding to services rendered as "Non- ascribed minimum monthly fee" or similar.

In the event that this Agreement is renewed pursuant to Section 3.1.2, the rates set forth above may be increased or reduced each year at the time of renewal, but any increase shall not exceed the Consumer Price Index, All Urban Consumers, Los Angeles-Long Beach-Anaheim.

Docusign Envelope ID: CB1AE30C-33F6-858A-8185-C7D37D5B7A03 Item: 14
519

ATTACHMENT 5
Item: 14
520

HOUSING REHABILITATION LOAN PORTFOLIO MANAGEMENT
(2022-044.4)

City of Lake Forest
100 Civic Center Dr.

Lake Forest, CA 92630

Docusign Envelope ID: FE5C1A40-5ED5-8E6C-83FB-41990A281D07 Item: 14
521

City of Lake Forest
Fourth Amendment to Professional Consultant Services Agreement Housing Rehabilitation Loan Portfolio Management
I. PARTIES AND DATE. ................................ ................................ ..............

II. RECITALS. ................................ ................................ ..............................

III. TERMS................................. ................................ ................................ ..

IV. SIGNATURES. ................................ ................................ ........................

V. EXHIBIT "A" SCOPE OF SERVICES ................................ ...........................

VI. EXHIBIT "C" - COMPENSATION ................................ ..............................

Docusign Envelope ID: FE5C1A40-5ED5-8E6C-83FB-41990A281D07 Item: 14
522

Title: Housing Rehabilitation Loan Portfolio Management 3 1. PARTIES AND DATE.

This Agreement is made and entered into this 1 day of August , 2026 , by and between the City of Lake Forest, a municipal corporation, organized under the laws of the State of California, with its principal place of business at 100 Civic Center Drive, Lake Forest, California 92630 (“City”) and AmeriNational Community Services, LLC dba AmeriNat, a Minnesota Limited Liability Company (LLC), with its principal place of business at 8121 E. Florence Avenue, Downey, CA 90240 (“Consultant”). City and Consultant are sometimes individually referred to herein as “Party” and collectively as “Parties.” Docusign Envelope ID: FE5C1A40-5ED5-8E6C-83FB-41990A281D07 Item: 14
523

Title: Housing Rehabilitation Loan Portfolio Management 4 2. RECITALS.

2.1. Agreement
The Parties entered into that certain Agreement for Loan Portfolio Management Consulting Services dated June 23, 2022 (“Agreement”).

2.2. First Amendment
The Parties entered into that certain First Amendment to the Agreement to extend the term of the Agreement, increase the total amount of compensation under the Agreement, and update the City's Representative dated December 19, 2024 ("First Amendment").

2.3. Second Amendment
The Parties entered into that certain Second Amendment to the Agreement in order to increase the total amount of compensation under the Agreement dated December 16, 2025 ("Second Amendment").

2.4. Third Amendment
The Parties entered into that certain Third Amendment to the Agreement in order to extend the term of the Agreement and update the compensation table dated June 16, 2026 ("Third Amendment").

2.5. Fourth Amendment
The Parties entered into that certain Fourth Amendment to the Agreement in order reduce the scope of services and amend the compensation schedule under the Agreement.

Docusign Envelope ID: FE5C1A40-5ED5-8E6C-83FB-41990A281D07 Item: 14
524

Title: Housing Rehabilitation Loan Portfolio Management 5 3. TERMS.

3.1. Scope of Services.

The Scope of Services as set forth in Exhibit “A” of the Agreement is hereby amended to include the Services set forth in EXHIBIT "A" SCOPE OF SERVICES to this Amendment, attached hereto and incorporated herein.

3.2. Schedule of Compensation.

Exhibit “C” of the Agreement is hereby amended in its entirety in the form of EXHIBIT "C" - COMPENSATION to this First Amendment, attached hereto and incorporated herein.

3.3. Remaining Provisions of Agreement.

Except as otherwise specifically set forth in this Fourth Amendment, the remaining provisions of the Agreement shall remain in full force and effect.

Docusign Envelope ID: FE5C1A40-5ED5-8E6C-83FB-41990A281D07 Item: 14
525

Title: Housing Rehabilitation Loan Portfolio Management 6 4. SIGNATURES.

4.1. SIGNATURES.

CITY OF LAKE FOREST AmeriNational Community Services, LLC dba AmeriNat
By: [AUTHORIZED CITY SIGNATURE]

Robert Pequeño
Mayor
By: [VENDOR SIGNATURE 1]

Adrienne Thorson
Chairman of the Board
[If Corporation, TWO SIGNATURES,
President OR Vice President AND Secretary
OR Treasurer REQUIRED]
ATTEST:

By: [CITY CLERK SIGNATURE]

Thy Merritt
City Clerk
By: [VENDOR SIGNATURE 2]

Mark Fredericks
Chief Financial Officer (Corporation or LLC)
APPROVED AS TO FORM:

By: [CITY ATTORNEY SIGNATURE]

Best Best & Krieger LLP
City Attorney

[CONTRACT ADMINISTRATOR APPROVAL]
[PROJECT MANAGER APPROVAL]
[CITY CLE

RK - INSURANCE APPROVAL]
Docusign Envelope ID: FE5C1A40-5ED5-8E6C-83FB-41990A281D07 Item: 14
526

Title: Housing Rehabilitation Loan Portfolio Management 7 4.2. LAKE FOREST HOUSING AUTHORITY

CITY OF LAKE FOREST AmeriNational Community Services, LLC dba AmeriNat
By: [AUTHORIZED CITY SIGNATURE]

Robert Pequeño
Chair
By: [VENDOR SIGNATURE 1]

Adrienne Thorson
Chairman of the Board
[If Corporation, TWO SIGNATURES,
President OR Vice President AND Secretary
OR Treasurer REQUIRED]
ATTEST:

By: [CITY CLERK SIGNATURE]

Thy Merritt
Authority Secretary
By: [VENDOR SIGNATURE 2]

Mark Fredericks
Chief Financial Officer (Corporation or LLC)
APPROVED AS TO FORM:

By: [CITY ATTORNEY SIGNATURE]

Best Best & Krieger LLP
Authority Counsel

[CONTRACT ADMINISTRATOR APPROVAL]
[PROJECT MANAGER APPROVAL]
[CITY CLERK - INSURANCE APPROVAL]
Docusign Envelope ID: FE5C1A40-5ED5-8E6C-83FB-41990A281D07 Item: 14
527

Title: Housing Rehabilitation Loan Portfolio Management 8 5. EXHIBIT "A" SCOPE OF SERVICES

5.1. EXHIBIT "A" SCOPE OF MAINTENANCE SERVICES
Loan Servicing for Amortized and Deferred Loans

1. Collection and Remittance of Payments: Consultant will collect payments from the borrowers through monthly or other scheduled remittances of principal, interest, fees, escrow balances and other identified payments. These remittances will be posted to the loan and ancillary records in accordance with the loan documents and the City's written instructions. Payments will be posted the same day as receipt. All funds will be maintained in an FDIC insured banking institution in a custodial account for the benefit of the City and the borrowers as applicable. Consultant will ensure the proper balancing of cash received and transmitted and loan portfolio totals on a daily and monthly basis. Remittances will be forwarded to the City monthly net of fees and other authorized charges due to Consultant.

2. Payment of Property Taxes: At the City's request, Consultant will monitor the timely payment of property taxes. Tax service will be required to monitor payment of property tax.

3. Insurance Monitoring: Consultant will notify the insurance agent in writing that Consultant is monitoring premium payments and that consultant should be made aware of delinquencies or cancellations. Consultant will force place insurance in accordance with respective regulation (see Insurance section).

4. Escrow/Impound Account: If the City chooses, Consultant will establish an escrow/impound account for any borrower for the payment of taxes and insurance. Many borrowers find it easier to pay into an escrow account on a monthly basis rather than making large semi-annual or annual tax and insurance payments. Consultant will collect the monthly escrow payment from the borrower and make the tax and insurance payments on the borrower's behalf. The borrower escrow accounts will be analyzed annually in accordance with the Real Estate Settlement Procedures Act (RESPA). Tax service is necessary to ensure the timely and accurate payment of property taxes.

5. Late Fees: In keeping with the provisions of the City's promissory note, Consultant will assess and retain a late fee when payment is not made within the grace period.

Lender Placed Insurance
In accordance with respective regulation, upon notification of a policy cancellation from the borrower's insurance carrier, or when proof of a current policy is not received, Consultant will request lender-placed insurance from Consultant's insurance provider.

1. Coverage is instantly bound upon receipt of request with an effective date up to 90 days prior to receipt of Consultant's request.

2. Consultant's insurance provider or their carrier will send out three letters to the borrower over the course of forty-five days. If the borrower provides proof of coverage, lender-placed coverage will be cancelled.

Docusign Envelope ID: FE5C1A40-5ED5-8E6C-83FB-41990A281D07 Item: 14
528

Title: Housing Rehabilitation Loan Portfolio Management 9 3. If the effective date of this coverage is the same and there is no lapse in coverage, there will be no premium charged. If there is a lapse in coverage, there may be a fee charged to the borrower's account for an earned premium.

4. If the borrower does not provide proof of coverage, Consultant's insurance provider will send an insurance policy and notification of premium to the borrower and bill Consultant for a one-year policy. If the borrower does not have an established impound account; Consultant will create one and disburse the premium from it. If the borrower fails to pay the premium before the end of the month, and the disbursed premium results in an escrow deficit balance, said balance will be accounted for in that month's reconciliation of the City Escrow Deficit Account. If the aggregate portfolio remittance for said month is insufficient to cover the deficit amount, City will be billed and responsible for the cost until recouped from the borrower. Any pay-off quotations or demands will reflect any impound deficit amounts (caused by the cost of any forced-place insurance or other advances) so that the borrower will still be held responsible for the cost even if they are unresponsive.

5. The Portfolio Status Report, delivered monthly to the City, will also reflect such negative impound balances (i.e. the total amount of such premiums owed by borrower).

6. The one-year policy is cancelable at any time by either Consultant or the City.

Account Inquiries
When requested by a borrower, Consultant will provide a detailed statement of all transactions relating to the borrower's payments and/or escrow account.

Non-sufficient Funds (NSF) Checks
In the event that a check is returned unpaid due to non-sufficient funds, a returned check fee may be assessed. A letter will be sent to the borrower requesting immediate payment plus the returned check fee. If this fee is not received, a memo will be placed on the individual's account and the fee will be collected at the time the loan is paid off.

Additional Portfolio Management Services

1. Loan Payoff Quotations, Satisfactions, Reconveyances: Consultant will provide Loan Payoff Quotations and will perform Satisfactions and Reconveyances of Mortgage at the borrower's expense for any loan at the City's request.

2. Loan Amortization Schedules: Consultant will provide Loan Amortization Schedules for any loan at the City's request.

3. 1098 Tax Forms: Pursuant to IRS regulations and, on behalf of the City, Consultant will submit required 1098 tax form for any and all borrowers paying interest on any City loan.

4. Year-End Account Summary: Consultant will supply a year-end account summary statement to each borrower if there has been principal, interest or escrow activity on their account. The report will indicate principal, and interest paid, amount of payments Consultant made on the borrower's behalf for taxes and insurance, and any remaining escrow balance.

Docusign Envelope ID: FE5C1A40-5ED5-8E6C-83FB-41990A281D07 Item: 14
529

Title: Housing Rehabilitation Loan Portfolio Management 10 5. Tickler Notifications: Consultant will provide for an annual tickler notification to any borrower, at the City's request.

Loan Transfer
In the event the City requires Consultant to transition loans back to the City or to another servicer, Consultant will gather and package all loan files (hard-copy and/or electronic copy) for shipment.

Consultant's will work with the City's staff to electronically transmit servicing data in an agreed upon format.

Loan Reconstruction
Reconstruction work may involve a detailed review of payment histories to determine posting accuracy and compliance with promissory notes, truth in lending statements, and other applicable related loan documents.

Reports
Consultant's standard reports are designed to meet the City's objectives and funding source requirements.

Data reporting is flexible and can be reported in several ways, including program type, funding source and funding year. Consultant may also provide soft-copy reports and electronic reporting.

1. Portfolio Status Report: The report provides a complete accounting per loan of the total portfolio.

The report identifies annual payments made, remaining balances, borrower"s name and account number, original loan balance, interest rate, and loan term. For those deferred loans accruing interest, the report shows the ongoing accrued interest balance.

2. Current Month Reconciliation Report: This report serves as reconciliation for the loan payments remitted by borrowers.

3. Delinquent Aging Report: This report reflects delinquent accounts at the 30, 60, 90, and over 90-day levels. Borrower accounts moved into the forbearance or foreclosure process are designated.

4. Loan Amortization Schedule: The Loan Amortization Schedule shows the breakout of principal and interest paid for each payment during the term of the loan. This schedule is useful in determining how much principal is still owed and how much interest has been paid, at any period of time. This report can also be used in determining any balloon amounts due per the terms of the note.

5. Escrow Analysis Report: For loans requiring monthly escrow/impound payments for taxes and/or insurance. Consultant conducts an annual escrow analysis to determine the proper monthly payment a given borrower needs to make in order to cover future tax and insurance payments. This report is especially useful when escrow requirements change significantly, e.g., a marked increase in property tax due to a reassessment or supplemental tax.

6. Account Status Information Report: Provides borrower profile, loan term and current balance and status information for individual borrower accounts within a City's portfolio.

7. Current Year Payment History: Details transactions on individual accounts for the current year's activity.

Loss Mitigation
Docusign Envelope ID: FE5C1A40-5ED5-8E6C-83FB-41990A281D07 Item: 14
530

Title: Housing Rehabilitation Loan Portfolio Management 11 Consultant will provide loss mitigation services for loans, including Community Development Block Grant program loans.

Consultant provides treatment for delinquent mortgages through positive pressure that is fair but firm.

The following policy of follow-up will be adhered to by Consultant to minimize any loss of income to the City:

1. New Borrower Delinquency: Early delinquency can be a sign of a chronic delinquent borrower.

Consultant forwards its first letter to new delinquent borrowers at 5 days past the first payment due date. If there is no response, a second letter is sent at 15 days. Borrowers are invited to contact consultant to discuss difficulties they may be facing in meeting their obligations. If no response is received to either letter, due diligence phone calls begin at 17 days delinquent.

2. Delinquency/Default Letter Production: Letters of varying tone and composition will be sent at 15, 30 and 45 and 90 days past the payment due date. The 45 day letter will include the Consumer Financial Protection Bureau (CFPB) mandated notification informing the borrower of the available loss mitigation options. The 90-day letter will detail for the borrower possible escalated collection activity up to and including foreclosure. The letters emphasize the seriousness of the situation, the potential for loss of the borrower's property, and demands immediate payment.

3. Due Diligence Phone Calls: Telephone calls will be placed to all mortgage loan borrowers in accordance with CFPB guidance and best practices. Consultant will attempt to establish live contact with the borrower beginning on the 17th day of delinquency with a good faith goal of establishing contact with the borrower by the 36th day of delinquency. Consultant will make one or more subsequent attempts to contact the borrower every 30 days thereafter. The objective of the call is to secure or demand prompt payment, obtain information needed to determine the reason for the delinquency, and to gain a commitment for future payments.

4. Credit Reporting: Consultant will report to the credit bureaus any borrower payment activity on a monthly basis.

5. Confirmation Letters: Contact with borrowers is used to solicit commitments to repay past due amounts. A borrower will be provided with the opportunity to bring the loan current immediately, and within six months. Once a commitment is gained, Consultant will forward a confirmation letter to document both the call and the commitment. The revised payment plan of no greater than six month's duration is then implemented. Default under this plan may cause Consultant to recommend foreclosure.

Forbearance Plans
Consultant will provide foreclosure or forbearance services for loans, including Community Development Block Grant program loans, if requested by the City.

Formal forbearance plans are typically used for defaults of 90+ days. A forbearance plan of less than six months duration is executed by the borrower and immediately implemented by Consultant, with notice immediately provided to the City. Formal modifications to promissory note terms and forbearance plans of greater than .six months duration are forwarded to the City for pre-approval. Before the borrower executes the agreement, the City is requested to approve the plan.

Docusign Envelope ID: FE5C1A40-5ED5-8E6C-83FB-41990A281D07 Item: 14
531

Title: Housing Rehabilitation Loan Portfolio Management 12 Once approved, Consultant will implement the new payment schedule. Should a borrower default from the new payment schedule without cause, Consultant will recommend foreclosure.

Forbearance Evaluation Process: A hardship is defined as a situation or set of events or circumstances beyond the normal control of the borrower that prohibits the borrower from adhering to a planned repayment schedule. If a borrower states, either verbally or in writing, that a hardship situation exists, Consultant will document the circumstances and provide the following:

1. Letter from borrower requesting the City's consideration of hardship

2. Nature of the hardship

3. Expected duration of the hardship

4. Evidence to substantiate hardship

5. Forbearance Plan Proposal
If the City approves the Forbearance Plan Proposal and executes the agreement with the borrower, Consultant will resume loan servicing under the new payment plan. The file will be tickled for follow-up at the expiration of the temporary plan.

Consultant's objective is to formulate a plan to bring the loan current as soon as possible. However, in light of the City original purpose in making these loans (to assist the low/moderate income and disadvantaged citizens of its community), Consultant may recommend forbearance plans that defer all or part of the regular repayments for a specified period of time.

Docusign Envelope ID: FE5C1A40-5ED5-8E6C-83FB-41990A281D07 Item: 14
532

Title: Housing Rehabilitation Loan Portfolio Management 13 6. EXHIBIT "C" - COMPENSATION

6.1. EXHIBIT "C" - COMPENSATION
Consultant shall be paid for services in accordance with Section 3.3 of the Agreement and as described above under Exhibit “A” Scope of Services and the not to exceed fee of ONE HUNDRED TEN THOUSAND DOLLARS ($110,000.00) billed on a time and materials basis according to the following schedule.

Loan Portfolio Management
Flow Loan Set-Up Fee: $55.00 per loan
Monthly Service Fee for Amortized Loans: $16.58 per loan per monthly Escrowing and/or monitoring of taxes and insurance are included with the service at no additional cost except for a one-time tax service vendor fee if applicable transferable tax contracts are not already in place.

Monthly Service for Deferred Loans:

Warehouse: $2.35 per loan per month

1. Warehouse and monitor of taxes and/or insurance: $6.05 per loan per month plus one- time tax service vendor fee.

2. Warehouse and escrow of taxes and/or insurance: $16.58 per loan per month plus a one-time tax service vendor fee.

3. Flat fee for receiving occasional payments on deferred loans: $16.58 per payment Tax-Service Pass-Through Cost
If it is determined that Tax Service is needed, then a one-time fee of $80.00 per loan upfront at time of servicing commencement will be charged (may be assessable to borrower) for loan amounts up to $500,000. For loan amounts over $500,000, there is an additional charge of $10 per $100,000. Future charges may vary based on outside vendor pricing.

Please note: Additional or supplemental charges that may be imposed by the respective taxing authority for procurement of duplicate tax bills will be directly passed through to the City.

Forbearance Plans
If requested by the City, AmeriNat will charge a flat fee of $395.00 per loan per occurrence to institute a formal forbearance plan (usually in excess of 6 months in duration and with approval of the City). The City may require the borrower to pay this fee. Informal forbearances (usually less than 6 months in duration) to allow a delinquent borrower to catch up and bring their loan current are performance at no charge to the borrower or the City.

Per-Event Fees
Docusign Envelope ID: FE5C1A40-5ED5-8E6C-83FB-41990A281D07 Item: 14
533

Title: Housing Rehabilitation Loan Portfolio Management 14 Tickler Notifications: A $15.00 per notification may be charged Check by Phone Service: $10.00 per loan per occurrence.

Loan Transfer Fee: $75.00 per loan one-time if transferred from AmeriNat Note: Pass-through (reimbursable) expenses not reimbursed monthly, will be considered servicer advances and will be subject to an interest charge at a rate of 1% per month compounded. A finance charge of 1% per month compounded will be applied to invoices outstanding and unpaid for more than 60 days. Pass-through (reimbursable) expenses, including but not limited to postage costs for statements, letters, and other notifications to borrowers, advances necessary for principal and interest payments, tax and insurance payments, legal and other professional fees for loss mitigation activities, costs of tax contracts, and other out of pocket costs necessary for performance of the scope of service tasks, will be reimbursed by the City monthly.

Extraordinary Account Research and/or Loan Reconstruction AmeriNat will conduct ongoing routine maintenance and general customer service activities on borrower information and balances as part of the servicing duties at no additional cost.

Should the City request additional research to be conducted, or if the City engages AmeriNat to conduct a Loan Reconstruction Service on its portfolio, an extraordinary research fee of $150.00 per hour will be charged, with a minimum one hour per occurrence. Such fee will be approved by the City before the research is conducted.

When research is conducted at the request of the City because of a discrepancy between the City's records and AmeriNat's records relating to the principal balance or other loan information, and the result of the research determines that the discrepancy was the results of activity being posted at the City and not forwarded to AmeriNat for updating its records, the extraordinary research fee will be charged for the time spent on the research.

For services or loans with unique servicing characteristics that are not shown above, the City and AmeriNat acknowledge that additional and/or different servicing requirements may be appropriate.

AmeriNat will work with the City in good faith to establish written terms for the servicing of these types of loans or additional services requested. Any agreement on the servicing provisions for any non- standard portfolio or additional services, including pricing for said services, shall be memorialized in a Statement of Work (“SOW”).

Minimum Monthly Fees
Fees are subject to a minimum monthly amount of $1,000 per month. The minimum is applicable to City-wide services, including fees for all services provided and including work provided to other departments or loan portfolios of the City.

Each monthly invoice shall identify services rendered and corresponding fees. In the event that the cost of services in any month is less than the $1,000 minimum monthly fee, the invoice shall clearly and separately identify any charges not corresponding to services rendered as "Non- ascribed minimum monthly fee" or similar.

Docusign Envelope ID: FE5C1A40-5ED5-8E6C-83FB-41990A281D07 Item: 14
534

Title: Housing Rehabilitation Loan Portfolio Management 15 In the event that this Agreement is renewed pursuant to Section 3.1.2, the rates set forth above may be increased or reduced each year at the time of renewal, but any increase shall not exceed the Consumer Price Index, All Urban Consumers, Los Angeles-Long Beach-Anaheim.

Docusign Envelope ID: FE5C1A40-5ED5-8E6C-83FB-41990A281D07 Item: 14
535

ATTACHMENT 6
Item: 14
536

LOAN DOCUMENT PREPARATION SERVICES
(2026-087)

City of Lake Forest
100 Civic Center Dr.

Lake Forest, CA 92630

Docusign Envelope ID: 8F8EF8AB-15A9-8A52-8199-FBAB4FED86F8 Item: 14
537

City of Lake Forest
Professional Consultant Services Agreement
Loan Document Preparation Services
I. PARTIES AND DATE. ................................ ................................ ..............

II. RECITALS. ................................ ................................ ..............................

III. TERMS................................. ................................ ................................ ..

IV. SIGNATURES. ................................ ................................ ........................

V. EXHIBIT "A" SCOPE OF SERVICES ................................ ...........................

VI. EXHIBIT "A-I" - FEDERALLY REQUIRED PROVISIONS FOR SERVICES ........

VII. EXHIBIT "B" - SCHEDULE OF SERVICES ................................ ..................

VIII. EXHIBIT "C" - COMPENSATION ................................ ..............................

IX. EXHIBIT "D" - INSURANCE REQUIREMENTS ................................ ...........

Docusign Envelope ID: 8F8EF8AB-15A9-8A52-8199-FBAB4FED86F8 Item: 14
538

Title: Loan Document Preparation Services
3 1. PARTIES AND DATE.

This Agreement is made and entered into this [***INSERT DAY***] day of [***INSERT MONTH***], [***INSERT YEAR***], by and between the City of Lake Forest, a municipal corporation, organized under the laws of the State of California, with its principal place of business at 100 Civic Center Drive, Lake Forest, California 92630 (“City”) and ADM Consulting, LLC, a Wisconsin Limited Liability Company (LLC), with its principal place of business at W220N3451 Springdale Road, Pewaukee, Wisconsin 53072-4119 (“Consultant”). City and Consultant are sometimes individually referred to herein as “Party” and collectively as “Parties.”
Docusign Envelope ID: 8F8EF8AB-15A9-8A52-8199-FBAB4FED86F8 Item: 14
539

Title: Loan Document Preparation Services
4 2. RECITALS.

2.1. Consultant.

Consultant desires to perform and assume responsibility for the provision of certain professional loan document preparation consulting services required by the City on the terms and conditions set forth in this Agreement. Consultant represents that it is experienced in providing professional loan document preparation consulting services to public clients, is licensed in the State of California, and is familiar with the plans of City.

2.2. Project.

City desires to engage Consultant to render such professional loan document preparation consulting services for the Housing Rehabilitation Loan and Paint Grant project ("Project") as set forth in this Agreement.

Docusign Envelope ID: 8F8EF8AB-15A9-8A52-8199-FBAB4FED86F8 Item: 14
540

Title: Loan Document Preparation Services
5 3. TERMS.

3.1. Scope of Services and Term.

3.1.1 General Scope of Services. Consultant promises and agrees to furnish to the City all labor, materials, tools, equipment, services, and incidental and customary work necessary to fully and adequately supply the professional Loan Document Preparation Services consulting services necessary for the Project ("Services"). The Services are more particularly described in Exhibit "A" attached hereto and incorporated herein by reference. All Services shall be subject to, and performed in accordance with, this Agreement, the exhibits attached hereto and incorporated herein by reference, and all applicable local, state and federal laws, rules and regulations. Additionally, Consultant shall comply with all Federal requirements applicable to the Services as set forth in Exhibit “A-I.”

3.1.2 Term. The term of this Agreement shall be from August 1, 2026 to June 30, 2027, unless earlier terminated as provided herein. Consultant shall complete the Services within the term of this Agreement, and shall meet any other established schedules and deadlines.

3.2. Responsibilities of Consultant.

3.2.1 Independent Contractor; Control and Payment of Subordinates. The Services shall be performed by Consultant or under its supervision. Consultant will determine the means, methods and details of performing the Services subject to the requirements of this Agreement. City retains Consultant on an independent contractor basis and not as an employee. Consultant retains the right to perform similar or different services for others during the term of this Agreement. Any additional personnel performing the Services under this Agreement on behalf of Consultant shall also not be employees of City and shall at all times be under Consultant's exclusive direction and control. Neither City, nor any of its officials, officers, directors, employees or agents shall have control over the conduct of Consultant or any of Consultant's officers, employees, or agents, except as set forth in this Agreement. Consultant shall pay all wages, salaries, and other amounts due such personnel in connection with their performance of Services under this Agreement and as required by law. Consultant shall be responsible for all reports and obligations respecting such additional personnel, including, but not limited to: social security taxes, income tax withholding, unemployment insurance, disability insurance, and workers' compensation insurance.

3.2.2 Schedule of Services. Consultant shall perform the Services expeditiously, within the term of this Agreement, and in accordance with the Schedule of Services set forth in Exhibit "B" attached hereto and incorporated herein by reference. Consultant represents that it has the professional and technical personnel required to perform the Services in conformance with such conditions. In order to facilitate Consultant's conformance with the Schedule, City shall respond to Consultant's submittals in a timely manner. Upon request of City, Consultant shall provide a more detailed schedule of anticipated performance to meet the Schedule of Services.

3.2.3 Conformance to Applicable Requirements. All work prepared by Consultant shall be subject to the approval of City.

3.2.4 Substitution of Key Personnel. Consultant has represented to City that certain key personnel will perform and coordinate the Services under this Agreement. Should one or more of such Docusign Envelope ID: 8F8EF8AB-15A9-8A52-8199-FBAB4FED86F8 Item: 14
541

Title: Loan Document Preparation Services
6 personnel become unavailable, Consultant may substitute other personnel of at least equal competence upon written approval of City. In the event that City and Consultant cannot agree as to the substitution of key personnel, City shall be entitled to terminate this Agreement for cause. As discussed below, any personnel who fail or refuse to perform the Services in a manner acceptable to the City, or who are determined by the City to be uncooperative, incompetent, a threat to the adequate or timely completion of the Project or a threat to the safety of persons or property, shall be promptly removed from the Project by the Consultant at the request of the City. The key personnel for performance of this Agreement are as follows: Elle Goetzke, Chief Operating Officer.

3.2.5 City's Representative. The City hereby designates Debra Rose, City Manager, or his/her designee, to act as its representative in all matters pertaining to the administration and performance of this Agreement ("City's Representative"). City's Representative shall have the power to act on behalf of the City for review and approval of all products submitted by Consultant but not the authority to enlarge the Scope of Work or change the total compensation due to Consultant under this Agreement. The City Manager shall be authorized to act on City's behalf and to execute all necessary documents which enlarge the Scope of Work or change the Consultant's total compensation subject to the provisions contained in Section 3.3 of this Agreement. Consultant shall not accept direction or orders from any person other than the City Manager, City's Representative or his/her designee.

3.2.6 Consultant's Representative. Consultant hereby designates Elle Goetzke, Chief Operating Officer, or his/her designee, to act as its representative for the performance of this Agreement ("Consultant's Representative"). Consultant's Representative shall have full authority to represent and act on behalf of the Consultant for all purposes under this Agreement. The Consultant's Representative shall supervise and direct the Services, using his/her best skill and attention, and shall be responsible for all means, methods, techniques, sequences, and procedures and for the satisfactory coordination of all portions of the Services under this Agreement.

3.2.7 Coordination of Services. Consultant agrees to work closely with City staff in the performance of Services and shall be available to City's staff, consultants and other staff at all reasonable times.

3.2.8 Standard of Care; Performance of Employees. Consultant shall perform all Services under this Agreement in a skillful and competent manner, consistent with the standards generally recognized as being employed by professionals in the same discipline in the State of California. Consultant represents and maintains that it is skilled in the professional calling necessary to perform the Services. Consultant warrants that all employees and subconsultants shall have sufficient skill and experience to perform the Services assigned to them. Finally, Consultant represents that it, its employees and subconsultants have all licenses, permits, qualifications and approvals of whatever nature that are legally required to perform the Services, and that such licenses and approvals shall be maintained throughout the term of this Agreement. As provided for in the indemnification provisions of this Agreement, Consultant shall perform, at its own cost and expense and without reimbursement from the City, any services necessary to correct errors or omissions which are caused by the Consultant's failure to comply with the standard of care provided for herein. Any employee of the Consultant or its sub-consultants who is determined by the City to be uncooperative, incompetent, a threat to the adequate or timely completion of the Project, a threat to the safety of persons or property, or any employee who fails or refuses to perform the Services in a manner acceptable to the City, shall be Docusign Envelope ID: 8F8EF8AB-15A9-8A52-8199-FBAB4FED86F8 Item: 14
542

Title: Loan Document Preparation Services
7 promptly removed from the Project by the Consultant and shall not be re employed to perform any of the Services or to work on the Project.

3.2.9 Laws and Regulations. Consultant shall keep itself fully informed of and in compliance with all local, state and federal laws, rules and regulations in any manner affecting the performance of the Project or the Services, including all Cal/OSHA requirements, and shall give all notices required by law. Consultant shall be liable for all violations of such laws and regulations in connection with Services. If Consultant performs any work knowing it to be contrary to such laws, rules and regulations, Consultant shall be solely responsible for all costs arising therefrom. Consultant shall defend, indemnify and hold City, its officials, directors, officers, employees, agents, and volunteers free and harmless, pursuant to the indemnification provisions of this Agreement, from any claim or liability arising out of any failure or alleged failure to comply with such laws, rules or regulations.

3.2.10 Safety. Consultant shall execute and maintain its work so as to avoid injury or damage to any person or property. In carrying out its Services, the Consultant shall at all times be in compliance with all applicable local, state and federal laws, rules and regulations, and shall exercise all necessary precautions for the safety of employees appropriate to the nature of the work and the conditions under which the work is to be performed. Safety precautions, where applicable, shall include, but shall not be limited to: (A) adequate life protection and lifesaving equipment and procedures; (B) instructions in accident prevention for all employees and subconsultants, such as safe walkways, scaffolds, fall protection ladders, bridges, gang planks, confined space procedures, trenching and shoring, equipment and other safety devices, equipment and wearing apparel as are necessary or lawfully required to prevent accidents or injuries; and (C) adequate facilities for the proper inspection and maintenance of all safety measures.

3.2.11 Insurance. Consultant agrees to procure and maintain, at Consultant’s expense all insurance specified in Exhibit “D” attached hereto and by this reference incorporated herein. Consultant shall require all subconsultants to carry the same policies and limits of insurance that the Consultant is required to maintain, unless otherwise approved in writing by the City.

3.2.12 Water Quality Management and Compliance.

3.2.12.1 Storm Water Management. Storm, surface, nuisance, or other waters may be encountered at various times during the Services. Consultant hereby acknowledges that it has investigated the risk arising from such waters, and assumes any and all risks and liabilities arising therefrom.

3.2.12.2 Compliance with Water Quality Laws, Ordinances and Regulations. Consultant shall keep itself and all subcontractors, staff, and employees fully informed of and in compliance with all local, state and federal laws, rules and regulations that may impact, or be implicated by the performance of the Services including, without limitation, all applicable provisions of the City’s ordinances regulating water quality and storm water; the Federal Water Pollution Control Act (33 U.S.C. § 1251, et seq.); the California Porter-Cologne Water Quality Control Act (Water Code § 13000 et seq.); and any and all regulations, policies, or permits issued pursuant to any such authority. Consultant must additionally comply with the lawful requirements of the City, and any other municipality, drainage district, or other local agency with jurisdiction over the location where the Services are to be conducted, regulating water quality and storm water discharges.

Docusign Envelope ID: 8F8EF8AB-15A9-8A52-8199-FBAB4FED86F8 Item: 14
543

Title: Loan Document Preparation Services
8 3.2.12.3 Compliance with DAMP and LIP. In addition to compliance with the laws, ordinances and regulations listed in Section 3.2.12.2 of this Agreement, Consultant must comply with all applicable requirements of the Orange County Drainage Area Management Plan (“DAMP”), the City of Lake Forest Local Implementation Plan (“LIP”) and the applicable Water Quality Management Plan (“WQMP”). The DAMP contains requirements related to design and construction of public projects. Consultant must be familiar the DAMP, and the LIP and comply with the requirements as specified therein.

A copy of the DAMP is available on the internet at:
http://www.ocwatersheds.com/documents/damp/mapplan
A copy of the LIP is available on the internet at:
http://www.lakeforestca.gov/296/Local-Implementation-Plan-LIP

3.2.12.4 Standard of Care. Consultant warrants that all employees and subcontractors shall have sufficient skill and experience to perform the work assigned to them without impacting water quality in violation of the laws, regulations and policies described in Sections 3.2.12.2 and 3.2.12.3 of this Agreement. Consultant further warrants that it, its employees and subcontractors have or will receive adequate training, as determined by the City, regarding these requirements as they may relate to the Services.

3.2.12.5 Liability for Non-compliance.
(A) Indemnity: Failure to comply with laws, regulations, and ordinances listed in Sections 3.2.12.2 and 3.2.12.3 of this Agreement is a violation of federal and state law. Notwithstanding any other indemnity contained in this Agreement, Consultant agrees to indemnify and hold harmless the City, its officials, officers, agents, employees and authorized volunteers from and against any and all claims, demands, losses or liabilities of any kind or nature which the City, its officials, officers, agents, employees and authorized volunteers may sustain or incur for noncompliance with the laws, regulations, and ordinances listed above, arising out of or in connection with the Services, except for liability resulting from the sole established negligence, willful misconduct or active negligence of the City, its officials, officers, agents, employees or authorized volunteers. (B) Defense: City reserves the right to defend any enforcement action or civil action brought against the City for Consultant’s failure to comply with any applicable water quality law, regulation, or policy. Consultant hereby agrees to be bound by, and to reimburse the City for the costs associated with, any settlement reached between the City and the relevant enforcement entity. (C) Damages: City may seek damages from Consultant for delay in completing the Services caused by Consultant’s failure to comply with the laws, regulations and policies described in Sections 3.2.12.2 and 3.2.12.3 of this Agreement, or any other relevant water quality law, regulation, or policy. regulation, or policy.

Docusign Envelope ID: 8F8EF8AB-15A9-8A52-8199-FBAB4FED86F8 Item: 14
544

Title: Loan Document Preparation Services
9 3.3. Fees and Payments.

3.3.1 Compensation. Consultant shall receive compensation, including authorized reimbursements, for all Services rendered under this Agreement at the rates set forth in Exhibit "C" attached hereto and incorporated herein by reference. The total compensation shall not exceed TEN THOUSAND DOLLARS ($10,000.00) without written approval of the City Council or City Manager as applicable. Extra Work may be authorized, as described below, and if authorized, will be compensated at the rates and manner set forth in this Agreement.

3.3.2 Payment of Compensation. Consultant shall submit to City a monthly invoice which indicates work completed and hours of Services rendered by Consultant. The invoice shall describe the amount of Services provided since the initial commencement date, or since the start of the subsequent billing periods, as appropriate, through the date of the invoice. City shall, within 30 days of receiving such invoice, review the invoice and pay all non-disputed and approved charges thereon. If the City disputes any of Consultant's fees, the City shall give written notice to Consultant within thirty (30) days of receipt of an invoice of any disputed fees set forth therein.

3.3.3 Reimbursement for Expenses. Consultant shall not be reimbursed for any expenses unless authorized in writing by City, or included in Exhibit "C" of this Agreement.

3.3.4 Extra Work. At any time during the term of this Agreement, City may request that Consultant perform Extra Work. As used herein, "Extra Work" means any work which is determined by City to be necessary for the proper completion of the Project, but which the Parties did not reasonably anticipate would be necessary at the execution of this Agreement. Consultant shall not perform, nor be compensated for, Extra Work without written authorization from the City.

3.3.5 Rate Increases. In the event that this Agreement is renewed pursuant to Section 3.1.2, the rate set forth in Exhibit “C” may be adjusted each year at the time of renewal as set forth in Exhibit “C.”

3.4. Labor Code Requirements.

3.4.1 Prevailing Wages. Consultant is aware of the requirements of California Labor Code Section 1720, et seq., and 1770, et seq., as well as California Code of Regulations, Title 8, Section 16000, et seq., ("Prevailing Wage Laws"), which require the payment of prevailing wage rates and the performance of other requirements on "public works" and "maintenance" projects. Since the Services are being performed as part of an applicable "public works" or "maintenance" project, as defined by the Prevailing Wage Laws, and if the total compensation is $1,000 or more, Consultant agrees to fully comply with such Prevailing Wage Laws. City shall provide Consultant with a copy of the prevailing rates of per diem wages in effect at the commencement of this Agreement. Consultant shall make copies of the prevailing rates of per diem wages for each craft, classification or type of worker needed to execute the Services available to interested parties upon request, and shall post copies at the Consultant's principal place of business and at the project site. It is the intent of the parties to effectuate the requirements of sections 1771, 1774, 1775, 1776, 1777.5, 1813, and 1815 of the Labor Code within this Agreement, and Consultant shall therefore comply with such Labor Code sections to the fullest extent required by law. Consultant shall defend, indemnify and hold the City, its officials, officers, employees, Docusign Envelope ID: 8F8EF8AB-15A9-8A52-8199-FBAB4FED86F8 Item: 14
545

Title: Loan Document Preparation Services
10 agents, and volunteers free and harmless from any claim or liability arising out of any failure or alleged failure to comply with the Prevailing Wage Laws.

3.4.2 Registration. If the Services are being performed as part of an applicable “public works” or “maintenance” project, in addition to the foregoing, then pursuant to Labor Code sections 1725.5 and 1771.1, the Consultant and all subconsultants must be registered with the Department of Industrial Relations (“DIR”). Consultant shall maintain registration for the duration of the project and require the same of any subconsultants. This project may also be subject to compliance monitoring and enforcement by the DIR. It shall be Contractor’s sole responsibility to comply with all applicable registration and labor compliance requirements, including the submission of payroll records directly to the DIR.

3.5. Accounting Records.

3.5.1 Maintenance and Inspection. Consultant shall maintain complete and accurate records with respect to all costs and expenses incurred under this Agreement. All such records shall be clearly identifiable. Consultant shall allow a representative of City during normal business hours to examine, audit, and make transcripts or copies of such records and any other documents created pursuant to this Agreement. Consultant shall allow inspection of all work, data, documents, proceedings, and activities related to the Agreement for a period of three (3) years from the date of final payment under this Agreement.

3.6. General Provisions.

3.6.1 Termination of Agreement.

3.6.1.1 Grounds for Termination. City may, by written notice to Consultant, terminate the whole or any part of this Agreement at any time and without cause by giving written notice to Consultant of such termination, and specifying the effective date thereof, at least seven (7) days before the effective date of such termination. Upon termination, Consultant shall be compensated only for those services which have been adequately rendered to City, and Consultant shall be entitled to no further compensation. Consultant may not terminate this Agreement except for cause.

3.6.1.2 Effect of Termination. If this Agreement is terminated as provided herein, City may require Consultant to provide all finished or unfinished Documents and Data and other information of any kind prepared by Consultant in connection with the performance of Services under this Agreement. Consultant shall be required to provide such document and other information within fifteen (15) days of the request.

3.6.1.3 Additional Services. In the event this Agreement is terminated in whole or in part as provided herein, City may procure, upon such terms and in such manner as it may determine appropriate, services similar to those terminated.

3.6.1.4 Delivery of Notices. All notices permitted or required under this Agreement shall be given to the respective parties at the following address, or at such other address as the respective parties may provide in writing for this purpose:

Consultant: ADM Consulting, LLC
W220N3451 Springdale Road
Docusign Envelope ID: 8F8EF8AB-15A9-8A52-8199-FBAB4FED86F8 Item: 14
546

Title: Loan Document Preparation Services
11 Pewaukee, Wisconsin 53072-4119
ATTN: Elle Goetzke, Chief Operating Officer
City: City of Lake Forest
100 Civic Center Drive
Lake Forest, CA 92630
ATTN: City Clerk
Such notice shall be deemed made when personally delivered or when mailed, forty-eight (48) hours after deposit in the U.S. Mail, first class postage prepaid and addressed to the party at its applicable address. Actual notice shall be deemed adequate notice on the date actual notice occurred, regardless of the method of service.

3.6.2 Ownership of Materials and Confidentiality.

3.6.2.1 Documents & Data; Licensing of Intellectual Property. This Agreement creates a non exclusive and perpetual license for City to copy, use, modify, reuse, or sublicense any and all copyrights, designs, and other intellectual property embodied in plans, specifications, studies, drawings, estimates, and other documents or works of authorship fixed in any tangible medium of expression, including but not limited to, physical drawings or data magnetically or otherwise recorded on computer diskettes, which are prepared or caused to be prepared by Consultant under this Agreement ("Documents & Data"). Consultant shall require all subconsultants to agree in writing that City is granted a non exclusive and perpetual license for any Documents & Data the subconsultant prepares under this Agreement. Consultant represents and warrants that Consultant has the legal right to license any and all Documents & Data. Consultant makes no such representation and warranty in regard to Documents & Data which were prepared by design professionals other than Consultant or provided to Consultant by the City. City shall not be limited in any way in its use of the Documents & Data at any time, provided that any such use not within the purposes intended by this Agreement shall be at City's sole risk.

3.6.2.2 Confidentiality. All ideas, memoranda, specifications, plans, procedures, drawings, descriptions, computer program data, input record data, written information, and other Documents & Data either created by or provided to Consultant in connection with the performance of this Agreement shall be held confidential by Consultant. Such materials shall not, without the prior written consent of City, be used by Consultant for any purposes other than the performance of the Services. Nor shall such materials be disclosed to any person or entity not connected with the performance of the Services or the Project. Nothing furnished to Consultant which is otherwise known to Consultant or is generally known, or has become known, to the related industry shall be deemed confidential. Consultant shall not use City's name or insignia, photographs of the Project, or any publicity pertaining to the Services or the Project in any magazine, trade paper, newspaper, television or radio production or other similar medium without the prior written consent of City.

3.6.2.3 Confidential Information. The City shall refrain from releasing Consultant’s proprietary information ("Proprietary Information") unless the City's legal counsel determines that the release of the Proprietary Information is required by the California Public Records Act or other applicable state or federal law, or order of a court of competent jurisdiction, in which case the City shall notify Consultant of its intention to release Proprietary Information. Consultant shall have five (5) Docusign Envelope ID: 8F8EF8AB-15A9-8A52-8199-FBAB4FED86F8 Item: 14
547

Title: Loan Document Preparation Services
12 working days after receipt of the Release Notice to give City written notice of Consultant's objection to the City's release of Proprietary Information. Consultant shall indemnify, defend and hold harmless the City, and its officers, directors, employees, and agents from and against all liability, loss, cost or expense (including attorney’s fees) arising out of a legal action brought to compel the release of Proprietary Information. City shall not release the Proprietary Information after receipt of the Objection Notice unless either: (1) Consultant fails to fully indemnify, defend (with City's choice of legal counsel), and hold City harmless from any legal action brought to compel such release; and/or (2) a final and non- appealable order by a court of competent jurisdiction requires that City release such information.

3.6.3 Cooperation; Further Acts. The Parties shall fully cooperate with one another, and shall take any additional acts or sign any additional documents as may be necessary, appropriate or convenient to attain the purposes of this Agreement.

3.6.4 Attorney's Fees. If either party commences an action against the other party, either legal, administrative or otherwise, arising out of or in connection with this Agreement, the prevailing party in such litigation shall be entitled to have and recover from the losing party reasonable attorney's fees and all other costs of such action.

3.6.5 Indemnification.

To the fullest extent permitted by law, Consultant shall defend (with counsel of City’s choosing), indemnify and hold the City, its officials, officers, employees, volunteers and agents free and harmless from any and all claims, demands, causes of action, costs, expenses, liability, loss, damage or injury of any kind, in law or equity, to property or persons, including wrongful death, in any manner arising out of, pertaining to, or incident to any alleged acts, errors or omissions, or willful misconduct of Consultant, its officials, officers, employees, subcontractors, consultants or agents in connection with the performance of the Consultant's Services, the Project or this Agreement, including without limitation the payment of all damages, expert witness fees and attorneys fees and other related costs and expenses. Consultant's obligation to indemnify shall not be restricted to insurance proceeds, if any, received by the Consultant or the City, its officials, officers, employees, agents or volunteers.

If Consultant’s obligation to defend, indemnify, and/or hold harmless arises out of Consultant’s performance as a “design professional” (as that term is defined under Civil Code section 2782.8), then, and only to the extent required by Civil Code section 2782.8, which is fully incorporated herein, Consultant’s indemnification obligation shall be limited to claims that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the Consultant, and, upon Consultant obtaining a final adjudication by a court of competent jurisdiction, Consultant’s liability for such claim, including the cost to defend, shall not exceed the Consultant’s proportionate percentage of fault.

3.6.6 Entire Agreement. This Agreement contains the entire Agreement of the parties with respect to the subject matter hereof, and supersedes all prior negotiations, understandings or agreements. This Agreement may only be modified by a writing signed by both parties.

3.6.7 Governing Law. This Agreement shall be governed by the laws of the State of California. Venue shall be in Orange County.

3.6.8 Time of Essence. Time is of the essence for each and every provision of this Agreement.

Docusign Envelope ID: 8F8EF8AB-15A9-8A52-8199-FBAB4FED86F8 Item: 14
548

Title: Loan Document Preparation Services
13 3.6.9 City's Right to Employ Other Consultants. City reserves right to employ other consultants in connection with this Project.

3.6.10 Successors and Assigns. This Agreement shall be binding on the successors and assigns of the parties.

3.6.11 Assignment or Transfer. Consultant shall not assign, hypothecate, or transfer, either directly or by operation of law, this Agreement or any interest herein without the prior written consent of the City, with such consent shall not be unreasonably withheld. Any attempt to do so shall be null and void, and any assignees, hypothecates or transferees shall acquire no right or interest by reason of such attempted assignment, hypothecation or transfer.

3.6.12 Construction; References; Captions. Since the Parties or their agents have participated fully in the preparation of this Agreement, the language of this Agreement shall be construed simply, according to its fair meaning, and not strictly for or against any Party. Any term referencing time, days or period for performance shall be deemed calendar days and not work days. All references to Consultant include all personnel, employees, agents, and subconsultants of Consultant, except as otherwise specified in this Agreement. All references to City include its elected officials, officers, employees, agents, and volunteers except as otherwise specified in this Agreement. The captions of the various articles and paragraphs are for convenience and ease of reference only, and do not define, limit, augment, or describe the scope, content, or intent of this Agreement.

3.6.13 Amendment; Modification. No supplement, modification, or amendment of this Agreement shall be binding unless executed in writing and signed by both Parties.

3.6.14 Waiver. No waiver of any default shall constitute a waiver of any other default or breach, whether of the same or other covenant or condition. No waiver, benefit, privilege, or service voluntarily given or performed by a Party shall give the other Party any contractual rights by custom, estoppel, or otherwise.

3.6.15 No Third-Party Beneficiaries. There are no intended third party beneficiaries of any right or obligation assumed by the Parties.

3.6.16 Invalidity; Severability. If any portion of this Agreement is declared invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect.

3.6.17 Prohibited Interests. Consultant maintains and warrants that it has not employed nor retained any company or person, other than a bona fide employee working solely for Consultant¬, to solicit or secure this Agreement. Further, Consultant warrants that it has not paid nor has it agreed to pay any company or person, other than a bona fide employee working solely for Consultant, any fee, commission, percentage, brokerage fee, gift or other consideration contingent upon or resulting from the award or making of this Agreement. For breach or violation of this warranty, City shall have the right to rescind this Agreement without liability. For the term of this Agreement, no member, officer or employee of City, during the term of his or her service with City, shall have any direct interest in this Agreement, or obtain any present or anticipated material benefit arising therefrom.

Docusign Envelope ID: 8F8EF8AB-15A9-8A52-8199-FBAB4FED86F8 Item: 14
549

Title: Loan Document Preparation Services
14 3.6.18 Equal Opportunity Employment. Consultant represents that it is an equal opportunity employer and it shall not discriminate against any subconsultant, employee or applicant for employment because of race, religion, color, national origin, handicap, ancestry, sex or age. Such non-discrimination shall include, but not be limited to, all activities related to initial employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff or termination. Consultant shall also comply with all relevant provisions of City's Minority Business Enterprise program, Affirmative Action Plan or other related programs or guidelines currently in effect or hereinafter enacted.

3.6.19 Labor Certification. By its signature hereunder, Consultant certifies that it is aware of the provisions of Section 3700 of the California Labor Code which require every employer to be insured against liability for Worker's Compensation or to undertake self-insurance in accordance with the provisions of that Code, and agrees to comply with such provisions before commencing the performance of the Services.

3.6.20 Authority to Enter Agreement. Consultant has all requisite power and authority to conduct its business and to execute, deliver, and perform the Agreement. Each Party warrants that the individuals who have signed this Agreement have the legal power, right, and authority to make this Agreement and bind each respective Party.

3.6.21 Counterparts. This Agreement may be signed in counterparts, each of which shall constitute an original.

3.7. Subcontracting.

3.7.1 Prior Approval Required. Consultant shall not subcontract any portion of the work required by this Agreement, except as expressly stated herein, without prior written approval of City. Subcontracts, if any, shall contain a provision making them subject to all provisions stipulated in this Agreement.

Docusign Envelope ID: 8F8EF8AB-15A9-8A52-8199-FBAB4FED86F8 Item: 14
550

Title: Loan Document Preparation Services
15 4. SIGNATURES.

4.1. SIGNATURES.

CITY OF LAKE FOREST ADM Consulting, LLC
By: [AUTHORIZED CITY SIGNATURE]

Robert Pequeño
Mayor
By: [VENDOR SIGNATURE 1]

Adrienne Thorson
Chief Executive Officer
[If Corporation, TWO SIGNATURES,
President OR Vice President AND Secretary
OR Treasurer REQUIRED]
ATTEST:

By: [CITY CLERK SIGNATURE]

Thy Merritt
City Clerk
By: [VENDOR SIGNATURE 2]

Elle Goetzke
Chief Operating Officer
APPROVED AS TO FORM:

By: [CITY ATTORNEY SIGNATURE]

Best Best & Krieger LLP
City Attorney

[CONTRACT ADMINISTRATOR APPROVAL]
[PROJECT MANAGER APPROVAL]
[

CITY CLERK - INSURANCE APPROVAL]
Docusign Envelope ID: 8F8EF8AB-15A9-8A52-8199-FBAB4FED86F8 Item: 14
551

Title: Loan Document Preparation Services
16 4.2. LAKE FOREST HOUSING AUTHORITY

CITY OF LAKE FOREST ADM Consulting, LLC
By: [AUTHORIZED CITY SIGNATURE]

Robert Pequeño
Chair
By: [VENDOR SIGNATURE 1]

Adrienne Thorson
Chief Executive Officer
[If Corporation, TWO SIGNATURES,
President OR Vice President AND Secretary
OR Treasurer REQUIRED]
ATTEST:

By: [CITY CLERK SIGNATURE]

Thy Merritt
Authority Secretary
By: [VENDOR SIGNATURE 2]

Elle Goetzke
Chief Operating Officer
APPROVED AS TO FORM:

By: [CITY ATTORNEY SIGNATURE]

Best Best & Krieger LLP
Authority Counsel

[CONTRACT ADMINISTRATOR APPROVAL]
[PROJECT MANAGER APPROVAL]
[CITY CLERK - INSURANCE APPROVAL]
Docusign Envelope ID: 8F8EF8AB-15A9-8A52-8199-FBAB4FED86F8 Item: 14
552

Title: Loan Document Preparation Services
17 5. EXHIBIT "A" SCOPE OF SERVICES

5.1. EXHIBIT "A" SCOPE OF SERVICES
Loan Document Preparation
Once a loan has been approved, the City shall forward to Consultant a Request for Loan Documents containing required information to complete the preparation of loan documents. In accordance with the loan document request, Consultant shall prepare and forward the following documents within five (5) business days for the City's execution:
• Deed of Trust
• Promissory Note
• Truth in Lending Disclosure Statement
• Request for Notice of Default and Sale
• Notice of Right to Cancel
• Control Instructions
• Declaration of Covenants, Conditions, and Restrictions (CC&Rs) • Other documents as agreed to with the City
Once the documents are executed by the borrower, the Deed of Trust and Request for Notice are returned to Consultant for recordation with the County Recorder. Following the recording of the Deed of Trust, Consultant shall confirm that the City's lien position is secure by updating title (when approved by the City).

Consultant shall provide the following Loan Document Preparation Services professional consulting services relative to the City's Housing Rehabilitation Loan and Paint Grant Program project.

Docusign Envelope ID: 8F8EF8AB-15A9-8A52-8199-FBAB4FED86F8 Item: 14
553

Title: Loan Document Preparation Services
18 6. EXHIBIT "A-I" - FEDERALLY REQUIRED PROVISIONS FOR SERVICES

6.1. EXHIBIT "A-I" - FEDERALLY REQUIRED PROVISIONS FOR MAINTENANCE

SERVICES
Byrd Anti-Lobbying Amendment (31 U.S.C. 1352)-Contractors that apply or bid for an award exceeding $100,000 must file the required certification. Each tier certifies to the tier above that it will not and has not used Federal appropriated funds to pay any person or organization for influencing or attempting to influence an officer or employee of any agency, a member of Congress, officer or employee of Congress, or an employee of a member of Congress in connection with obtaining any Federal contract, grant or any other award covered by 31 U.S.C. 1352. Each tier must also disclose any lobbying with non-Federal funds that takes place in connection with obtaining any Federal award. Such disclosures are forwarded from tier to tier up to the non-Federal award.

Debarment and Suspension (Executive Orders 12549 and 12689)-A contract award (see 2 CFR 180.220) must not be made to parties listed on the governmentwide exclusions in the System for Award Management (SAM), in accordance with the 0MB guidelines at 2 CFR 180 that implement Executive Orders 12549 (3 CFR part 1986 Comp., p. 189) and 12689 (3 CFR part 1989 Comp., p. 235), "Debarment and Suspension." SAM Exclusions contains the names of parties debarred, suspended, or otherwise excluded by agencies, as well as parties declared ineligible under statutory or regulatory authority other than Executive Order 12549
Docusign Envelope ID: 8F8EF8AB-15A9-8A52-8199-FBAB4FED86F8 Item: 14
554

Title: Loan Document Preparation Services
19 7. EXHIBIT "B" - SCHEDULE OF SERVICES

7.1. EXHIBIT "B" - SCHEDULE OF SERVICES
The Consultant shall provide the services described in Exhibit “A” Scope of Services as directed by the City.

Docusign Envelope ID: 8F8EF8AB-15A9-8A52-8199-FBAB4FED86F8 Item: 14
555

Title: Loan Document Preparation Services
20 8. EXHIBIT "C" - COMPENSATION

8.1. EXHIBIT "C" - COMPENSATION
Consultant shall be paid for services in accordance with Section 3.3 of the Agreement and as described above under Exhibit “A” Scope of Services and the not to exceed fee of TEN THOUSAND DOLLARS ($10,000.00). Compensation shall be paid per the following schedule and terms.

Fee for Loan Documentation Preparation Services

1. A fee of $375.00 plus pass through costs approved by the City in advance is charged for loan document preparation.

2. Ordering credit, title or appraisal: $50 each (due 30 days after receipt of application, plus outside costs*)

3. A cancellation fee of $95.00 plus outside costs approved by the City before incurred applies to any project for which credit, title, or appraisals have been supplied by Consultant, but which is thereafter canceled by City without performance of loan document preparations. A project will be considered cancelled if a Loan Document Request is not received by the Consultant from the City within sixty (60) days of ordering the aforementioned services.

4. A fee of $55.00 will be charged for a document that is re-drafted at the request of the City solely due to actions by the City.

Services for Loan Document Preparation are subject to a non-refundable annual minimum of $4,500. The minimum fee is due upon contract execution and annually thereafter. Invoices processed for work completed will be applied to the minimum fee, with a copy provided to the City. If the minimum fee has been fully applied to invoices, remaining invoices will be due within 30 days of the invoice date.

Docusign Envelope ID: 8F8EF8AB-15A9-8A52-8199-FBAB4FED86F8 Item: 14
556

Title: Loan Document Preparation Services
21 9. EXHIBIT "D" - INSURANCE REQUIREMENTS

9.1. EXHIBIT "D" - INSURANCE REQUIREMENTS

1.1.1 Time for Compliance. Consultant shall not commence work under this Agreement until it has provided evidence satisfactory to the City that it has secured all insurance required under this section. In addition, Consultant shall not allow any subconsultant to commence work on any subcontract until it has provided evidence satisfactory to the City that the subconsultant has secured all insurance required under this section.

1.1.2 Types of Insurance Required. As a condition precedent to the effectiveness of this Agreement for work to be performed hereunder, and without limiting the indemnity provisions of the Agreement, the Consultant, in partial performance of its obligations under such Agreement, shall procure and maintain in full force and effect during the term of the Agreement the following policies of insurance. If the existing policies do not meet the insurance requirements set forth herein, Consultant agrees to amend, supplement or endorse the policies to do so. (A) Commercial General Liability: Commercial General Liability Insurance which affords coverage at least as broad as Insurance Services Office "occurrence" form CG 0001, or the exact equivalent, with limits of not less than $1,000,000 per occurrence and no less than $2,000,000 in the general aggregate. Defense costs shall be paid in addition to the limits. The policy shall contain no endorsements or provisions (1) limiting coverage for contractual liability; (2) excluding coverage for claims or suits by one insured against another (cross-liability); or (3) containing any other exclusion(s) contrary to the terms or purposes of this Agreement.
(B) Automobile Liability Insurance: Automobile Liability Insurance with coverage at least as broad as Insurance Services Office Form CA 0001 covering "Any Auto" (Symbol 1), or the exact equivalent, covering bodily injury and property damage for all activities with limits of not less than $1,000,000 combined limit for each occurrence.
(C) Workers’ Compensation: Workers' Compensation Insurance, as required by the State of California and Employer's Liability Insurance with a limit of not less than $1,000,000 per accident for bodily injury and disease.
(D) Professional Liability (Errors & Omissions): Professional Liability insurance or Errors & Omissions insurance appropriate to Consultant’s profession with limits of not less than $1,000,000. Covered professional services shall specifically include all work to be performed under the Agreement and delete any exclusions that may potentially affect the work to be performed (for example, any exclusions relating to lead, asbestos, pollution, testing, underground storage tanks, laboratory analysis, soil work, etc.). If coverage is written on a claims-made basis, the retroactive date shall precede the effective date of the initial Agreement and continuous coverage will be maintained or an extended reporting period will be exercised for a period of at least three (3) years from termination or expiration of this Agreement.

1.1.3 Insurance Endorsements. Required insurance policies shall contain the following provisions, or Consultant shall provide endorsements on forms approved by the City to add the following provisions to the insurance policies:

Docusign Envelope ID: 8F8EF8AB-15A9-8A52-8199-FBAB4FED86F8 Item: 14
557

Title: Loan Document Preparation Services
22 (A) Commercial General Liability
(1) Additional Insured: The City, its officials, officers, employees, agents, and volunteers shall be additional insureds with regard to liability and defense of suits or claims arising out of the performance of the Agreement.

Additional Insured Endorsements shall not (1) be restricted to "ongoing operations"; (2) exclude "contractual liability"; (3) restrict coverage to "sole" liability of Consultant; or (4) contain any other exclusions contrary to the terms or purposes of this Agreement. For all policies of Commercial General Liability insurance, Consultant shall provide endorsements in the form of ISO CG 20 10 10 01 and 20 37 10 01 (or endorsements providing the exact same coverage) to effectuate this requirement. (2) Cancellation: Required insurance policies shall not be canceled or the coverage reduced until a thirty (30) day written notice of cancellation has been served upon the City except ten (10) days shall be allowed for non-payment of premium. (B) Automobile Liability:
(1) Cancellation: Required insurance policies shall not be canceled or the coverage reduced until a thirty (30) day written notice of cancellation has been served upon the City except ten (10) days shall be allowed for non-payment of premium. (C) Professional Liability (Errors & Omissions):
(1) Cancellation: Required insurance policies shall not be canceled or the coverage reduced until a thirty (30) day written notice of cancellation has been served upon the City except ten (10) days shall be allowed for non-payment of premium. (2) Contractual Liability Exclusion Deleted: This insurance shall include contractual liability applicable to this Agreement. The policy must “pay on behalf of” the insured and include a provision establishing the insurer’s duty to defend.
(D) Workers’ Compensation:
(1) Cancellation: Required insurance policies shall not be canceled or the coverage reduced until a thirty (30) day written notice of cancellation has been served upon the City except ten (10) days shall be allowed for non-payment of premium. (2) Waiver of Subrogation: A waiver of subrogation stating that the insurer waives all rights of subrogation against the City, its officials, officers, employees, agents, and volunteers.

1.1.4 Primary and Non-Contributing Insurance. All policies of Commercial General Liability and Automobile Liability insurance shall be primary and any other insurance, deductible, or self- insurance maintained by the City, its officials, officers, employees, agents, or volunteers shall not contribute with this primary insurance. Policies shall contain or be endorsed to contain such provisions.

1.1.5 Waiver of Subrogation. All policies of Commercial General Liability and Automobile Liability insurance shall contain or be endorsed to waive subrogation against the City, its officials, officers, employees, agents, and volunteers or shall specifically allow Consultant or others providing insurance evidence in compliance with these specifications to waive their right of recovery prior to a Docusign Envelope ID: 8F8EF8AB-15A9-8A52-8199-FBAB4FED86F8 Item: 14
558

Title: Loan Document Preparation Services
23 loss. Consultant hereby waives its own right of recovery against the City, its officials, officers, employees, agents, and volunteers, and shall require similar written express waivers and insurance clauses from each of its subconsultants.

1.1.6 Deductibles and Self-Insured Retentions. Any deductible or self-insured retention must be approved in writing by the City and shall protect the City, its officials, officers, employees, agents, and volunteers in the same manner and to the same extent as they would have been protected had the policy or policies not contained a deductible or self-insured retention.

1.1.7 Evidence of Insurance. The Consultant, concurrently with the execution of the Agreement, and as a condition precedent to the effectiveness thereof, shall deliver either certified copies of the required policies, or original certificates on forms approved by the City, together with all endorsements affecting each policy. Required insurance policies shall not be in compliance if they include any limiting provision or endorsement that has not been submitted to the City for approval. The certificates and endorsements for each insurance policy shall be signed by a person authorized by that insurer to bind coverage on its behalf. At least fifteen (15 days) prior to the expiration of any such policy, evidence of insurance showing that such insurance coverage has been renewed or extended shall be filed with the City. If such coverage is cancelled or reduced and not replaced immediately so as to avoid a lapse in the required coverage, Consultant shall, within ten (10) days after receipt of written notice of such cancellation or reduction of coverage, file with the City evidence of insurance showing that the required insurance has been reinstated or has been provided through another insurance company or companies.

1.1.8 Failure to Maintain Coverage. In the event any policy of insurance required under this Agreement does not comply with these specifications or is canceled and not replaced immediately so as to avoid a lapse in the required coverage, City has the right but not the duty to obtain the insurance it deems necessary and any premium paid by City will be promptly reimbursed by Consultant or City will withhold amounts sufficient to pay premium from Consultant payments. In the alternative, City may cancel this Agreement effective upon notice.

1.1.9 Acceptability of Insurers. Each such policy shall be from a company or companies with a current A.M. Best's rating of no less than A:VII and authorized to transact business of insurance in the State of California, or otherwise allowed to place insurance through surplus line brokers under applicable provisions of the California Insurance Code or any federal law.

1.1.10 Enforcement of Contract Provisions (non estoppel). Consultant acknowledges and agrees that actual or alleged failure on the part of the City to inform Consultant of non-compliance with any requirement imposes no additional obligation on the City nor does it waive any rights hereunder.

1.1.11 Requirements Not Limiting. Requirement of specific coverage or minimum limits contained in this Appendix are not intended as a limitation on coverage, limits, or other requirement, or a waiver of any coverage normally provided by any insurance.

1.1.12 Insurance for Subconsultants. Consultant shall include all subconsultants engaged in any work for Consultant relating to this Agreement as additional insureds under the Consultant's policies, or the Consultant shall be responsible for causing subconsultants to purchase the appropriate insurance in compliance with the terms of these Insurance Requirements, including adding the City, its Docusign Envelope ID: 8F8EF8AB-15A9-8A52-8199-FBAB4FED86F8 Item: 14
559

Title: Loan Document Preparation Services
24 officials, officers, employees, agents, and volunteers as additional insureds to the subconsultant's policies. All policies of Commercial General Liability insurance provided by Consultant’s subconsultants performing work relating to this Agreement shall be endorsed to name the City, its officials, officers, employees, agents and volunteers as additional insureds using endorsement form ISO CG 20 38 04 13 or an endorsement providing equivalent coverage. Consultant shall not allow any subconsultant to commence work on any subcontract relating to this Agreement until it has received satisfactory evidence of subconsultant’s compliance with all insurance requirements under this Agreement, to the extent applicable. The Consultant shall provide satisfactory evidence of compliance with this section upon request of the City.

Docusign Envelope ID: 8F8EF8AB-15A9-8A52-8199-FBAB4FED86F8 Item: 14
560

INSR ADDL SUBR

LTR INSR WVD

DATE (MM/DD/YYYY)

PRODUCER CONTACT
NAME:

FAXPHONE
(A/C, No):(A/C, No, Ext):

E-MAIL
ADDRESS:

INSURER A :

INSURED INSURER B :

INSURER C :

INSURER D :

INSURER E :

INSURER F :

POLICY NUMBER

POLICY EFF POLICY EXPTYPE OF INSURANCE LIMITS(MM/DD/YYYY) (MM/DD/YYYY)

COMMERCIAL GENERAL LIABILITY

AUTOMOBILE LIABILITY

UMBRELLA LIAB

EXCESS LIAB

WORKERS COMPENSATION

AND EMPLOYERS' LIABILITY
DESCRIPTION OF OPERATIONS / LOCATIONS / VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached if more space is required)

AUTHORIZED REPRESENTATIVE
INSURER(S) AFFORDING COVERAGE NAIC #
Y / N
N / A
(Mandatory in NH)

ANY PROPRIETOR/PARTNER/EXECUTIVE
OFFICER/MEMBER EXCLUDED?
EACH OCCURRENCE $
DAMAGE TO RENTED $PREMISES (Ea occurrence)CLAIMS-MADE OCCUR MED EXP (Any one person) $
PERSONAL & ADV INJURY $
GENERAL AGGREGATE $GEN'L AGGREGATE LIMIT APPLIES PER:

PRODUCTS - COMP/OP AGG $
$
PRO-
OTHER:

LOCJECT

COMBINED SINGLE LIMIT
$(Ea accident)
BODILY INJURY (Per person) $ANY AUTO
OWNED SCHEDULED BODILY INJURY (Per accident) $AUTOS ONLY AUTOS

AUTOS ONLY
HIRED PROPERTY DAMAGE $AUTOS ONLY (Per accident)
$
OCCUR EACH OCCURRENCE $
CLAIMS-MADE AGGREGATE $
DED RETENTION $ $

PER OTH-

STATUTE ER
E.L. EACH ACCIDENT $
E.L. DISEASE - EA EMPLOYEE $
If yes, describe under
E.L. DISEASE - POLICY LIMIT $DESCRIPTION OF OPERATIONS below POLICY

NON-OWNED

SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE

THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS.

THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS

CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.

THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS

CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER.

IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed.

If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer any rights to the certificate holder in lieu of such endorsement(s).

COVERAGES CERTIFICATE NUMBER: REVISION NUMBER:

CERTIFICATE HOLDER CANCELLATION
© 1988-2015 ACORD CORPORATION. All rights reserved.

The ACORD name and logo are registered marks of ACORDACORD 25 (2016/03)

ACORDTM CERTIFICATE OF LIABILITY INSURANCE
Valley Forge Insurance Company
Continental Insurance Company
National Fire Insurance Co. of Hartford
Westfield Select Insurance Company
Federal Insurance Company
07/16/2026
USI Insurance Services, LLC
8000 Norman Center Drive
Suite 400
Bloomington, MN 55437
Melissa Haag
612 509-1001 610-537-1954
[email protected]
ADM Consulting LLC
W220 N3451 Springdale Rd
Pewaukee, WI 53072
20508
35289
20478
17105
20281
A X
X
X
X X 8044745079 06/01/2026 06/01/2027 1,000,000
100,000
15,000
1,000,000
2,000,000
2,000,000
B
X X
X X 80044745065 06/01/2026 06/01/2027 1,000,000
B X X
X 10000
X X 8044745051 06/01/2026 06/01/2027 5,000,000
5,000,000
C
N
X 8044745096 06/01/2026 06/01/2027 X
1,000,000
1,000,000
1,000,000
D
F
Professional
Crime
IPB484308X01
J06019869
06/01/2026
06/01/2026
06/01/2027
06/01/2027
$5,000,000
$4,000,000
Following Endorsements Apply To The Names/Projects/Events Listed Below Only If Required By Written Contract Or Agreement:

General Liability: Additional Insured, Primary and Noncontributory per Form 80-02-2367; Waiver of Subrogation included in General Liability policy form.

Automobile Liability: Additional Insured and Waiver of Subrogation per Form 16-02-0292. (See Attached Descriptions)
City of Lake Forest
100 Civic Center Dr.

Lake Forest, CA 92630
1 of 2
#S55080620/M54322226
OSPLLCClient#: 1951452
CXMBT
Docusign Envelope ID: 8F8EF8AB-15A9-8A52-8199-FBAB4FED86F8 Item: 14
561

SAGITTA 25.3 (2016/03)
DESCRIPTIONS (Continued from Page 1)
Workers Compensation: Waiver of Subrogation per Form WC000313.

Umbrella Liability follows form. The additional insured and waiver of subrogation coverages indicated by the box(es) checked above are provided by the forms listed that only extend coverage if required of the insured by a written contract or agreement.

WHEN REQUIRED BY WRITTEN CONTRACT OR AGREEMENT: City of Lake Forest is an Additional Insured. 2 of 2
#S55080620/M54322226
Docusign Envelope ID: 8F8EF8AB-15A9-8A52-8199-FBAB4FED86F8 Item: 14
562

CITY COUNCIL AGENDA REPORT
MEETING DATE: 07/21/2026
DEPARTMENT: Public Works
SUBJECT:

AWARD CONSTRUCTION CONTRACT FOR SLURRY SEAL PROJECT FOR RESIDENTIAL STREETS, ZONE D (26S01A) AND CIVIC CENTER PARKING LOT (26F01)
RECOMMENDED ACTION(S):

1. Approve contract documents for construction of Slurry Seal Project for Residential Streets, Zone D (26S01A) and Civic Center Parking Lot (26F01).

2. Award a Construction Contract in the amount of $2,046,878 to Pavement Coatings Co.

3. Reject all other bids received and authorize return of the bid bonds upon receipt of the executed contract documents from Pavement Coatings Co.

4. Authorize the Mayor to sign, and the City Clerk to attest, the contract with Pavement Coatings Co.

EXECUTIVE SUMMARY:

Slurry Seal Project for Residential Streets, Zone D (26S01A) and Civic Center Parking Lot (26F01) (“proposed Project”) would repair and extend the life of asphalt pavement at various locations throughout the City of Lake Forest (“City”).

The proposed work in Zone D encompasses the residential and commercial areas from Trabuco Road and Portola Parkway between Lake Forest Drive and the City of Irvine boundary limit, and the asphalt pavement limits of the Civic Center Parking Lot. The proposed Project was advertised on May 26, 2026. On June 19, 2026, the City received six (6) bids for the proposed Project ranging from $2,046,878 to $3,158,500. The apparent low bidder is Pavement Coatings Co. The total estimated cost to construct, inspect, provide construction support, and provide contingency for the proposed Project is $2,450,000.

The proposed Project would be funded by the Measure M2 Fairshare (“M2”), Infrastructure Reserve, and Road Maintenance Rehabilitation Account (“SB1”) for the Zone D slurry seal portion, and the General Fund for the Civic Center parking lot. Sufficient funds for the Zone D slurry seal portion of the work and Civic Item: 15
563

4 1
3 6
Center slurry seal are available in the City’s Annual Street Resurfacing and Slurry Seal program and General Fund.

Staff recommend the City Council approve the proposed Construction Contract with Pavement Coatings Co.

BACKGROUND:

The City has an established, annual street maintenance program to slurry seal and asphalt overlay public streets. As a requirement of the Orange County Transportation Authority’s (“OCTA”) M2 funding, the City utilizes a pavement management system to evaluate and score the condition of each street biannually utilizing a Pavement Condition Index (“PCI”). The pavement management system provides recommendations to maintain a streets condition based on the PCI rating. The overall PCI for the entire City is 77, which is a “Good” rating. The City performs slurry seal applications in nine-year intervals and resurfaces streets on an as-needed basis with available funding.

Completed in Fiscal Year (“FY”) 2025-26, the non-arterial streets asphalt repairs, Zone D (24S01A) project repaired pavement within Zone D. In FY 2025-26, both the annual street maintenance program and slurry seal of the Civic Center parking lot were scheduled and budgeted. The proposed Project would repair and extend the life of asphalt pavement in Zone D for annual street maintenance and complete the slurry seal of the Civic Center parking lot. The proposed Project was advertised on May 26, 2026, as one bid package to support more competitive bid results and improved pricing.

DISCUSSION:

The proposed Project would spot repair and slurry seal the Civic Center asphalt parking lot and the residential and commercial streets from Trabuco Road and Portola Parkway between Lake Forest Drive and the City of Irvine boundary limit (Attachment 1). In addition, all the existing traffic striping, markings, and legends would be replaced.

On June 19, 2026, the City received bids from six (6) firms, ranging from $2,046,878 to $3,158,500. The total construction cost included in the bids consists of two separate subtotals for residential streets in Zone D and the Civic Center parking lot, as the funding for each project is from separate sources. Staff reviewed Pavement Coatings Co. bid package for completeness. In addition, the electronic bidding system used by the City eliminates mathematical errors in the bids. Therefore, the submitted bid results, including the subtotals for the two parts of the proposed Project, are provided in Table 1 below.

Item: 15
564

4 1
3 6
Table 1: Bid Results
Contracting Firm OpenGov
Verified subtotal
for Zone D
OpenGov
Verified subtotal
for Civic Center
Parking Lot
OpenGov
Verified Base
Bid Amounts
Pavement
Coatings Co. $2,021,803.00 $ 25,075.00 $2,046,878.00 American Asphalt
South, Inc. $2,032,127.00 $ 24,700.00 $2,056,827.00 All American
Asphalt $2,299,297.00 $ 34,145.00 $2,333,442.00
Roy Allan Slurry
Seal, Inc. $2,383,872.60 $ 19,695.00 $2,403,567.60 Union Pavement
Services, Inc. $2,512,000.00 $ 22,620.00 $2,534,620.00 Doug Martin
Contracting
Company, Inc. $3,114,775.00 $ 43,725.00 $3,158,500.00 After analysis of the bids received, staff determined that Pavement Coatings Co. was the lowest responsive, responsible bidder for the proposed Project.

Recently, Pavement Coatings Co. completed projects in the cities of Garden Grove, Whittier, and Laguna Beach. Staff conducted a reference check that indicated Pavement Coatings Co. is a responsible contractor (Attachment 2). The Finance Department prepared the proposed Construction Contract with Pavement Coatings Co., which Pavement Coatings Co. subsequently signed (Attachment 3). The City Attorney reviewed and approved the contract as to form.

The proposed Construction Contract bid amount as determined by the estimated quantities is $2,046,878. Per Lake Forest Municipal Code Section 3.13.085, the City Manager may approve additional work not-to-exceed 10% of the final contract amount ($204,687.80). The proposed Construction Contract plans and specifications are not attached to the agenda due to their size; however, they are available for review in the Office of the City Clerk and on the City’s digital bid advertising platform, OpenGov.com. Staff attached the approved signed title sheet for the Slurry Seal Project (Attachment 4). If the proposed Construction Contract with Pavement Coatings Co. is approved, staff anticipate project construction would begin in August 2026. The construction contract specifies 60 working days to complete the work.

The funds for Civic Center Parking Lot Slurry Seal are not M2 or SB1 eligible.

Therefore, they were included in the Capital Improvement Projects (“CIP”) budget Item: 15
565

4 1
3 6
in the General Fund. The Zone D slurry seal work is budgeted separately from the City’s Annual Street Resurfacing and Slurry Seal program and there are sufficient funds available in the 2025-2032 CIP budget for the recommended action.

FISCAL IMPACT:

The total project cost to construct, inspect, provide construction support, and provide contingency for the project is estimated to be $2,450,000. Approving the recommended actions would award the proposed Construction Contract to Pavement Coatings Co., in the amount of $2,046,878.

The 2025-2032 Capital Improvements Project Budget currently has $8,700,000 in Measure M2 Fairshare, Infrastructure Reserve, and Road Maintenance Rehabilitation Account (SB1) Funds for street resurfacing and seal work.

The funds for Civic Center Parking Lot Slurry Seal would come from the General Fund. $200,000 was budgeted in FY 2025-2026 for this purpose. There are sufficient funds available in the 2025-2032 CIP budget for the recommended action.

ATTACHMENTS:

1. Attachment 1 - Project Location Map

2. Attachment 2 - Contractor’s Reference Check

3. Attachment 3 - Proposed Construction Contract with Pavement Coatings Co.

4. Attachment 4 - Signed Title Sheet
Initiated By: Ravi Shah, Principal Civil Engineer
Submitted By: Douglas Erdman, Director of Public Works/City Engineer Approved By: Debra Rose, City Manager
Item: 15
566

Attachment 1
Item: 15
567

LAKE
FOREST
DR

TRABUCO RD

RIDGE ROUTE DR

JERONIMO RD

PORTOLA PKWY
D
A
B
C
E
F
G
The City of Lake Forest
Pavement Maintenance Areas
Department of Public Works
I0 0.5 1
Miles
Legend
A
B
C
D
E
F
G
Item: 15
568

SLURRY SEAL CIVIC CENTER (26F01)
LEGEND

LIMITS OF

SLURRY SEAL
Type 1 Slurry
Item: 15
569

Attachment 2
Item: 15
570

Apparent Low Bidder: Contact #1: Contact #2: Contact #3:

Pavement Coatings Co. City of Garden Grove City of Whittier City of Laguna Beach Name Nick Hsieh Phillip Wang Tran Tran
Phone No. or Email (714) 741-5190 (562) 567-9500 (949) 497-0338

QUESTION RESPONSE RESPONSE RESPONSE

1. Title and type of project Arterial Street Slurry Seal Project 2023 25-008 Slurry Program Phase 1 Zone 6 Slurry Seal and Rehabilitation

2. Contract Amount $4,643,865 $2,182,510 $1,291,801

3. Approximate duration 60 Wdays 50 Wdays 40 Wdays

4. Actual or estimated project completion date September 2023 March 2026 March 2026

5. Quality of the work Good Good Good

6. Similarity of the Project Very good Very good Very good

7. Contractor’s relationship with agency representatives Good Good Good

8. Claims or stop notices No No No

9. Change order requests Yes, generated by agency. Yes, generated by agency. Yes

10. Agency’s desire to have contractor bid on future projects Yes Yes Yes

11. Additional Comments City generated change order was reasonably priced. City initiated additional work areas. Worked within tight time frame and fall/winter weather conditions
Slurry Seal Program, Zone D (26S01A) and Civic Center Parking Lot (26F01) Item: 15
571

Attachment 3
Item: 15
572

SLURRY SEAL AND STREET RESURFACING - RESIDENTIAL SLURRY SEAL PROJECT 1A, ZONE D (26S01A) AND SLURRY SEAL CIVIC
CENTER (26F01)
(2026-080)

City of Lake Forest
100 Civic Center Dr.

Lake Forest, CA 92630

Docusign Envelope ID: F2B06906-126E-81C2-811D-D0E1DE75B1AE Item: 15
573

City of Lake Forest
Section 00500 Construction Contract
Slurry Seal and Street Resurfacing - Residential Slurry Seal Project 1A, Zone D (26S01A) and Slurry Seal Civic Center (26F01)
I. SECTION 00500 CONSTRUCTION CONTRACT ................................ ........

Docusign Envelope ID: F2B06906-126E-81C2-811D-D0E1DE75B1AE Item: 15
574

Title: Slurry Seal and Street Resurfacing - Residential Slurry Seal Project 1A, Zone D (26S01A) and Slurry Seal Civic Center (26F01)
3 1. SECTION 00500 CONSTRUCTION CONTRACT

1.1. CONTRACT
THIS CONTRACT is made this [***INSERT DAY***] day of [***INSERT MONTH***], [***INSERT YEAR***], in the County of Orange, State of California, by and between the City of Lake Forest hereinafter called City, and Pavement Coatings Co., hereinafter called Contractor. City and the Contractor for the considerations stated herein agree as follows:

1.2. SCOPE OF WORK
The Contractor shall perform all Work within the time stipulated the contract and shall provide all labor, materials, equipment, tools, utility services, and transportation to complete all of the Work required in strict compliance with the Contract Documents as specified in "COMPONENT PARTS OF THE CONTRACT" section below for the following Project:

Slurry Seal and Street Resurfacing - Residential Slurry Seal Project 1A, Zone D (26S01A) and Slurry Seal Civic Center (26F01)
The Contractor and its surety shall be liable to City for any damages arising as a result of the Contractor’s failure to comply with this obligation.

1.3. TIME FOR COMPLETION
The Work shall be commenced on the date stated in City’s Notice to Proceed. The Contractor shall complete all Work required by the Contract Documents within sixty (60) working days from the commencement date stated in the Notice to Proceed. By its signature hereunder, Contractor agrees the time for completion set forth above is adequate and reasonable to complete the Work.

1.4. CONTRACT PRICE
City shall pay to the Contractor as full compensation for the performance of the Contract, subject to any additions or deductions as provided in the Contract Documents, and including all applicable taxes and costs, the sum of TWO MILLION FORTY SIX THOUSAND EIGHT HUNDRED SEVENTY EIGHT DOLLARS ($2,046,878.00). Payment shall be made as set forth in the General Conditions.

1.5. LIQUIDATED DAMAGES
In accordance with Government Code section 53069.85, it is agreed that the Contractor will pay City the sum of two thousand five hundred dollars ($2,500) for each and every calendar day of delay beyond the time prescribed in the Contract Documents for finishing the Work, as Liquidated Damages and not as a penalty or forfeiture. In the event that Liquidated Damages are not paid, the Contractor agrees City may deduct that amount from any money due or that may become due the Contractor under the Contract.

This Article does not affect the City’s rights to other damages or remedies specified in the Contract Documents or allowed by law.

1.6. COMPONENT PARTS OF THE CONTRACT
The “Contract Documents” include the following:

Docusign Envelope ID: F2B06906-126E-81C2-811D-D0E1DE75B1AE Item: 15
575

Title: Slurry Seal and Street Resurfacing - Residential Slurry Seal Project 1A, Zone D (26S01A) and Slurry Seal Civic Center (26F01)
4 • Notice Inviting Bids
• Instructions to Bidders
• Bid Form
• Contractor’s Certificate Regarding Workers’ Compensation • Bid Bond
• Designation of Subcontractors
• Information Required of Bidders
• Noncollusion Declaration form
• Iran Contracting Act Certification
• Public Works Contractor Registration Certification
• Contract
• Performance Bond
• Payment Bond
• General Conditions
• Special Conditions
• Technical Specifications
• Addenda
• Plans and Drawings
• Approved and fully executed change orders
Any other documents contained in or incorporated into the Contract The Contactor shall complete the Work in strict accordance with all of the Contract Documents.

All of the Contract Documents are intended to be complementary. Work required by one of the Contract Documents and not by others shall be done as if required by all. This Contract shall supersede any prior agreement of the parties.

1.7. PROVISIONS REQUIRED BY LAW
Each and every provision of law required to be included in these Contract Documents shall be deemed to be included in these Contract Documents. The Contractor shall comply with all requirements of applicable federal, state and local laws, rules and regulations, including, but not limited to, the provisions of the California Labor Code and California Public Contract Code which are applicable to this Project.

Docusign Envelope ID: F2B06906-126E-81C2-811D-D0E1DE75B1AE Item: 15
576

Title: Slurry Seal and Street Resurfacing - Residential Slurry Seal Project 1A, Zone D (26S01A) and Slurry Seal Civic Center (26F01)
5 1.8. INDEMNIFICATION
Contractor shall provide indemnification as set forth in the General Conditions.

1.9. PREVAILING WAGES
Contractor shall be required to pay the prevailing rate of wages in accordance with the Labor Code which such rates shall be made available at City Hall or may be obtained online at http//www.dir.ca.gov/dlsr. and which must be posted at the job site.

1.10. SIGNATURES
IN WITNESS WHEREOF, this Contract has been duly executed by the above-named parties, on the day and year above written.

Pavement Coatings Co.

By [VENDOR SIGNATURE 1]

Name: Tim Schmid
Title: President
License No. 303609

CITY OF LAKE FOREST
By [AUTHORIZED CITY SIGNATURE]
______________________________
Robert Pequeño
Mayor
By [VENDOR SIGNATURE 2]

Name: [James Wu
Title: [Secretary (Corporation or LLC)
(If Corporation, TWO SIGNATURES, President OR
Vice President AND Secretary OR Treasurer
REQUIRED)]

Attest:
[CITY CLERK SIGNATURE]

Thy Merritt
City Clerk
[CONTRACT ADMINISTRATOR APPROVAL]
[PROJECT MANAGER APPROVAL]
[CITY CLERK - INSURANCE APPROVAL]
Approved as to Form:
[CITY ATTORNEY SIGNATURE]
__________________________________
Best Best & Krieger, LLP
City Attorney

Docusign Envelope ID: F2B06906-126E-81C2-811D-D0E1DE75B1AE Item: 15
577

Attachment 4
Item: 15
578

Request for Bids (RFB) #26S01A & 26F01
Title: Slurry Seal Project for Residential Streets, Zone D (26S01A) and Civic Center Parking Lot (26F01) 4 1. SECTION 00000 TITLE PAGE

CITY OF LAKE FOREST
Slurry Seal Project for Residential Streets, Zone D (26S01A) and Civic Center Parking Lot (26F01) May 2026
Prepared By:

CITY OF LAKE FOREST
Public Works Department
100 Civic Center Drive
Lake Forest, CA 92630

Ravi Shah, P.E.

Principal Civil Engineer

Under the Supervision Of:

CITY OF LAKE FOREST
Public Works Department
100 Civic Center Drive
Lake Forest, CA 92630
Approved By:

Douglas Erdman, P.E.

Director of Public Works/City Engineer
Item: 15
579

CITY COUNCIL AGENDA REPORT
MEETING DATE: 7/21/2026
DEPARTMENT: Public Works
SUBJECT:

APPROVAL OF PARCEL MAP NO. 2025-121
RECOMMENDED ACTION(S):

Adopt a Resolution entitled: A RESOLUTION OF THE CITY COUNCIL OF THE

CITY OF LAKE FOREST, CALIFORNIA, APPROVING FINAL PARCEL MAP NO. 2025-121, FOR CONDOMINIUM PURPOSES AND SUBDIVIDING ONE EXISTING INDUSTRIAL OFFICE COMPLEX PARCEL INTO 4 NEW PARCELS AND ALLOWING UP TO 80 INDUSTRIAL OFFICE CONDOMINIUM UNITS, IN

THE PACIFIC COMMERCENTRE PLANNED COMMUNITY-BUSINESS PARK AT 21098 BAKE PARKWAY, ASSESSOR’S PARCEL NUMBER 610-311-13 EXECUTIVE SUMMARY:

On July 3, 2026, the Planning Commission approved Tentative Parcel Map No. 2025-121 (“Parcel Map”). The existing industrial office complex outlined in the Parcel Map is located at 20902-21098 Bake Parkway, assessor’s parcel number 610-311-13, in the Pacific Commercentre Planned Community-Business Park (Attachment 1). The Parcel Map is a request for condominium purposes and would subdivide the existing industrial office complex into four new parcels, allowing up to 80 industrial office condominium units (Attachment 2).

Approval of the Parcel Map would allow the owner, Spectrum Partners, LLC, a Delaware Limited Liability Company (“Spectrum”), to sell up to 80 offices as condominium units. Spectrum has met all conditions of approval, including the setting of monuments for the Parcel Map. City of Lake Forest (“City”) staff and the City Attorney reviewed and approved the Resolution. Staff recommend adoption of the Resolution for approval of the Parcel Map (Attachment 3).

BACKGROUND:

Pursuant to the Lake Forest Municipal Code, the subdivision of a parcel requires Planning Commission approval of a tentative parcel map, and City Council approval of the final parcel map. At the meeting of July 3, 2025, the Planning Commission conducted a duly noticed public hearing and adopted a resolution approving Tentative Parcel Map No. 2025-121.

Item: 16
580

On July 3, 2026, the Planning Commission approved Tentative Parcel Map No. 2025-121 for condominium purposes and subdividing one existing industrial office complex into four new parcels, allowing up to 80 condominium units. The complex is located at 20902-21098 Bake Parkway, assessor’s parcel number 610-311-13. The property is currently located in the Pacific Commercentre Planned Community Business Park and is owned by Spectrum.

DISCUSSION:

The Parcel Map is a request to subdivide the existing office complex into four new parcels and allow up to 80 industrial office condominium units. The proposed subdivision would allow each of the office condominium units to be sold separately and for a condominium owners association to be formed under the oversight of the California Department of Real Estate. Upon approval of the Parcel Map, the current property owner would own all 80 units and would be responsible for preparing and recording the Covenants, Conditions, and Restrictions (“CC&Rs”), and forming the condominium business owner’s association.

Each new owner of a condominium unit would join the condominium business owner’s association and assume shared responsibility for the land and common area improvements. Common area improvements include the land that comprises the property, the building shell, the parking lot, site landscaping, building mechanical equipment, utility infrastructure, and exterior signage. The association's responsibilities, as well as the rights and responsibilities of its individual members, are detailed in the CC&Rs. The City Attorney has reviewed and approved the CC&Rs, and the owner is in the process of recording the document. The approved CC&Rs include appropriate provisions for common area responsibility and maintenance.

The conditions of approval require monumentation for the condominium units. A monument bond is typically required to guarantee that the monuments will be installed. In this case, the owner has already installed the required monuments, and City staff has field verified that they were installed correctly. Therefore, a monument bond is not required.

The Parcel Map also dedicates an easement to the City for public street and public utility purposes along Bake Parkway. In addition, the map includes an irrevocable offer of dedication to the City for public street and public purposes along Bake Parkway. The City will accept the easement at this time. However, the City will not accept the irrevocable offer of dedication at this time, and the offer will remain available for possible future acceptance by the City.

Item: 16
581

City Staff and the City Attorney reviewed the Resolution. Staff recommend adoption of the Resolution for approval of the Parcel Map. The full-size Parcel Map is on file with the City Clerk’s office and is available for review by the City Council upon request and by members of the public.

FISCAL IMPACT:

There is no fiscal impact associated with the recommended action.

ATTACHMENTS:

1. Attachment 1 - Location Map PM No. 2025-121

2. Attachment 2 - Parcel Map No. 2025-121

3. Attachment 3 - Resolution Approving Final Parcel Map No. 2025-121 Initiated By: Douglas Erdman, Director of Public Works/City Engineer Submitted By: Douglas Erdman, Director of Public Works/City Engineer Approved By: Debra Rose, City Manager
Item: 16
582

Attachment 1
Item: 16
583

Item: 16
584

Item: 16
585

Item: 16
586

Item: 16
587

Item: 16
588

Item: 16
589

Item: 16
590

Item: 16
591

Item: 16
592

Item: 16
593

Item: 16
594

Item: 16
595

Item: 16
596

Item: 16
597

Attachment 3
Item: 16
598

RESOLUTION NO. 2026- _____

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE
FOREST, CALIFORNIA, APPROVING FINAL PARCEL MAP NO.
2025-121, FOR CONDOMINIUM PURPOSES AND SUBDIVIDING

ONE EXISTING INDUSTRIAL OFFICE COMPLEX PARCEL INTO
4 NEW PARCELS AND ALLOWING UP TO 80 INDUSTRIAL

OFFICE CONDOMINIUM UNITS, IN THE PACIFIC

COMMERCENTRE PLANNED COMMUNITY-BUSINESS PARK AT
21098 BAKE PARKWAY, ASSESSOR’S PARCEL NUMBER 610-
311-13
WHEREAS, on July 3, 2025, the Planning Commission approved Tentative Parcel Map No. 2025-121 for BSP Spectrum Center, LLC a Delaware Limited Liability Company; and
WHEREAS, Final Parcel Map No. 2025-121 has been submitted by BSP Spectrum Center, LLC a Delaware Limited Liability Company; to subdivide an existing office complex into 4 new parcels and allowing up to 80 industrial office condominium units, and
WHEREAS, the Director of Public Works/City Engineer and the County of Orange Surveyor’s Office has reviewed Final Parcel Map No. 2025-121 and has found it to be in substantial conformance with the Tentative Parcel Map and to be technically correct;

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAKE
FOREST, DOES HEREBY RESOLVE, AS FOLLOWS:

Section 1. The foregoing recitals are true and correct and are incorporated herein and made an operative part of this Resolution.

Section 2. The City Council does hereby approve Final Parcel Map No. 2025-121 for office condominium purposes pursuant to Government Code Section 66457 and 66458 (Subdivision Map Act) and Sections 7.22.025 of the Lake Forest Municipal Code.

Section 3. If any provision of this Resolution is held invalid, the remainder of this Resolution shall not be affected by such invalidity, and the provisions of this resolution are severable.

Section 4. This Resolution shall become effective upon its adoption.

Section 5. The City Clerk shall certify to the adoption of this Resolution and so note on the Final Parcel Map.

Item: 16
599

PASSED, APPROVED AND ADOPTED this ____ day of _____ 2026, by the following vote, to wit:

ROBERT PEQUENO
MAYOR
ATTEST:

THY MERRITT

CITY CLERK
APPROVED AS TO FORM:

MATTHEW RICHARDSON

CITY ATTORNEY

STATE OF CALIFORNIA )

COUNTY OF ORANGE ) SS

CITY OF LAKE FOREST )
I, Thy Merritt, City Clerk of the City of Lake Forest, California, do hereby certify that the foregoing Resolution No. 2026- ___ was duly passed and adopted at a regular meeting of the Lake Forest City Council on the ____ day of _____ 2026, by the following vote, to wit:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:
__________________________

THY MERRITT

CITY CLERK
Item: 16
600

CITY COUNCIL AGENDA REPORT
MEETING DATE: 7/21/2026
DEPARTMENT: Community Development
SUBJECT:

SECOND EXTENSION OF URGENCY ORDINANCE FOR MORATORIUM ON MASSAGE ESTABLISHMENTS.

RECOMMENDED ACTION(S):

Adopt an Urgency Ordinance entitled: AN EXTENSION OF AN URGENCY

ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE FOREST, CALIFORNIA, EXTENDING ORDINANCE NO. 379 ADOPTED BY THE CITY COUNCIL OF THE CITY OF LAKE FOREST ON AUGUST 19, 2025, AND SUBSEQUENTLY EXTENDED BY ORDINANCE NO. 381 TO AUGUST 18, 2026, PURSUANT TO CALIFORNIA GOVERNMENT CODE SECTION 65858

TEMPORARILY PROHIBITING THE ESTABLISHMENT OF BUSINESSES

OFFERING MASSAGES PENDING STUDY AND ADOPTION OF

REGULATORY AND ZONING STANDARDS AND DETERMINING THE
ORDINANCE TO BE EXEMPT FROM CEQA.

EXECUTIVE SUMMARY:

Staff recommend the City Council adopt the proposed Urgency Ordinance extending the existing temporary moratorium on the establishment of new massage businesses for an additional six months (Attachment 1). The moratorium was adopted to provide the City of Lake Forest (“City”) with time to evaluate and develop appropriate regulatory and zoning standards for massage businesses and related personal care uses. Staff have since conducted a thorough analysis of potential amendments to regulate businesses offering massage services. Currently, staff is conducting outreach to business operators, property owners, and franchisees to gather input on industry practices and operational considerations, as well as solicit feedback on proposed regulatory changes.

Additional time is needed to complete this outreach, analyze the findings, and prepare code amendments that protect public health and safety, address unlicensed operations and illicit activities, and provide enhanced enforcement tools. Extending the moratorium would provide the necessary time to complete outreach and analysis, and enact proposed regulatory changes to ensure all new massage businesses are established under a regulatory regime.

Item: 17
601

4 1
6 5
BACKGROUND:

The City regulates massage establishments under Chapter 5.07 of the Lake Forest Municipal Code (“LFMC”), including zoning, operational standards, and licensing. Despite these regulations, issues persist with illicit activity, including suspected prostitution, and the clustering of massage businesses near each other and sensitive uses such as schools and parks. The City has also identified businesses operating as “personal care services” that offer massage services without obtaining the license and approvals required of massage establishments.

Unlike massage establishments, these businesses are not currently required to obtain a City license, creating a regulatory gap and enforcement challenge. This gap also allows some operators to avoid compliance with massage establishment regulations, reducing the City‘s ability to ensure compliance. In addition, Code Enforcement investigations have identified unpermitted massage operations throughout the city, underscoring the need for stronger regulations.

In August 2025, the City Council adopted a temporary moratorium on new massage establishments, which was subsequently extended through August 18, 2026, to allow staff additional time to study the issue, conduct stakeholder outreach, and coordinate with the Orange County Sheriff’s Department and City Attorney's Office (Attachment 3). The proposed extension would provide additional time to continue outreach and investigations, which would inform the updated regulations to protect public health and safety, prevent illicit activity, and strengthen enforcement and abatement tools.

A Progress Report has been prepared and posted in accordance with Government Code Section 65858(d), which requires a written description of the measures taken to alleviate the conditions that led to the adoption of an interim ordinance prior to its extension (Attachment 2).

DISCUSSION:

Staff are recommending the City Council adopt the proposed Urgency Ordinance extending the existing temporary moratorium on the establishment of new massage businesses for an additional six months, or until the ordinance providing the revised regulatory standards for massage establishments becomes effective, whichever is earlier. The original ordinance, adopted on August 19, 2025, established a 45-day moratorium pursuant to California Government Code Section 65858 to provide the City time to evaluate issues related to massage establishments and develop appropriate regulatory and zoning standards for these uses. On September 16, 2025, the City Council adopted an extension of Item: 17
602

4 1
6 5
the moratorium through August 18, 2026, to allow staff to continue its review, conduct stakeholder outreach, and evaluate potential code amendments.

Staff continue to conduct outreach to massage and personal care business operators to better understand industry practices, identify operational concerns, and ensure that future regulations are clear, equitable, and enforceable.

Additional time is necessary to complete this outreach, analyze findings, and prepare comprehensive code amendments. The proposed extension also allows Code Enforcement staff to continue active investigations into unpermitted massage establishments currently operating within the city. These efforts are critical to identifying patterns of noncompliance, closing regulatory gaps, and informing effective enforcement strategies.

Collectively, this outreach and enforcement work will support the development of updated municipal code provisions that adequately address massage and personal care uses. The proposed amendments are intended to protect public health and safety, prevent illicit activities, including prostitution and human trafficking, address unlicensed massage operations, and provide the City with clearer enforcement and abatement tools. Maintaining the moratorium during this period would prevent the establishment of new massage businesses that could exacerbate existing regulatory challenges and would ensure that the City is well- positioned to implement thoughtful, well-informed regulations upon completion of staff’s work.

This is the second and final extension of the moratorium. Pursuant to Government Code Section 65858(a), the extension of the moratorium requires a noticed public hearing in accordance with Section 65090 and adoption of an Urgency Ordinance by a four-fifths vote of the City Council. If adopted, the proposed Urgency Ordinance will remain in effect through February 18, 2026, or until the ordinance providing the revised regulatory standards for massage establishments becomes effective, whichever is earlier.

As required by law, a written report describing the City’s efforts to study the conditions that led to the adoption of the initial moratorium has been prepared and has been on file with the City Clerk since July 11, 2026 (Attachment 2).

For additional background, please refer to the City Council Agenda Reports of August 19, 2025, and September 16, 2025 (Attachment 3).

ENVIRONMENTAL:

This moratorium extension is not subject to the California Environmental Quality Act ("CEQA") pursuant to the following sections of the State CEQA Guidelines:

Item: 17
603

4 1
6 5
Pursuant to State CEQA Guidelines section 15060(c)(2), an activity is not subject to CEQA if the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment. Here, the extension of an Urgency Ordinance will extend the moratorium on massage establishments. This action will not cause a direct or reasonably indirect physical change in the environment because such actions do not authorize or prompt any development or physical changes to the environment. Thus, section 15060(c)(2) applies to the moratorium, and no further action is required.

Additionally, under State CEQA Guidelines section 15060(c)(3), an activity is not subject to CEQA if the activity is not a project as defined in Section 15378(a).

Under Section 15378(a), a project is an action that has the potential for resulting in a direct or reasonably foreseeable indirect physical change in the environment.

This is a request to extend the Urgency Ordinance adopted by City Council on August 19, 2025, and subsequently extended on September 16, 2025, through August 18, 2026. The City is reviewing the effectiveness of current zoning and operational standards for massage establishments and evaluating potential revisions to the City’s regulatory and zoning standards to enhance oversight and improve enforceability. City staff’s recommendation is for the City Council to extend the moratorium for an additional six months, or until the ordinance providing the revised regulatory standards for massage establishments becomes effective, whichever is earlier. This extension is necessary to give the City time to conduct outreach and solicit feedback for the proposed revisions to the regulatory standards for massage establishments and massage-related services.

Section 65858(a) of the California Code allows the extension of an existing ordinance providing for a moratorium after notice pursuant to Section 65090 and a public hearing.

These actions do not cause a direct or reasonably indirect physical change in the environment because such actions do not authorize or prompt any development or physical changes to the environment. Therefore, this moratorium does not constitute a project as defined by CEQA and no further action is therefore required. This moratorium also qualifies for the commonsense exemption under Section 15061(b)(3). Under Section 15061(b)(3), CEQA applies only to projects which have the potential for causing a significant effect on the environment.

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 activity is not subject to CEQA. Here, the proposed Urgency Ordinance does not have the potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment, because such actions do not authorize or prompt any development or physical changes to the environment. Therefore, it can be seen with certainty that there is no possibility that this moratorium extension may have a significant effect on the environment. As a result, the proposed Urgency Ordinance is not subject to CEQA.

Item: 17
604

4 1
6 5
FISCAL IMPACT:

There is no direct fiscal impact associated with the adoption of the proposed Urgency Ordinance. Activities related to the study, outreach, investigation, and development of regulatory and zoning standards for businesses offering massage services are being conducted by existing City staff and absorbed within current departmental budgets.

ATTACHMENTS:

1. Attachment 1 - Proposed Urgency Ordinance

2. Attachment 2 - Progress Report

3. Attachment 3 - City Council Agenda Reports, August 19, 2025, and September 16, 2025
Initiated By: Amy Stonich, AICP, Assistant Director of Community Development
Submitted By: Gayle Ackerman, AICP, Director of Community Development Approved By: Debra Rose, City Manager
Item: 17
605

55136.00000\44149409.1
-1-
5 5
3 9
3 ATTACHMENT 1
Item: 17
606

55136.00000\44149409.1
-2-
5 5
3 9
3 URGENCY ORDINANCE NO. ________

AN EXTENSION OF AN URGENCY ORDINANCE OF

THE CITY COUNCIL OF THE CITY OF LAKE FOREST,
CALIFORNIA, EXTENDING ORDINANCE NO. 379

ADOPTED BY THE CITY COUNCIL OF THE CITY OF
LAKE FOREST ON AUGUST 19, 2025, AND
SUBSEQUENTLY EXTENDED BY ORDINANCE NO.
381 TO AUGUST 18, 2026, PURSUANT TO
CALIFORNIA GOVERNMENT CODE SECTION 65858

TEMPORARILY PROHIBITING THE ESTABLISHMENT

OF BUSINESSES OFFERING MASSAGES PENDING

STUDY AND ADOPTION OF REGULATORY AND

ZONING STANDARDS AND DETERMINING THE

ORDINANCE TO BE EXEMPT FROM CEQA
WHEREAS, pursuant to Cal. Const. Art. XI, Sec. 7 and under the City’s general police powers, the City of Lake Forest (“City”) is empowered and charged with responsibility for the health, safety, and welfare of its citizens; and WHEREAS, the City protects the health, safety, and welfare of the community through numerous avenues, including by establishing and enforcing zoning, licensing and health and safety regulations on specified commercial activities; and WHEREAS, the City is authorized by State law, including, without limitation, Government Code Section 51030 et seq. and Business & Professions Code Section 16000 et seq. to regulate massage establishments; and
WHEREAS, such regulations include Chapter 5.07 of the Lake Forest Municipal Code (“LFMC”), which contains the licensing requirements and operational standards for massage establishments in the City; and
WHEREAS, in addition to the regulations provided by LFMC Chapter 5.07, massage establishments also require a use permit to be approved by the Planning Commission, pursuant to LFMC Chapter 9.184, in order to lawfully operate; and WHEREAS, despite the above regulatory framework, in recent years, the City has experienced issues related to illicit sexual activity and suspected prostitution at businesses offering massage services; and
WHEREAS, between 2022-2024, the Orange County Sheriff’s Department (“OCSD”) conducted investigations at massage establishments across the City.

According to law enforcement reports, massage therapists attempted to engage in illicit sexual activity with undercover investigators at four establishments: 23803 El Toro Road, 22706 Aspan Street, Unit 503, 22855 Lake Forest Drive, Suite E, and 23401 El Toro Road, Suite 100. These incidents resulted in, among other things, the City denying Item: 17
607

55136.00000\44149409.1
-3-
5 5
3 9
3 massage business license renewals, issuing administrative citations and police citations, and revoking a massage-related use permit at 23803 El Toro Road; and WHEREAS, the above illegal activity resulted in significant public expense including code enforcement inspections, law enforcement undercover operations, and administrative and legal review and enforcement actions. These illegal activities diverted resources from other pressing City needs; and
WHEREAS, massage establishments that offer illicit sexual activity pose an immediate and significant threat to the health, safety and welfare of the community.

Among other things, these impacts include the potential for: (1) injury and abuse to patrons being solicited for unlawful services, and (2) increased opportunities for prostitution activity and human trafficking of workers by virtue of the secretive nature associated with offering unauthorized and undisclosed services; and WHEREAS, on August 19, 2025, pursuant to Government Code Section 65858, the City Council adopted Ordinance No. 379, establishing a 45-day temporary moratorium on massage establishments. During the initial moratorium period, staff began evaluating the scope of the impacts of massage establishments, engaging stakeholders, and exploring potential zoning and regulatory solutions; and WHEREAS, on September 16, 2025, pursuant to Government Code Section 65858, the City Council adopted Ordinance No. 381 for extension of an urgency ordinance for moratorium on massage establishments for an additional 10 months and 15 days, to expire on August 18, 2026; and
WHEREAS, during the time in which the temporary moratorium has been in effect, City staff, in collaboration with the Sheriff’s Department and the City Attorney’s Office, has conducted a thorough analysis on potential amendments to the City’s Municipal Code to more effectively regulate massage establishments; and
WHEREAS, City staff requires additional time to complete outreach to business operators, property owners, and franchisees to solicit feedback on the proposed regulatory amendments, analyze the findings, continue active investigations, and prepare an ordinance with the finalized amendments to the Lake Forest Municipal Code; and WHEREAS, in accordance with Government Code Section 65858, the City Council desires to extend its temporary moratorium on the establishment of new massage businesses within the City for an additional six months, or until the ordinance providing the revised regulatory standards for massage establishments becomes effective, whichever is earlier; and
WHEREAS, all legal prerequisites to the adoption of this Urgency Ordinance have occurred.

Item: 17
608

55136.00000\44149409.1
-4-
5 5
3 9
3 NOW, THEREFORE, the City Council of the City of Lake Forest does ordain as follows:

Section 1. Incorporation. The recitals above are each incorporated by reference and adopted as findings by the City Council.

Section 2. CEQA. The City Council finds that this Urgency Ordinance is not a project within the meaning of Section 15378 of the State of California Environmental Quality Act (“CEQA”) Guidelines, because it has no potential for resulting in physical change in the environment, directly or indirectly. The City Council further finds, under Title 14 of the California Code of Regulations, section 15061(b)(3) that this interim urgency ordinance is nonetheless exempt from the requirements of CEQA. 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 activity is not subject to CEQA.

Section 3. Urgency Findings. This Urgency Ordinance is adopted under the provisions of Government Code Sections 36937 and 65858. The City Council finds that massage establishments as described herein pose significant and urgent threats to the health, safety and welfare of the community as follows:
a. In recent years, the City has experienced issues related to illicit sexual activity and suspected prostitution at businesses offering massage services. b. Between 2022-2024, the Orange County Sheriff’s Department (“OCSD”) conducted investigations at massage establishments across the City. According to law enforcement reports, massage therapists attempted to engage in illicit sexual activity with undercover investigators at four establishments: 23803 El Toro Road, 22706 Aspan Street, Unit 503, 22855 Lake Forest Drive, Suite E, and 23401 El Toro Road, Suite 100.

These incidents resulted in, among other things, the City denying massage business license renewals, issuing administrative citations and police citations, and revoking a massage-related use permit at 23803 El Toro Road.
c. The above illegal activity resulted in significant public expense including code enforcement inspections, law enforcement undercover operations, and administrative and legal review and enforcement actions. These illegal activities diverted resources from other pressing City needs.
d. Massage establishments that offer illicit sexual activity pose an immediate and significant threat to the health, safety and welfare of the community. Among other things, these impacts include the potential for: (1) injury and abuse to patrons being solicited for unlawful services, and (2) increased opportunities for prostitution activity and human trafficking of workers by virtue of the secretive nature associated with offering unauthorized and undisclosed services.

Section 4. Directive. The City Council hereby directs and orders that, during the time that this Urgency Ordinance is in effect, the City will not approve or issue any use Item: 17
609

55136.00000\44149409.1
-5-
5 5
3 9
3 permit, variance, building permit, or other applicable entitlement for the following: New massage establishments, or the enlargement of existing massage establishments. During the moratorium period, any massage establishment that has obtained a use permit will be allowed to obtain a license and building permit to establish. Existing massage businesses may continue to apply for licenses or license renewals, and the City may continue to make final decisions on those applications.

Section 5. Applications. The City will continue to accept and process applications for uses prohibited by this moratorium if so legally required. Any application received and processed during the moratorium shall be processed at the applicant’s sole cost and risk with the understanding that no permit, approval or other entitlement for a use covered by Section 4, above, may issue while this moratorium or any extension thereof is in effect.

Notwithstanding anything to the contrary, the City will process and make final decisions on massage establishment license applications and renewals thereof during the moratorium period or any extension thereof.

Section 6. Effective Date. This Urgency Ordinance shall be effective immediately, and shall remain in effect for 6 months from its adoption, or until the ordinance providing the revised regulatory standards for massage establishments becomes effective, whichever is earlier.

Section 8. Publication. The City Clerk is directed to certify the adoption of this Urgency Ordinance and post or publish this Urgency Ordinance as required by law.

Section 9. Custodian of Records. The custodian of records for this Urgency Ordinance is the City Clerk and the records comprising the administrative record are located at Lake Forest City Hall, 100 Civic Center Dr., Lake Forest, California 92630.

Section 10. Severability. If any provision of this Urgency Ordinance or its application to any person or circumstance is held to be invalid by a court of competent jurisdiction, such invalidity has no effect on the other provisions or applications of the Urgency Ordinance that can be given effect without the invalid provision or application, and to this extent, the provisions of this Urgency Ordinance are severable. The City Council declares that it would have adopted this Urgency Ordinance irrespective of the invalidity of any portion thereof.

PASSED, APPROVED, AND ADOPTED this 21st day of July 2026 by the following vote, to wit:

ROBERT PEQUENO
MAYOR
ATTEST:

THY MERRITT
Item: 17
610

55136.00000\44149409.1
-6-
5 5
3 9
3 CITY CLERK
APPROVED AS TO FORM:

MATTHEW E. RICHARDSON

CITY ATTORNEY

STATE OF CALIFORNIA )

COUNTY OF ORANGE ) SS

CITY OF LAKE FOREST )
I, _______________, Acting City Clerk of the City of Lake Forest, do hereby certify that the foregoing Urgency Ordinance No. ____ was duly introduced and immediately adopted at a regular meeting of the City Council on the 21ST day of July 2026, by the following roll-call vote, to wit:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

THY MERRITT

CITY CLERK
Item: 17
611

ATTACHMENT 2
Item: 17
612