Agenda packet — Orange City Council, February 8, 2022 (part 2 of 4)

Surname-based Voter Registration and Turnout data from the California Statewide Database.

2.32%
46%
39%
2%
10%
15,423
31%
56%
1%
12%
11,105
29%
27%
5%
1%
65%
1%
9,476
27%
25%
5%
1%
67%
1%
6,743
22%
20%
4%
1%
73%
1%
23,689
30%
54%
16%
23%
37%
57%
57%
5%
2%
17%
44%
22%
9%
39%
62%
13%
19%
18%
41%
10%
69%
31%
44%
56%
4 23,224
-141
-0.60%
38%
41%
2%
16%
15,702
23%
57%
2%
17%
14,107
25%
23%
9%
2%
64%
2%
12,253
23%
21%
9%
2%
66%
2%
8,755
20%
18%
7%
1%
71%
2%
23,527
25%
56%
19%
24%
50%
63%
63%
10%
5%
15%
41%
25%
13%
36%
68%
8%
13%
12%
52%
16%
79%
21%
32%
68%
5 23,301
-64
-0.27%
45%
38%
1%
12%
15,007
31%
57%
1%
10%
13,723
31%
29%
7%
2%
61%
1%
11,961
29%
27%
7%
2%
63%
1%
8,844
26%
24%
6%
1%
66%
1%
22,897
25%
56%
19%
24%
44%
60%
60%
7%
3%
14%
40%
25%
11%
39%
67%
8%
16%
11%
51%
15%
79%
21%
30%
70%
6 23,044
-321
-1.37%
16%
55%
1%
25%
17,623
13%
66%
1%
20%
17,090
13%
12%
14%
1%
71%
1%
15,471
12%
11%
14%
1%
72%
1%
11,578
11%
10%
11%
1%
76%
1%
23,466
24%
52%
25%
19%
81%
75%
75%
9%
7%
7%
31%
36%
22%
33%
66%
6%
9%
12%
46%
26%
84%
16%
15%
85%
Total
140,190
862

3.69%
41%
40%
2%
15%
95,252
28%
55%
2%
14%
77,755
27%
25%
9%
2%
63%
1%
67,082
25%
23%
9%
1%
64%
1%
47,607
21%
20%
7%
1%
70%
1%
139,913
25%
57%
18%
23%
50%
60%
60%
8%
4%
14%
40%
26%
12%
34%
65%
11%
14%
16%
45%
14%
67%
33%
42%
58%
01/31/2022 1:45 Page 1 of 1
Total Pop
Citizen Voting Age Pop
Voter Registration
(Nov 2020)
Voter Turnout
(Nov 2020)
Voter Turnout
(Nov 2018)
Age
Immigration
Language spoken at home
Education
(among those age 25+)
Household Income
Housing Stats
357
2 4
5 1
3 6
5 57
55 261
55 22
22 241
Cannon St N Tu
s
ti
n
S
t
E Santiago Canyon Rd
N
G
l
a
s
s
e
ll
S
t
W Katella Ave
E Taft Ave
E Collins Ave
S
T
u
s
ti
n
S
t
S Main St
W Chapman Ave
W Walnut Ave
Th
e
City
D
r
S
S Glassell St
E Chapman Ave
E Lincoln Ave
E Meats Ave
Serrano Ave
City of OrangeRedistricting 2022
Public Map 123
©2021 CALIPER
358
Public Map 123
District 1
Total Pop 23,452
Deviation from ideal 87
% Deviation 0.37%
% Hisp 47.1%
% NH White 39%
% NH Black 2%
% Asian-American 9%
Total 15,846
% Hisp 34%
% NH White 51%
% NH Black 1%
% Asian/Pac.Isl. 12%
Total 10,346
% Latino est. 35%
% Spanish-Surnamed 32%
% Asian-Surnamed 3%
% Filipino-Surnamed 1%
% NH White est. 62%
% NH Black 1%
Total 8,605
% Latino est. 33%
% Spanish-Surnamed 30%
% Asian-Surnamed 3%
% Filipino-Surnamed 1%
% NH White est. 63%
% NH Black 1%
Total 5,933
% Latino est. 27%
% Spanish-Surnamed 25%
% Asian-Surnamed 3%
% Filipino-Surnamed 1%
% NH White est. 69%
% NH Black est. 1%
ACS Pop. Est. Total 23,162
age0-19 28%
age20-60 59%
age60plus 13%
immigrants 22%
naturalized 41%
english 58%
spanish 58%
asian-lang 5%
other lang 2%
Language Fluency Speaks Eng. "Less than Very Well" 14%
hs-grad 43%
bachelor 21%
graduatedegree 9%
Child in Household child-under18 31%
Pct of Pop. Age 16+ employed 65%
income 0-25k 19%
income 25-50k 14%
income 50-75k 23%
income 75-200k 38%
income 200k-plus 6%
single family 55%
multi-family 45%
rented 65%
owned 35%
Total population data from the 2020 Decennial Census.

Surname-based Voter Registration and Turnout data from the California Statewide Database.

Latino voter registration and turnout data are Spanish-surname counts adjusted using Census Population Department undercount estimates. NH White and NH Black registration and turnout counts estimated by NDC. Citizen Voting Age Pop., Age, Immigration, and other demographics from the 2015-2019 American Community Survey and Special Tabulation 5-year data. 2 23,459
94 0.40%
51%
27%
4%
16%
16,417
42%
39%
4%
15%
10,139
42%
38%
11%
2%
46%
3%
8,203
40%
36%
11%
2%
47%
3%
4,939
34%
31%
10%
2%
53%
3%
23,975
20%
66%
14%
25%
48%
47%
47%
11%
4%
18%
46%
22%
8%
26%
58%
16%
17%
21%
41%
5%
36%
64%
70%
30%
3 23,428
63 0.27%
34%
44%
2%
17%
16,242
21%
59%
2%
17%
14,939
23%
21%
9%
2%
65%
2%
13,018
22%
20%
9%
2%
67%
2%
9,359
19%
18%
7%
1%
72%
2%
23,227
22%
56%
21%
24%
52%
65%
65%
10%
6%
13%
41%
25%
14%
33%
68%
8%
12%
12%
53%
16%
80%
20%
30%
70%
4 23,243
-122
-0.52%
52%
34%
2%
11%
13,073
32%
54%
1%
13%
11,876
32%
29%
7%
2%
60%
1%
10,178
29%
27%
7%
1%
63%
1%
7,289
26%
24%
6%
1%
67%
1%
22,325
29%
54%
17%
29%
38%
53%
53%
7%
4%
19%
39%
24%
10%
46%
67%
11%
20%
15%
42%
12%
68%
32%
40%
60%
5 23,354
-11
-0.05%
46%
39%
1%
10%
15,922
30%
62%
1%
7%
13,194
30%
27%
6%
1%
64%
1%
11,452
28%
26%
6%
1%
66%
1%
8,391
24%
22%
5%
1%
71%
1%
23,562
24%
57%
19%
20%
46%
64%
64%
4%
2%
13%
43%
25%
9%
34%
65%
11%
13%
13%
49%
14%
74%
26%
37%
63%
6 23,254
-111
-0.48%
17%
55%
1%
25%
17,752
13%
66%
1%
20%
17,261
13%
12%
14%
1%
71%
1%
15,626
12%
11%
14%
1%
72%
1%
11,696
11%
10%
11%
1%
76%
1%
23,661
24%
52%
24%
19%
80%
75%
75%
9%
7%
7%
31%
36%
21%
33%
66%
6%
9%
12%
46%
26%
84%
16%
15%
85%
Total
140,190
216

0.92%
41%
40%
2%
15%
95,252
28%
55%
2%
14%
77,755
27%
25%
9%
2%
63%
1%
67,082
25%
23%
9%
1%
64%
1%
47,607
21%
20%
7%
1%
70%
1%
139,913
25%
57%
18%
23%
50%
60%
60%
8%
4%
14%
40%
26%
12%
34%
65%
11%
14%
16%
45%
14%
67%
33%
42%
58%
01/31/2022 2:10 Page 1 of 1
Total Pop
Citizen Voting Age Pop
Voter Registration
(Nov 2020)
Voter Turnout
(Nov 2020)
Voter Turnout
(Nov 2018)
Age
Immigration
Language spoken at home
Education
(among those age 25+)
Household Income
Housing Stats
359
1 5
2 3
4 6
5 57
55 261
55 22
22 241
Cannon St N Tu
s
ti
n
S
t
E Santiago Canyon Rd
N
G
l
a
s
s
e
ll
S
t
W Katella Ave
E Taft Ave
E Collins Ave
S
T
u
s
ti
n
S
t
S Main St
W Chapman Ave
W Walnut Ave
Th
e
City
D
r
S
S Glassell St
E Chapman Ave
E Lincoln Ave
E Meats Ave
City of OrangeRedistricting 2022
Public Map 124
©2021 CALIPER
360
Public Map 124
District 1
Total Pop 23,582
Deviation from ideal 217
% Deviation 0.93%
% Hisp 35.3%
% NH White 49%
% NH Black 2%
% Asian-American 10%
Total 18,372
% Hisp 26%
% NH White 62%
% NH Black 1%
% Asian/Pac.Isl. 10%
Total 12,262
% Latino est. 28%
% Spanish-Surnamed 26%
% Asian-Surnamed 4%
% Filipino-Surnamed 1%
% NH White est. 69%
% NH Black 0%
Total 10,540
% Latino est. 26%
% Spanish-Surnamed 24%
% Asian-Surnamed 4%
% Filipino-Surnamed 1%
% NH White est. 70%
% NH Black 0%
Total 7,536
% Latino est. 21%
% Spanish-Surnamed 20%
% Asian-Surnamed 3%
% Filipino-Surnamed 1%
% NH White est. 75%
% NH Black est. 0%
ACS Pop. Est. Total 23,446
age0-19 25%
age20-60 59%
age60plus 16%
immigrants 20%
naturalized 49%
english 70%
spanish 70%
asian-lang 6%
other lang 3%
Language Fluency Speaks Eng. "Less than Very Well" 7%
hs-grad 43%
bachelor 26%
graduatedegree 11%
Child in Household child-under18 25%
Pct of Pop. Age 16+ employed 63%
income 0-25k 17%
income 25-50k 13%
income 50-75k 20%
income 75-200k 42%
income 200k-plus 9%
single family 63%
multi-family 37%
rented 55%
owned 45%
Total population data from the 2020 Decennial Census.

Surname-based Voter Registration and Turnout data from the California Statewide Database.

3.24%
22%
50%
2%
24%
17,339
16%
59%
2%
23%
17,015
16%
15%
14%
1%
68%
2%
15,150
15%
14%
13%
1%
69%
2%
11,025
13%
12%
11%
1%
73%
2%
24,036
25%
53%
22%
24%
61%
71%
71%
12%
7%
10%
35%
31%
20%
38%
66%
5%
9%
12%
47%
26%
93%
7%
18%
82%
5 23,690
325

1.39%
58%
29%
2%
9%
13,839
41%
50%
1%
7%
11,569
38%
35%
6%
2%
56%
1%
9,784
35%
32%
6%
2%
58%
1%
7,018
31%
29%
5%
1%
63%
1%
23,491
27%
57%
16%
23%
44%
51%
51%
5%
2%
19%
40%
21%
8%
40%
67%
12%
17%
14%
46%
12%
62%
38%
49%
51%
6 22,516
-849
-3.63%
26%
51%
1%
18%
16,783
16%
67%
1%
15%
15,662
18%
17%
10%
1%
70%
1%
14,062
17%
16%
10%
1%
71%
1%
10,590
15%
14%
8%
1%
75%
1%
22,869
23%
53%
24%
21%
59%
72%
72%
9%
6%
9%
35%
33%
18%
33%
66%
6%
12%
13%
50%
20%
81%
19%
18%
82%
Total
140,190
1,607

6.88%
41%
40%
2%
15%
95,252
28%
55%
2%
14%
77,755
27%
25%
9%
2%
63%
1%
67,082
25%
23%
9%
1%
64%
1%
47,607
21%
20%
7%
1%
70%
1%
139,913
25%
57%
18%
23%
50%
60%
60%
8%
4%
14%
40%
26%
12%
34%
65%
11%
14%
16%
45%
14%
67%
33%
42%
58%
01/31/2022 2:17 Page 1 of 1
Total Pop
Citizen Voting Age Pop
Voter Registration
(Nov 2020)
Voter Turnout
(Nov 2020)
Voter Turnout
(Nov 2018)
Age
Immigration
Language spoken at home
Education
(among those age 25+)
Household Income
Housing Stats
361
2 1
5 3
4 6
5 57
55 261
55 22
22 241
Cannon St N Tu
s
ti
n
S
t
E Santiago Canyon Rd
N
G
l
a
s
s
e
ll
S
t
W Katella Ave
E Taft Ave
E Collins Ave
S
T
u
s
ti
n
S
t
S Main St
W Chapman Ave
W Walnut Ave
Th
e
City
D
r
S
S Glassell St
E Chapman Ave
E Lincoln Ave
E Meats Ave
Serrano Ave
City of OrangeRedistricting 2022
Public Map 125
©2021 CALIPER
362
Public Map 125
District 1
Total Pop 23,290
Deviation from ideal -75
% Deviation -0.32%
% Hisp 37.7%
% NH White 47%
% NH Black 2%
% Asian-American 10%
Total 16,840
% Hisp 25%
% NH White 63%
% NH Black 0%
% Asian/Pac.Isl. 11%
Total 11,605
% Latino est. 28%
% Spanish-Surnamed 26%
% Asian-Surnamed 4%
% Filipino-Surnamed 1%
% NH White est. 68%
% NH Black 0%
Total 9,957
% Latino est. 27%
% Spanish-Surnamed 25%
% Asian-Surnamed 4%
% Filipino-Surnamed 1%
% NH White est. 70%
% NH Black 0%
Total 7,104
% Latino est. 21%
% Spanish-Surnamed 20%
% Asian-Surnamed 4%
% Filipino-Surnamed 1%
% NH White est. 75%
% NH Black est. 0%
ACS Pop. Est. Total 22,583
age0-19 27%
age20-60 58%
age60plus 15%
immigrants 21%
naturalized 46%
english 67%
spanish 67%
asian-lang 5%
other lang 2%
Language Fluency Speaks Eng. "Less than Very Well" 10%
hs-grad 43%
bachelor 25%
graduatedegree 11%
Child in Household child-under18 29%
Pct of Pop. Age 16+ employed 62%
income 0-25k 18%
income 25-50k 15%
income 50-75k 17%
income 75-200k 40%
income 200k-plus 9%
single family 66%
multi-family 34%
rented 55%
owned 45%
Total population data from the 2020 Decennial Census.

Surname-based Voter Registration and Turnout data from the California Statewide Database.

0.43%
51%
27%
4%
16%
16,315
41%
39%
4%
15%
10,161
41%
37%
11%
2%
47%
3%
8,224
39%
36%
11%
2%
48%
3%
4,963
33%
31%
10%
2%
54%
3%
23,842
20%
66%
14%
25%
48%
47%
47%
11%
3%
18%
46%
23%
8%
26%
58%
16%
17%
21%
41%
5%
36%
64%
70%
30%
3 23,299
-66
-0.28%
53%
33%
2%
9%
13,099
34%
52%
2%
11%
11,333
31%
28%
6%
2%
62%
2%
9,601
29%
26%
6%
1%
64%
2%
6,802
24%
22%
4%
1%
69%
2%
23,219
27%
57%
17%
26%
35%
53%
53%
5%
3%
21%
42%
22%
8%
40%
68%
11%
19%
18%
42%
10%
63%
37%
45%
55%
4 23,217
-148
-0.63%
26%
46%
2%
24%
16,513
18%
56%
2%
23%
15,915
19%
17%
14%
2%
65%
2%
14,006
18%
16%
14%
2%
66%
2%
9,937
15%
14%
11%
1%
71%
2%
23,178
25%
54%
21%
23%
65%
69%
69%
11%
7%
11%
36%
29%
19%
37%
68%
6%
9%
11%
51%
23%
88%
12%
22%
78%
5 23,402
37 0.16%
52%
34%
2%
10%
15,024
36%
54%
1%
8%
12,310
35%
32%
5%
2%
60%
1%
10,508
32%
29%
6%
2%
62%
1%
7,477
28%
26%
5%
2%
66%
1%
23,292
26%
57%
18%
22%
45%
56%
56%
5%
3%
15%
41%
23%
9%
37%
67%
12%
15%
16%
47%
10%
62%
38%
47%
53%
6 23,517
152

0.65%
28%
50%
1%
18%
17,461
18%
67%
1%
14%
16,431
19%
18%
10%
1%
69%
1%
14,786
18%
17%
10%
1%
71%
1%
11,324
16%
15%
8%
1%
75%
1%
23,799
23%
53%
24%
21%
62%
71%
71%
9%
5%
9%
34%
33%
18%
32%
65%
6%
11%
13%
49%
21%
83%
17%
18%
82%
Total
140,190
300

1.28%
41%
40%
2%
15%
95,252
28%
55%
2%
14%
77,755
27%
25%
9%
2%
63%
1%
67,082
25%
23%
9%
1%
64%
1%
47,607
21%
20%
7%
1%
70%
1%
139,913
25%
57%
18%
23%
50%
60%
60%
8%
4%
14%
40%
26%
12%
34%
65%
11%
14%
16%
45%
14%
67%
33%
42%
58%
01/31/2022 2:56 Page 1 of 1
Total Pop
Citizen Voting Age Pop
Voter Registration
(Nov 2020)
Voter Turnout
(Nov 2020)
Voter Turnout
(Nov 2018)
Age
Immigration
Language spoken at home
Education
(among those age 25+)
Household Income
Housing Stats
363
1 5
2 4
3 6
5 57
55 261
55 22
22 241
Cannon St N Tu
s
ti
n
S
t
E Santiago Canyon Rd
W Katella Ave
E Taft Ave
E Collins Ave
S
T
u
s
ti
n
S
t
S Main St
W Chapman Ave
W Walnut Ave
Th
e
City
D
r
S
S Glassell St
E Chapman Ave
E Lincoln Ave
E Meats Ave
Serrano Ave
City of OrangeRedistricting 2022
NDC Map 126
©2021 CALIPER
364
NDC Map 126
District 1
Total Pop 23,582
Deviation from ideal 217
% Deviation 0.93%
% Hisp 35.3%
% NH White 49%
% NH Black 2%
% Asian-American 10%
Total 18,372
% Hisp 26%
% NH White 62%
% NH Black 1%
% Asian/Pac.Isl. 10%
Total 12,262
% Latino est. 28%
% Spanish-Surnamed 26%
% Asian-Surnamed 4%
% Filipino-Surnamed 1%
% NH White est. 69%
% NH Black 0%
Total 10,540
% Latino est. 26%
% Spanish-Surnamed 24%
% Asian-Surnamed 4%
% Filipino-Surnamed 1%
% NH White est. 70%
% NH Black 0%
Total 7,536
% Latino est. 21%
% Spanish-Surnamed 20%
% Asian-Surnamed 3%
% Filipino-Surnamed 1%
% NH White est. 75%
% NH Black est. 0%
ACS Pop. Est. Total 23,446
age0-19 25%
age20-60 59%
age60plus 16%
immigrants 20%
naturalized 49%
english 70%
spanish 70%
asian-lang 6%
other lang 3%
Language Fluency Speaks Eng. "Less than Very Well" 7%
hs-grad 43%
bachelor 26%
graduatedegree 11%
Child in Household child-under18 25%
Pct of Pop. Age 16+ employed 63%
income 0-25k 17%
income 25-50k 13%
income 50-75k 20%
income 75-200k 42%
income 200k-plus 9%
single family 63%
multi-family 37%
rented 55%
owned 45%
Total population data from the 2020 Decennial Census.

Surname-based Voter Registration and Turnout data from the California Statewide Database.

1.39%
42%
40%
2%
14%
15,069
27%
55%
1%
16%
13,692
27%
25%
7%
2%
64%
2%
11,787
26%
24%
7%
2%
65%
2%
8,352
21%
20%
5%
2%
71%
2%
23,561
26%
57%
17%
24%
42%
58%
58%
8%
4%
16%
43%
23%
11%
38%
69%
10%
14%
15%
50%
12%
73%
27%
38%
62%
4 22,523
-842
-3.60%
42%
42%
2%
12%
15,175
25%
58%
2%
14%
13,248
25%
23%
8%
1%
65%
2%
11,550
23%
21%
8%
1%
67%
2%
8,352
20%
19%
7%
1%
71%
2%
22,718
25%
54%
20%
25%
43%
64%
64%
8%
5%
14%
42%
24%
13%
38%
66%
7%
15%
14%
48%
16%
82%
18%
27%
73%
5 23,270
-95
-0.41%
58%
28%
2%
10%
13,169
40%
50%
1%
8%
11,321
39%
35%
6%
2%
55%
1%
9,582
36%
33%
6%
2%
58%
1%
6,843
31%
29%
6%
1%
62%
1%
22,537
27%
57%
16%
24%
44%
50%
50%
5%
2%
20%
38%
22%
8%
41%
67%
13%
17%
14%
44%
12%
60%
40%
50%
50%
6 23,834
469

2.01%
16%
55%
1%
25%
18,077
13%
66%
1%
20%
17,705
13%
12%
14%
1%
71%
1%
16,014
12%
11%
14%
1%
72%
1%
12,028
11%
10%
11%
1%
76%
1%
24,002
24%
52%
25%
19%
79%
75%
75%
10%
7%
7%
31%
36%
22%
32%
65%
6%
9%
12%
47%
26%
84%
16%
15%
85%
Total
140,190
1,311

5.61%
41%
40%
2%
15%
95,252
28%
55%
2%
14%
77,755
27%
25%
9%
2%
63%
1%
67,082
25%
23%
9%
1%
64%
1%
47,607
21%
20%
7%
1%
70%
1%
139,913
25%
57%
18%
23%
50%
60%
60%
8%
4%
14%
40%
26%
12%
34%
65%
11%
14%
16%
45%
14%
67%
33%
42%
58%
01/31/2022 9:00 Page 1 of 1
Total Pop
Citizen Voting Age Pop
Voter Registration
(Nov 2020)
Voter Turnout
(Nov 2020)
Voter Turnout
(Nov 2018)
Age
Immigration
Language spoken at home
Education
(among those age 25+)
Household Income
Housing Stats
365
5 1 2
3 4
6 5
57 55
261
55 22
22 241
Cannon St N Tu
s
ti
n
S
t
E Santiago Canyon Rd
W Katella Ave
E Taft Ave
E Collins Ave
S
T
u
s
ti
n
S
t
S Main St
W Chapman Ave
W Walnut Ave
Th
e
City
D
r
S
S Glassell St
E Chapman Ave
E Lincoln Ave
E Meats Ave
City of OrangeRedistricting 2022
Public Map 127
Note: This map is not contiguous as currently shown but is contiguous on the original submission.Drawing in the map as submitted would require dividing four Census blocks. ©2021 CALIPER 366
Public Map 127
District 1
Total Pop 24,115
Deviation from ideal 750
% Deviation 3.21%
% Hisp 36.2%
% NH White 48%
% NH Black 2%
% Asian-American 10%
Total 18,533
% Hisp 26%
% NH White 62%
% NH Black 1%
% Asian/Pac.Isl. 10%
Total 12,453
% Latino est. 28%
% Spanish-Surnamed 26%
% Asian-Surnamed 4%
% Filipino-Surnamed 1%
% NH White est. 68%
% NH Black 0%
Total 10,695
% Latino est. 27%
% Spanish-Surnamed 25%
% Asian-Surnamed 4%
% Filipino-Surnamed 1%
% NH White est. 70%
% NH Black 0%
Total 7,634
% Latino est. 21%
% Spanish-Surnamed 20%
% Asian-Surnamed 3%
% Filipino-Surnamed 1%
% NH White est. 75%
% NH Black est. 0%
ACS Pop. Est. Total 23,961
age0-19 25%
age20-60 59%
age60plus 16%
immigrants 21%
naturalized 48%
english 68%
spanish 68%
asian-lang 6%
other lang 3%
Language Fluency Speaks Eng. "Less than Very Well" 8%
hs-grad 43%
bachelor 26%
graduatedegree 11%
Child in Household child-under18 26%
Pct of Pop. Age 16+ employed 63%
income 0-25k 17%
income 25-50k 13%
income 50-75k 20%
income 75-200k 42%
income 200k-plus 9%
single family 62%
multi-family 38%
rented 56%
owned 44%
Total population data from the 2020 Decennial Census.

Surname-based Voter Registration and Turnout data from the California Statewide Database.

2.00%
31%
45%
2%
20%
16,160
19%
58%
2%
20%
15,366
17%
16%
13%
1%
67%
2%
13,601
16%
15%
13%
1%
69%
2%
9,860
14%
13%
11%
1%
73%
2%
23,345
25%
53%
22%
24%
60%
68%
68%
9%
6%
12%
36%
29%
18%
37%
66%
7%
13%
13%
44%
24%
85%
15%
23%
77%
5 22,829
-536
-2.29%
59%
28%
2%
9%
12,808
40%
50%
1%
8%
11,020
39%
35%
6%
2%
55%
1%
9,316
36%
33%
6%
2%
58%
1%
6,655
31%
29%
5%
1%
63%
1%
22,097
27%
57%
16%
23%
44%
50%
50%
5%
2%
20%
38%
22%
8%
41%
67%
13%
17%
14%
44%
12%
60%
40%
51%
49%
6 22,965
-400
-1.71%
27%
51%
1%
18%
17,453
18%
67%
1%
14%
15,888
19%
17%
10%
1%
70%
1%
14,229
18%
16%
10%
1%
71%
1%
10,708
16%
15%
8%
1%
75%
1%
23,814
24%
53%
23%
20%
57%
71%
71%
8%
6%
8%
37%
31%
17%
33%
66%
6%
11%
13%
51%
19%
82%
18%
19%
81%
Total
140,190
1,286

5.50%
41%
40%
2%
15%
95,252
28%
55%
2%
14%
77,755
27%
25%
9%
2%
63%
1%
67,082
25%
23%
9%
1%
64%
1%
47,607
21%
20%
7%
1%
70%
1%
139,913
25%
57%
18%
23%
50%
60%
60%
8%
4%
14%
40%
26%
12%
34%
65%
11%
14%
16%
45%
14%
67%
33%
42%
58%
02/01/2022 0:33 Page 1 of 1
Total Pop
Citizen Voting Age Pop
Voter Registration
(Nov 2020)
Voter Turnout
(Nov 2020)
Voter Turnout
(Nov 2018)
Age
Immigration
Language spoken at home
Education
(among those age 25+)
Household Income
Housing Stats
367
Attachment 2 – Redistricting Public Outreach Update
January 28, 2022 at 12:00 noon was the deadline for the public to submit revisions to the focus maps the Council identified on December 14, 2021 and/or new draft redistricting maps for consideration for at the February 8, 2022 City Council meeting.

Between the most recently public hearing and the deadline stated above, staff engaged in public outreach to notify the community. This effort included posts to the City’s social media platforms, including 60 social media posts, one email blast in English and Spanish to the interest list and community groups, and one press release in English and Spanish. Additionally, staff made flyers available at the public counters, all library branches, Orange Senior Center, and the Friendly Center in English and Spanish. In addition to online, paper map drawing kits in English and in Spanish were available at the City Clerk’s counter, the Community Services’ Counter, the Grijalva Sports Center, and all three City library branches. All marketing materials encouraged users to visit the City’s redistricting website for more information and/or to submit a draft map.

According to the City’s consultant public affairs consultant, Tripepi Smith, between December 14, 2021 and January 28, 2022, the organic engagement on the redistricting website is good in comparison to other cities also engaging in redistricting. Total, we saw 553 visitors, approximately 87.9%, of which were new users to website between December 14, 2021 and January 28, 2022. Regarding the Draft Maps page, users generated 196 page views, approximately 79% of these were unique page views. The average user spent about two minutes and 50 seconds viewing the page, which is longer than the industry standard (one minute and 27). Specific to the Draw a Map page, users generated 135 page views, approximately 86%, of these were unique page views. During this time, visitors may have been reviewing the City Council selected focus maps. The average time spent on the Draw A Map page during the previous public hearing and the deadline was one minute and 54 seconds, also higher than the industry standard. Visitors to the page most likely spend time reading instructions on how to use the provided mapping tools.

Regarding engagement on the City’s Facebook posts, the combined average reach, defined as the number of people who saw any content from your page or about your page, of the 16 posts is approximately 23,147. Additionally, the 16 posts generated 473 engagement actions, which includes the number of times a link included in your post was clicked by a user, comments and shares. The metrics still indicate that our redistricting posts drew equivalent audience share to similar posts that fall under a “Government business or elections information” umbrella.

In total, the City received seven maps from the public and one map from the City’s consultant, National Demographics Corporation (NDC) for consideration. 368
Attachment 3 – Public Comments Sent to the City Manager’s Office and the City Clerk
Comment
Number
Comment
1 Kylie I spoke at 2nd redistricting portion at the Orange City Council meeting and expressed my input that district 5 should NOT be changed due to no major changes in population. In addition any attempts to manipulate or gerrymander would be a violation of the California Voting Rights Act. I am submitting this email to be part of the public record for final input on redistricting. Let me know if this email and my presentation at city council is sufficient.

Sammy Rodriguez
524 S. Hill Street
Orange CA 92869
District 5
Sent from my iPhone
2 To whom it may concern;
On behalf of the Orange Park Association and the residents of Orange Park Acres we are submitting this districting map showing our recommendation. We want to thank you for this opportunity to give our data and suggestions for the future of Orange.

Please note Santiago Creek is a key boundary that is important to Orange Park Acres and other communities of interest in East Orange.

Unit 61 is south of the Creek and belongs in District 6. We appreciate your attention to this detail.

Please let me know you receive this map and data so I am confirmed it is submitted.

Sincerely,
Sherry Hart Panttaja, President
Orange Park Association
3 Hi,
Is it possible to show income levels per proposed mapping districts. It appears some of the District 1 mapping proposed is to keep lower income residents in Orange within District 1.

GIS has the ability to isolate zip codes and sub areas by income levels. 369
Maybe for equity you need to look at Districting vs income levels.

Regards,
Brett Rekola, PE
West Maple Ave
Orange, Ca
92868
4 Hello,
Here is my map submission. The link is below and the csv is attached.

My intentions here were as follows:
- Create more proportionally shaped districts.
- Keep District 1 focused in Old Towne.
- Keep District 5 El Modena together as one.
- Modify District 6 to comply with the Fair Maps Act.
- Balanced population between districts.

If I had to nickname each district it would be:
1: Old Towne
2: West End
3: Central
4: North End
5: El Modena
6: East End
Thank you!
https://davesredistricting.org/join/62b74c65-2e54-482d-b86d6c25dfcde171 Jordan Prell
714-975-1721
5148 E Ryals Ln, Orange, 92869
5 We are residents of Orange for most of the past 25 years - all of it in East Orange areas.

We have reviewed the 4 currently proposed redistricting maps. We support map #109 or #105 as they seem to make the most sense by keeping areas with similar issues and living experiences together.

The one map that we object to is map #119 - this seems to purposely separate the east orange areas with the most in common (traffic issues, Sully Miller issues, etc.).
370
Christopher DeRosa
Jennifer DeRosa
Brandon DeRosa
7216 E Magdalena Dr.

Orange, CA 92867
6 To Whom It May Concern,
Thank you for inviting the citizens of Orange to participate in the process of redrawing our districts. I appreciate the transparency with which the city is navigating this project and the education I have received on a very complex challenge.

When drawing my map, I considered simple organization and population numbers only.

I look forward to following the progress and completion of this project.

Again, thank you for the opportunity to participate.

Kind Regards,
Patty Bornhop
714-293-5644
371
Comment Number 7:
372
373
374
375
376
377
Agenda Item
City Council
Item #: 10.2. 2/8/2022 File #: 22-0021
TO: Honorable Mayor and Members of the City Council
THRU: Thomas R. Hatch, Interim City Manager
FROM: Gary A. Sheatz, City Attorney

1. SUBJECT
Public Hearing to receive and file report summarizing measures taken to evaluate impacts addressed by urgency Ordinance No. 02-21; and to consider adoption of second extension of urgency Ordinance No. 02-21.

2. SUMMARY
Government Code Section 65858(d) requires a written report describing the measures taken to alleviate the condition or conditions leading to adoption of urgency Ordinance No. 02-21-A prior to its extension. The extension of the Ordinance would continue to prohibit the addition of three or more bedrooms or three or more bathrooms to the primary residence on lots less than 12,000 square feet for one additional one year and would continue the revised definitions of Dormitory and Student Housing, unless permanent regulations are adopted prior to that time.

3. RECOMMENDED ACTION

1. Receive and file report of measures taken.

2. Adopt Ordinance No. 02-21-B. Second Extension of a Revised Urgency Ordinance of the City Council of the City of Orange prohibiting the addition of three or more bedrooms or three or more bathrooms to a primary residence use on lots less than 12,000 square feet, and adding definitions of dormitory and student housing.

4. FISCAL IMPACT
None.

5. STRATEGIC PLAN GOALS
Goal 1: Provide for a Safe Community
d: Assure the development of the City occurs in a fashion that maximizes public safety.

Goal 3: Enhance and promote quality of life in the community c: Support and enhance attractive, diverse living environments.

6. DISCUSSION AND BACKGROUND
In the past two years, the City has seen numerous applications for additions or interior renovations to single-family dwellings (primary residences) in which several bedrooms and bathrooms are added, City of Orange Page 1 of 2 Printed on 2/3/2022
powered by Legistar™378
Item #: 10.2. 2/8/2022 File #: 22-0021
many with exterior doors and wet bars in each bedroom, in some cases transforming two or three bedroom homes into seven or eight bedroom and bathroom structures.

The negative impacts from the unrestricted additions to houses in single-family neighborhoods have caused serious negative effects on the families residing nearby. Those negative effects include parking on front lawns, illegal street parking, unsafe vehicle speed demonstrations, trampled landscaping, loud music, unruly parties, congregation of crowds from outside the neighborhoods in the front yards over and above the ordinary number of occupants, confrontational interactions with neighbors, public drinking, numerous late night disturbances, litter and trash including bottles and cups strewn about the neighborhood, overflowing trash cans, police responses to resident complaints, party call prosecutions, and what has generally been described by residents as a “fraternity” atmosphere.

On February 16, 2021, the City Council adopted urgency Ordinance No. 02-21, which addressed the immediate threat to the public health, safety, and welfare caused by a surge of construction activity involving residential additions by prohibiting the addition of three or more bedrooms or three or more bathrooms to single-family dwellings on lots less than 12,000 square feet. It also provided and/or revised current definitions of dormitory, student housing, bedroom, primary residence, and boarding house uses. On March 23, 2021, the City Council extended the revised urgency Ordinance for ten months and fifteen days, until February 15, 2022. On that same date, the City Council introduced Ordinance No. 03-21, that added permanent definitions of bedroom and primary residence. That Ordinance became effective May 13, 2021. California Government Code section 65858(a) permits the urgency Ordinance, revised to delete the definitions of bedroom and primary residence, to be extended for another year.

The prohibition on large residential additions and the clear identification of student housing uses has allowed the City to research possible changes to the Orange Municipal Code (OMC). The adoption of standards applicable to open living space, lot coverage, parking requirements, and the categorization and proper placement for uses such as dormitories and student housing, and their impact on related infrastructure necessities while protecting neighborhoods from unregulated growth is being and will continue to be intensely studied. City staff continues to evaluate the housing stock and property sizes in the City to assess the conditions under which increasing the bedroom and bathroom count in single-family residences is suitable. The recent passage of SB 9 legislation allowing an R1 lot to be split into two lots, and allowing a second dwelling unit on each R1 lot has complicated this evaluation, necessitating more time in preparing a permanent OMC revision.

Staff’s review is on-going and requires up to an additional one year of research and empirical study.

As such, staff is recommending adoption of the extension of urgency Ordinance No. 02-21, as amended, to remain in effect until February 15, 2023.

7. ATTACHMENTS
· Ordinance No. 02-21-B
City of Orange Page 2 of 2 Printed on 2/3/2022
powered by Legistar™379
Agenda Item
City Council
Item #: 10.2. 2/8/2022 File #: 22-0021
TO: Honorable Mayor and Members of the City Council
THRU: Thomas R. Hatch, Interim City Manager
FROM: Gary A. Sheatz, City Attorney

3. RECOMMENDED ACTION

1. Receive and file report of measures taken.

4. FISCAL IMPACT
None.

5. STRATEGIC PLAN GOALS
Goal 1: Provide for a Safe Community
d: Assure the development of the City occurs in a fashion that maximizes public safety.

Goal 3: Enhance and promote quality of life in the community c: Support and enhance attractive, diverse living environments.

6. DISCUSSION AND BACKGROUND
In the past two years, the City has seen numerous applications for additions or interior renovations to single-family dwellings (primary residences) in which several bedrooms and bathrooms are added, City of Orange Page 1 of 2 Printed on 2/3/2022
powered by Legistar™380
Item #: 10.2. 2/8/2022 File #: 22-0021
many with exterior doors and wet bars in each bedroom, in some cases transforming two or three bedroom homes into seven or eight bedroom and bathroom structures.

Staff’s review is on-going and requires up to an additional one year of research and empirical study.

As such, staff is recommending adoption of the extension of urgency Ordinance No. 02-21, as amended, to remain in effect until February 15, 2023.

7. ATTACHMENTS
· Ordinance No. 02-21-B
City of Orange Page 2 of 2 Printed on 2/3/2022
powered by Legistar™381
ORDINANCE NO. 02-21-B

SECOND EXTENSION OF A REVISED URGENCY

ORDINANCE OF THE CITY COUNCIL OF THE

CITY OF ORANGE PROHIBITING THE ADDITION

OF THREE OR MORE BEDROOMS OR THREE OR

MORE BATHROOMS TO A PRIMARY RESIDENCE
USE ON LOTS LESS THAN 12,000 SQUARE FEET,

AND ADDING DEFINITIONS OF DORMITORY
AND STUDENT HOUSING.

WHEREAS, Section 65858(a) of the California Government Code authorizes the City Council to adopt, as an urgency measure, an interim ordinance prohibiting any uses which may be in conflict with a contemplated zoning proposal which the City Council, planning commission or planning department is studying to protect the public health, safety and welfare; and WHEREAS, the City in general, and the neighborhoods in proximity to Chapman University in particular, have been experiencing a surge of construction activity and new applications for additions to and/or interior renovations to single-family dwellings (primary residences) in which numerous bedrooms and bathrooms are being added, many with exterior doors and wet bars in each bedroom, in some cases transforming two or three bedroom homes into seven or eight bedroom and bathroom structures; and WHEREAS, the mansionization of former single-family dwellings has in many cases been promoted as “student housing properties,” with the goal of “creating a student housing assemblage” on specific streets; and
WHEREAS, the Orange Municipal Code (OMC) does not currently contain a definition for such uses as dormitory or student housing, and adding such definitions will (1) provide clarity for the categorization of renovations to primary residences as opposed to the creation of uses such as dormitories or student housing and (2) help differentiate the characteristics of singlefamily homes from dormitories and student housing uses; and WHEREAS, those mansionized single-family dwellings already constructed have caused numerous deleterious effects on the families residing nearby, including parking on front lawns, illegal street parking, unsafe vehicle speed demonstrations, trampled landscaping, loud music, unruly parties, congregation of crowds from outside the neighborhoods in the front yards over and above the number of occupants, confrontational interactions with neighbors, public drinking, late night disturbances, litter including bottles and cups visible to the neighborhood, overflowing trash cans, police responses to resident complaints, party call prosecutions, and what has been described by neighbors as a “fraternity” atmosphere, all of which effects constitute a public nuisance to the community; and
WHEREAS, on February 16, 2021, the City Council adopted urgency Ordinance No. 02-21, prohibiting the addition of three or more bedrooms or three or more bathrooms to a 382
Ord. No. 02-21-B 2 MEB
primary residence use on lots less than 12,000 square feet, and adding definitions of dormitory, primary residence and student housing, and revising definitions of bedroom and boarding house, which Ordinance was effective for forty-five days, until April 2, 2021; and WHEREAS, pursuant to Government Code Section 65858(a), on March 23, 2021, after notice as required by law and a public hearing, the City Council extended urgency Ordinance No. 02-21, as revised, for ten months and fifteen days, until February 15, 2022 (Ordinance No. 02-21-A); and
WHEREAS, on April 13, 2021, the City Council adopted Ordinance No. 03-21, that added permanent definitions of Primary Residence and Bedroom among other provisions, which Ordinance became effective on May 13, 2021. Said definitions are no longer necessary in the urgency Ordinance; and
WHEREAS, pursuant to Government Code Section 65858(a), after notice and a public hearing as required by law, the City Council may, by not less than a four-fifths vote, extend the urgency Ordinance for an additional one year; and
WHEREAS, extension of urgency Ordinance No. 02-21-A, as amended, will extend the prohibition on the addition of three or more bedrooms or three or more bathrooms to a primary residence use on lots less than 12,000 square feet for an additional one year and will extend the addition of definitions of dormitory and student housing; and WHEREAS, notice of the hearing on the extension of urgency Ordinance No. 02-21-A was published in a newspaper of general circulation in accordance with Government Code Section 65090; and
WHEREAS, a public hearing was held on February 8, 2022, to consider extension of urgency Ordinance No. 02-21-A, for one year, until February 15, 2023; and WHEREAS, the City is continuing to review and study the development standards contained in its Zoning Code to examine under what circumstances and to what extent singlefamily dwellings constituting a primary dwelling use may be expanded in the number of bedrooms and number of bathrooms, along with other remodeling development standards; and WHEREAS, the City is continuing to study the required procedure for evaluating applications for the expansion of single-family dwellings to determine the proper level of review required to protect the peace, health, safety and welfare of the neighborhood and the public at large and mitigate the specific adverse impacts stated herein; and WHEREAS, the City is continuing to study the definitions of dormitory, student housing and boarding house, to achieve a fair balance between accommodation of property owners’ rights and the negative effects of a concentration of students occupying dwellings in single-family residential neighborhoods; and
383
Ord. No. 02-21-B 3 MEB
WHEREAS, the City is also studying the effect of SB 9, that allows lot splits and second units in single-family residential neighborhoods, on the mansionization trends observed in the City; and
WHEREAS, the City Council finds:

1. That there continues to be a current and immediate threat to the public peace, health, safety and welfare; and

2. That the approval of additional building permits or any other applicable entitlement allowing the addition of three or more bedrooms or three or more bathrooms to a single-family dwelling that is a primary residence use on a lot less than 12,000 square feet as required by the current Zoning Code would have specific adverse impacts upon the public peace, health, safety or welfare; and

3. That the addition to Orange Municipal Code Chapter 17.04 of the following definitions is necessary to preserve the public peace, health, safety and welfare:

DORMITORY, See also STUDENT HOUSING – A structure used for group accommodations, containing a number of private or semiprivate bedrooms with or without a private bathroom, usually with common recreation and kitchen areas, primarily advertised to and exclusively occupied by students of an educational facility. A dormitory may be owned or operated by a university, college, or private owner.

STUDENT HOUSING, See also DORMITORY -- A structure designed, primarily advertised to and exclusively used for long-term stay by students of an educational facility for sleeping accommodations. This includes a dormitory or fraternity/sorority house or apartment. Student housing may be owned or operated by a university, college, or private owner.

4. That extension of urgency Ordinance No. 02-21-A, as amended, is necessary to mitigate and avoid the specific adverse impacts stated herein; and

5. That there is no feasible alternative to satisfactorily mitigate or avoid the specific, adverse impacts stated herein as well or better, with a less burdensome or restrictive effect, than extension of urgency Ordinance No. 02-21-A, as amended; and WHEREAS, the City Council determines, by no less than a four-fifths vote, that extension of this urgency Ordinance, as amended, until February 15, 2023, is a matter of Citywide importance and is necessary for the immediate preservation and protection of the public health, safety or welfare of the community.

NOW THEREFORE, the City Council of the City of Orange hereby ordains as follows:
384
Ord. No. 02-21-B 4 MEB
SECTION I:

The recitals and findings contained herein are true and correct, incorporated herein, and with the public record, form the basis for the second extension of this urgency Ordinance.

SECTION II:

The City shall not approve any building permits or any other applicable entitlement allowing the addition of three or more bedrooms or three or more bathrooms to a primary residence use on a lot less than 12,000 square feet, as required by the current Zoning Code.

SECTION III:

Chapter 17.04 of the Orange Municipal Code shall be revised to add the definitions of dormitory and student housing as set forth in the findings, above.

SECTION IV:

The subject urgency Ordinance is exempt from the provisions of the California Environmental Quality Act (CEQA) per State CEQA Guidelines 15060(c)(2), 15060(c)(3) and 15061(b)(3) because it will not result in a direct or reasonably foreseeable indirect physical change in the environment, because there is no possibility it will have a significant effect on the environment, and it is not a "project", as defined in Section 15378 of the State CEQA Guidelines.

In the unlikely event the urgency Ordinance would constitute a project under CEQA, it is exempt from the provisions of CEQA per State CEQA Guideline 15321 (Class 21, Enforcement Actions by Regulatory Agencies) because it is an action taken by the City as a regulatory agency, as authorized by local ordinance, to prevent the issuance of permits for the addition of three or more bedrooms or bathrooms to a single-family dwelling in order to prevent a public nuisance. As such, no further analysis is warranted or required.

SECTION V:

This urgency Ordinance is intended to immediately supersede any existing provisions of the Orange Municipal Code to the extent those existing provisions are inconsistent with this urgency Ordinance.

SECTION VI:

If any section, subdivision, paragraph, sentence, clause or phrase of this urgency Ordinance is for any reason held to be invalid or unconstitutional, such decision shall not affect the validity of the remaining portions of this urgency Ordinance. The City Council hereby declares that it would have passed this urgency Ordinance, and each section, subdivision, paragraph, sentence, clause and phrase thereof, irrespective of the fact that any one (or more) section, subdivision, paragraph, sentence, clause or phrase had been declared invalid or unconstitutional.
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Ord. No. 02-21-B 5 MEB
SECTION VII:

In accordance with Government Code 65858, urgency Ordinance No. 02-21-B shall remain in effect for an additional one year, until February 15, 2023, in order to protect the public peace, health, safety and welfare of the community unless otherwise repealed.

APPROVED this ____ day of ________________, 2022.
_____________________________________
Mark A. Murphy, Mayor, City of Orange
ATTEST:
________________________________________
Pamela Coleman, City Clerk, City of Orange

STATE OF CALIFORNIA )

COUNTY OF ORANGE )

CITY OF ORANGE )
I, PAMELA COLEMAN, City Clerk of the City of Orange, California, do hereby certify that the foregoing Ordinance was adopted as an urgency Ordinance at a special meeting of the City Council held on the 16th day of February, 2021, and thereafter was extended for ten months and fifteen days at a regular adjourned meeting of said City Council held on the 23rd day of March, 2021, and thereafter was extended for one year at a regular meeting of said City Council held on the 8th day of February, 2022, by the following vote, to wit:

AYES: COUNCILMEMBERS:

NOES: COUNCILMEMBERS:

ABSENT: COUNCILMEMBERS:

ABSTAIN: COUNCILMEMBERS:
________________________________________
Pamela Coleman, City Clerk, City of Orange
386
Agenda Item
City Council
Item #: 10.3. 2/8/2022 File #: 22-0028
TO: Honorable Mayor and Members of the City Council
FROM: Thomas R. Hatch, Interim City Manager

1. SUBJECT
Public Hearing to consider an Agreement to Convey Land with OSH Katella Terrace LLC accepting a land donation of the property located at 1249 E. Katella Avenue from OSH Katella, LLC to facilitate the development of the Katella Terrace Apartments senior affordable housing project.

2. SUMMARY
The proposed Agreement to Convey Land would transfer ownership of the property at 1249 E.

Katella Avenue to the City of Orange for the purpose of facilitating development of a 74-unit senior affordable housing project.

3. RECOMMENDED ACTION

1. Approve the Agreement to Convey Land with OSH Katella Terrace, LLC and authorize the Mayor and City Clerk to execute on behalf of the City.

2. Authorize the City Manager to approve and execute documents approved as to form by the City Attorney necessary to carry out the Agreement to Convey Land and the acquisition of the property by the City, including without limitation escrow documents, title documents, conveyance documents and certificate of acceptance.

3. Authorize the City Manager to sign a commitment letter to Katella Terrace LP that is consistent with the provisions of the Agreement to Convey Land.

4. FISCAL IMPACT
Approval of the Agreement to Convey Land would waive approximately $90,000 in litigation fees owed to the City by OSH Katella Terrace, LLC.

5. STRATEGIC PLAN GOALS
Goal 3: Enhance and promote quality of life in the community c: Support and enhance attractive, diverse living environments.

6. DISCUSSION AND BACKGROUND
For over four decades, the Orange City Council has consistently supported the development of quality affordable housing, helping to develop 1,671 units of affordable housing since 1985. In 1981, the City and the YMCA collaborated to create the nonprofit Orange Senior Housing, Inc. (OSH) for the purpose of developing senior affordable housing on a 3.5-acre site adjacent to Hart Park. In 1986, OSH opened Triangle Terrace, a community of 75 senior apartment homes in which every City of Orange Page 1 of 3 Printed on 2/3/2022
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Item #: 10.3. 2/8/2022 File #: 22-0028
tenant is provided a HUD Section 8 Voucher, pursuant to a contract between OSH and HUD.

In July 2016, the City Council approved a new ground lease to permit a development partnership including OSH to obtain tax credit financing to renovate Triangle Terrace. Concurrently, the City Council approved an Agreement that allowed OSH to extract cash from the refinancing that would be restricted to investment in senior affordable housing in the city. In November 2016, the refinancing of Triangle Terrace was completed, and the Restricted Amount for investment was determined to be $8,041,349. During 2017-2018, OSH made offers on several sites within the city limits, and reviewed counteroffers with City staff. A consensus was developed to pursue the 1.5-acre site at 1249 E.

Katella Avenue, where a recent change to the City’s zoning ordinance provided for high density senior housing on property with Commercial zoning. Using portions of the Restricted Funds, OSH paid the costs of escrow, due diligence, project design, and entitlement until the plans for Katella Terrace were approved by the City Council in September 2019. The project will create 74 new housing units, 73 affordable units that will be restricted to Lower Income seniors, and one manager unit. In October 2019, a wholly-owned affiliate of OSH purchased the 1.5-acre property.

When a neighboring commercial property owner challenged the entitlement under the California Environmental Quality Act, the City and OSH retained joint counsel to defend the entitlement. The litigation was settled, without change to the project’s design, by an agreement to notify the neighboring property owner whenever the construction of the project would impair traffic on the adjacent street and public alley. During 2020, OSH used portions of the Restricted Funds to demolish a two-story office building and surface parking on the site. OSH continues to use Restricted Funds to maintain the vacant property.

Project Financing
Affordable housing projects require extensive subsidies to ensure they can remain affordable and financially viable over several decades. This typically requires that they receive funding from multiple sources including federal tax credits, which are block granted to the state and awarded on a competitive basis. While this project was delayed by litigation, the state revised its criteria for scoring tax credit projects to award additional points for projects with municipal land ownership. The proposed Agreement to Convey Land would make the project more competitive for federal tax credits by transferring ownership of the land to the City.

Agreement to Convey Land
The proposed Agreement to Convey Land would transfer ownership of the property at 1249 E.

Katella Avenue to the City of Orange. The transfer of land would only occur after receiving approval from the California Department of Housing and Community Development that this transfer is exempt surplus land as defined by Government Code Section 54221(f)(1)(A) and Section 37364. In consideration for the land, the City would waive the approximately $90,000 in legal fees that it is owed by OSH Katella Terrace, LLC for the joint representation in the litigation involving the project entitlement. In addition to waiving legal fees, the City would agree to negotiate exclusively with Katella Terrace, LP (Developer) for the following:
· A Development and Disposition Agreement (DDA) with the Developer for the project, this DDA would require City Council approval
· Finalize the Form of Lease (Attachment 2 to the agreement) to lease the property to the Developer for 60 years
Recommendation
Staff recommends the approval of the Agreement to Convey Land to allow the proposed Katella Terrace senior affordable housing project to be competitive for state tax credits. Staff is also City of Orange Page 2 of 3 Printed on 2/3/2022
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Item #: 10.3. 2/8/2022 File #: 22-0028
Terrace senior affordable housing project to be competitive for state tax credits. Staff is also recommending that the City Council authorize the City Manager to issue a commitment letter consistent with the terms of the Agreement to Convey Land. The commitment letter would allow the Developer to seek financing from other sources.

7. ATTACHMENT
· Agreement to Convey Land
City of Orange Page 3 of 3 Printed on 2/3/2022
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Agenda Item
City Council
Item #: 10.3. 2/8/2022 File #: 22-0028
TO: Honorable Mayor and Members of the City Council
FROM: Thomas R. Hatch, Interim City Manager

2. SUMMARY
The proposed Agreement to Convey Land would transfer ownership of the property at 1249 E.

Katella Avenue to the City of Orange for the purpose of facilitating development of a 74-unit senior affordable housing project.

3. RECOMMENDED ACTION

1. Approve the Agreement to Convey Land with OSH Katella Terrace LLC and authorize the Mayor and City Clerk to execute on behalf of the City.

3. Authorize the City Manager to sign a commitment letter to Katella Terrace LP that is consistent with the provisions of the Agreement to Convey Land.

4. FISCAL IMPACT
Approval of the Agreement to Convey Land would waive approximately $90,000 in litigation fees owed to the City by OSH Katella Terrace, LLC.

5. STRATEGIC PLAN GOALS
Goal 3: Enhance and promote quality of life in the community c: Support and enhance attractive, diverse living environments.

6. DISCUSSION AND BACKGROUND
For over four decades, the Orange City Council has consistently supported the development of quality affordable housing, helping to develop 1,671 units of affordable housing since 1985. In 1981, the City and the YMCA collaborated to create the nonprofit Orange Senior Housing, Inc. (OSH) for the purpose of developing senior affordable housing on a 3.5-acre site adjacent to Hart Park. In 1986, OSH opened Triangle Terrace, a community of 75 senior apartment homes in which every City of Orange Page 1 of 3 Printed on 2/3/2022
powered by Legistar™390
Item #: 10.3. 2/8/2022 File #: 22-0028
tenant is provided a HUD Section 8 Voucher, pursuant to a contract between OSH and HUD.

Agreement to Convey Land
The proposed Agreement to Convey Land would transfer ownership of the property at 1249 E.

Katella Avenue to the City of Orange. The transfer of land would only occur after receiving approval from the California Department of Housing and Community Development that this transfer is exempt surplus land as defined by Government Code Section 54221(f)(1)(A) and Section 37364. In consideration for the land, the City would waive the approximately $90,000 in legal fees that it is owed by OSH Katella Terrace, LLC for the joint representation in the litigation involving the project entitlement. In addition to waiving legal fees, the City would agree to negotiate exclusively with Katella Terrace, LP (Developer) for the following:
· A Development and Disposition Agreement (DDA) with the Developer for the project, this DDA would require City Council approval
· Finalize the Form of Lease (Attachment 2 to the agreement) to lease the property to the Developer for 60 years
Recommendation
Staff recommends the approval of the Agreement to Convey Land to allow the proposed Katella Terrace senior affordable housing project to be competitive for state tax credits. Staff is also City of Orange Page 2 of 3 Printed on 2/3/2022
powered by Legistar™391
Item #: 10.3. 2/8/2022 File #: 22-0028
Terrace senior affordable housing project to be competitive for state tax credits. Staff is also recommending that the City Council authorize the City Manager to issue a commitment letter consistent with the terms of the Agreement to Convey Land. The commitment letter would allow the Developer to seek financing from other sources.

7. ATTACHMENT
· Agreement to Convey Land
City of Orange Page 3 of 3 Printed on 2/3/2022
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AGREEMENT TO CONVEY LAND
(Katella Terrace Apartments
1249 E. Katella Avenue)
By and Between

THE CITY OF ORANGE, CALIFORNIA
(“City”)
and

OSH KATELLA TERRACE LLC
(“Owner”)
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This AGREEMENT TO CONVEY LAND (the “Agreement”), dated as of ______________, 2022, is entered into by and between THE CITY OF ORANGE, a municipal corporation, (the “City”), and OSH KATELLA TERRACE LLC., a California limited liability company (the “Owner”). City and Owner agree as follows:

RECITALS
A. Owner currently owns fee title to that certain real property in City of Orange commonly known as 1249 E. Katella Avenue, described in the Legal Description attached hereto as Attachment No. 1 (the “Property”).

B. Owner and City entered into that certain Density Bonus Housing Agreement concerning the Property dated January 20, 2020 and recorded in the Official Records, Orange County ClerkRecorder, on March 2, 2020 as Document No. 2020000090418 (the “Density Bonus Agreement”), providing for the development of the Property with a 74 dwelling unit development to be exclusively rented to Senior Lower Income Household Eligible Tenants at Affordable Rent (the “Housing Development”).

C. In order to achieve the purposes and satisfy the terms, conditions, covenants and requirements of the Density Bonus Agreement: (1) Owner proposes to convey the Property to City in accordance with the provisions of this Agreement, subject to the Density Bonus Agreement and the Covenant Agreement required by Section 1.2 of this Agreement; (2) following such conveyance, City intends to enter into exclusive good faith negotiations with Katella Terrace, L.P., a California limited partnership, the proposed developer of the Housing Development on the Property (the “Developer”), for the lease of the Property to Developer consistent with the provisions of this Agreement for the development of the Housing Development by Developer; and (3) following such lease of the Property to Developer and Completion of the Housing Development by Developer, Developer would manage and operate the Housing Development for rental exclusively to Senior Lower Income Household Eligible Occupants at a Rental Cost that will not exceed Affordable Rent, all in accordance with the terms and conditions of this Agreement, including all attachments hereto.

D. In furtherance of the public purposes set forth in the laws of the State of California to provide for and facilitate urgently needed affordable housing, Owner desires to convey the Property to City subject to the terms and conditions of this Agreement.

E. The conveyance and use of the Property pursuant to this Agreement, and the fulfillment generally of this Agreement are in the vital and best interests of the City of Orange and the health, safety, morals and welfare of its residents, and in accord with the public purposes and provisions of applicable federal, state and local laws and requirements.

F. All capitalized terms in this Agreement which are not defined herein shall have the meaning ascribed to them in the Density Bonus Agreement. 394

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NOW, THEREFORE, in consideration of their mutual promises set forth herein, City and Owner hereby agree as follows:

ARTICLE 1 CONVEYANCE OF THE PROPERTY
Section 1.1 Conveyance of the Property
In accordance with and subject to all the terms, covenants, and conditions of this Agreement and the covenant agreement required by Section 1.2 of this Agreement to be entered into between Owner and City and recorded against the Property concurrently with the Close of Escrow hereunder (the “Covenant Agreement”), Owner agrees to convey the Property to City and City agrees to accept title to the Property from Owner, for and in consideration of (i) the performance by City of its obligations under this Agreement and the Covenant Agreement and (ii) the waiver by City as of the Close of Escrow of joint representation litigation fees in the approximate amount of Ninety Thousand Dollars ($90,000) owed to City by Owner arising from certain previously pending and now settled litigation pertaining to the Project.

Section 1.2 Covenant Agreement
The Covenant Agreement shall provide for the continuation of all of the terms, agreements, covenants and requirements of the Density Bonus Agreement and shall require City to perform the following obligations after the Close of Escrow hereunder:
a. Negotiate exclusively and in good faith with Developer, pursuant to an agreement to negotiate in form and substance reasonably acceptable to City, to enter into a proposed Disposition and Development Agreement with Developer (the “DDA”) consistent with the Density Bonus Agreement, this Agreement, the Covenant Agreement and the criteria for an exempt surplus land transfer set forth in California Government Code Section 37364;
b. Use reasonable best efforts to obtain the HCD Transfer Approval described in Section

1.3.b (1) (b) of this Agreement;
c. Expeditiously consider approval of the proposed DDA in the manner required by law; d. In the event the DDA is approved by City and entered into with Developer, diligently and in good faith perform the obligations of City under the DDA and lease the Property to Developer for a 60-year term as and when required by the DDA so long as the DDA is in effect in accordance with its terms, pursuant to a written lease in form and substance consistent with the terms and conditions of the Form of Lease attached hereto as Attachment No. 2;
e. In the event the Property is leased to Developer by City under the DDA, diligently and in good faith perform the obligations of City under the lease for the term of the lease unless earlier terminated pursuant to the provisions of the lease. 395

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Section 1.3 Escrow
a. Opening of Escrow
Within thirty (30) days after the HCD Transfer Approval is received by City from the California Department of Housing and Community Development (“HCD”), Owner shall open an escrow for the conveyance of the Property to City with Escrow Agent and deliver to the Escrow Agent a fully executed copy of this Agreement. Thereafter, Developer and City shall execute and deliver to Escrow Agent any supplemental escrow instructions reasonably required by Escrow Agent or otherwise agreed to by the parties to consummate the conveyance of the Property to City as contemplated herein (the “Joint Escrow Instructions”); provided that neither City nor Developer shall have any obligation to execute any such additional or amended escrow instructions except to the extent necessary and consistent with this Agreement. b. Conditions Precedent to the Close of Escrow

1. City’s Conditions. City’s obligation to acquire the Property from Owner under this Agreement shall be conditioned upon the satisfaction, or City’s signed written waiver, of each of the following conditions precedent on or before the Close of Escrow:
(a) Title Policy. Title Company will be irrevocably committed to issue a title policy for the conveyance of the Property to City in form and substance reasonably acceptable to City.
(b) HCD Transfer Approval. The receipt by City of evidence satisfactory to City, in its sole and absolute discretion, that HCD approves the transfer of the Property pursuant to the DDA as contemplated by this Agreement as being a transfer of exempt surplus land as defined by Government Code Section 54221(f)(1)(A) and Section 37364. (c) Owner’s Deliveries. Owner will have delivered to Escrow Agent, on or before the Close of Escrow the Grant Deed and the Covenant Agreement executed by Owner in recordable form, and any other documents to be executed (and acknowledged where required) by Owner to consummate the transaction contemplated herein. (d) Owner’s Performance. Owner will have performed all of its material obligations required by this Agreement to be performed before the Close of Escrow. (e) Possession of the Property. The Property shall be vacant, free of any leases, contracts, agreements or other rights of occupancy or possession on the part of any third parties which will be binding on the Property or any portion thereof after the Close of Escrow, and Owner shall have satisfied, at its sole expense, all statutory requirements applicable to removal of any occupants or termination of any such leases, contracts, agreements or other rights of occupancy or possession, if any.
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(f) Owner’s Closing Statement. Owner will have reasonably approved Owner’s escrow closing statement.

2. Owner’s Conditions. Owner’s obligation to convey the Property to City under this Agreement shall be conditioned upon the satisfaction, or Owner’s signed written waiver, of each of the following conditions precedent on or before the Close of Escrow:
(a) City’s Deliveries. City will have delivered to Escrow Agent, on or before the Close of Escrow, the Covenant Agreement executed by City in recordable form, documentary evidence of the waiver of payment by Owner of the litigation fees referred to in Section 1.1 of this Agreement, and any other documents to be executed (and acknowledged where required) by City to consummate the transaction contemplated herein.
(b) HCD Transfer Approval. The receipt by City of the HCD Transfer Approval described in Section 1.3.b (1) (b) of this Agreement.
(c) City’s Performance. City will have performed all of its material obligations required by this Agreement to be performed before the Closing Date. (d) City’s Closing Statement. City will have reasonably approved City’s escrow closing statement.

Section 1.4 Close of Escrow.
a. The Close of Escrow for conveyance of title to the Property to City (the “Close of Escrow”) will occur on or before June 30, 2022, unless such date is extended by written agreement of Owner and City. City and Owner agree to perform all acts necessary to satisfy the conditions precedent to Close of Escrow set forth in Section 1.3.b above in sufficient time for the Close of Escrow to timely occur under this Agreement.
b. Possession of the Property will be delivered to City concurrently with the Close of Escrow.

Section 1.5 Condition of Title
Owner will convey to City fee simple merchantable title to the Property free and clear of all liens, encumbrances, assessments, easements, leases and taxes, subject only to the Density Bonus Agreement and the Covenant Agreement and such title exceptions as may be first approved in writing by City in its sole and absolute discretion. Owner shall convey the Property to City pursuant to a grant deed reasonably acceptable to the parties consistent with the terms and conditions of this Agreement (the “Grant Deed”).

ARTICLE 2 RELATIONSHIP OF THE PARTIES INVOLVED IN THE PROJECT 397

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Section 2.1 Relationship of City and Owner
Nothing contained in this Agreement or in any other document or instrument made in connection with this Agreement shall be deemed or construed to create a partnership, tenancy in common, joint tenancy, joint venture or co-ownership by or between City and Owner. City shall not be in any way responsible or liable for the debts, losses, obligations or duties of Owner with respect to the Project or the Property.

Section 2.2 Not a Development Agreement
This Agreement is not a “Development Agreement” as provided in Section 65864 et seq. of the California Government Code. The development of the Property must comply with all required City approvals and permits and all applicable conditions of approval required by City.

Section 2.3 Disclaimer of Responsibility by City
a. City neither undertakes nor assumes nor will have any responsibility, right or duty to Owner or to any third party to review, inspect, supervise, pass judgment upon or inform Owner or any third party of any matter in connection with the Property or Project. b. It is understood and agreed by Owner that City review of plans and applications for land use decisions for the Project, including without limitation building permits and zoning, shall be conducted by City in its governmental capacity, and nothing in this Agreement shall be construed so as to bind City to make any approval or any particular exercise of its discretion, except to the extent required by applicable law.

Section 2.4 Nonliability of City Officials and Employees No member, official, employee or consultant of City will be personally liable to the other party, or any successor in interest, in the event of any default or breach by City or for any amount which may become due to the other party or to its successor, or on any obligations under the terms of this Agreement.

Section 2.5 No Third Party Beneficiaries
The provisions of this Agreement shall be for the sole benefit of Owner and City, and neither Developer nor any other person or entity shall have any rights under this Agreement nor be deemed to be a third party beneficiary of this Agreement or of any of the obligations of the parties to this Agreement.

Section 2.6 Relationship of Owner and Developer
The parties hereto contemplate that on or before the execution of the DDA, Developer will be organized as a California limited partnership in which Owner will not control or own a majority interest in Developer entity, with Horizon-ELOM Holdings, LLC as the Administrative General 398

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Partner of Developer with an interest in the Developer entity of 0.005%, Owner as the Managing General Partner of Developer with a non-controlling interest in the Developer entity of 0.005%, and the limited partner(s) of Developer having an interest in the Developer entity of 99.99%; and that prior to commencement of the development of the Housing Development, the limited partners shall be comprised of one or more tax credit investors. Owner may be removed as Managing General Partner of Developer by either the Administrative General Partner or the Limited Partner in accordance with the provisions of the Developer entity limited partnership agreement. Owner represents and warrants that the facts set forth in this Agreement, including without limitation this Section 2.6, are true and correct.

ARTICLE 3 TERMINATION AND INDEMNIFICATION
Section 3.1 Termination
Either Owner or City shall have the right to terminate this Agreement at any time prior to the Close of Escrow by delivering a written notice of termination to the other party if:
a. The other party is in material default of any material obligation hereunder, and following receipt of written notice specifying in reasonable detail the nature of such default and the actions required to cure such default, fails to cure such default within thirty (30) days of receipt of such notice of default; or b. HCD does not issue the HCD Transfer Approval described in Section 1.3.b (1) (b) of this Agreement within one hundred twenty (120) days of the Effective Date of this Agreement; or
c. The conveyance of the Property from Owner to City pursuant to this Agreement does not occur on or before June 30, 2022, except as such date might be extended pursuant to either Section 1.4 or Section 4.6 of this Agreement.

Section 3.2 Indemnification
Owner agrees to and will defend, indemnify and hold City and its officers, employees, contractors and agents (the “City Indemnitees”) harmless from and against all claims, liability, obligations, penalties, litigation, demands, defenses, judgments, suits, proceedings, disbursements, loss, damage, costs or expenses (including reasonable attorneys’ fees, experts’ fees and court costs) of any kind or of any nature whatsoever (“Indemnified Liabilities”) arising from or as a result of the death of any person or any accident, injury, loss or damage whatsoever caused to any person or to the property of any person arising directly or indirectly out of or related to the use of the Property or development of the Project on the Property or any other actions or omissions on the part of Owner or its officers, employees, contractors or agents in connection therewith, whether occurring prior to or after the Close of Escrow. Owner shall further indemnify and defend City Indemnitees from any Indemnified Liabilities arising from (i) ownership, operation or occupancy of the Property, but only to the extent first arising prior to the Close of Escrow and (ii) the presence of any hazardous materials on, in, under, or affecting all or any portion of the Property whether 399

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arising prior to or after the Close of Escrow, except to the extent such hazardous materials were caused by (a) Indemnitee, its employees, officers, agents or consultants, or (b) Developer, its employees, contractors, officers, agents, consultants, successors and assigns, or tenants after lease or license of the Property from City to Developer, or (c) any other third party after lease or license of the Property from City to Developer.

Owner represents and warrants to City that Owner has received no written notice of (i) any release of hazardous materials on or in the vicinity of the Property, or (ii) any actual or alleged violation of hazardous materials laws, or any pending or threatened investigation of any potential violation, on, in or under, or in the vicinity of the Property.

ARTICLE 4 GENERAL PROVISIONS
Section 4.1 Notices, Demands and Communications between the Parties Formal notices, demands and communications between City and Owner will be sufficiently given if dispatched by overnight delivery with a nationally or regionally-recognized courier or by registered or certified mail, postage prepaid, return receipt requested, to the principal offices of City and Developer, at the following addresses:

City: City of Orange
300 E. Chapman Avenue
Orange, California 92866
Attention: Director of Community Development
With a copy to: Office of the City Attorney
City of Orange
300 E. Chapman Avenue
Orange, California 92866
Owner: OSH Katella Terrace LLC
555 S. Shaffer Street
Orange, California 92866
Attention: President
Such written notices, demands and communications may be sent in the same manner to such other addresses as either party may from time to time designate by mail as provided in this Section 4.1. Any notice that is transmitted by electronic facsimile transmission followed by delivery of a “hard” copy, shall be deemed delivered upon its transmission; any notice that is personally delivered (including by means of professional messenger service, courier service such as United Parcel Service or Federal Express, or by U.S. Postal Service), will be deemed received on the documented date of receipt by the recipient; and any notice that is sent by registered or certified mail, postage prepaid, return receipt required will be deemed received on the date of receipt thereof.
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Section 4.2 Conflicts of Interest
a. No member, official or employee of City may have any personal interest, direct or indirect, in this Agreement nor may any such member, official or employee participate in any decision relating to the Agreement which affects his or her personal interests or the interests of any corporation, partnership or association in which he or she is, directly or indirectly, interested. b. Owner warrants that it has not paid or given, and will not pay or give, any third party any money or other consideration for obtaining this Agreement.

Section 4.3 Nonliability of City Officials and Employees No member, official, employee or consultant of City or Owner will be personally liable to the other party, or any successor in interest, in the event of any default or breach by City or Owner or for any amount which may become due to the other party or to its successor, or on any obligations under the terms of this Agreement.

Section 4.4 Captions
The captions of the paragraphs of this Agreement are for convenience and reference only, and the words contained in the captions are in no way to be held to explain, modify, amplify or aid in the interpretations, constructions or meaning of the provisions of this Agreement.

Section 4.5 Inspection of Books and Records
Owner must maintain complete, accurate, and current records pertaining to the Property for a period of five (5) years after the creation of such records, and permit any duly authorized representative of City, at City’s sole expense and upon reasonable advance notice, to inspect and copy records, including records pertaining to income and household size of occupants of the Units, during regular business hours. Records must be kept accurate and current and located in the County of Orange, California.

Section 4.6 Approvals; Administrative Extensions
Unless otherwise provided in this Agreement, approvals required of City or Owner will not be unreasonably conditioned, delayed or withheld. In addition, unless otherwise provided in this Agreement, a requirement of City approval or execution of any additional documents or instruments contemplated by this Agreement means the approval or execution thereof by City Manager or designee. The City Manager or designee shall not unreasonably withhold approval of up to three (3) extensions of the time for Close of Escrow and/or performance by Owner of its obligations under this Agreement, so long as the City Manager is reasonably satisfied that Owner is diligently proceeding in good faith with its obligations under this Agreement, and provided that (i) no single extension shall be for more than six (6) months, and (ii) in no event shall the time for Close of Escrow be extended to a date beyond December 31, 2023. 401

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Section 4.7 Real Estate Commissions
Neither City nor Owner will be liable for any real estate commissions, brokerage fees or finders’ fees which may arise from the sale of the Property to City. City and Owner each represent to the other that it has employed no broker, agent, or finder in connection with this transaction and that no person has claimed any commission, fee or other compensation in connection with this transaction.

Section 4.8 Further Assurances
Each of the parties hereto will execute any further documents consistent with the terms of this Agreement, including documents in recordable form, as the other party may from time to time reasonably find necessary or appropriate to effectuate their respective purposes in entering into this Agreement.

Section 4.9 Time Is of the Essence
Time is of the essence of this Agreement and of the performance of all the terms, covenants and conditions of Owner and City contained in this Agreement.

Section 4.10 Authority of the Parties
Each of the Parties has the full power and authority to execute and deliver this Agreement and all other documents or instruments executed and delivered, or to be executed and delivered, pursuant to this Agreement, and to perform and observe the terms and provisions of all of the above.
402

AGREEMENT TO CONVEY LAND

KATELLA TERRACE

Page 10 ends

Section 4.11 Authority of Persons Executing Documents
This Agreement and all other documents or instruments executed and delivered pursuant to this Agreement have been executed and delivered by persons who are duly authorized to execute and deliver the same for and on behalf of each of the respective Parties. In addition, all actions required under each of the Parties' organizational documents and applicable governing law for the authorization, execution, delivery and performance of this Agreement and all other documents or instruments executed and delivered pursuant to this Agreement, have been duly taken.

ARTICLE 5 ENTIRE AGREEMENT, WAIVERS AND AMENDMENTS
a. This Agreement may be executed in counterparts and/or duplicate originals each of which is deemed to be an original.
b. This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, constitutes the entire understanding and agreement of the parties, and supersedes all negotiations or previous agreements between the parties with respect to all or any part of the Property, except for the Density Bonus Agreement.
c. All waivers of the provisions of this Agreement must be in writing and signed by the appropriate authorities of City or Owner, and all amendments hereto must be in writing and signed by the appropriate authorities of City and Owner. This Agreement and any provisions hereof may be amended by mutual written agreement by Owner and City.

ARTICLE 6 TIME FOR ACCEPTANCE OF AGREEMENT BY CITY; DATE OF

AGREEMENT
This Agreement, when executed by Owner and delivered to City, will not be effective until executed by City following City approval as required by law. If City fails to approve, execute and deliver this Agreement to Owner within ten (10) working days after this Agreement is signed by Owner, Owner will have the right to withdraw its offer to enter into this Agreement by providing written notice to City. This Agreement will be dated for reference purposes as of the date set forth in the introductory paragraph hereof, but will not be effective until executed by City and expiration of any appeals periods applicable thereto (the “Effective Date”). [Remainder of page intentionally left blank; signatures on next page] 403

AGREEMENT TO CONVEY LAND

KATELLA TERRACE

Page 11 ends

IN WITNESS WHEREOF, City and Developer have signed this Agreement as of the dates set opposite their signatures.

THE CITY OF ORANGE
Dated: , 2022 By:

Mark A. Murphy, Mayor
ATTEST:

Pamela Coleman, City Clerk
APPROVED AS TO FORM:

By:

Gary A. Sheatz, City Attorney
APPROVED AS TO FORM:

KANE, BALLMER & BERKMAN
Special Counsel to the City
By:

OSH KATELLA TERRACE LLC., a California
limited liability company
Dated: , 2022 By:

Name:

Its:

Dated: , 2022 By:

Name:

Its:
404
ATTACHMENT NO. 1

LEGAL DESCRIPTION
(Subject to verification by City)
The Property referred to herein below is situated in the City of Orange, County of Orange, State of California, and is described as follows:

PARCEL A:

THAT PORTION OF LOT H OF THE VAN DE GRAAFF TRACT, AS SHOWN ON A MAP THEREOF RECORDED IN BOOK 4, PAGE 440, MISCELLANEOUS RECORDS IN THE

OFFICE OF THE COUNTY RECORDER OF LOS ANGELES COUNTY, SHOWN AS PARCEL 2 ON A MAP THEREOF RECORDED IN BOOK 139, PAGES 5 AND 6 OF PARCEL

MAPS RECORDS OF SAID ORANGE COUNTY, RESERVING THEREFROM CERTAIN

NON-EXCLUSIVE EASEMENTS FOR INGRESS EGRESS AND PARKING PURPOSES, AS

SET FORTH IN THE DECLARATION OF RECIPROCAL EASEMENTS RECORDED OCTOBER 24, 1979 IN BOOK 13367, PAGE 97, AS INSTRUMENT NO. 38132, RECORDS OF ORANGE COUNTY.

PARCEL B:

A NON-EXCLUSIVE EASEMENT FOR INGRESS, EGRESS AND PARKING PURPOSES AS

SET FORTH IN THAT CERTAIN DECLARATION OF RECIPROCAL EASEMENTS RECORDED OCTOBER 24, 1979 IN BOOK 13367, PAGE 97, AS INSTRUMENT NO. 38132, RECORDS OF ORANGE COUNTY, OVER THOSE PORTIONS OF SAID PROPERTY.

APN 375-461-48
405
ATTACHMENT NO. 2

FORM OF LEASE
(Behind this page)
406

GROUND LEASE
By and Between CITY OF ORANGE,
"Landlord"
and
KATELLA TERRACE, L.P.,
"Tenant"
Dated as of ____________, 2022
407
2 GROUND LEASE
THIS GROUND LEASE (the "Lease"), dated, for identification purposes only, as of ____________, 2022 is entered into by and between the City of Orange, a municipal corporation ("Landlord"), and Katella Terrace, L.P., a California limited partnership ("Tenant").

RECITALS
A. WHEREAS, Tenant is controlled by an experienced owner, developer and manager of affordable housing for lower income seniors; and B. WHEREAS, Landlord is the owner of certain real property situated in the City of Orange, County of Orange, State of California, and legally described in Exhibit "A" attached hereto and incorporated herein by this reference (the "Property").

NOW, THEREFORE, for and in consideration of the mutual promises, covenants, and conditions herein contained, Landlord and Tenant agree as follows:

ARTICLE 1. LEASE OF THE PROPERTY

1.1 Lease of the Property. Landlord leases to Tenant, and Tenant leases from Landlord, the Property on the terms and conditions as set forth in this Lease. The lease of the Property to Tenant pursuant to this Ground Lease is subject to (i) that certain Density Bonus Housing Agreement concerning the Property dated January 20, 2020 and recorded in the Official Records, Orange County Clerk-Recorder, on March 2, 2020 as Document No. 2020000090418 (the “Density Bonus Agreement”); (ii) that certain Disposition and Development Agreement entered into by and between Landlord and Tenant dated _________, 2022 (the “DDA”); and (iii) the Regulatory Agreement dated _________, 20__ entered into by and between Landlord and Tenant dated of even date herewith and recorded in the Official Records, Orange County ClerkRecorder, on _____ as Document No. _________ (the “Regulatory Agreement”). Tenant for itself and its successors and assigns to the leasehold interest conveyed by this Ground Lease or any portion thereof or any interest therein covenants and agrees to be bound by the provisions of this Ground Lease, the Density Bonus Agreement, the DDA and the Regulatory Agreement.

1.2 Purpose of Lease. The purpose of this Lease is to provide for the construction, development, maintenance, management and operation of a 74-unit senior housing project and associated uses in accordance with (i) the Density Bonus Agreement; and (ii) the DDA; and (iii) the Regulatory Agreement. Tenant will not occupy or use the Property, nor permit the Property to be occupied or used, nor do or permit anything to be done in or on the Property, in whole or in part, for any other purpose, and the use and occupancy of the Property shall at all times be consistent with the requirements of the Density Bonus Agreement, the DDA and the Regulatory Agreement set forth in Exhibit “E” attached hereto and incorporated herein by this reference..

1.3 Recorded Encumbrances. This Lease, the interests of Landlord and Tenant hereunder, and the Property, are in all respects subject to and bound by all of the covenants, conditions, restrictions, reservations, rights, rights-of-way and easements of record. 408
3 1.4 Memorandum of Lease. A short form Memorandum of Lease referring to this Lease is being executed by Landlord and Tenant concurrently herewith, and recorded in the Official Records of the County of Orange, California.

ARTICLE 2. DEFINITIONS
All capitalized terms used herein may be defined where first used in this Lease and/or as set forth in this Article 2.
"Award" means any compensation or payment made or paid for the Total, Partial or Temporary Taking of all of any part of or interest in the Property and/or the Improvements, whether pursuant to judgment, agreement or otherwise.
"Capital Improvements" means all work and improvements with respect to the Property for which costs and expenses may be capitalized in accordance with generally accepted accounting principles.
"City" means the City of Orange, a California municipal corporation. "Commencement Date" has the meaning set forth in Article 3.
“Civil Code” means the California Civil Code.
"Event of Default" has the meaning set forth in Article 19. “Government Code” means the California Government Code. "Hazardous Materials" means any chemical, substance, object, condition, material, waste, or controlled substance which is or may be hazardous to human health or safety or to the environment, due to its radioactivity, ignitability, corrosiveness, explosivity, flammability, reactivity, toxicity, infectiousness, or other harmful or potentially harmful properties or effects, including, without limitation, all chemicals, substances, materials, or wastes that are now or hereafter may be listed, defined, or regulated in any manner by any federal, state, or local government agency or entity, or under any federal, state, or local law, regulation, ordinance, rule, policy or procedure due to such properties or effects. Notwithstanding the foregoing, "Hazardous Materials" shall not include any substances typically used in the construction, rehabilitation, operation, maintenance or repair of an apartment complex provided that such substances are used in accordance with all applicable laws.
"Impositions" means all taxes (including, without limitation, sales and use taxes); assessments (including, without limitation, all assessments for public improvements or benefits whether or not commenced or completed prior to the Commencement Date and whether or not to be completed within the Term); water, sewer or other rents, rates and charges; excises; levies; license fees; permit fees; inspection fees and other authorization fees and other charges; in each case whether general or special, ordinary or extraordinary, foreseen or unforeseen, of every character (including all interests and penalties thereon), which are attributable or applicable to any portion of the Term and may be assessed, levied, confirmed or imposed on or in respect of, or be 409
4 a lien upon (a) the Property or the Improvements, or any part thereof, or any estate, right or interest therein, (b) any occupancy, use or possession of or activity conducted on the Property or the Improvements, or any part thereof, or (c) this Lease. The term "Impositions" shall also include any and all increases in the foregoing, whether foreseen or unforeseen, ordinary or extraordinary, including, without limitation, any increase in real property taxes resulting from a sale of the Property by Landlord.
"Improvements" means all buildings, structures and other improvements, including the building fixtures thereon, now located on the Property or hereafter constructed on the Property; all landscaping, fencing, walls, paving, curbing, drainage facilities, lighting, parking areas, roadways and similar site improvements now located or hereafter placed upon the Property. "Insurance Requirements" means all terms of any insurance policy covering or applicable to the Property or the Improvements, or any part thereof, all requirements imposed by the issuer of any such policy, and all orders, rules, regulations and other requirements of the National Board of Fire Underwriters (or any other body exercising similar functions) applicable to or affecting the Property or the Improvements, or any part thereof, or any use or condition of the Property or the Improvements, or any part thereof.
"Legal Requirements" means all laws, statutes, codes, acts, ordinances, orders, judgments, decrees, injunctions, rules, regulations, permits, licenses, authorizations, directions and requirements of and agreements with all governments, departments, commissions, boards, courts, authorities, agents, officials and officers, foreseen or unforeseen, ordinary or extraordinary, which now or at any time hereafter may be applicable to the Property or the Improvements, or any part thereof, or to any of the adjoining sidewalks, streets or ways, or to any use or condition of the Property or the Improvements, or any part thereof.
"Memorandum of Lease" refers to the memorandum of lease which has been recorded as described in Section 1.4.
"Mortgage" has the meaning set forth in Section 16.1.1. "Mortgagee" has the meaning set forth in Section 16.1.1. "Notice of Intended Taking" means any notice or notification on which a reasonably prudent person would rely and which said person would interpret as expressing an existing intention of Taking as distinguished from a mere preliminary inquiry or proposal. It includes, without limitation, the service of a condemnation summons and complaint on a party to this Lease.

The notice is considered to have been received when a party to this Lease receives from the condemning agency or entity a notice of intent to take, in writing, containing a description or map of the taking which reasonably defines the extent of the taking. "Partial Taking" means any taking of the fee title of the Property and/or the Improvements that is not either a Total, Substantial or Temporary Taking. 410
5 "Potential Default" means any condition or event which, with the lapse of time or the giving of notice, or both, would constitute an Event of Default. "Project" refers to the Property and the Improvements constructed and maintained thereon.
"Property" has the meaning set forth in Recital "B," above. “Substantial Taking" means the Taking of so much of the Property and/or the Improvements that the portion of the Property and/or the Improvements not taken cannot be repaired or reconstructed, taking into consideration the amount of the Award available for repair or reconstruction, so as to constitute a complete, rentable structure, capable of producing a proportionately fair and reasonable net annual income, and all other charges payable under this Lease, and after performance of all covenants and conditions required by Tenant by law and under this Lease.
"Taking" means a taking or damaging, including severance damage, by eminent domain or by inverse condemnation or for any public or quasi-public use under any statute. The taking may occur as a result of a transfer pursuant to the recording of a final order in condemnation, a voluntary transfer or conveyance to the taking authority under threat of condemnation, or a transfer while condemnation proceedings are pending. Unless otherwise provided, the taking shall be deemed to occur as of the earlier of (a) the date actual physical possession is taken by the condemner, or (b) the date on which the right to compensation and damages accrues under the law applicable to the Property and/or the Improvements. A taking as used in this Lease does not include the voluntary dedication of any portion of the Property necessary to obtain building permits or to comply with any other applicable governmental rule, regulation or statute; nor does it include the enactment of any law, ordinance or regulation which may affect the use or value of the Property but which does not involve an actual taking of any portion thereof. Eminent domain actions filed by Landlord against owners of portions of the Property and pending as of the Commencement Date shall not be deemed, construed or interpreted as a Taking under this Lease. "Temporary Taking" means a Taking of all or any part of the Property and/or the Improvements for a term certain which term is specified at the time of Taking. Temporary Taking does not include a taking which is to last for an indefinite period or a taking which will terminate only upon the happening of a specified event unless it can be determined at the time of the taking substantially when such event will occur. If a Taking for an indefinite term should take place, it shall be treated as a Total, Substantial or Partial Taking in accordance with the definitions set forth herein.
"Term" has the meaning set forth in Article 3.
"Total Taking" means the taking of the fee title to all of the Property. 411
6 ARTICLE 3. TERM
The Term of this Lease shall commence on the date first written above, herein referred to as the "Commencement Date". The Landlord shall record the Memorandum of Lease upon the Commencement Date, and Tenant shall be entitled to possession of the Property upon recordation of the Memorandum of Lease. The Term of this Lease shall commence upon the Commencement Date and shall end 60 years from that date (the "Term").

ARTICLE 4. RENTAL

4.1 Rent. Tenant shall pay to Landlord, an Annual Administrative Fee of Five Thousand Dollars ($5,000.00). In addition to the Annual Administrative Fee, the specific terms of Rent will be negotiated in the DDA, based upon the fair market appraised value of the ground lease, payable in a form consistent with the financial feasibility of the Project.

4.2 Utilities. Tenant shall be responsible for the payment of all water, gas, electricity and other utilities used in connection with the Project and the Property throughout the Term of this Lease.

4.3 Taxes and Assessments.

4.3.1 Payment of Taxes. Subject to any applicable exemptions, Tenant shall pay real property taxes applicable to the Property during the Term of this Lease. All such payments shall be made prior to the delinquency date of such payment. If any such taxes paid by Tenant shall cover any period of time prior to or after the expiration of the Term, Tenant's share of such taxes shall be equitably prorated to cover only the period of time within the tax fiscal year during which this Lease shall be in effect, and Landlord shall reimburse Tenant to the extent required.

4.3.2 Personal Property. Tenant shall pay prior to delinquency all taxes assessed against and levied upon trade fixtures, furnishings, equipment and all other personal property of Tenant contained in the Property or elsewhere. When possible, Tenant shall cause said trade fixtures, furnishings, equipment and all other personal property to be assessed and billed separately from the real property of Landlord.

ARTICLE 5. POSSESSION OF PROPERTY

5.1 Acceptance of Premises. Tenant hereby accepts the Property.

5.2 Ownership of Improvements. During the term of this Lease, (a) fee title to the Property is and shall be vested in Landlord; and (b) fee title to all Improvements, now existing or later made, on the Property are and shall be vested in Tenant.

5.3 Surrender of Property.

5.3.1 Upon Expiration or Termination. Tenant agrees that on expiration or earlier termination of the Term, which in the case of an early termination due to the occurrence of an Event of Default is not timely cured by Tenant in accordance with the provisions of this Lease, 412
7 the leasehold estate hereby granted to Tenant shall be terminated and shall revert to Landlord, and all Improvements on the Property shall become the property of Landlord free and clear from any liens or claims whatsoever (other than non-monetary liens previously approved or otherwise accepted in writing by Landlord), in good condition, reasonable wear and tear excepted without any further compensation therefor from Landlord to Tenant or any other person.

5.3.2 Condition. On expiration or termination of the Term, Tenant shall peaceably and quietly leave and surrender the Property and the Improvements to Landlord in good order, condition and repair, reasonable wear and tear and obsolescence excepted. Tenant shall leave in place and in good order, condition and repair, all fixtures and machinery; except (if Tenant is not then in default under this Lease) Tenant shall have the right to remove only Tenant-owned appliances, other unattached equipment, furniture and merchandise that Tenant shall have installed, which removal must be done without material damage to the Property or Improvements.

Landlord shall have the right to have the Property and the Improvements inspected at Tenant's cost to determine whether the Property and the Improvements have been property maintained, repaired and restored in accordance with the terms of this Lease. That notwithstanding, and subject to the exception of the environmental indemnities that shall survive any termination in perpetuity, Tenant shall not be responsible for the interior physical condition of individual occupied apartments on the termination or expiration of this Lease.

5.3.3 Delivery of Documents. Contemporaneous with the expiration or termination of the Term, upon request of Landlord Tenant shall deliver to Landlord the following:
(a) Such documents, instruments and conveyances as Landlord may reasonably request to enable Landlord's ownership of the Property and the Improvements to be reflected of record, including, without limitation, a quitclaim deed in recordable form to the Property and the Improvements.
(b) All construction plans, surveys, permits, existing contracts for services, maintenance, operation, and other documents relating to use, operation, management, and maintenance of the Improvements as may be in effect and in the possession of Tenant at the time.
(c) All documents and instruments required to be delivered by Tenant to Landlord pursuant to this Section shall be complete, legible, originals or true copies, and shall otherwise be in a form reasonably satisfactory to Landlord.

ARTICLE 6. REPRESENTATIONS AND WARRANTIES

6.1 Landlord's Representations. Landlord represents and warrants to Tenant that it owns the Property in fee simple, free and clear of all monetary encumbrances and has the power and authority to enter into this Lease and perform all obligations and agreements incidental or pertinent to this Lease. Landlord covenants not to voluntarily encumber its fee interest with any monetary encumbrances without the prior written consent of Tenant. 413
8 6.2 Tenant’s Representations.

6.2.1 Tenant represents and warrants to Landlord that it has examined the Property and acknowledges that it hereby accepts possession of the Property in its "AS IS" condition, with all faults and defects, including, without limitation, infestation of or damage to the Property caused by wood-destroying pests or organisms.

6.2.2 Tenant is not in default under any law or regulation or under any order of any federal, state or local court, board, commission or agency whatsoever, and there are no claims, actions, suits or proceedings pending or, to the knowledge of Tenant, threatened against or affecting Tenant or the Property, at law or in equity, before or by any federal, state or local court, board, commission or agency whatsoever that might, if determined adversely to Tenant, materially affect Tenant's ability to perform its obligations hereunder.

6.2.3 All information provided by Tenant to the California Debt Limit Allocation Committee ("CDLAC") and the California Tax Credit Allocation Committee (“TCAC”) shall be true and correct in all material respects as of the date of the applications are submitted. Tenant acknowledges it has an obligation to provide CDLAC, TCAC and Landlord updated information as pertinent.

6.2.4 All documents, materials and information provided by Tenant to Landlord relating to Tenant's qualifications, financial strength, and ability to perform its obligations under this Lease are true, correct and complete in all material respects as of their respective dates, and no material adverse change has occurred, or is reasonably likely to occur, that would make any such documents, materials or information incorrect, incomplete, or misleading in any material respect.

ARTICLE 7. DEVELOPMENT OF THE PROPERTY

7.1 Construction. All Improvements on the Property shall be constructed in a good and workmanlike manner, and shall comply with the Scope of Development attached hereto as Exhibit D and with all applicable governmental permits, laws, ordinances and regulations. Tenant shall comply with the Schedule of Performance attached hereto as Exhibit C. Tenant will construct or cause to be constructed on the Property the Improvements in accordance with this Lease and the DDA, including the Scope of Development. Tenant will carry out the development, construction (as defined by applicable law) and operation of the Project on the Property, including, without limitation, any and all public works (as defined by applicable law), if any, in conformity with all applicable local, state and federal laws, including, without limitation, all applicable federal and state labor laws (including, without limitation, any applicable requirement to pay prevailing wages).

7.2 Site Conditions. All portions of the Property, and any improvements thereon, which are leased to Tenant by Landlord will be leased in an “as is” condition, with no warranty, express or implied, by Landlord as to the condition of the soil, its geology, or the presence of known or unknown faults or the presence of any Hazardous Materials, and it will be the sole responsibility of Tenant, at Tenant’s expense, to investigate and determine the soil conditions of 414
9 the Property and the suitability of the Property for the development of the Project. If the soil conditions of the Property, or any part thereof, are not in all respects entirely suitable for the use or uses to which the Property will be put, then it is the sole responsibility and obligation of Tenant to take such action as may be necessary to place the Property and the soil conditions thereof in all respects in a condition entirely suitable for the development of the Property as described in the DDA and the Scope of Development, which may include demolition, clearing, or moving buildings, structures, or other improvements, and removal of Hazardous Materials. Tenant hereby releases Landlord and its respective officers, employees, agents and consultants from any and all claims, liabilities, losses, damages, judgments, costs or expenses arising from or connected to any and all matters or statements of fact affecting the Property concerning or related to the physical condition of the Property.

7.3 Governmental Approvals. If requested by Landlord in writing, Tenant covenants and agrees to deliver to Landlord conformed copies of all governmental approvals and permits obtained by Tenant for the construction, alteration or reconstruction of any Improvements upon the Property. In no event shall Tenant commence construction of any Improvements pursuant to the provisions of this Article 7 until Tenant shall have obtained all necessary governmental approvals and permits to so construct such Improvements.

7.4 Notice of Non-Responsibility. Landlord shall have the right to record and post appropriate notices of non-responsibility on the Property as may be provided by applicable law.

7.5 Notice of Completion. On completion of construction of the Improvements, Tenant shall file or cause to be filed a notice of completion.

7.6 Subsequent Alterations. Tenant may from time to time, at its sole expense, make improvements and other alterations to the Property which Tenant reasonably determines to be beneficial. Tenant shall timely pay any obligation incurred by Tenant with respect to any such alterations or improvements that could become a lien against the Property.

7.7 Indemnification. Tenant hereby agrees, to the fullest extent of the law, to defend, indemnify and hold harmless Landlord and its members, officers, agents, employees and consultants (hereinafter collectively referred to as “Indemnitees”) from and against any and all loss, damage, cost, expense, liability, claims, demands, suits, reasonable attorneys’ fees and judgments arising directly or indirectly from or in any manner connected to Tenant’s possession, occupancy or use of the Property or arising from or in any manner connected to Tenant’s construction of the Improvements, business, activities, operations, services or work conducted in, on or about the Property regardless of any active or passive negligence by any or all Indemnitees, except as otherwise stated herein.

Tenant further agrees to indemnify, defend and hold harmless Indemnitees from and against all loss, damage, costs, expense, liability, claims, demands, suits, reasonable attorneys’ fees and judgments arising from or in any manner connected to the furnishing or supplying of any work, services, materials, equipment or supplies to Tenant or on Tenant’s behalf by any persons, firms, corporations or other entities in, on or about the Property. 415
10 Indemnitees will be entitled to recovery of attorneys’ fees incurred as a result of Tenant’s failure to provide the defense and indemnity required by this Section 7.7. This Section will survive the expiration or termination of this Lease.

ARTICLE 8. USE OF THE PROPERTY, HAZARDOUS MATERIALS, AND

NONDISCRIMINATION

8.1 No Use of Hazardous Materials on the Property. Tenant covenants and agrees that it shall not use, store, dispose, release, handle or otherwise manage Hazardous Materials on the Property except in connection with any construction, rehabilitation, operation, maintenance or repair of the Improvements or in the ordinary course of its business, and that such conduct shall be done in compliance with all applicable federal, state and local laws.

8.2 Notice and Remediation by Tenant. Tenant shall promptly give the Landlord written notice of any release of any Hazardous Materials, and/or any notices, demands, claims or ordersreceived by Tenant from any governmental agency pertaining to Hazardous Materials which may affect the Property.

8.3 Sub-Tenants. No action by any Sub-Tenant in violation of its sublease shall constitute a cause to terminate this Lease provided that Tenant pursues its available remedies against such Sub-Tenant.

8.4 Nondiscrimination. Tenant covenants by and for itself, its successors and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of any person or group of persons, on account of any basis listed in Government Code Section 12955(a) and (d), as those bases are defined in Sections 12926, 12926.1, 12955(m) and (p)(1), and 12955.2, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, nor shall Tenant, or any person claiming under or through Tenant, establish or permit any practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of Tenants, Sub-Tenants, or vendees in the Property. Notwithstanding the foregoing, with respect to familial status, the foregoing shall not be construed to apply to housing for older persons, as defined in Government Code Section 12955.9. With respect to familial status, nothing herein shall be construed to affect Civil Code Sections 51.2, 51.3, 51.4,

51.10, 51.11 and 799.5, relating to housing for senior citizens. Civil Code Section 51(d) and 1360, and Government Code Section 12955 (n), (o) and (p) shall apply to this Section 8.4.

8.5 Form of Nondiscrimination and Nonsegregation Clauses. All leases and contracts made or entered into by Tenant, itssuccessors or assigns, as to any portion of the Property shall contain the following language:

8.5.1 In leases: “(1) Tenant herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them that there shall be no discrimination against or segregation of, any person or group of persons on account of any basis listed in Government Code Section 12955(a) and (d), asthose bases are defined in Sections 12926, 12926.1, 12955(m) and (p)(1), and 12955.2, in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the Tenant or any person claiming under or 416
11 through the Tenant, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of Tenants, SubTenants, or vendeesin the premises herein leased. (2) Notwithstanding paragraph (1), with respect to familial status, paragraph (1) shall not be construed to apply to housing for older persons, as defined in Government Code Section 12955.9. With respect to familial status, nothing in paragraph (1) shall be construed to affect Civil Code Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5, relating to housing for senior citizens. Civil Code Section 51(d) and 1360, and Government Code Section 12955(n), (o), and (p) shall apply to paragraph (1).”

8.5.2 In contracts: “(1) There shall be no discrimination against or segregation of, any person or group of persons on account of any basis listed in Government Code Section 12955(a) and (d), as those bases are defined in Sections 12926, 12926.1, 12955(m) and (p)(1), and 12955.2, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property nor shall the transferee, or any person claiming under or through the transferee, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of Tenants, Sub-Tenants, or vendees in the premises herein leased. (2) Notwithstanding paragraph (1), with respect to familial status, paragraph (1) shall not be construed to apply to housing for older persons, as defined in Government Code Section 12955.9. With respect to familial status, nothing in paragraph (1) shall be construed to affect Civil Code Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5, relating to housing for senior citizens.

Civil Code Section 51(d) and 1360, and Government Code Section 12955 (n), (o), and (p) shall apply to paragraph (1).”

8.6 Effect and Duration of Covenants. The covenants established in this Article shall, without regard to technical classification and designation, be binding on Tenant and any successor in interest to the Property, or Tenant's leasehold interest therein, or any part thereof, for the benefit and in favor of the Landlord, until the expiration of the Term, except to the extent said covenant expressly provides that it shall survive the expiration of the Term.

8.7 Use of the Property. Tenant will use the Property solely for the construction of the Project, in accordance with this Lease and the DDA, including the Scope of Development, and for the maintenance and operation of the Project in accordance with this Lease, the Density Bonus Agreement and the Regulatory Agreement. Accordingly, the rental, use, occupancy, eligibility of tenants, affordable rent, and allocation of units shall all be in accordance with the Density Bonus Agreement and the Regulatory Agreement.

ARTICLE 9. INSURANCE

9.1 Tenant's Insurance. Without limiting Landlord's right to indemnification, Tenant shall secure and maintain insurance coverage as set forth in this Article.

9.2 Commercial General and Automobile Liability Worker's Compensation.

Commencing on the Commencement Date and continuing throughout the Term of this Lease, Tenant shall procure and maintain, at its sole cost and expense, in a form and content satisfactory to the Landlord and City, the following policies of insurance:
417
12 9.2.1 Commercial General Liability Insurance covering bodily injury, property damage, personal injury, and advertising injury written on a per- occurrence and not a claims-made basis containing the following minimum limits: (i) general aggregate limit of Ten Million Dollars ($10,000,000); (ii) products-completed operations aggregate limit of Three Million Dollars ($3,000,000); (iii) personal and advertising injury limit of One Million Dollars ($1,000,000); and (iv) each occurrence limit of One Million Dollars ($1,000,000). Said policy shall include the following coverages: (I) blanket contractual liability (specifically covering the indemnification clause contained in Section 9.8, below); (II) products and completed operations; (III) independent contractors; (IV) Owner's broad form property damage; (V) severability of interest; (VI) cross liability; and (VII) property damage liability arising out of the so-called "XCU" hazards (explosion, collapse and underground hazards). The policy shall be endorsed to have the general aggregate apply to this Project only.

9.2.2 A policy of worker's compensation insurance in such amount as will fully comply with the laws of the State of California and which shall indemnify, insure, and provide legal defense for Landlord and Tenant against any loss, claim, or damage arising from any injuries or occupational diseases occurring to any worker employed by or any persons retained by Tenant in the course of carrying out the work or services contemplated in this Lease, and Employers Liability Insurance in an amount not less than One Million Dollars ($1,000,000) combined single limit for all damages arising from each accident or occupational disease.

9.2.3 A policy of comprehensive automobile liability insurance written on a peroccurrence basis in an amount not less than Two Million Dollars ($2,000,000) combined single limit covering all owned, non-owned, leased and hired vehicles used in connection with the Work.

9.3 Property; Business Interruption; Boiler and Machinery Insurance.

Commencing on the date Landlord issues a Release of Construction Covenants for the Project and continuing throughout the term of this Lease, Tenant shall procure and maintain, at its sole cost and expense, in a form and content satisfactory to the City, the following insurance:

9.3.1 Insurance against fire, extended coverage, vandalism, and malicious mischief, and such other additional perils, hazards, and risks as now are or may be included in the standard "all risk" form in general use in Orange County, California, with the standard form fire insurance coverage in an amount equal to full actual replacement cost thereof, as the same may change from time to time. The above insurance policy or policies shall include coverage for earthquakes to the extent generally and commercially available at commercially reasonable rates, if such insurance is generally obtained for affordable Projects in the counties of Orange and Los Angeles. Landlord shall be a loss payee under such policy or policies and such insurance shall contain a replacement cost endorsement.

9.3.2 Business interruption and extra expense insurance to protect Tenant and Landlord covering loss of revenues and/or extra expense incurred by reason of the total or partial suspension or delay of, or interruption in, the operation of the Project caused by loss or damage to, or destruction of, any part of the insurable real property structures or equipment as a result of the perils insured against under the all-risk physical damage insurance, covering a period of suspension, delay, or interruption of at least twelve (12) months, in an amount not less than the amount required to cover such business interruption and/or extra expense loss during such period. 418
13 9.3.3 Boiler and machinery insurance in the aggregate amount of the full replacement value of the equipment typically covered by such insurance.

9.4 Contractor Insurance Requirements. Tenant shall cause any general contractor with whom it has contracted for the performance of work on the Property to secure, prior to commencing any activities hereunder, and maintain insurance that satisfies all of the requirements of this Article.

9.5 Additional Requirements. The following additional requirements shall apply to all of the above policies of insurance:

9.5.1 All of the above policies of insurance shall be primary insurance and, except the Worker's Compensation, Employer Liability insurance, and automobile liability insurance, shall name Landlord, City and their respective officers, officials, members, employees, agents, and representatives (collectively, "Landlord and City and Landlord and City Personnel") as additional insureds on an ISO Form CG 20:10 (current version) or substantially similar form and not an ISO Form CG 20:09.The insurer shall waive all rights of subrogation and contribution it may have against Landlord and City and Landlord and City Personnel and their respective insurers. All of said policies of insurance shall provide that said insurance may not be amended or cancelled without providing thirty (30) days' prior written notice to Landlord. In the event any of said policies of insurance are cancelled, Tenant shall, prior to the cancellation date, submit new evidence of insurance in conformance with this Section to the Landlord. Not later than the Commencement Date, Tenant shall provide the Landlord and City with Certificates of Insurance or appropriate insurance binders evidencing the above insurance coverages and said Certificates of Insurance or binders shall be subject to the reasonable approval of the Landlord and City.

9.5.2 The policies of insurance required by this Lease shall be satisfactory only if issued by companies of recognized good standing authorized to do business in California, rated "A-" or better in the most recent edition of Best Rating Guide, The Key Rating Guide or in the Federal Register, and only if they are of a financial category Class VII or better, unless such requirements are waived by the Landlord and City due to unique circumstances.

9.5.3 Tenant agrees that the provisions of this Section shall not be construed as limiting in any way Landlord's right to indemnification or the extent to which Tenant may be held responsible for the payment of damages to any persons or property resulting from Tenant's activities or the activities of any person or persons for which Tenant is otherwise responsible.

9.6 Remedies for Defaults Regarding Insurance. In addition to any other remedies Landlord may have if Tenant fails to provide or maintain any insurance policies or policy endorsements to the extent and within the time herein required, Landlord may, at its sole option, after thirty (30) days’ Notice to Tenant:

9.6.1 Obtain such insurance and charge Tenant the amount of the premium for such insurance, in which event Tenant shall promptly remit such sum to Landlord;

9.6.2 Withhold any payment(s) which become due to Tenant hereunder until Tenant demonstrates compliance with the requirements hereof; and 419
14 9.6.3 Declare Tenant in Default and exercise its rights and remedies under this Lease.

Exercise of any of the above remedies, however, is an alternative to other remedies Landlord may have and is not the exclusive remedy for Tenant's failure to maintain insurance or secure appropriate endorsements.

Nothing herein contained shall be construed as limiting in any way the extent to which Tenant may be held responsible for payment of damages to persons or property resulting from Tenant's contractors or any subcontractor's performance under this Lease.

ARTICLE 10. MAINTENANCE; REPAIRS; ALTERATIONS; RECONSTRUCTION Throughout the Term, Tenant shall, at Tenant's sole cost and expense, maintain the Property and the Improvements in good condition and repair, ordinary wear and tear excepted, and in accordance with all applicable federal, state and local laws, ordinances and regulations of governmental agencies having jurisdiction.

ARTICLE 11. OWNERSHIP OF AND RESPONSIBILITY FOR IMPROVEMENTS

11.1 Ownership During Term.

11.1.1 Improvements. All Improvements on the Property as permitted or required by this Lease shall, during the Term, be and remain the property of Tenant in fee title, and Landlord shall not have title thereto.

11.1.2 Personal Property. All personal property, furnishings, fixtures and equipment, including, without limitation, Tenant-owned appliances, which are not so affixed to the Property or the buildings thereon as to require substantial damage to the buildings upon removal thereof shall constitute personal property including, but not limited to: (a) functional items related to the everyday operations of the Property; (b) personal property furnishings, fixtures and equipment of the nature or type deemed by law as permanently resting upon or attached to the buildings or land by any means, including, without limitation, cement, plaster, nails, bolts or screws, or essential to the ordinary and convenient use of the Property and the Improvements. At any time during the Term and at termination thereof, Tenant shall have the right to remove any and all such personal property, furnishings, fixtures and equipment; provided that Tenant repairs any damage to the Property or the Improvements caused by such removal.

11.1.3 Basic Building Systems. For purposes of this Lease, the personal property, furnishings, fixtures and equipment described in this Section 11.1 shall not include those major building components or fixtures necessary for operation of the basic building systems such as, but not limited to, the elevators, plumbing, sanitary fixtures, heating and central air-cooling system.

11.2 Ownership at Expiration or Termination.
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15 11.2.1 Property of Landlord. At the expiration or earlier termination of the Term, except as provided in Section 11.2.2, all Improvements which constitute or are a part of the Property shall become the property of Landlord.

11.2.2 Removal by Tenant. Tenant shall not be required or permitted to remove the Improvements, or any of them, at the expiration or sooner termination of the Term; provided, however, that subject to the provisions of Section 5.3.2, within thirty (30) days following the expiration or earlier termination of the Term, Tenant may remove all personal property, furniture and equipment.

11.2.3 Unremoved Property. Any personal property, furnishings or equipment not removed by Tenant within thirty (30) days after the expiration or sooner termination of the Term, shall, without compensation to Tenant, become Landlord's property, free and clear of all claims to or against them by Tenant or any third person, firm or entity arising by, through or under Tenant.

11.2.4 Maintenance and Repair of Improvements. Subject to the provisions of this Lease concerning condemnation, alterations and damage and destruction, Tenant agrees to assume full responsibility for the operation and maintenance of the Property and the Improvements and all fixtures and furnishings thereon or therein throughout the Term of the Lease without expense to Landlord, and to maintain and preserve the Property and Improvements in a decent, safe and sanitary condition consistent with all applicable laws. Tenant agrees that Landlord shall not be required to perform any maintenance, repairs or services, or to assume any expense not specifically assumed herein in connection with the Property and Improvements unless specifically required under the terms of this Lease.

11.3 Waste. Subject to the alteration rights of Tenant and damage and destruction or condemnation of the Property or any part thereof, Tenant shall not commit or suffer to be committed any waste of the Property or the Improvements, or any part thereof. Tenant agrees to keep the Property and the Improvements clean and clear of refuse and obstructions, and to dispose properly of all garbage, trash and rubbish.

ARTICLE 12. DAMAGE OR DESTRUCTION OF PROPERTY OR IMPROVEMENTS

12.1 Tenant's Repair Obligation.

12.1.1 In case of damage to or destruction of the Property or the Improvements, or any part thereof, by fire or other cause at any time during the Term of this Lease, Tenant, if and to the extent sufficient insurance proceeds and reserves are available to restore the Property and each Mortgagee approves the application of such proceeds to payment of costs of restoration of the Property to the extent such approval is required under such Mortgagee's loan documents, shall restore the same as nearly as possible to condition and character immediately prior to such damage or destruction. Such restoration shall be commenced with due diligence and in good faith, and prosecuted with due diligence and in good faith, unavoidable delays excepted. If, in case of damage to or destruction of the Property or the Improvements and with consent and approval of each Mortgagee, Tenant elects to terminate this Lease, Tenant shall provide Landlord with written notice of such election within ninety (90) days of the date such damage or destruction occurs, 421
16 Tenant shall clear the Property of the damaged Improvements and any debris, and this Lease shall immediately terminate concurrently with Landlord's receipt of such election.

12.2 Tenant's Restoration of Premises.

12.2.1 If, during the Term, the Improvements are damaged or destroyed, Tenant shall make the loss adjustment with the insurance company insuring the loss. The proceeds shall be paid directly to the Mortgagee, if any, whose Mortgage is first in priority of lien for application in accordance with the provisions of such Mortgage (notwithstanding anything else in this Lease to the contrary), and if there is not a Mortgagee, to Tenant for the purpose of making the restoration of the Improvements in accordance with this Article.

12.2.2 Both parties shall promptly execute all documents and perform all acts reasonably required by the Insurance Trustee to perform its obligations under this Section 12.2.

12.3 Procedure for Restoring Improvements.

12.3.1 The restoration shall be accomplished as follows:
(a) Tenant shall complete the restoration within twenty-four (24) months after final plans and specifications and working drawings have been approved by the appropriate government bodies and all required permits have been obtained. (b) Tenant shall retain a licensed contractor that is bendable. During the construction period, the contractor shall be required to carry public liability and property damage insurance, builders risk insurance, standard fire and extended coverage insurance, with vandalism and malicious mischief endorsements in accordance with Article 9. (c) Tenant shall notify Landlord of the date of commencement of the restoration not later than ten (10) days prior to commencement of restoration to enable Landlord to post and record notices of non-responsibility.
(d) Tenant shall accomplish the restoration in a manner that will cause the least inconvenience, annoyance, and disruption to the Property and the Improvements. (e) On completion of the restoration, Tenant shall immediately record a notice of completion.

12.4 Mortgagee Protection. The following provisions are for the protection of a Mortgagee and shall, notwithstanding anything contained in this Lease to the contrary, control; provided, however, in the event of any conflict between the terms of this Section and the terms of any Mortgage, the terms of such Mortgage shall prevail:

12.4.1 Insurance. Any insurance proceeds payable from any policy of insurance (other than liability insurance) required by this Lease shall be paid to the Mortgagee, if any, to the extent required by the Mortgage. The Mortgagee, if any, shall have the right to participate in all adjustments,settlements, negotiations or actions with the insurance company regarding the amount 422
17 and allocation of any such insurance proceeds. Any insurance policies permitted or required by this Lease shall name the Mortgagee, if any, as an additional insured or loss payee, as appropriate, if required by such Mortgage.

12.4.2 Restoration. Tenant shall have no obligation to restore or repair the Improvements following the occurrence of any casualty for which insurance is not required under this Lease. Tenant shall have no obligation to restore or repair damage to the Improvements that cost in excess of available insurance proceeds. In addition, Tenant shall have no obligation to restore or repair damage to the Improvements if the casualty occurs during the last five (5) years of this Lease term. In the event such a loss occurs in the last five years, then, at the election of Tenant, with the prior written consent of the Mortgagee, if any, insurance proceeds shall be used, first, to reduce or pay in full the Mortgage, and, second, to clear the Property of the damaged Improvements and any debris, with any excess being payable as provided in this Lease.

ARTICLE 13. EMINENT DOMAIN

13.1 Notice. The party receiving any notice of the kind specified in this Section 13.1 shall promptly give the other party and each Mortgagee, if any, notice of the receipt, contents and date of the notice received. For purposes of this Article, the term "Notice" shall include:

13.1.1 Notice of Intended Taking;

13.1.2 Service of any legal process relating to condemnation of the Property or the Improvements;

13.1.3 Notice in connection with any proceedings or negotiations with respect to such condemnation; or

13.1.4 Notice of intent or willingness to make or negotiate a private purchase, sale or transfer in lieu of condemnation.

13.2 Representation in Proceedings or Negotiations. Landlord and Tenant shall each have the right to represent their respective interests in each proceeding or negotiation with respect to a Taking or intended Taking and to make full proof of their claims. No agreements or settlement with or sale or transfer to the condemning authority shall be made without the consent of Tenant.

Landlord and Tenant each agree to execute and deliver to the other any instruments which may be required to effectuate or facilitate the provisions of this Lease relating to condemnation.

13.3 Total Taking.

13.3.1 In the event of a Total Taking, this Lease shall terminate as of the date of the Taking.

13.3.2 If this Lease is terminated pursuant to this Section 13.3, the Award for such Taking shall be apportioned and distributed as follows:
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18 (a) First, to the Mortgagee, if any, whose Mortgage is first in priority of lien to the extent of such Mortgage and then to other Mortgagees in the order of priority of lien of their respective Mortgages;
(b) Second, to Landlord, a sum equal to the fair market value of Landlord's fee interest in the Property (subject to the remaining Term and the rent reserved) on the date immediately preceding the Taking or threat of condemnation, as determined by the appraisal method set forth in Article 14;
(c) Third, to Tenant, a sum equal to the fair market value of the Improvements made by Tenant on the date immediately preceding the Taking as determined by the appraisal method set forth in Article 14 and determined as if there were no Taking, nor threat of condemnation; plus the residual value of the Term, subject to the rent reserved; plus any part of the Award attributable to the Tax Credits; and
(d) Fourth, to Landlord, the remainder, if any.

13.4 Substantial Taking.

13.4.1 In the event of a Taking which, in Tenant's and Landlord's mutually agreeable judgment is substantial, Tenant may, with the consent and subject to the rights of each Mortgagee, if any, terminate this Lease. For purposes hereof, a Taking shall be deemed "substantial" if it renders the Property economically infeasible for Tenant's intended purpose. If Tenant elects to terminate this Lease under this provision, Tenant shall give written notice of its election to do so to Landlord within forty-five (45) days after receipt of a copy of a Notice of Intended Taking. In the event Landlord disputes the right of Tenant to terminate this Lease under this provision, Landlord shall give Tenant notice of this fact within forty-five (45 days) after receiving the notice of Tenant's election to terminate, and the parties shall either raise this issue in the eminent domain proceeding, if any, as an issue with respect to the apportionment of the Award between Landlord and Tenant or, if there is no eminent domain proceeding, pursue other remedies a permitted by Section 19.2. In the event it is determined that Tenant does not have the right to terminate this Lease, the apportionment of the Award forsuch Taking and the obligations of Tenant to restore shall be governed by the terms of Section 13.6 or Section 13.7, whichever is applicable.

13.4.2 In the event Tenant terminates this Lease in accordance with this Section

13.4,such termination shall be as of the time when the Taking entity takes possession of the portion of the Property and the Improvements taken. In such event, the Award for such Substantial Taking (including any award for severance, consequential or other damages which will accrue to the portion of the Property and/or the Improvements not taken) shall be apportioned and distributed as follows:
(a) First, to the Mortgagee, if any, whose Mortgage is first in priority of lien to the extent of such Mortgage and then to other Mortgagees in the order of priority of lien of their respective Mortgages to the extent of such Mortgages; 424
19 (b) Second, to Landlord, a sum equal to the fair market value of Landlord's fee interest in the Property taken (subject to the remaining Term and Rent reserved) on the date immediately preceding the Taking as determined by the appraisal process provided for in Section 14.9 commenced as provided in Section 13.3.2;
(c) Third, to Landlord, a sum equal to the portion of the Award for severance, consequential or other damages which accrued to the portion of Landlord's fee interest in the Property not taken;
(d) Fourth, to Tenant a sum equal to the fair market value of the Improvements made by Tenant taken preceding the date of the Taking as determined by the appraisal process provided for in Article 14, commenced as provided in Section 13.3.2, and as modified by Section 13.6.3; plus the residual value of the Term, subject to the rent reserved; plus any part of the Award attributable to the Tax Credits; and (e) Fifth, to Landlord, the remainder, if any.

13.5 Tenant's Right to Revoke Notice of Termination. Notwithstanding anything to the contrary contained in Section 13.4, if Tenant has elected to terminate this Lease, and the taking authority abandons or revises the Taking, Tenant shall have forty-five (45) days from receipt of written notice of such abandonment or revision to revoke its notice of termination of this Lease.

13.6 Partial Taking.

13.6.1 In the event of a Partial Taking, this Lease shall continue in full force and effect and there shall be no abatement in or reduction of any of Tenant's obligations hereunder.

13.6.2 The Award for such Partial Taking shall be apportioned and distributed first to the Mortgagee, if any, whose Mortgage is first in priority of lien to the extent of such Mortgage and then to other Mortgagees in the order of priority of lien of their respective Mortgages to the extent of such Mortgages, then to Landlord and Tenant in proportion to the fair market value of their respective interests in the Property and Improvements, as such interests existed immediately prior to such Partial Taking. Notwithstanding anything contained herein to the contrary, any part of the Award attributable to the Low Income Housing Tax Credit shall belong to Tenant.

13.6.3 The fair market value of the parties' respective interests in the Property and the Improvements shall be determined by the appraisal process provided in Article 14, except that the assumptions listed in such Article shall not apply. Rather, the appraisal shall be based on the value of the Property as improved and encumbered by this Lease and on the value of the Improvements as they stand, but without regard to any Taking or threat of condemnation.

13.6.4 Any Award for severance, consequential or other damages which accrues by reason of the Partial Taking to the portion of the Property or the Improvements not taken shall be distributed first to the Mortgagee, if any, to the extent of the Mortgage, then shall be apportioned between Landlord and Tenant in accordance with the diminution in value of their respective interests.
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20 13.7 Obligation to Repair on Partial Taking: Promptly after any Partial Taking, and regardless of the amount of the Award for such Taking, Tenant shall, to the extent of the Award received by Tenant, and in the mannerspecified in the provisions of this Lease, repair, alter, modify or reconstruct the Improvements and/or other improvements on the Property so as to make them usable for the designated purpose and capable of producing a fair and reasonable net income.

13.8 Temporary Taking.

13.8.1 In the event of a Temporary Taking of the whole or any part of the Property and/or Improvements, the Term shall not be reduced or affected in any way and Tenant shall continue to pay in full any sum or sums of money and charges herein reserved and provided to be paid by Tenant, and, subject to the other provisions of this Section, Tenant shall be entitled to any Award or payment for the temporary use of the Property and/or Improvements prior to the termination of this Lease, and Landlord shall be entitled to any Award or payment for such use after the termination of this Lease.

13.8.2 If, after the occurrence of a Temporary Taking, possession of the Property and/or Improvements shall revert to Tenant prior to the expiration of the Term of the Lease, Tenant shall, to the extent of the amount of any award or payment, unless at such time there remains less than five (5) years in the Term, restore the Property and/or Improvements, and in all other respects indemnify and hold Landlord harmless from the effects of such Taking so that the Property and/or Improvements in every respect shall upon completion of such restoration be in the same condition as they were prior to the Taking thereof.

13.8.3 Any Award or payment for damages or cost of restoration made on or after the termination of this Lease shall be paid first to the Mortgagee, if any, to the extent of the Mortgage, then to Landlord absolutely, together with the remaining balance of any other funds paid to Tenant for such damages or cost of restoration. Tenant shall thereupon be excused from any obligation to restore the Property and/or Improvements upon the termination of such Taking except that any obligation that may have accrued for Tenant to restore the Property and/or Improvements prior to the commencement of said Taking shall continue to be the obligation of Tenant.

ARTICLE 14. APPRAISAL
Whenever an appraisal of the Property is called for under the terms of this Lease, the parties shall use the following procedure:

14.1 Appointment of Appraiser. Within ten (10) days after notice from Landlord to Tenant or Tenant to Landlord, as the case may be, and in each case with a copy to each Mortgagee, if any, Landlord and Tenant shall each appoint an MAI appraiser to participate in the appraisal process provided for in this Article and shall give written notice thereof to the other party and each Mortgagee, if any. Upon the failure of either party so to appoint, the non-defaulting party shall have the right to apply to the Superior Court of Orange County, California, to appoint an appraiser to represent the defaulting party. Within ten (10) days of the parties' appointment, the two (2) 426
21 appraisers shall jointly appoint a third MAI appraiser and give written notice thereof to Landlord and Tenant, with a copy to each Mortgagee, if any, or if within ten (10) days of the appointment of said appraisers the two (2) appraisers shall fail to appoint a third, then either party hereto shall have the right to make application to said Superior Court to appoint such third appraiser.

14.2 Determination of Fair Market Value.

14.2.1 Within thirty (30) days after the appointment of the third appraiser, the appraisers shall determine the fair market value of the Property and the Improvements in accordance with the provisions hereof, and shall execute and acknowledge their determination of fair market value in writing and cause a copy thereof to be delivered to each of the parties hereto.

14.2.2 The appraisers shall determine the fair market value of the Property and the Improvements as of the date of Landlord's notice referred to in Section 14.1, based on sales of comparable property in the area in which the Property is located. If, however, in the judgment of a majority of the appraisers, no such comparable sales are available, then the appraisal shall be based on the following assumptions: (i) that the Property is free and clear of this Lease, and all easements and encumbrances; and (ii) that the Property is available for immediate sale and development for the purposes and at the density and intensity of development permitted under the zoning, subdivision and land use planning ordinances and regulations applicable to the Property in effect on the Commencement Date of this Lease, and any changes or amendments thereto or modification or variance from the provisions thereof or conditional use permits which could reasonably be anticipated to have been granted or approved as of the date of this Lease.

Notwithstanding anything contained herein to the contrary, if the appraisal, for the particular purposes for which it is being done, should reasonably reflect the rent restrictions imposed on the Property pursuant to the Regulatory Agreement attached hereto as Exhibit E and/or the Tax Credit Program, then such rent restrictions shall be taken into consideration by the appraisers.

14.2.3 If a majority of the appraisers are unable to agree on fair market value within thirty (30) days of the appointment of the third appraiser, the three (3) appraisals shall be added together and their total divided by three (3). The resulting quotient shall be the fair market value of the Property and the Improvements. If, however, the low appraisal and/or high appraisal is or are more than ten percent (10%) lower and/or higher than the middle appraisal, the low and/or high appraisal shall be rounded up/down to ten percent (10%) lower or higher than the middle appraisal and the three appraisals shall thereafter be divided by three (3).

14.3 Payment of Fees. Each of the parties hereto shall (a) pay for the services of its appointee, (b) pay one-half (1/2) of the fee charged by the appraiser selected by their appointees, and (c) pay one-half (1/2) of all other proper costs of the appraisal.

ARTICLE 15. ASSIGNMENT

15.1 Prohibition Against Transfer During the Term. Because of the importance that Landlord places on Tenant's qualification, expertise and identity, and the reliance Landlord makes upon Tenant's ability to construct and operate the Project, during the Term except for Permitted Transfers and otherwise as provided pursuant to Article 16, Tenant shall not assign or attempt to 427
22 assign this Lease or any right herein. For purposes hereof, the following transfers shall be deemed to be "Permitted Transfers" for purposes of the Lease:

15.1.1 A conveyance of a security interest in Tenant's leasehold estate in the Property in connection with any Mortgage and any subsequent transfer of title to such leasehold estate by foreclosure, deed or other conveyance in lieu of foreclosure in connection therewith to a Mortgagee or an affiliate of a Mortgagee, and thereafter the first transfer to an unaffiliated person;

15.1.2 The removal of the one or more of the general partners of the Tenant for cause in accordance with Tenant's partnership agreement and replacement of said within 90 days from the date the general partner is removed, which replacement shall be subject to the prior written consent of the Landlord, which consent shall not be unreasonably withheld, delayed, or conditioned;

15.1.3 The sale and/or assignment of the Tenant's limited partner, the "Equity Partner's" limited partnership interest in Tenant;

15.1.4 Subject to the restrictions imposed by the Regulatory Agreement attached hereto as Exhibit E, the rental or lease for occupancy of each of the apartment units in the Project to income qualified households at the defined affordable rents;

15.1.5 The granting of easements or permits to facilitate development of the Property in accordance with this Agreement;

15.1.6 In addition, the withdrawal, removal and/or replacement of any managing member of Tenant's limited liability company or general partner of Tenant's partnership, as the case may be, pursuant to the terms of the Tenant's partnership agreement, as the case may be, shall not constitute a default hereunder, provided that any required substitute member or general partner, as the case may be, is reasonably acceptable to Landlord and is selected with reasonable promptness;

15.1.7 Any transfer approved in writing by the Landlord; and

15.1.8 The transfer by Tenant of the leasehold estate in the Property to a limited liability company or limited partnership established for the purpose of owning, developing and operating the Property, in which Tenant is a general partner or member and the Equity Partner is the investor limited partner or investor member.

15.2 Other Rights of Mortgagees. Landlord agrees that nothing in this Lease shall be construed to limit or abrogate the rights of a Mortgagee to (a) seek the appointment of a receiver, or (b) delegate or assign its rights under this Lease to any third party in connection with the exercise of said Mortgagee's rights and remedies under its Mortgage.

ARTICLE 16. MORTGAGES

16.1 Leasehold Mortgages.
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23 16.1.1 General Provisions. At all times during the Term, Tenant shall have the right to mortgage, pledge, deed in trust, assign rents, issues and profits and/or collaterally (or absolutely for purposes of security if required by any Mortgagee) assign its interest in this Lease (but in no event Landlord's fee interest in the Property), or otherwise encumber this Lease, and/or the interest of Tenant hereunder, in whole or in part, and any interests or rights appurtenant to this Lease, and to assign or pledge the same as security for any debt (the holder of any such mortgage, pledge or other encumbrance, and the beneficiary of any such deed of trust being hereafter referred to as "Mortgagee" and the mortgage, pledge, deed of trust or other instrument hereafter referred to as "Mortgage"), upon and subject to each and all of the following terms and conditions:
(a) Any permitted Mortgages entered into by Tenant are to be originated only by lenders approved in writing by Landlord, which approval will not be unreasonably withheld. Landlord shall state the reasons for any such disapproval. Notwithstanding the forgoing, Landlord shall be deemed to have automatically approved (i) a commercial or savings bank, a trust company, an insurance company, a savings and loan association, a building and loan association, an educational institution, or a pension, retirement or welfare fund; or (ii) any governmental agency or quasi-governmental agency, including, without limitation, the City of Orange, the County of Orange, or the State of California. Tenant may change the existing financing on this Property, by paying off any existing permitted Mortgage with the proceeds of a new Mortgage or adding one or more mortgages to the existing Mortgage without the consent of Landlord. Notwithstanding the foregoing, if at any time after the Commencement Date, Tenant wishes to refinance the Project using the proceeds generated by the sale of Low Income Housing Tax Credits, Landlord reserves the right to approve the terms of any such refinancing. (b) All rights acquired by said Mortgagee shall be subject to each and all of the covenants, conditions and restrictions set forth in this Lease, and to all rights of Landlord thereunder, none of which covenants, conditions and restrictions is or shall be waived by Landlord by reason of the giving of such Mortgage.
(c) If Tenant encumbers its leasehold estate by way of a Mortgage as permitted herein, and if Landlord is advised in writing of the name and address of the Mortgagee, then this Lease shall not be terminated or canceled on account of any Event of Default by Tenant in the performance of the terms, covenants or conditions hereof, nor shall Landlord be entitled to exercise any other remedies under Section 19.2, until Landlord shall have complied with the provisions of Section 16.2 as to the Mortgagee's rights to cure and to obtain a New Lease.

16.1.2 Consent of Mortgagee Required. No cancellation, surrender, termination, or modification of this Lease shall be effective without the written consent of the holder of any Mortgage.

16.2 Rights and Obligations of Leasehold Mortgagees. If Tenant or Tenant's successors or assigns shall mortgage the leasehold interest herein demised, then, as long as any such Mortgage shall remain unsatisfied of record, the following provisions shall apply:
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24 16.2.1 No Cancellation. Landlord will not cancel, accept a surrender of, terminate or modify this Lease without the prior consent in writing of the Mortgagee.

16.2.2 Notice of Defaults. Landlord agrees to give Mortgagee immediate notice of all defaults by Tenant under this Lease, and to simultaneously give to Mortgagee a written copy of all notices and demands that Landlord gives to Tenant. No notice or demand under this Lease shall be effective until after notice is received by Mortgagee. Any notices of default given by Landlord under this Lease shall describe the default(s) with reasonable detail. Mortgagee shall have the right to cure any breach or default within the time periods given below.

16.2.3 Mortgagee's Cure Rights.
(a) Notice and Cure. After receipt by Tenant of a notice of default under this Lease and the expiration of any applicable period of cure given to Tenant under this Lease, Landlord shall deliver an additional notice ("Mortgagee's Notice") to Mortgagee specifying the default and stating that Tenant's period of cure has expired. Mortgagee shall thereupon have the additional periods of time to cure any uncured default, as set forth below, without payment of default charges, fees, late charges or interest that might otherwise be payable by Tenant. Landlord shall not terminate this Lease or exercise its other remedies under this Lease if:
(i) Within 90 days after Mortgagee's receipt of the Mortgagee's Notice, Mortgagee (i) cures the default, or (ii) if the default reasonably requires more than 90 days to cure, commences to cure said default and diligently prosecutes the same to completion, but in no event later than 180 days after Mortgagee’s receipt of the Mortgagee’s Notice; or (ii) Where the default cannot be cured by payment or
expenditure of money or without possession of the Property or otherwise, Mortgagee initiates foreclosure or other appropriate proceedings within 90 days after receipt of the Mortgagee's Notice, cures all other defaults, complies with all other covenants and conditions of this Lease, and continues to pay all rents, real property taxes and assessments, and insurance premiums to be paid by Tenant under this Lease. Mortgagee shall then have 120 days following the later to occur of (i) the date of execution and delivery of a new lease of the Property pursuant to Section 16.2.4 (a "New Lease"), or (ii) the date on which Mortgagee or its nominee is able to occupy the Property following eviction of or vacating by Tenant under this Lease, to cure such default; provided, however, that if any such default, by its nature, is such that it cannot practicably be cured within 120 days, then Mortgagee shall have such time as shall be reasonably necessary to cure the default provided that Mortgagee commences such cure within such 120-day period and thereafter diligently prosecutes the cure to completion, but in no event later than one (1) year following such occupancy.
(b) Landlord agrees to accept performance by Mortgagee of all cures, conditions and covenants as though performed by Tenant, and agrees to permit Mortgagee access to the Property to take all such actions as may be necessary or useful to perform any condition or covenants of this Lease or to cure any default of Tenant. (c) If Mortgagee elects any of the above-mentioned options, then upon Mortgagee's acquisition of this Lease by foreclosure, whether by power of sale or otherwise or by deed or assignment in lieu of foreclosure, or if a receiver be appointed, this Lease shall continue 430
25 in full force and effect, provided that, if Mortgagee elects the option provided in Section

16.2.3(a)(ii), then upon Mortgagee's acquisition of this Lease, Mortgagee shall cure all prior defaults of Tenant under this Lease within the time set forth in said Section, and Landlord shall treat Mortgagee as Tenant under this Lease. If Mortgagee commences an action as set forth in Section 16.2.3(a)(ii), and thereafter Tenant cures such defaults (which cure Landlord shall be obligated to accept) and Mortgagee then terminates all proceedings under the option in said Section, then this Lease shall remain in full force and effect between Landlord and Tenant.

16.2.4 New Lease. In the event this Lease is terminated for any reason prior to the end of this Lease Term, Landlord shall enter into a new lease ("New Lease") with Mortgagee or Mortgagee's nominee covering the Property, provided that Mortgagee (a) requests such New Lease by written notice to Landlord within ninety (90) days after written notice by Landlord of termination of this Lease, and (b) cures all prior defaults of Tenant that are reasonably capable of being cured by Mortgagee. The New Lease shall be for the remainder of this Lease Term, effective at the date of such termination, and shall include all the rents and all the covenants, agreements, conditions, provisions, restrictions and limitations contained in this Lease. In connection with a New Lease, Landlord shall assign to Mortgagee or its nominee all of Landlord's interest in all existing subleases of all or any part of the Property and all attornment given by the Sub-Tenants.

Landlord shall not terminate or agree to terminate any sublease or enter into any new lease or sublease for all or any portion of the Property without Mortgagee's prior written consent, unless Mortgagee fails to timely deliver its request for a New Lease under this Section. In connection with any such New Lease, Landlord shall, by grant deed, convey to Mortgagee or its nominee title to the Improvements, if any, which become vested in Landlord as a result of termination of this Lease. Landlord shall allow to the Tenant under the New Lease a credit against rent equal to the net income derived by Landlord from the Property during the period from the date of termination of this Lease until the date of execution of the New Lease under this Section.

16.2.5 Security Deposits. Mortgagee or any other purchaser at a foreclosure sale of the Mortgage (or Mortgagee or its nominee if one of them enters into a New Lease with Landlord) shall succeed to all the interest of Tenant in any security or other deposits or other impound payments paid by Tenant to Landlord.

16.2.6 Permitted Delays. So long as Mortgagee is prevented by any process or injunction issued by any court or by any statutory stay, or by reason of any action by any court having jurisdiction of any bankruptcy or insolvency proceeding involving Tenant, from commencing or prosecuting foreclosure or other appropriate proceedings in the nature thereof, Mortgagee shall not be deemed for that reason to have failed to commence such proceedings or to have failed to diligently prosecute such proceedings, provided that Mortgagee uses reasonable efforts to contest and appeal the issuance or continuance of any such process, stay or injunction.

16.2.7 Defaults Deemed Cured. On transfer of this Lease at any foreclosure sale under the Mortgage or by deed or assignment in lieu of foreclosure, or upon creation of a New Lease, any or all of the following defaults relating to the prior owner of this Lease shall be deemed cured:
(a) Attachment, execution or other judicial levy upon this Lease; 431
26 (b) Assignment of this Lease for the direct or indirect benefit of creditors of the prior Tenant;
(c) Judicial appointment of a receiver or similar officer to take possession of this Lease;
(d) Filing any petition by, for or against Tenant under any chapter of the federal Bankruptcy Act or any federal or state debtor relief statute, as amended; (e) Any failure by Tenant to make a disclosure of a hazardous substance release as required by the California Health and Safety Code, this Lease or otherwise; and (f) Any other defaults personal to Tenant and/or not otherwise reasonably curable by Mortgagee.

16.2.8 Anything herein contained to the contrary notwithstanding, the provisions of this Section shall inure only to the benefit of the holders of Mortgages. If the holders of more than one such Mortgage shall make written requests upon Landlord in accordance with this Lease, the new lease (as provided for in Section 16.2.4) shall be entered into pursuant to the request of the holder whose Mortgage shall be prior in lien thereto and thereupon the written requests for a new lease of each holder of a Mortgage junior in lien shall be and be deemed to be void and of no force or effect.

16.3 Landlord's Forbearance and Right to Cure Defaults on Leasehold Mortgages.

16.3.1 Notice. Landlord will give to any Mortgagee, at such address as is specified by the Mortgagee in accordance with Section 23.1, a copy of each notice or other communication with respect to any claim that a default exists or is about to exist from Landlord to Tenant hereunder at the time of giving such notice or communication to Tenant, and Landlord will give to the Mortgagee a copy of each notice of any rejection of this Lease by any trustee in bankruptcy of Tenant; provided, however, that a failure by Landlord to provide any such notice to Mortgagee shall not excuse a default by Tenant or extend Tenant's time to perform its obligations hereunder or effectuate a cure ofsaid default. Each such notice to a Mortgagee shall be given by U.S. certified mail, postage prepaid, return receipt requested, and shall be effective upon receipt.

16.3.2 Mortgagee's Transferees, Etc. In the event the leasehold estate hereunder shall be acquired by foreclosure, trustee's sale or deed or assignment in lieu of foreclosure of a Mortgage, the purchaser at such sale or the transferee by such assignment and its successors as holders of the leasehold estate hereunder shall not be liable for any rent, if any, or other obligations accruing after its or their subsequent sale or transfer of such leasehold estate and such purchaser or transferee and its successors shall be entitled to transfer such estate or interest without consent or approval of Landlord; provided that, the purchaser or transferee or successor as holder of the leasehold estate hereunder shall be liable for the payment of all rent, if any, becoming due with respect to the period during which such purchaser, transferee or other successor is the holder of the leasehold estate hereunder. This Section shall also apply to the rights of a Mortgagee in 432
27 connection with the entry into a New Lease under Section 16.2.4 and to the appointment of a receiver on behalf of a Mortgagee.

16.4 No Liability of Mortgagee for Prior Indemnified Acts. A Mortgagee shall not be obligated to assume the liability of Tenant for any indemnities arising for a period prior to Mortgagee's acquiring the right to possession of the Property under this Lease.

16.5 Landlord Cooperation. Landlord covenants and agrees that it will act and fully cooperate with Tenant in connection with Tenant's right to grant leasehold mortgages as hereinabove provided. At the request of Tenant or any proposed or existing Mortgagee, Landlord shall promptly execute and deliver (i) any documents or instruments reasonably requested to evidence, acknowledge and/or perfect the rights of Mortgagees as herein provided; and (ii) an estoppel certificate certifying the status of this Lease and Tenant's interest herein and such matters as are reasonably requested by Tenant or such Mortgagees. Such estoppel certificate shall include, but not be limited to, certification by Landlord that (a) this Lease is unmodified and in full force and effect (or, if modified, state the nature of such modification and certify that this Lease, as so modified, is in full force and effect), (b) all rents currently due under this Lease have been paid, (c) there are not, to Landlord's knowledge, any uncured Events of Default on the part of Tenant under this Lease or facts, acts or omissions which with the giving of notice or passing of time, or both, would constitute an Event of Default. Any such estoppel certificate may be conclusively relied upon by any proposed or existing leasehold Mortgagee or assignee of Tenant's interest in this Lease.

16.6 Landlord Mortgages. Landlord's fee interest in the Property shall be senior to, and not be subordinated to, any financing obtained by Tenant in connection with the Property.

Landlord shall not encumber, pledge or otherwise convey as security its fee estate in the Property unless all holders of any such encumbrance, pledge or other security expressly agree to be subject to and bound by the terms of this Lease and that no foreclosure or other enforcement of such encumbrance, pledge or other security will disturb or effect this Lease or the rights of any Mortgagee hereunder.

16.7 Claims. Landlord and Tenant shall deliver to Mortgagee notice of any litigation or arbitration proceedings between the parties or involving the Property or this Lease. Mortgagee shall have the right, at its option, to intervene and become a party to any such proceedings. If Mortgagee elects not to intervene or become a party, Landlord shall deliver to Mortgagee prompt notice of and a copy of any award, decision or settlement agreement made in connection with any such proceeding.

16.8 Further Amendments. Landlord shall, subject to the covenants, terms and conditions of this Lease and its attachments, reasonably consider including in this Lease by suitable amendment from time to time any provision which may be reasonably requested by any proposed Mortgagee for the purpose of implementing the mortgagee protection provisions contained in this Lease and allowing that Mortgagee reasonable means to protect or preserve the lien of its Mortgage upon the occurrence of a default under the terms of this Lease. Landlord and Tenant each agree to execute and deliver (and to acknowledge for recording purposes, if necessary) any agreement required to effect any such amendment.
433
28 16.9 Bankruptcy of Landlord. In the event that Landlord shall become subject to any bankruptcy or insolvency proceeding, any rights, elections, or actions available to Tenant therein shall be subject to the rights of each Mortgagee, if any, under the Mortgage to consent to, or to exercise on behalf of Tenant, such rights, elections, or actions. Without limiting the foregoing, no consent or acquiescence by Tenant to any rejection of this Lease by Landlord or any successor or trustee in such proceeding shall be binding or effective without the prior, written consent thereto by each Mortgagee, if any, and the rights, liens, and claims of each Mortgagee shall extend to, encumber, and include all rights to damages for any such rejection and all rights to continued possession of the Property.

16.10 Transfer Rights. Foreclosure of any permitted Mortgage, or any sale thereunder, whether by judicial proceedings or by virtue of any power contained in the Mortgage, or any conveyance of the leasehold estate hereunder from Tenant to any Mortgagee or an affiliate of Mortgagee or entity controlled by Mortgagee, through, or in lieu of, foreclosure or other appropriate proceedings in the nature thereof, shall not require the consent of Landlord or constitute a breach of any provision of or a default under this Lease, and upon such foreclosure, sale or conveyance, Landlord shall recognize the purchaser or other transferee in connection therewith as Tenant hereunder. Any further assignments shall require the approval of Landlord, which shall not unreasonably be withheld, conditioned, or delayed.

ARTICLE 17. SUBLEASING

17.1 Subleasing of Property. All subleases ("Subleases") made by Tenant shall be subject to the following provisions and restrictions:

17.1.1 Tenant may sublease individual apartment units to any tenant or household who qualifies, and any commercial or office space to a Sub-Tenant, without the consent of Landlord.

17.1.2 On any termination of this Lease prior to the expiration of the Term, all of Tenant's interest as Sub-Landlord under any and all existing valid and enforceable Subleases shall be deemed automatically assigned, transferred and conveyed to Landlord. Landlord shall thereafter be bound on such Subleases to the same extent Tenant, as Sub-Landlord, was bound thereunder for all liabilities arising from and after the date of such assignment and Landlord shall have all the rights under such Subleases that Tenant, as Sub-Landlord, had under such Subleases.

17.1.3 Any Sub-Tenant qualifying shall, upon written request, receive a nondisturbance agreement from Landlord.

17.2 Nondisturbance Agreements. Upon request, Landlord shall execute nondisturbance agreements with any Sub-Tenant, which nondisturbance agreement shall provide that so long as such Sub-Tenant has not defaulted under the terms of the Sublease, such SubTenant's rights will not be terminated by Landlord on Landlord's exercise of Landlord's right to terminate this Lease for Tenant's breach.
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29 ARTICLE 18. PERFORMANCE OF TENANT'S COVENANTS

18.1 Right of Performance. If Tenant shall at any time fail to pay any Imposition or other charge in accordance with Article 4 within the time period therein permitted, then Landlord, after thirty (30) days' written notice to Tenant and without waiving or releasing Tenant from any obligation of Tenant hereunder, may (but shall not be required to) pay such Imposition or other charge payable by Tenant pursuant to the provisions of Article 4.

18.2 Reimbursement and Damages. All sums so paid by Landlord shall constitute additional rent payable by Tenant under this Lease and shall be paid by Tenant to Landlord on demand.

ARTICLE 19. EVENTS OF DEFAULT; REMEDIES

19.1 Events of Default. Any one or all of the following events shall constitute an Event of Default hereunder:

19.1.1 If Tenant shall default in the payment of any Rent or other liquidated sums payable hereunder when and as the same becomes due and payable and such default shall continue for more than ten (10) days after Landlord shall have given written notice thereof to Tenant; or

19.1.2 The abandonment or vacation of the Property by Tenant for a period of thirty (30) consecutive days; or

19.1.3 The entry of any decree or order for relief by any court with respect to Tenant, or any assignee or transferee of Tenant (hereinafter "Assignee"), in any involuntary case under the Federal Bankruptcy Code or any other applicable federal or state insolvency law; or the appointment of or taking possession by any receiver, liquidator, assignee, trustee, sequestrator or other similar official of Tenant or any Assignee (unless such appointment is in connection with a Mortgagee's exercise of its remedies under its Mortgage), or of any substantial part of the property of Tenant or such Assignee, or the ordering or winding up or liquidating of the affairs of Tenant or any Assignee and the continuance of such decree or order unstayed and in effect for a period of ninety (90) days or more; or the commencement by Tenant or any such Assignee of a voluntary proceeding under the Federal Bankruptcy Code or any other applicable state or federal law or consent by Tenant or any such Assignee to the entry of any order for relief in an involuntary case under any such law, or consent by Tenant or any such Assignee to the appointment of or taking of possession by a receiver, liquidator, assignee, trustee, sequestrator or other similar official of Tenant or any such Assignee, or of any substantial property of any of the foregoing, or the making by Tenant or any such Assignee of any general assignment for the benefit of creditors; or Tenant or any such Assignee takes any other voluntary action related to the business of Tenant or any such Assignee or the winding up of the affairs of any of the foregoing.

19.1.4 If Tenant shall default in the performance of or compliance with any other term, covenant or condition of this Lease (other than as set forth in Section 19.1.1) and such default shall continue for more than thirty (30) days after Landlord shall have given written notice thereof to Tenant, provided, however, if cure of such default reasonably requires more than thirty (30) 435
30 days, then, provided that Tenant commences to cure within such thirty (30) day period and thereafter diligently and continuously prosecutes the cure to completion (within no more than one hundred eighty (180) days following Landlord's written notice to Tenant), Tenant shall not be in default.

19.1.5 Notwithstanding anything to the contrary contained in this Lease, prior to declaring any default or taking any remedy permitted under this Lease or applicable law based upon an alleged default, Landlord shall give written notice of such default to the Equity Partner.

19.2 Remedies.

19.2.1 If an Event of Default shall occur and continue as aforesaid, Landlord shall have cumulatively, or in the alternative, all rights and remedies available at law or in equity and, in addition, Landlord shall have the immediate option to terminate this Lease (subject to Section

19.2.7), bring suit against Tenant, pursue the remedy described in this Section and/or recover as an award in such suit or arbitration proceeding the following:
(a) The worth at the time of award of the unpaid rent and all other sums due hereunder which had been earned at the time of termination; (b) The worth at the time of award of the amount by which the unpaid rent and all other sums due hereunder which would have been earned after termination until the time of award exceeds the amount of such rental loss that Tenant proves could have been reasonably avoided;
(c) The worth at the time of award of the amount by which the unpaid rent and all other sums due hereunder for the balance of the Term after the time of award exceeds the amount of such rental loss that Tenant proves could be reasonably avoided; (d) Any other amount necessary to compensate Landlord for all the detriment proximately caused by the Tenant's failure to perform its obligations under this Lease or which in the ordinary course of things could be likely to result therefrom ; and (e) Such amounts in addition to or in lieu of the foregoing as may be permitted from time to time by applicable California law.

19.2.2 The "worth at the time of award" of the amount referred to in subparagraph

19.2.1(c) above shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus one percent (1%).

19.2.3 Without terminating this Lease, so long as Landlord does not deprive Tenant of legal possession of the Property and allows Tenant to assign or sublet, Landlord may continue this Lease in effect and bring suit from time to time for any sums due, and for any subsequent Event of Default of the same or other covenants and agreements herein. 436
31 19.2.4 If an Event of Default occurs, Landlord shall also have the right, with or without terminating this Lease, but subject to any nondisturbance agreements entered into with Sub-Tenants, to reenter the Property and remove all persons and property from the Property; such property may be removed and stored in a public warehouse or elsewhere at the cost of and for the account of Tenant.

19.2.5 If an Event of Default occurs, Landlord shall also have the right, with or without terminating this Lease, to relet the Property. If Landlord so elects to exercise its right to relet the Property but without terminating this Lease, then rentals received by Landlord from such reletting shall be applied: first, to the payment of any indebtedness other than Rent due hereunder from Tenant to Landlord; second, to the payment of any cost of such reletting; third, to the payment of the cost of any alterations and repairs to the Property; fourth, to the payment of rent due and unpaid hereunder; and fifth, the residue, if any, shall be held by Landlord and applied in payment of future rent as the same may become due and payable hereunder. Should the amount of rental received from such reletting during any month which is applied to the payment of rent hereunder be less than that agreed to be paid during that month by Tenant hereunder, then Tenant shall pay such deficiency to Landlord immediately upon demand therefor by Landlord. Such deficiency shall be calculated and paid monthly. Tenant shall also pay to Landlord, as soon as ascertained, any costs and expenses incurred by Landlord in such reletting or in making alterations and repairs not covered by the rentals received from such reletting.

19.2.6 No reentry or taking possession of the Property by Landlord pursuant to Paragraphs 19.2.3 or 19.2.4 shall be construed as an election to terminate this Lease unless a written notice of such intention is given to Tenant or unless the termination thereof is decreed by a court of competent jurisdiction.

19.2.7 Notwithstanding anything to the contrary in this Lease (except for Section

13.3.1), in no event shall Landlord have the right to terminate this Lease as a result of the occurrence and continuance of an Event of Default or otherwise until the expiration of the initial fifteen (15) year tax credit compliance period as described in Section 42(i)(1) of the Internal Revenue Code of 1986, as amended.

19.3 No Waiver of Default. No acceptance by Landlord of a lesser sum than the rents or any other charges then due shall be deemed to be other than on account of the earliest installment of the rents or other charges due, nor shall any endorsement or statement on any check or any letter accompanying any check or payment of rent or charges due be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord's right to recover the balance of such installment or pursue any other remedy provided in this Lease. The receipt by Landlord of any rent or any other sum of money or any other consideration paid by Tenant after the termination of this Lease, or after giving by Landlord of any notice hereunder to effect such termination, shall not, except as otherwise expressly set forth in this Lease, reinstate, continue, or extend the term of this Lease, or destroy, or in any manner impair the efficacy of any such notice of termination as may have been given hereunder by Landlord to Tenant prior to the receipt of any such sum of money or other consideration, unless so agreed to in writing and signed by Landlord. 437
32 ARTICLE 20. PERMITTED CONTESTS
Tenant, at no cost or expense to Landlord, may contest (after prior written notice to Landlord) by appropriate legal proceedings conducted with due diligence, the amount or validity or application, in whole or in part, of any Imposition or lien or any Legal Requirement or Insurance Requirement, provided that (a) in the case of liens of mechanics, materialmen, suppliers or vendors, or Impositions or liens therefor, such proceedings shall suspend the collection thereof from Landlord, and shall suspend a foreclosure against the Property and/or the Improvements, or any interest therein, or any rent, if any, (b) neither the Property or the Improvements, nor any part thereof or interest therein, or the rent, if any, or any portion thereof, would be in any danger of being sold, forfeited or lost by reason of such proceedings, (c) in the case of a Legal Requirement, Landlord would not be in any danger of any criminal liability or, unless Tenant shall have furnished a bond or other security therefor satisfactory to Landlord, any additional civil liability for failure to comply therewith and the Property and the Improvements would not be subject to the imposition of any lien as a result of such failure, and (d) Tenant shall have furnished to Landlord, if requested, a bond or other security, satisfactory to Landlord. If Tenant shall fail to contest any such matters, or to give Landlord security as hereinabove provided, Landlord may, but shall not be obligated to, contest the matter or settle or compromise the same without inquiring into the validity or the reasonableness thereof. Landlord, at the sole cost and expense of Tenant, will cooperate with Tenant and execute any documents or pleadings legally required for any such contest.

ARTICLE 21. [INTENTIONALLY DELETED]
ARTICLE 22. FORCE MAJEURE

22.1 Subject to Paragraph 22.2 below, any prevention, delay, nonperformance or stoppage by Tenant due to any of the following causes shall be excused: any regulation, order, act, restriction or requirement or limitation imposed by any federal, state, municipal or foreign government or any department or agency thereof, or civil or military authority; acts of God; acts or omissions of Landlord or its agents or employees; fire, explosion or floods; strikes, walkouts or inability to obtain materials; war, riots, sabotage or civil insurrection; or any other causes beyond the reasonable control of Tenant.

22.2 No prevention, delay, or stoppage of performance shall be excused unless:

22.2.1 Tenant notifies Landlord within thirty (30) days of such prevention, delay or stoppage that it is claiming excuse of its obligations under this Article; and

22.2.2 Tenant diligently proceeds within thirty (30) days of the conclusion of such prevention, delay or stoppage to cure the condition causing the prevention, delay or stoppage; and

22.2.3 Tenant effects such cure within a reasonable time.

ARTICLE 23. GENERAL PROVISIONS

23.1 Notices. All notices or demands shall be in writing and shall be served personally, by overnight courier, or by express or certified mail. Service shall be deemed conclusively made 438
33 at the time of service if personally served; the next business day if sent by overnight courier and receipt is confirmed by the signature of an agent or employee of the party served; the next business day after deposit in the United States mail, properly addressed and postage prepaid, return receipt requested, if served by express mail; and three (3) days after deposit thereof in the United States mail, properly addressed and postage prepaid, return receipt requested, if served by certified mail.

23.1.1 Any notice to Landlord shall be given to:

City of Orange
300 East Chapman Avenue
P.O. Box 449 Orange, CA 92866
Attention: City Attorney
Telephone: (714) 744-5580

23.1.2 Any notice to Tenant shall be given to:

Katella Terrace, L.P.

Attention:

Telephone: ( ) ___-____
with copies to:
____________________, Esq.

Telephone: (___) ___-____
Fax: (213) 239-0410
Orange Senior Housing, Inc.
555 S. Shaffer Street
Orange, CA 92866
Attention: President
Telephone: 714-633-7344
Any party may, by virtue of written notice in compliance with this Section, alter or change the address or the identity of the person to whom any notice, or copy thereof, is to be sent.

23.2 Certificates. Landlord or Tenant, as the case may be, shall execute, acknowledge and deliver to the other, promptly upon request, a certificate of Landlord or Tenant, as the case may be, certifying (a) that this Lease is unmodified and in full force and effect (or, if there have been modifications, that this Lease is in full force and effect, as modified, and stating the date of each instrument so modifying this Lease), (b) the date, if any, through which the rent, if any, has been paid, (c) whether there are then existing any offsets or defenses against the enforcement of any term hereof on the part of Tenant to be performed or complied with (and, if so, specifying the same), and (d) whether any default exists hereunder and, if any such default exists, specifying the nature and period of existence thereof and what action Landlord or Tenant, as the case may be, is taking or proposes to take with respect thereto and whether notice thereof has been given to the party in default. Any certificate may be relied upon by any prospective purchaser, transferee, mortgagee or trustee under a deed of trust of the fee or leasehold estate in the Property or any part thereof or of Landlord's or Tenant's interest under this Lease. Tenant will also deliver to Landlord, 439
34 promptly upon request, such information with respect to the Property or any part thereof as from time to time may reasonably be requested.

23.3 No Merger of Title. There shall be no merger of this Lease or the leasehold estate created by this Lease with any other estate in the Property or any part thereof by reason of the fact that the same person, firm, corporation or other entity may acquire or own or hold, directly or indirectly: (a) this Lease or the leasehold estate created by this Lease or any interest in this Lease or in any such leasehold estate, and (b) any other estate in the Property and the Improvements or any part thereof or any interest in such estate, and no such merger shall occur unless and until all persons, corporations, firms and other entities, including any leasehold Mortgagee or leasehold Mortgagees, having any interest (including a security interest) in (i) this Lease or the leasehold estate created by this Lease, and (ii) any other estate in the Property or the Improvements or any part thereof shall join in a written instrument effecting such merger and shall duly record the same.

23.4 Quiet Enjoyment. Tenant, upon paying the rent and any other charges herein provided for and upon performing and complying with all covenants, agreements, terms and conditions of this Lease to be permed or complied with by it, shall lawfully and quietly hold, occupy and enjoy the Property during the term of this Lease without hindrance or molestation by Landlord, or any person or persons claiming through Landlord.

23.5 No Claims Against Landlord. Nothing contained in this Lease shall constitute any consent or request by Landlord, express or implied, for the performance of any labor or services or the furnishing of any materials or other property with respect to the Property or any part thereof, nor as giving Tenant any right, power or authority to contract for or permit the performance of any labor or services or the furnishing of any materials or other property in such fashion as would permit the making any claim against Landlord or its interest in the Property in respect thereof.

23.6 Inspection. Landlord and its authorized representatives may enter the Property or any part thereof at all reasonable times for the purpose of inspecting, servicing or posting notices, protecting the Property or the Improvements, or for any other lawful purposes. Notwithstanding the immediately preceding sentence, except in the event of an emergency, Landlord may only enter the apartment units after giving the Tenant three (3) days’ written notice.

23.7 No Waiver by Landlord. To the extent permitted by applicable law, no failure by Landlord to insist upon the strict performance of any term hereof or to exercise any right, power or remedy consequent upon a default under this Lease, and no acceptance or rent during the continuance of such default, shall constitute a waiver of any such default or of any such term. No waiver of any default shall affect or alter this Lease, which shall continue in full force and effect, or the rights of Landlord with respect to any other then existing or subsequent default.

23.8 Holding Over. In the event Tenant shall hold over or remain in possession of the Property or the Improvements with the consent of Landlord after the expiration of the Term, such holding over or continued possession shall create a tenancy for month to month only, upon the same terms and conditions as are herein set forth so far as the same are applicable. 440
35 23.9 Attorneys’ Fees. In the event of a dispute between the parties arising out of or in connection with this Lease, which results in arbitration or litigation, the prevailing party shall be entitled to have and recover from the losing party reasonable attorneys' fees and costs of suit incurred by the prevailing party.

23.10 No Partnership. Anything contained herein to the contrary notwithstanding, Landlord does not in any way or for any purpose become a partner of Tenant in the conduct of its business, or otherwise, or a joint venturer or member of a joint enterprise with Tenant hereunder.

23.11 Remedies Cumulative. The various rights, options, elections and remedies of Landlord and Tenant, respectively, contained in this Lease shall be cumulative and no one of them shall be construed as exclusive of any other, or of any right, priority or remedy allowed or provided by law and not expressly waived in this Lease.

23.12 Time is of the Essence. Time is of the essence of this Lease and all of the terms, provisions, covenants and conditions hereof.

23.13 Survival of Representations, Warranties and Covenants. The respective representations, warranties and covenants contained herein shall remain in place throughout the Term of the Lease.

23.14 Construction of Agreement. This Lease shall be construed in accordance with the substantive laws of the State of California, without regard to the choice of law rules thereof. The rule of construction that a document be construed strictly against its drafter shall have no application to this Lease.

23.15 Severability. If one or more of the provisions of this Lease shall be held to be illegal or otherwise void or invalid, the remainder of this Lease shall not be affected thereby and shall remain in full force and effect to the maximum extent permitted under applicable laws and regulations.

23.16 Entire Agreement; Modification. This Lease contains the entire agreement of the parties with respect to the matters discussed herein. This Lease may be amended only by an agreement in writing signed by both parties, with the prior written consent of each Mortgagee, if any. Any amendment to this Lease made without the prior written consent of a Mortgagee may be void at the option of such Mortgagee.

23.17 Binding Effect and Benefits. This Lease shall inure to the benefit of and be binding on the parties hereto and their respective successors and assigns. Except as otherwise set forth herein, nothing in this Lease, expressed or implied, is intended to confer on any person other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Lease.

23.18 Further Assurances. Each party hereto will promptly execute and deliver without further consideration such additional agreement, assignments, endorsements and other documents as the other party hereto may reasonably request to carry out the purposes of this Lease. 441
36 23.19 Counterparts. This Lease may be executed simultaneously in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Lease.

23.20 Number and Gender. Whenever the singular number is used in this Lease and required by the context, the same shall include the plural, and the masculine gender shall include the feminine and neuter genders.

23.21 Incorporation by Reference. Every Exhibit attached to this Lease and referred to herein is hereby incorporated by reference.

Exhibit A: Legal Description Exhibit B: Memorandum of Lease Exhibit C: Schedule of Performance Exhibit D: Scope of Development Exhibit E: Regulatory Agreement
[Remainder of page intentionally left blank; signatures on next page] 442
37 IN WITNESS WHEREOF, the undersigned have executed this Lease as of the date first above written.
"Tenant"
Katella Terrace, L.P., a California limited partnership By:______________________, a _______________________, its _____________ APPROVED BY:
_____________________, a ___________________________, as administrative limited partner of Tenant
By:________________________
Manager
"Landlord"
City of Orange, a municipal corporation
By:_______________________
Mark A. Murphy, Mayor
APPROVED AS TO FORM:

By:_______________________
Gary A. Sheatz, City Attorney
ATTEST:

By:_______________________
Pamela A. Coleman, City Clerk
443
EXHIBIT "A"

LEGAL DESCRIPTION OF THE PROPERTY

THAT CERTAIN LAND SITUATED IN THE CITY OF ORANGE, COUNTY OF ORANGE, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS:

APN:
444
B-1

EXHIBIT B
Exempt From Recording Fee Pursuant to Government Code Sections 6103 and 27383

MEMORANDUM OF UNRECORDED LEASE
This MEMORANDUM OF UNRECORDED LEASE ("Memorandum") is hereby entered into as of by and between City of Orange, a municipal corporation ("Landlord"), and Katella Terrace, L.P., a California limited partnership (''Tenant").

RECITALS
A. Landlord and Tenant have entered into a "Lease" dated concurrently herewith for that certain real property owned by Landlord (the "Property"), which provides for the construction, maintenance, management and operation of a 74-unit affordable senior apartment project, to be made available long term at an affordable housing cost (the "Project").The Property is legally described in Exhibit "A," which is attached hereto and incorporated herein by this reference. A copy of the Lease is available for public inspection at the office of the Landlord.

8. The term of the Lease commences on the date of recordation of this Memorandum of Unrecorded Lease in the Official Records of Orange County (the "Commencement Date") and, subject to the provisions set forth in the Lease and applicable law that may result in an earlier termination of the Lease, continues until the sixtieth (60th) anniversary of the Commencement Date.

C. The Lease provides that a short form Memorandum of Lease shall be executed and recorded in the Official Records of Orange County, California.

NOW, THEREFORE, the parties hereto certify as follows:

Landlord, pursuant to the Lease, hereby leases the Property to Tenant upon the terms and conditions provided for therein. This Memorandum is not a complete summary of the Lease, and shall not be used to interpret the provisions of the Lease.

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
445
B-2
"Tenant"
Katella Terrace, LP., a California limited partnership
By:

APPROVED BY:

By:

Manager
"Landlord"
City of Orange, a municipal corporation
By:

Mark A. Murphy, Mayor
APPROVED AS TO FORM:

By:

Gary A. Sheatz, City Attorney
ATTEST:

By:

Pamela A. Coleman, City Clerk
446

EXHIBIT C
Schedule of Performance
[Behind this page]
447

EXHIBIT D
Scope of Development
[Behind this page]
448

EXHIBIT E
Form of Regulatory Agreement
[Behind this page]
449
Agenda Item
City Council
Item #: 10.4. 2/8/2022 File #: 22-0024
TO: Honorable Mayor and Members of the City Council
THRU: Thomas R. Hatch, Interim City Manager
FROM: Susan Galvan, Interim Community Development Director

1. SUBJECT
Public Hearing to consider General Plan Amendment No. 2022-0001; City of Orange 2021-2029 Housing Element Update.

2. SUMMARY
A request to adopt an updated General Plan Housing Element in accordance with State law. The updated Housing Element replaces the 2014-2021 Housing Element in its entirety. The updated Housing Element identifies and analyzes existing and projected housing needs, plans for the longterm provision of housing for a variety of household income levels, and articulates the City’s official policies for the preservation, conservation, improvement, and production of housing within the City for the 2021 through 2029 planning period.

3. RECOMMENDED ACTION
Adopt City Council Resolution No. 11378. A Resolution of the City Council of the City of Orange approving General Plan Amendment No. 2022-0001 adopting the City of Orange 2021-2029 General Plan Housing Element.

4. FISCAL IMPACT
None.

5. STRATEGIC PLAN GOALS
Goal 3: Enhance and promote quality of life in the community. c. Support and enhance attractive, diverse living environments.

6. DISCUSSION AND BACKGROUND
The Housing Element is one of the chapters or “elements” of the City’s General Plan required by State law, establishing the City’s official policies related to housing. Pursuant to State law, it is also required to plan to accommodate new housing development consistent with the City’s Regional Housing Needs Assessment allocation.

The Housing Element was last updated in January 2014 and covered the 2014-2021 planning period.

State law requires the Housing Element be updated to cover the 2021-2029 planning period within 120 days of the October 15, 2021 deadline (February 12, 2022). If the City adopts the Housing Element Update by this deadline and it is certified by the State Department of Housing and City of Orange Page 1 of 5 Printed on 2/3/2022
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Element Update by this deadline and it is certified by the State Department of Housing and Community Development (HCD) (i.e., deemed in compliance with State requirements) the Housing Element will not need to be updated for another eight years. If the City does not adopt the Housing Element by the deadline, or if the adopted Housing Element is not certified by the HCD, the City will continue to work with HCD to gain compliance.

If not adopted or certified, the City could be subject to legal challenges, become ineligible for certain State funding programs, be mandated to utilize a ministerial review process for entitling housing projects, or have its authority to issue building permits suspended.

Given the complex housing issues confronting California, the State has set forth high expectations for municipalities to put policies and programs in place that result in housing production at a range of affordability levels, with particular interest in housing for Very Low and Low Income households.

Draft Housing Element Content
The City of Orange 2021-2029 General Plan Housing Element identifies and analyzes the existing and projected housing needs of the Orange community and articulates the City’s policy actions for the preservation, conservation, improvement, and production of housing units in the city. The City has been tasked by HCD through a process called the Regional Housing Needs Assessment (RHNA) to accommodate 3,936 dwelling units at varying affordability levels through new construction, development of Accessory Dwelling Units, and conservation of units at risk of converting from affordable to market rate units during the 2021-2029 timeframe. Details about the RHNA process are outlined in Attachment 3.

The Housing Element addresses State requirements as detailed in Attachment 3. The Housing Plan (Section 4) of the Housing Element update establishes four central goals supported by 31 policy actions to address the City’s housing needs. These goals include:
· Providing high quality housing stock and neighborhoods · Accommodating all income levels of the City’s RHNA allocation · Ensuring maintenance, preservation, and development of housing · Providing equal housing opportunities for all
Through implementation of the policy actions and the identification of candidate housing sites within the adequate sites analysis, the Housing Element demonstrates that the City is providing substantive opportunities and making a good-faith effort to address the housing needs of the community consistent with State law.

Key Policy Action Changes from Previous Housing Element Removed:

Certain policy actions from the 2014-2021 Housing Element have been deleted as they have either been accomplished or are no longer relevant including:
· Process annexation of the East Orange General Plan area (portions of Santiago Hills II Irvine Company property that is now dedicated open space).
· Develop an Affordable Housing Toolkit for the City’s website (completed). · Balance housing production with needs of local employers (completed through the entitlement City of Orange Page 2 of 5 Printed on 2/3/2022
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· Balance housing production with needs of local employers (completed through the entitlement of hundreds of housing units within proximity to Children’s Hospital Orange County, St. Joseph Hospital and UC Irvine Medical Center).

Added:
· Eliminate discretionary review process for projects on opportunity sites where at least 20% of units are affordable to low income households through establishing objective development and design standards for such projects.
· Subsidize application processing fees for residential development where all units are affordable to low and very low income households.
· Evaluate planning and development review process for streamlining opportunities. · Assist property owners with Accessory Dwelling Units (ADU). · Track ADU affordability.
· Provide local water and sewer service providers a copy of the adopted Housing Element, and collaborate on prioritizing services for new residential development. · Update the General Plan Safety Element to address updated State wildland fire and flood information.
· Integrate environmental justice content into the General Plan in compliance with SB 1000 in order to avoid concentrations of socio-economically disadvantaged populations in areas of the city with environmental challenges (exposure to sources of pollution such as transportation corridors and industrial uses).
· Conduct outreach efforts throughout the 2021-2029 timeframe to gather community input related to development of, and access to, housing with a focus on under-represented communities.
· Continue to further fair housing by taking actions to address barriers that restrict access to housing opportunities, and address discrimination and patterns of socio-economic segregation.
· Update the Density Bonus Ordinance to bring into alignment with current State law. · Update the Residential Care Facilities Ordinance to bring into alignment with current State law related to facilities with 7+ residents.
· Update the Orange Municipal Code to comply with the provisions of the State Farmworker and Employee Housing Act requirements.

Public Outreach
As part of the Housing Element Update process, the City conducted extensive public outreach activities beginning in 2019 including virtual stakeholder meetings and workshops, and an online survey. A public review draft of the Housing Element was made available from May 21 through June 21, 2021 prior to sending the document to HCD for its review and comment. More detailed City of Orange Page 3 of 5 Printed on 2/3/2022
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21, 2021 prior to sending the document to HCD for its review and comment. More detailed information about the public outreach process and community feedback is provided in Attachment 3 and Appendix C of the draft Housing Element Update (Attachment 4).

7. ANALYSIS AND STATEMENT OF THE ISSUES
Issue 1: RHNA and Housing Opportunity Sites
For the 2021-2029 Housing Element cycle, the City of Orange is responsible for demonstrating the ability to construct 3,936 RHNA units, or 2% of the countywide allocation (183,861 units). The units do not have to be constructed if the market does not choose to do so, but the Housing Element must demonstrate that there is viable zoning capacity to build the allocated units. The RHNA also assigns the housing unit need by household income level. The affordability breakdown is provided below:

Housing Opportunity Sites
The City’s General Plan land use and zoning designations provide adequate development capacity to accommodate the RHNA in various locations of the city. All of the identified sites represent underutilized property that either has the potential for infill development, or the possibility of entire site redevelopment. Many sites are located in areas with Urban Mixed Use or Neighborhood Mixed Use zoning (Uptown Orange, West Katella Avenue and South Main Street), while other sites are in transition with pending or active development applications that include housing. A number of housing units are also anticipated to be produced in the form of Accessory Dwelling Units or Junior Accessory Dwelling Units. Housing Opportunity Sites and likely development scenarios are presented in Appendix B of the Housing Element Update.

Summary of RHNA Status and Sites Inventory
Extremely Low/ Very Low
Income
Low Income Moderate
Income
Above
Moderate
Income
Total
2021-2029 RHNA1,067 604 677 1,588 3,936
RHNA Credit (Units Built) -- -- -- -- --
Total RHNA Obligations 1,067 604 677 1,588 3,936
Sites Available
Residential Zones 0 0 0 81 81
Neighborhood Mixed Use (NMU-24) 16 4 114 0 134
Urban Mixed-Use (UMU) 1,025 478 618 1,696 3,817
Total Potential Capacity Based on
Existing GP and Zoning
1,041 482 732 1,777 4,032
Accessory Dwelling Unit Production 80 137 96 7 320
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Total RHNA Obligations 1,067 604 677 1,588 3,936
Sites Available
Residential Zones 0 0 0 81 81
Neighborhood Mixed Use (NMU-24) 16 4 114 0 134
Urban Mixed-Use (UMU) 1,025 478 618 1,696 3,817
Total Potential Capacity Based on
Existing GP and Zoning
1,041 482 732 1,777 4,032
Accessory Dwelling Unit Production 80 137 96 7 320
Total Sites Available 1,121 619 828 1,784 4,352
Potential Unit Surplus +54 +15 +151 +196 +416
The sites identified as candidate housing sites are anticipated to develop at a range of densities and affordability levels. The City anticipates continuing its work with local affordable housing developers to bring forward affordable/workforce housing projects meeting varied housing needs. Additionally, staff expects that the types of State and regional funding programs available for housing will continue to evolve, providing expanded creative financing options for affordable housing development.

Housing development, whether market rate or affordable, is largely dependent on the non-profit and private development community and the economy. The City will support and encourage the development of affordable and workforce housing projects on sites contemplated as candidate housing sites, as well as on parcels that had not been anticipated for infill residential development.

Issue 2: HCD Review
Staff submitted the Draft Housing Element for HCD review in July 2021. HCD provided comments to the City in September 2021 which are contained in Attachment 2 of the Planning Commission Staff Report (Attachment 3 to this report). Staff, with support from the City’s consultant, has addressed these comments in the public hearing draft of the document. A matrix of HCD comments and City responses is provided in Attachment 3 of the Planning Commission Staff Report. The revised document will be re-submitted to HCD following City Council adoption in anticipation of a determination that the Housing Element Update is in compliance with State law.

7. ATTACHMENTS
· Attachment 1 Resolution No. 11378
· Attachment 2 Planning Commission Resolution No. PC 01-22 · Attachment 3 Planning Commission Staff Report and Draft Minutes, January 3, 2022 · Attachment 4 Draft 2021-2029 Housing Element Update
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Agenda Item
City Council
Item #: 10.4. 2/8/2022 File #: 22-0024
TO: Honorable Mayor and Members of the City Council
THRU: Thomas R. Hatch, Interim City Manager
FROM: Susan Galvan, Interim Community Development Director

1. SUBJECT
Public Hearing to consider General Plan Amendment No. 2022-0001; City of Orange 2021-2029 Housing Element Update.

4. FISCAL IMPACT
None.

5. STRATEGIC PLAN GOALS
Goal 3: Enhance and promote quality of life in the community. c. Support and enhance attractive, diverse living environments.

The Housing Element was last updated in January 2014 and covered the 2014-2021 planning period.

State law requires the Housing Element be updated to cover the 2021-2029 planning period within 120 days of the October 15, 2021 deadline (February 12, 2022). If the City adopts the Housing Element Update by this deadline and it is certified by the State Department of Housing and City of Orange Page 1 of 5 Printed on 2/3/2022
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Element Update by this deadline and it is certified by the State Department of Housing and Community Development (HCD) (i.e., deemed in compliance with State requirements) the Housing Element will not need to be updated for another eight years. If the City does not adopt the Housing Element by the deadline, or if the adopted Housing Element is not certified by the HCD, the City will continue to work with HCD to gain compliance.

Key Policy Action Changes from Previous Housing Element Removed:

Certain policy actions from the 2014-2021 Housing Element have been deleted as they have either been accomplished or are no longer relevant including:
· Process annexation of the East Orange General Plan area (portions of Santiago Hills II Irvine Company property that is now dedicated open space).
· Develop an Affordable Housing Toolkit for the City’s website (completed). · Balance housing production with needs of local employers (completed through the entitlement City of Orange Page 2 of 5 Printed on 2/3/2022
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· Balance housing production with needs of local employers (completed through the entitlement of hundreds of housing units within proximity to Children’s Hospital Orange County, St. Joseph Hospital and UC Irvine Medical Center).

Public Outreach
As part of the Housing Element Update process, the City conducted extensive public outreach activities beginning in 2019 including virtual stakeholder meetings and workshops, and an online survey. A public review draft of the Housing Element was made available from May 21 through June 21, 2021 prior to sending the document to HCD for its review and comment. More detailed City of Orange Page 3 of 5 Printed on 2/3/2022
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21, 2021 prior to sending the document to HCD for its review and comment. More detailed information about the public outreach process and community feedback is provided in Attachment 3 and Appendix C of the draft Housing Element Update (Attachment 4).

Summary of RHNA Status and Sites Inventory
Extremely Low/ Very Low
Income
Low Income Moderate
Income
Above
Moderate
Income
Total
2021-2029 RHNA1,067 604 677 1,588 3,936
RHNA Credit (Units Built) -- -- -- -- --
Total RHNA Obligations 1,067 604 677 1,588 3,936
Sites Available
Residential Zones 0 0 0 81 81
Neighborhood Mixed Use (NMU-24) 16 4 114 0 134
Urban Mixed-Use (UMU) 1,025 478 618 1,696 3,817
Total Potential Capacity Based on
Existing GP and Zoning
1,041 482 732 1,777 4,032
Accessory Dwelling Unit Production 80 137 96 7 320
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Total RHNA Obligations 1,067 604 677 1,588 3,936
Sites Available
Residential Zones 0 0 0 81 81
Neighborhood Mixed Use (NMU-24) 16 4 114 0 134
Urban Mixed-Use (UMU) 1,025 478 618 1,696 3,817
Total Potential Capacity Based on
Existing GP and Zoning
1,041 482 732 1,777 4,032
Accessory Dwelling Unit Production 80 137 96 7 320
Total Sites Available 1,121 619 828 1,784 4,352
Potential Unit Surplus +54 +15 +151 +196 +416
The sites identified as candidate housing sites are anticipated to develop at a range of densities and affordability levels. The City anticipates continuing its work with local affordable housing developers to bring forward affordable/workforce housing projects meeting varied housing needs. Additionally, staff expects that the types of State and regional funding programs available for housing will continue to evolve, providing expanded creative financing options for affordable housing development.

A RESOLUTION OF THE CITY COUNCIL

APPROVING GENERAL PLAN AMENDMENT
NO. 2022-0001 ADOPTING THE CITY OF
ORANGE 2021-2029 GENERAL PLAN HOUSING

ELEMENT
APPLICANT: CITY OF ORANGE
WHEREAS, the Housing Element is one of the required chapters of the City’s General Plan, required by State law; and
WHEREAS, the City previously adopted its 2014-2021 General Plan Housing Element in January 2014; and
WHEREAS, the California Government Code (commencing with Section 65580) requires cities to review and update their Housing Elements according to a schedule set forth by the California Department of Housing and Community Development (HCD); and WHEREAS, the City also desires to update its Housing Element to ensure that it accurately reflects the City’s housing policy and addresses community needs; and WHEREAS, the City has prepared the 2021-2029 Housing Element as an update to its previously approved Housing Element in compliance with State law; and WHEREAS, the Planning Commission conducted one duly advertised public hearing on January 3, 2022, at which time interested persons had an opportunity to testify either in support of, or opposition to, the 2021-2029 Housing Element update and recommended unanimous approval to the City Council thereof.

NOW, THEREFORE, BE IT RESOLVED that the City Council approves General Plan Amendment No. 2022-0001, adopting the 2021-2029 General Plan Housing Element attached hereto and incorporated herein as Exhibit A and directs staff to implement the policy action programs identified in the 2021-2029 Housing Element.

SECTION 1 – FINDINGS

1. The General Plan Housing Element meets the requirements of the California Government Code.

The Housing Element contains a housing needs assessment, resources and constraints analysis, review of past performance, housing policy actions, adequate sites analysis, and fair housing analysis, consistent with State requirements. The content of the Housing Element addresses comments provided by the State of California Department of Housing and Community Development (HCD) on the City’s 2021-2029 Draft Housing Element. 460
2 Following City adoption of the 2021-2029 Housing Element, a copy will be submitted to HCD for final certification.

2. The Housing Element is generally consistent with the goals and policies stated within all other elements of the City’s General Plan.

The Housing Element is consistent with the City’s land use plan and is consistent with the goals and policies of the remaining elements of the General Plan.

3. The Housing Element advances the State’s housing goal of “decent housing and a suitable living environment for all members of the community”.

The Housing Element contains a needs assessment documenting housing needs in the Orange community and establishes policy actions to meet those needs through the preservation, conservation, improvement and production of housing units in Orange. The housing policy actions aim to provide opportunities for production of new housing units for all income levels, further fair housing, and also address housing for special needs groups including seniors and large families. As such, City adoption of the Housing Element and implementation of the housing policy actions advance the State’s housing goal of providing “decent housing and a suitable living environment for all members of the community.” SECTION 2 – ENVIRONMENTAL REVIEW
The Housing Element update is exempt from the California Environmental Quality Act (CEQA) as follows: (i) pursuant to Section 15061(b)(3) of the State CEQA Guidelines (Common Sense Exemption) because it can be seen with certainty that there is no possibility that the proposed 2021- 2029 Housing Element Update would have a significant effect on the environment; (ii) no property re-zoning is needed to accommodate the City’s Regional Housing Needs Allocation, and potential residential development densities have already been analyzed and mitigated in an earlier Environmental Impact Report (the Program Environmental Impact Report prepared for the 2010 Comprehensive General Plan Update, State Clearinghouse No. 2006031117); and (iii) pursuant to Guideline 15283, CEQA does not apply to Regional Housing Needs determinations made by a city. For these reasons, no further CEQA documentation is required.

ADOPTED this ____ day of ____________________, 2022
Mark A. Murphy, Mayor, City of Orange
ATTEST:

Pamela Coleman, City Clerk, City of Orange
461
3 STATE OF CALIFORNIA )

COUNTY OF ORANGE )

CITY OF ORANGE )
I, PAMELA COLEMAN, City Clerk of the City of Orange, California, do hereby certify that the foregoing Resolution was duly and regularly adopted by the City Council of the City of Orange at a regular meeting thereof held on the day of , 2022 by the following vote:

AYES: COUNCILMEMBERS:

NOES: COUNCILMEMBERS:

ABSENT: COUNCILMEMBERS:

ABSTAIN: COUNCILMEMBERS:

Pamela Coleman, City Clerk, City of Orange
462
463
464
465
Agenda Item
Planning Commission
Item #: 7.1. 1/3/2022 File #: 21-0583
TO: Chair and Members of the Planning Commission
FROM: Anna Pehoushek, Assistant Community Development Director

1. SUBJECT
Public Hearing: General Plan Amendment No. 2022-0001; City of Orange 2021-2029 Housing Element Update

2. SUMMARY
A request to adopt an updated General Plan Housing Element in accordance with state law. The updated Housing Element replaces the 2014-2021 Housing Element in its entirety. The updated Housing Element identifies and analyzes existing and projected housing needs, plans for the longterm provision of housing for a variety of household income levels and articulates the City’s official policies for the preservation, conservation, improvement, and production of housing within the City for the 2021 through 2029 planning period.

3. RECOMMENDED ACTION
Adopt Planning Commission Resolution No. 01-22 entitled:

A Resolution of the Planning Commission of the City of Orange recommending that the City Council approve General Plan Amendment No. 2022-0001 adopting the City of Orange 2021-2029 General Plan Housing Element.

4. AUTHORIZING GUIDELINES
Orange Municipal Code (OMC) Sections 17.08.020 and 17.10.010 authorize the Planning Commission to provide a recommendation to the City Council for amendments to the City’s General Plan.

5. PROJECT BACKGROUND
The Housing Element is one of the chapters or “elements” of the City’s General Plan required by State law. The Housing Element establishes the City’s official policies related to housing. Pursuant to state law, it is also required to plan to accommodate new housing development consistent with the City’s Regional Housing Needs Assessment allocation.

The Housing Element was last updated in January 2014 and covered the 2014 through 2021 planning period. State law requires the Housing Element be updated to cover the 2021 through 2029 planning period within 120 days of the October 15, 2021 deadline (February 12, 2022). If the City adopts the Housing Element Update by this deadline and it is certified by the State Department of Housing and Community Development (HCD) (i.e., deemed in compliance with state requirements) the Housing Element will not need to be updated for another eight years. If the City does not adopt the Housing Element by the deadline, or if the adopted Housing Element is not certified by the HCD, the City will continue to work with HCD to gain compliance. If additional edits are required, an City of Orange Page 1 of 8 Printed on 12/23/2021
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the City will continue to work with HCD to gain compliance. If additional edits are required, an adopted Housing Element may need to be amended once compliance is gained.

If not adopted or certified, the City could be subject to legal challenges, become ineligible for certain state funding programs, be mandated to utilize a ministerial review process for entitling housing projects, or have its authority to issue building permits suspended.

6. PROJECT DESCRIPTION
The City of Orange 2021-2029 General Plan Housing Element identifies and analyzes the existing and projected housing needs of the Orange community and articulates the City’s policy actions for the preservation, conservation, improvement, and production of housing units in the City. The City has been tasked by HCD through a process called the Regional Housing Needs Assessment (RHNA) to show our viability to construct 3,936 dwelling units at varying affordability income levels. Details on the RHNA process are outlined in Issue 1 of the Analysis and Statement of Issues section of this staff report. The Quantified Objectives for the 2021-2029 planning period are to accommodate the City’s 3,936 RHNA unit allocation at varying affordability levels through new construction, development of Accessory Dwelling Units, and conservation of units at risk of converting from affordable to market rate units.

The Housing Element addresses the following content, in accordance with State requirements:
· Population and employment trends.
· Existing and projected housing needs for all income groups, including extremely low income households.
· City housing and household characteristics, including cost for housing compared to ability to pay, overcrowding, and housing conditions.
· An inventory of land reasonably viable for residential development. · Analysis of existing and potential constraints, governmental and non-governmental, upon maintenance, improvement, or development of housing for all income levels. · Housing needs of people experiencing homelessness, including identification of zoning where emergency shelters are allowed as a permitted use.
· Special housing needs: handicapped, elderly, large families, farm workers, and female-headed households.
· Opportunities for energy conservation with respect to residential development. · Identification of publicly assisted housing developments. · Units at risk of conversion to market rate housing.
· Maintenance, improvement, and development of housing. · Identification of adequate sites with required public services and facilities for a variety of housing types for all income levels.
· Strategies to assist in the development of adequate housing to meet the needs of Very Low, Low, and Moderate Income households.
· Public participation program in the formulation of Housing Element Goals, Policies, and Programs.
· Regional Housing Needs Assessment prepared by the Southern California Association of City of Orange Page 2 of 8 Printed on 12/23/2021
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Governments.
· Analysis of Fair Housing, including Affirmatively Furthering Fair Housing. · Review of the effectiveness of the past Element, including the City’s accomplishments during the previous planning period.

The Housing Plan (Section 4) of the Housing Element update establishes four central goals supported by 31 policy actions to address the City’s housing needs. These goals include:
· Providing high quality housing stock and neighborhoods · Accommodating all income levels of the City’s RHNA allocation · Ensuring maintenance, preservation, and development of housing · Providing equal housing opportunities for all
Policy actions focus on:
· Acquisition/rehabilitation of housing units
· Monitoring and preserving affordable units at risk of converting to market rate units · Evaluating the housing development entitlement process · Addressing deferred property maintenance and code violations · Preserving of historic residential structures
· Promoting affordable housing
· Encouraging development of housing for large families and seniors · Facilitating infill development
· Exploring alternative funding and financing
· Providing funding support for non-profit community housing development organizations · Monitoring adequate sites for housing
· Coordinating with Chapman University to address student housing needs · Accommodating development of Accessory Dwelling Units/Junior Accessory Dwelling Units · Furthering fair housing
The complete collection of goals and policy actions is presented in Section 4 of the Housing Element update. Through implementation of the policy actions and the identification of candidate housing sites within the adequate sites analysis, the Housing Element demonstrates that the City is providing substantive opportunities and making a good-faith effort to address the housing needs of the community and fair access to housing. The policy framework and identified opportunity sites both encourage and accommodate new housing development in a manner that meets the City’s RHNA allocation and is consistent with state law.

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Public Outreach
As part of the Housing Element Update process, the City conducted extensive public outreach activities beginning in 2019. These efforts included:
· Establishing a Housing Element Update webpage with all housing element materials and information.
· Two stakeholder meetings (English and Spanish) on December 1, 2020 engaging service providers, housing advocacy groups, developers, church representatives, and similar entities that provide support services to individuals with housing needs. · Virtual Community Workshops on October 12, 2020 and May 26, 2021 with recordings available on the webpage.
· An online Community Survey available from October 12, 2020 to December 1, 2020.

A public review draft of the Housing Element was made available from May 21 through June 21, 2021 on the City’s website prior to sending the document to HCD for its review and comment. The content of the draft Housing Element considers the input provided during this process. More detailed information about the public outreach process and community feedback is provided in Appendix C of the draft Housing Element Update (Attachment 1).

7. ANALYSIS AND STATEMENT OF THE ISSUES
Issue 1: Regional Housing Needs Allocation
RHNA allocation is derived from a regional housing goal that HCD supplies to the Southern California Association of Governments (SCAG), the metropolitan planning agency that coordinates regional planning activity for the six counties comprising Southern California. Once HCD establishes the regional housing goal, SCAG is then required to allocate a portion of the overall housing units for the region to each city and county jurisdiction in the region based on a complex methodology that incorporates factors such as housing market demand, employment opportunities, community patterns, concentrations of low-income households, and more.

For the 2021-2029 Housing Element cycle, 183,861 RHNA units are allocated throughout all jurisdictions in Orange County. Of those units, the City of Orange is responsible for demonstrating the ability to construct 3,936 RHNA units, or 2% of the County allocation. The units do not have to be constructed if the market does not choose to do so, but our 2021-2029 Housing Element must demonstrate that we have viable zoning capacity to build our RHNA allocated units. The 3,936 units of this 2021-2029 RHNA cycle assigned to Orange represents a significant increase over the 2014- 2021 RHNA which required Orange to demonstrate the ability to accommodate only 363 units. In addition to identifying a total number of housing units needed during the planning period, the RHNA also assigns the housing unit need by household income level. The affordability breakdown for the City’s RHNA is provided below:

City of Orange Housing Needs 2021-2029
Income Category (% of County Area Median
Income)
Number of Units Percent
Very Low (21 to 50%) 1,067 27.1%
Low (51 to 80%) 604 15.3%
Moderate (81 to 120%) 677 17.2%
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City of Orange Housing Needs 2021-2029
Income Category (% of County Area Median
Income)
Number of Units Percent
Very Low (21 to 50%) 1,067 27.1%
Low (51 to 80%) 604 15.3%
Moderate (81 to 120%) 677 17.2%
Above Moderate (over 120%) 1,588 40.4%
Total 3,936 100%
Note: The 2021 area median income in Orange County is $106,700.

Housing Opportunity Sites
The City’s General Plan land use and zoning designations provide adequate development capacity to accommodate the City’s RHNA in various locations of the City. All of the identified sites represent under-utilized property that either has the potential for infill development, or the possibility of entire site redevelopment. Many of the sites are located in portions of Orange with Urban Mixed Use or Neighborhood Mixed Use zoning, while others are sites in transition with pending or active development applications that include housing. The City also anticipates that a number of housing units will be produced in the form of Accessory Dwelling Units or Junior Accessory Dwelling Units.

Housing Opportunity Sites and likely development scenarios are presented in Appendix B of the Housing Element Update.

Summary of RHNA Status and Sites Inventory
Extremely Low/ Very Low
Income
Low Income Moderate
Income
Above
Moderate
Income
Total
2021-2029 RHNA1,067 604 677 1,588 3,936
RHNA Credit (Units Built) -- -- -- -- --
Total RHNA Obligations 1,067 604 677 1,588 3,936
Sites Available
Residential Zones 0 0 0 81 81
Neighborhood Mixed Use (NMU-24) 16 4 114 0 134
Urban Mixed-Use (UMU) 1,025 478 618 1,696 3,817
Total Potential Capacity Based on
Existing GP and Zoning
1,041 482 732 1,777 4,032
Accessory Dwelling Unit Production 80 137 96 7 320
Total Sites Available 1,121 619 828 1,784 4,352
Potential Unit Surplus +54 +15 +151 +196 +416
Housing Affordability
The sites identified as candidate housing sites are anticipated to develop at a range of affordability levels. Where sites have General Plan and Zoning designations that allow over 30 units per acre, HCD acknowledges that greater affordability can be achieved in projects developed at this “default density” or higher. Sites meeting the “default density” are located in Uptown Orange in the vicinity of City of Orange Page 5 of 8 Printed on 12/23/2021
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the Outlets at Orange, and on West Katella Avenue.

In addition to the “default density” sites, the City of Orange benefits from long-standing relationships with local affordable housing developers who have a proven track record in Orange of bringing forward affordable housing units for families and senior citizens. Four such projects are currently in process, which the City anticipates will qualify with HCD towards fulfilling our 2021-2029 affordable RHNA categories. The proposed Housing Element Update anticipates continued work with these entities to continue to bring forward affordable/workforce housing projects meeting varied housing needs.

State and regional funding programs available for housing are presently expanding. Therefore, staff is speculating that tax incentives and a variety of creative funding sources will continue to evolve to encourage and facilitate affordable housing development. While the City receives relatively limited federal housing funds (HOME program), it will continue to accumulate its annual allocation in order to ultimately offer these funds to assist affordable housing projects in the community. Recent projects that have received HOME funds or involved creative financing include the entitled Corp Yard housing project on Struck Avenue and the Orange Senior Housing project on Katella Avenue.

During the 2014-2021 Housing Element cycle, 1,950 units were built in relation to the City’s 393 unit RHNA. The constructed units satisfied the identified housing unit need at nearly all of the income levels except for Very Low Income, for which 74 of the 83 unit need remain unmet.

Because the City has limited funding available to offer to affordable housing developers, and cannot look to redevelopment funds to incentivize development of affordable housing, it is dependent on the non-profit or private development community to bring forward affordable housing projects. Similarly, because the City does not have significant surplus property, it is not typically able to incentivize affordable housing projects by providing land. Therefore, housing development, whether market rate or affordable, is largely dependent on the development community and the economy.

Staff anticipates that affordable and workforce housing projects will continue to materialize in coming years, and are likely to occur on both sites contemplated in the Housing Element Update as candidate housing sites, as well as on parcels that had not been anticipated for infill residential development.

Issue 2: Policy Document Review and Updates
Changes in state law require the City to review and update, as necessary, its policy documents to bring various development disciplines into alignment with each other. There are four areas where follow up work on various policy documents will be necessary. Specifically:
· SB 1035 requires the City to identify flood hazards and address fire risk on residential property. Staff is presently undertaking a review of the General Plan Safety Element and anticipates bringing the item forward for Council consideration in the first quarter of 2022. · SB 1000 requires that the City include an environmental justice component to its General Plan. Staff intends to perform a review of the existing General Plan to determine where environmental justice content is currently addressed and where amendments may be needed to integrate additional language that addresses state law. · In conjunction with furthering fair housing opportunities through outreach and education, the City will update its Density Bonus ordinance to be consistent with state law. · To facilitate housing production and create more opportunities for housing development, the City of Orange Page 6 of 8 Printed on 12/23/2021
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· To facilitate housing production and create more opportunities for housing development, the City recently adopted a Small Lot Subdivision Ordinance, and is presently preparing a Transfer of Development Rights Ordinance that would allow development rights to be transferred from historic district properties to Urban Mixed Use districts for purposes of increasing density on the receiver site, and a specific plan for the North Tustin Street corridor that will provide strategic opportunities for the integration of housing in that district. · In response to any changes in state law related to emergency, transitional and supportive housing, the City will review and amend the Orange Municipal Code to ensure consistency with state law.

Issue 3: HCD Review
Staff submitted the Draft Housing Element for HCD review in July 2021. HCD provided comments to the City in September 2021 (Attachment 2). Staff with support from the City’s consultant has addressed these comments in the public hearing draft of the document. A matrix of HCD comments and City responses is provided in Attachment 3 to this report. The revised document will be resubmitted to HCD in anticipation of a determination that the Housing Element Update is in compliance with State law.

8. PUBLIC NOTICE
A Public Hearing notice was published in the Anaheim Bulletin newspaper on December 23, 2021 and posted at City kiosks. Project stakeholders were also notified.

9. ENVIRONMENTAL REVIEW
The project is exempt from the California Environmental Quality Act (CEQA) as follows: (i) pursuant to Section 15061(b)(3) of the state CEQA Guidelines (Common Sense Exemption) because it can be seen with certainty that there is no possibility that the proposed 2021-2029 Housing Element Update would have a significant effect on the environment; (ii) no property re-zoning is needed to accommodate the City’s Regional Housing Needs Allocation, and potential residential development densities have already been analyzed and mitigated in an earlier Environmental Impact Report (the Program Environmental Impact Report prepared for the 2010 Comprehensive General Plan Update, State Clearinghouse No. 2006031117); (iii) pursuant to Guideline 15283, CEQA does not apply to Regional Housing Needs determinations made by a city. For these reasons, no further CEQA documentation is required.

10. ADVISORY BOARD ACTION
Not applicable. The Planning Commission is advisory to the City Council for General Plan amendments.

11. ATTACHMENTS · Attachment 1 Planning Commission Resolution No. PC 01-22 · Attachment 2 HCD Comment Letter
· Attachment 3 HCD Response Matrix
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· Attachment 4 Draft Housing Element Update
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GENERAL PLAN AMENDMENT NO. 2022-0001

HOUSING ELEMENT UPDATE
RESOLUTION NO. PC 01-22

A RESOLUTION OF THE PLANNING

COMMISSION OF THE CITY OF ORANGE

RECOMMENDING THAT THE CITY COUNCIL
APPROVE GENERAL PLAN AMENDMENT NO.
2022-0001 ADOPTING THE CITY OF ORANGE
2021-2029 GENERAL PLAN HOUSING

ELEMENT
APPLICANT: CITY OF ORANGE
Moved by Commissioner _______ and seconded by Commissioner _______ that the following Resolution be adopted:

WHEREAS, the Planning Commission has authority per California Government Code Section 65358 and Orange Municipal Code Sections 17.08.020 and 17.10.010 to review and make recommendations to the City Council for amendments to the City’s General Plan; and WHEREAS, the Housing Element is one of the required chapters of the City’s General Plan, required by State law; and
WHEREAS, the City previously adopted its 2014-2021 General Plan Housing Element in January 2014; and
WHEREAS, the California Government Code requires Cities to review and update their Housing Elements according to a schedule set forth by the California Department of Housing and Community Development (HCD); and
WHEREAS, the City also desires to update its Housing Element to ensure that it accurately reflects the City’s housing policy and addresses community needs; and WHEREAS, the City has prepared the 2021-2029 Housing Element as an update to its previously approved Housing Element in compliance with State law; and WHEREAS, the Planning Commission conducted one duly advertised public hearing on January 3, 2022, at which time interested persons had an opportunity to testify either in support of, or opposition to, the 2021-2029 Housing Element update; NOW, THEREFORE, BE IT RESOLVED that the Planning Commission recommends that the City Council review, consider and make certain findings pursuant to CEQA and approve 47425
Planning Commission
Resolution No. PC 01-22

Page 2 ends

General Plan Amendment No. 2021-0001, adopting the 2021-2029 General Plan Housing Element based on the findings contained in Section 1 of this Resolution.

BE IT FURTHER RESOLVED that the Planning Commission recommends that the City Council direct staff to implement the policy action programs identified in the 2021-2029 Housing Element.

SECTION 1 – FINDINGS

1. The General Plan Housing Element meets the requirements of the California Government Code.

The Housing Element contains a housing needs assessment, resources and constraints analysis, review of past performance, housing policy actions, adequate sites analysis, and fair housing analysis, consistent with State requirements. The content of the Housing Element addresses comments provided by the State of California Department of Housing and Community Development Department (HCD) on the City’s 2021-2029 Draft Housing Element. Following City adoption of the 2021-2029 Housing Element, a copy will be submitted to HCD for final certification.

2. The Housing Element is generally consistent with the goals and policies stated within all other elements of the City’s General Plan.

The Housing Element is consistent with the City’s land use plan and is consistent with the goals and policies of the remaining elements of the General Plan.

3. The Housing Element advances the State’s housing goal of “decent housing and a suitable living environment for all members of the community”.

The Housing Element contains a needs assessment documenting housing needs in the Orange community and establishes policy actions to meet those needs through the preservation, conservation, improvement and production of housing units in Orange. The housing policy actions aim to provide opportunities for production of new housing units for all income levels, further fair housing, and also address housing for special needs groups including seniors and large families. As such, City adoption of the Housing Element and implementation of the housing policy actions advances the State’s housing goal of providing “decent housing and a suitable living environment for all members of the community.”
SECTION 2 – ENVIRONMENTAL REVIEW
The Housing Element update is exempt from the California Environmental Quality Act (CEQA) as follows: (i) pursuant to Section 15061(b)(3) of the State CEQA Guidelines (Common Sense Exemption) because it can be seen with certainty that there is no possibility that the proposed 2021-2029 Housing Element Update would have a significant effect on the environment; (ii) no property re-zoning is needed to accommodate the City’s Regional Housing Needs Allocation, and potential residential development densities have already been analyzed and mitigated in an 47526
Planning Commission
Resolution No. PC 01-22

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earlier Environmental Impact Report (the Program Environmental Impact Report prepared for the 2010 Comprehensive General Plan Update, State Clearinghouse No. 2006031117); (iii) pursuant to Guideline 15283, CEQA does not apply to Regional Housing Needs determinations made by a city. For these reasons, no further CEQA documentation is required.

I hereby certify that the foregoing Resolution was adopted on January 3, 2022 by the Planning Commission of the City of Orange by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

Dave Simpson, Planning Commission Chair
Date
47627
STATE OF CALIFORNIA - BUSINESS, CONSUMER SERVICES AND HOUSING AGENCY GAVIN NEWSOM, Governor

DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT

DIVISION OF HOUSING POLICY DEVELOPMENT
2020 W. El Camino Avenue, Suite 500
Sacramento, CA 95833
(916) 263-2911 / FAX (916) 263-7453
www.hcd.ca.gov
September 13, 2021
Anna Pehoushek, Assistant Community Development Director Planning Division
City of Orange
300 E. Chapman Ave.

Orange, CA 92866
Dear Anna Pehoushek:

RE: Review of the City of Orange’s 6th Cycle (2019-2021) Draft Housing Element Thank you for submitting the City of Orange’s draft housing element received for review on July 15, 2021. Pursuant to Government Code section 65585, subdivision (b), the California Department of Housing and Community Development (HCD) is reporting the results of its review. Our review was facilitated by a telephone conversation on September 9, 2021 with you, Senior Planner Chad Ortlieb, and the City’s consultants Nick Chen and Ines Galmiche of Kimley-Horn. In addition, HCD considered comments from the Kennedy Commission; the Law Office of Richard L. Spix; and Elder Law & Disability Rights Center pursuant to Government Code section 65585, subdivision (c).

The draft element addresses many statutory requirements; however, revisions will be necessary to comply with State Housing Element Law (Article 10.6 of the Gov. Code). The enclosed Appendix describes these, and other revisions needed to comply with State Housing Element Law.

To remain on an eight-year planning cycle, the City must adopt its housing element within 120 calendar days from the statutory due date of October 15, 2021 for Southern California Association of Governments (SCAG) localities. If adopted after this date, Government Code section 65588, subdivision (e)(4), requires the housing element be revised every four years until adopting at least two consecutive revisions by the statutory deadline. For more information on housing element adoption requirements, please visit HCD’s website at:
http://www.hcd.ca.gov/community-development/housing-element/housing-elementmemos/docs/sb375_final100413.pdf.

For your information, some general plan element updates are triggered by housing element adoption. HCD reminds the County to consider timing provisions and welcomes the opportunity to provide assistance. For information, please see the Technical Advisories issued by the Governor’s Office of Planning and Research at:
47728
Anna Pehoushek, Assistant Community Development Director

Page 2 ends

http://opr.ca.gov/docs/OPR_Appendix_C_final.pdf and
http://opr.ca.gov/docs/Final_6.26.15.pdf.

Public participation in the development, adoption and implementation of the housing element is essential to effective housing planning. Throughout the housing element process, the City should continue to engage the community, including organizations that represent lowerincome and special needs households, by making information regularly available and considering and incorporating comments where appropriate.

Pursuant to Government Code section 65583.3, subdivision (b), the City must utilize standards, forms, and definitions adopted by HCD when preparing the sites inventory. Please see HCD’s housing element webpage at https://www.hcd.ca.gov/communitydevelopment/housing-element/index.shtml for a copy of the form and instructions. The City can reach out to HCD at [email protected] for technical assistance. Upon adoption of the housing element, the City must submit an electronic version of the sites inventory with its adopted housing element to [email protected].

Several federal, state, and regional funding programs consider housing element compliance as an eligibility or ranking criteria. For example, the CalTrans Senate Bill (SB) 1 Sustainable Communities grant; the Strategic Growth Council and HCD’s Affordable Housing and Sustainable Communities programs; and HCD’s Permanent Local Housing Allocation consider housing element compliance and/or annual reporting requirements pursuant to Government Code section 65400. With a compliant housing element, the City meets housing element requirements for these and other funding sources.

We are committed to assisting the City in addressing all statutory requirements of State Housing Element Law. If you have any questions or need additional technical assistance, please contact Mashal Ayobi, of our staff, at [email protected] or (916) 776-7421.

Sincerely,
Shannan West
Land Use & Planning Unit Chief
Enclosure
47829
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APPENDIX

CITY OF ORANGE
The following changes are necessary to bring the City’s housing element into compliance with Article 10.6 of the Government Code. Accompanying each recommended change, we cite the supporting section of the Government Code.

Housing element technical assistance information is available on HCD’s website at http://www.hcd.ca.gov/community-development/housing-element/housing-elementmemos.shtml. Among other resources, the housing element section contains HCD’s latest technical assistance tool, Building Blocks for Effective Housing Elements (Building Blocks), available at http://www.hcd.ca.gov/community-development/building-blocks/index.shtml and includes the Government Code addressing State Housing Element Law and other resources.

A. Review and Revision
Review the previous element to evaluate the appropriateness, effectiveness, and progress in implementation, and reflect the results of this review in the revised element. (Gov. Code, § 65588 (a) and (b).)
As part of the evaluation of programs in the past cycle (Appendix A: 5th Cycle Review), the element must provide an explanation of the effectiveness of goals, policies, and related actions in meeting the housing needs of special needs populations (e.g., elderly, persons with disabilities, large households, female headed households, farmworkers and persons experiencing homelessness).

B. Housing Needs, Resources, and Constraints

1. Affirmatively further[ing] fair housing (AFFH) in accordance with Chapter 15 (commencing with Section 8899.50) of Division 1 of Title 2…shall include an assessment of fair housing in the jurisdiction (Gov. Code, § 65583, subd. (c)(10)(A)) The element includes information on pages H-79 to H-85 on AFFH. However, additional information is required as follows:

Enforcement and Outreach: The element must include the City’s ability to provide enforcement and outreach capacity at a geographic level. Page 28 of the AFFH Guidance Memo1 states, “Wherever possible, the summary should include a discussion of fair housing enforcement and outreach (FHEO) at a geographic level appropriate to better determine any locational trends—simply reporting information at a city-wide level will not fully display patterns and impacts on protected characteristics. Examples of appropriate geographic levels include census tracts, block groups, neighborhoods, housing development, or any other sub-section of a locality.” Additionally, there are some missing required pieces of the FHEO section:
• Lawsuits
1 HCD’s AFFH Guidance Memo: https://hcd.ca.gov/community-development/affh/docs/affh_document_final_4-27-2021.pdf 47930
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• Enforcement actions
• Settlements
• Judgments related to fair housing or civil rights
Pursuant to page 29 of the AFFH Guidance Memo, the element should include a description of state and local fair housing laws and how the locality complies with these laws. This page gives an example list of state and local fair housing laws.

Integration and Segregation: The housing element only analyzes integration/segregation patterns & trends for race and ethnicity. Per page 31 of the AFFH Guidance Memo, “At minimum, the analysis must discuss levels of segregation and integration for race and ethnicity, income, familial status, persons with disabilities, and identify the groups that experience the highest levels of segregation.”
Racially/Ethnically Concentrated Areas of Poverty (R/ECAP): While there are no R/ECAPs in the jurisdiction, the element must describe whether there are any Racially Concentrated Areas of Affluence (RCAAs). Page 33 of the AFFH Guidance Memo gives more information about RCAAs.

Disproportionate Housing Needs: The element needs a disproportionate housing needs analysis on homelessness. Please refer to page 39 of the AFFH Guidance Memo for more information on this.

Access to Opportunity: The element discusses the overall high/low opportunity indicators based on census tract but doesn’t give an in-depth discussion of the opportunity variables nor compare to Opportunities at a regional level. Please refer to page 35 of the AFFH Guidance Memo for more info to include to strengthen this section.

In addition, the element is missing an analysis on Disparities in Access to Opportunity for Persons with Disabilities. Pages 36-38 of the AFFH Guidance Memo give more information on what’s required for this part of the analysis.

Contributing Factors: On pages 3-82 of the housing element, it mentions that the County’s Analysis of Impediments (AI) identifies the regional goals for mitigating impediments to fair housing. However, the City must create its own list of contributing factors resulting from the AFFH analysis and must prioritize them. Per page 49 of the AFFH Guidance Memo, “The housing element must include an identification and prioritization of significant contributing factors to segregation, racially or ethnically concentrated areas of poverty, disparities in access to opportunity, and disproportionate housing needs.”
Local Data and Knowledge and Other Relevant Factors: The element generally does not address this requirement. Although the element provides some data in the areas of Fair Housing Enforcement and Capacity, Segregation and Integration, Racially/Ethnically Concentrated Areas of Poverty (R/ECAP), Access to Opportunity, and Disproportionate Housing Needs and Displacement Risk, the City’s analysis for each of these areas must also be informed by regional and local data and knowledge 48031
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from stakeholders within the City. For example, the analysis could utilize outreach as described above through surveys, interviews, etc. from local non-profit organizations and advocacy groups engaged in housing issues. In addition, the element must include other relevant factors that contribute to fair housing issues in the jurisdiction.

For instance, the element can analyze historical governmental and nongovernmental land use, zoning, and investment practices (e.g., infrastructure) or other information and demographic trends.

Sites Inventory: The element discusses the proposed number of sites and units relative to racial segregation (p. 3-84) but must also address other components of the assessment of fair housing (e.g., R/ECAP, Access to Opportunity, Disproportionate Housing Need, including Displacement). The analysis must also include discussion of all regional housing needs allocation (RHNA) categories, including above moderateincome households, in relation to areas with a higher proportion of white residents and higher median incomes and address how the sites are identified to improve conditions (or if sites exacerbate conditions, how a program can mitigate the impact), whether the sites are isolated by income group and should be supported by local data and knowledge.

Goals, Priorities, Metrics, and Milestones: The element must be revised to add or modify goals and actions based on the outcomes of a complete analysis. Goals and actions must specifically respond to the analysis and to the identified and prioritized contributing factors to fair housing issues and must be significant and meaningful enough to overcome identified patterns and trends. Actions must have metrics and milestones as appropriate and must address housing mobility enhancement, new housing choices and affordability in high opportunity areas, place-based strategies for community preservation and revitalization and displacement protection.

2. Include an analysis and documentation of household characteristics, including level of payment compared to ability to pay, housing characteristics, including overcrowding, and housing stock condition. (Gov. Code, § 65583, subd. (a)(2).) The element identifies the age of the housing stock (p. 2-32). However, this data is insufficient to estimate the number of units in need of rehabilitation and replacement.

The analysis could supplement this information with estimates from a recent windshield survey or sampling, estimates from the code enforcement agency, or information from knowledgeable builders/developers, including non-profit housing developers or organizations. For additional information, see the Building Blocks at http://www.hcd.ca.gov/community-development/building-blocks/housingneeds/housing-stock-characteristics.shtml.

3. An inventory of land suitable and available for residential development, including vacant sites and sites having realistic and demonstrated potential for redevelopment during the planning period to meet the locality’s housing need for a designated income level, and an analysis of the relationship of zoning and public facilities and services to these sites. (Gov. Code, § 65583, subd. (a)(3).) 48132
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The City has a RHNA of 3,936 housing units, of which 1,671 are for lower-income households. To address this need, the element relies on sites that are residentially zoned or in a mixed-use zone that permits residential uses. To demonstrate the adequacy of these sites and strategies to accommodate the City’s RHNA, the element must include complete analyses:

Realistic Capacity: For sites in commercial and mixed-use zones, the element must consider the likelihood of residential development of the estimated number of residential units determined for each site. To demonstrate the likelihood for residential development in nonresidential zones, the element could describe any performance standards mandating a specified portion of residential and any factors increasing the potential for residential development such as incentives for residential use, and residential development trends in the same nonresidential zoning districts.

For additional information, see the Building Blocks at
http://www.hcd.ca.gov/community-development/building-blocks/site-inventoryanalysis/analysis-of-sites-and-zoning.shtml#zoning.

Suitability of Nonvacant Sites: While the element provides a description of existing uses on nonvacant and underutilized sites, the element needs to also analyze the extent that existing uses may impede additional residential development. For example, the element includes sites owned by the Regents of the University of California, shopping and commercial centers with active retail, and an Outlet Mall.

The element can summarize past experiences converting existing uses to higher density residential development, include current market demand for the existing use, provide analysis of existing leases or contracts that would perpetuate the existing use or prevent additional residential development and include current information on development trends and market conditions in the City and relate those trends to the sites identified. The element could also consider indicators such as age and condition of the existing structure expressed developer interest, low improvement to land value ratio, and other factors. In addition, the element should indicate if the sites owned by the Regents of the University of California are expected to be put on a surplus list or if conversations with the Regents have occurred related to potential residential development of this site.

For your information, if the housing element relies upon nonvacant sites to accommodate more than 50 percent of the RHNA for lower-income households, the housing element must demonstrate that the existing use is not an impediment to additional residential development in the planning period (Gov. Code, § 65583.2, subd. (g)(2).). This can be demonstrated by providing substantial evidence that the existing use is likely to be discontinued during the planning period (Gov. Code, § 65583.2, subd. (g)(2).

Large Sites: The 1547 W Katella Ave site is 13.37 acres, and 1 City Blvd West is

11.30 acres. Sites larger than ten acres in size are deemed inadequate to accommodate housing for lower-income housing unless it is demonstrated that sites of equivalent size were successfully developed during the prior planning period for an equivalent number of lower-income housing units as projected for the site or unless the housing element describes other evidence to HCD that the site is adequate to 48233
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accommodate lower-income housing (Gov. Code, § 65583.2, subd. (c)(2)(A).). As part of this analysis the element could indicate if a part or whole of the site will be developed and how the site is expected to be redeveloped.

Accessory Dwelling Units (ADU): The element projects 320 ADUs over the planning period or approximately 40 ADUs per year over the eight-year planning period.

According to HCD records, ten units were permitted in 2018, ten were permitted in 2019, and 39 permitted in 2020. These trends do not support an assumption of 40 ADUs per year. To support assumptions for ADUs in the planning period, the element should reconcile trends with HCD records, adjust assumptions as appropriate and include additional information such as more recent permitted units and inquiries, resources and incentives, other relevant factors and modify policies and programs as appropriate.

Sites with Zoning for a Variety of Housing Types:

Emergency Shelters: While the element notes emergency shelters are allowed in the M-1 and M-2 zones, it must demonstrate the City still has sufficient capacity to accommodate the identified housing need for emergency shelters and evaluate the available acreage for characteristics like parcel size or potential redevelopment or reuse opportunities, proximity to services and describe development standards.

Accessory Dwelling Units: The element should clarify whether ADUs are permitted in all zones that allow residential uses. Table 3-6 on page 3-22 appears to indicate that ADUs are only allowed in single family residential zones.

4. An analysis of potential and actual governmental constraints upon the maintenance, improvement, or development of housing for all income levels, including the types of housing identified in paragraph (1) of subdivision (c), and for persons with disabilities as identified in the analysis pursuant to paragraph (7), including land use controls, building codes and their enforcement, site improvements, fees and other exactions required of developers, and local processing and permit procedures. The analysis shall also demonstrate local efforts to remove governmental constraints that hinder the locality from meeting its share of the regional housing need in accordance with Government Code section 65584 and from meeting the need for housing for persons with disabilities, supportive housing, transitional housing, and emergency shelters identified pursuant to paragraph (7). Transitional housing and supportive housing shall be considered a residential use of property and shall be subject only to those restrictions that apply to other residential dwellings of the same type in the same zone. (Gov. Code, § 65583, subd. (a)(5).)
Processing and Permitting Procedures: While the element describes the application process, it must describe and analyze the City permit processing and approval procedures by zone and housing type (e.g., multifamily rental housing, mobilehomes, housing for agricultural employees, supportive housing). The analysis must evaluate the processing and permit procedures’ impacts as potential constraints on housing supply and affordability. For example, the analysis should consider processing and approval procedures and time for typical single- and multi-family developments, 48334
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including type of permit, level of review, approval findings and any discretionary approval procedures.

Design Review: The element must describe and analyze the design review guidelines and process, including approval procedures and decision-making criteria, for their impact as potential constraints on housing supply and affordability. For example, the analysis could describe required findings and discuss whether objective standards and guidelines improve development certainty and mitigate cost impacts. The element must demonstrate this process is not a constraint or it must include a program to address this permitting requirement, as appropriate.

Zoning and Fees Transparency: The element must clarify its compliance with new transparency requirements for posting all zoning and development standards for each parcel on the jurisdiction’s website pursuant to Government Code section 65940.1, subdivision (a), paragraph (1).

Constraints on Housing for Persons with Disabilities: The element currently details that residential care facilities serving six or fewer persons are permitted in all residential zones. However, residential care facilities serving seven or more persons are limited to the same zones with the approval of a conditional use permit. The element should analyze the process as a potential constraint on housing for persons with disabilities and add or modify programs as appropriate to ensure zoning permits group homes objectively with approval certainty.

Local Ordinances: The element must specifically analyze locally adopted ordinances such as inclusionary ordinances or short-term rental ordinances that directly impact the cost and supply of residential development. The analysis should demonstrate local efforts to remove governmental constraints that hinder the locality from meeting its share of the regional housing need and from meeting the need for housing for persons with disabilities, supportive housing, transitional housing, and emergency shelters.

5. An analysis of potential and actual nongovernmental constraints upon the maintenance, improvement, or development of housing for all income levels, including the availability of financing, the price of land, the cost of construction, the requests to develop housing at densities below those anticipated in the analysis required by subdivision (c) of Government Code section 65583.2, and the length of time between receiving approval for a housing development and submittal of an application for building permits for that housing development that hinder the construction of a locality’s share of the regional housing need in accordance with Government Code section 65584. The analysis shall also demonstrate local efforts to remove nongovernmental constraints that create a gap between the locality’s planning for the development of housing for all income levels and the construction of that housing. (Gov. Code, § 65583, subd. (a)(6).)
The element must be revised to include analysis of requests to develop housing at densities below those anticipated, and the length of time between receiving approval for a housing development and submittal of an application for building permits that 48435
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potentially hinder the construction of a locality’s share of the regional housing need.

The analysis must also include an analysis regarding local efforts to address nongovernmental constraints.

6. Analyze any special housing needs such as elderly; persons with disabilities, including a developmental disability; large families; farmworkers; families with female heads of households; and families and persons in need of emergency shelter. (Gov.

Code, § 65583, subd. (a)(7).)
While the element quantifies the City’s special needs populations, it must also analyze their special housing needs. The element does not include analysis of available resources nor draw any conclusions on housing need that would lead towards programs. For a complete analysis of each population group, the element should discuss challenges faced by the population, the existing resources to meet those needs (e.g., availability senior housing units, number of large units, number of deed restricted units, etc.), an assessment of any gaps in resources, and proposed policies, programs, and funding to help address those gaps. In particular, the element should analyze and address how the City is addressing the housing and service needs of the 341 persons identified as experiencing homelessness. It is HCD’s understanding that the City is terminating its contract with Mary’s Kitchen which provides meals and other services within the City of Orange. The element should discuss how the City will be replacing these services or filling the needs gap resulting from the of loss of Mary’s Kitchen within the City.

7. Analyze existing assisted housing developments that are eligible to change to nonlow-income housing uses during the next ten years due to termination of subsidy contracts, mortgage prepayment, or expiration of use restrictions. (Gov. Code, § 65583, subd. (a)(9) through 65583(a)(9)(D).)
According to the California Housing Partnership, four properties that are at-risk:

Friendly Center (8 units), Casas Del Rio (40 units), Walnut-Pixley (Site A) (22 units), and the Knolls Apartments (260 units) of converting to market rate within a ten-year period. As a result, the element must provide an analysis on units identified as at-risk of converting to market-rate housing. The analysis of “at-risk” units must include the following (Gov. Code, § 65583, subd. (a)(9).):
• Listing of each development by project name and address • Type of governmental assistance received
• Earliest date of change from low-income use
• Total number of elderly and non-elderly units
• Estimated total cost for producing, replacing, and preserving the units at-risk • Identification of public and private non-profit corporations known to the City to have the legal and managerial capacity to acquire and manage at-risk units • Identification and consideration of use of federal, state, and local financing and subsidy programs.

For additional information and sample analysis, see the Building Blocks at http://www.hcd.ca.gov/community-development/building-blocks/housingneeds/assisted-housing-developments.shtml and for more information on identifying 48536
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units at-risk, see the California Housing Partnership Corporation at http://www.chpc.net.

C. Housing Programs

1. Include a program which sets forth a schedule of actions during the planning period, each with a timeline for implementation, which may recognize that certain programs are ongoing, such that there will be beneficial impacts of the programs within the planning period, that the local government is undertaking or intends to undertake to implement the policies and achieve the goals and objectives of the housing element through the administration of land use and development controls, the provision of regulatory concessions and incentives, and the utilization of appropriate federal and state financing and subsidy programs when available. The program shall include an identification of the agencies and officials responsible for the implementation of the various actions. (Gov. Code, § 65583, subd. (c).)
Programs must demonstrate that they will have a beneficial impact within the planning period. Beneficial impact means specific commitment to deliverables, measurable metrics or objectives, definitive deadlines, dates, or benchmarks for implementation. Programs containing unclear language (e.g., “Evaluate”; “Consider”; “Encourage”; etc.) should be amended to include more specific and measurable actions. Deliverables should occur early in the planning period to ensure actual housing outcomes.

To address the program requirements of Government Code section 65583, subdivision (c)(1-6), and to facilitate implementation, all programs should be revised to include: (1) a description of the City’s specific role in implementation including meaningful actions the city will take to achieve the identified goals, policies, and program objectives; (2) definitive implementation timelines (e.g., December 31, 2024); (3) objectives, quantified where appropriate; and (4) identification of responsible agencies and officials (e.g., Planning Assistant, Community Development, etc.). For example, Policy Action 1A (Acquisition/Rehabilitation of Multifamily Residential Development), Policy Action 2C (Development of Housing for Large Families), 2L (Candidate Sites Used in Previous Housing Elements) all requires specific timeframes for identified actions. In addition, the following programs require additional information:

Policy Action 2G (Support Community Housing Development Organization New Construction Projects): The element must describe how the City will seek qualified organizations and more general information on this program.

Policy Action 4B (Homeless Services). The Policy Action states the City provides support for navigation centers in Buena Park and Placentia. The element must describe how the City supports these navigation centers and how these navigation centers address and support the housing and service needs of those individuals experiencing homelessness in the City of Orange.

Policy Action 4E (Support for Persons with Disabilities): Describe how the City will support housing for persons with disabilities and work with the regional center to promote opportunities for supportive living services.
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2. Identify actions that will be taken to make sites available during the planning period with appropriate zoning and development standards and with services and facilities to accommodate that portion of the city’s or county’s share of the regional housing need for each income level that could not be accommodated on sites identified in the inventory completed pursuant to paragraph (3) of subdivision (a) without rezoning, and to comply with the requirements of Government Code section 65584.09. Sites shall be identified as needed to facilitate and encourage the development of a variety of types of housing for all income levels, including multifamily rental housing, factory-built housing, mobilehomes, housing for agricultural employees, supportive housing, single-room occupancy (SRO) units, emergency shelters, and transitional housing.
(Gov. Code, § 65583, subd. (c)(1).)
As noted in Finding B3, the element does not include a complete site analysis; therefore, the adequacy of sites and zoning were not established. Based on the results of a complete sites inventory and analysis, the City may need to add or revise programs to address a shortfall of sites or zoning available to encourage a variety of housing types. In addition, the element should be revised as follows:

Policy Action 2E (Facilitate Infill Construction): Provide a specific timeline for evaluating provisions in the Zoning Code for feasibility of providing additional regulatory relief (i.e., streamlined review, reduced and objective development standards, lot consolidations, etc.) In addition, this program could be expanded to provide specific provisions to support development of housing on the sites identified in the inventory including the redevelopment of sites with existing uses identified to accommodate the lower-income RHNA. As existing leases have been identified as a potential constraint to developing the nonvacant sites for the lower-income RHNA, the program could also monitor development on sites with existing leases as it relates to the provision of housing affordable to lower-income households and commit to the provision of additional actions as necessary to facilitate development or identify additional sites.

Policy Action 2K (Create ADU Monitoring Program): The program states that the City will monitor ADU development progress after 2 years of adopting the 6th cycle housing element and will take action within six months to ensure adequate capacity at each income level. The program should also commit to monitor by affordability assumptions.

3. The housing element shall contain programs which assist in the development of adequate housing to meet the needs of extremely low-, very low-, low- and moderate-income households. (Gov. Code, § 65583, subd. (c)(2).) Policy Action 2B (Promotion of Affordable Housing) indicates the development of housing for lower- and moderate-income households will be assisted primarily by applying state density bonus law (SDBL). However, in addition to complying with SDBL, the element must include a program(s) describing specific actions the City will take to assist in the development of housing affordable to lower- and moderateincome households, including extremely low-income households (ELI). For 48738
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example, programs could prioritize some funding for the development of housing affordable to ELI households and offer financial incentives or regulatory concessions to encourage the development of a variety of housing types, such as multifamily, SRO units, and supportive housing, to address the identified housing needs for ELI households. The inclusion of specific programs to assist in the development of housing affordable to lower-income households is critical as, per third party comments received from the Kennedy Commission, the number of units affordable to moderate- and above moderate-income households approved in the last seven years was 23 times greater than those approved for low- and very lowincome households.

4. Address and, where appropriate and legally possible, remove governmental and nongovernmental constraints to the maintenance, improvement, and development of housing, including housing for all income levels and housing for persons with disabilities. The program shall remove constraints to, and provide reasonable accommodations for housing designed for, intended for occupancy by, or with supportive services for, persons with disabilities. (Gov. Code, § 65583, subd. (c)(3).)
As noted in Findings B4 and B5, the element requires a complete analysis of potential governmental and nongovernmental constraints. Depending upon the results of that analysis, the City may need to revise or add programs and address and remove or mitigate any identified constraints.

8. The housing program shall preserve for low-income household the assisted housing developments identified pursuant to paragraph (9) of subdivision (a). The program for preservation of the assisted housing developments shall utilize, to the extent necessary, all available federal, state, and local financing and subsidy programs identified in paragraph (9) of subdivision (a), except where a community has other urgent needs for which alternative funding sources are not available. The program may include strategies that involve local regulation and technical assistance. (Gov.

Code, § 65583, subd. (c)(6).)
The element includes Policy Action 1B (Monitoring and Preservation of “at-risk” Units) to monitor the units and provide technical assistance. However, the element must include specific and proactive actions to preserve the at-risk units. For example, the program could support applications by non-profits for funding to purchase at-risk units, strengthen relationships with the listed non-profits and develop a plan or strategy for quickly moving forward in the case units are noticed to convert to market-rate uses in the planning period, and consider pursuing funding on at least an annual basis. The program could also commit to contacting nonprofits immediately to develop a preservation strategy by a date certain and be ready to quickly act when notice of conversion is received and monitoring the units to ensure tenants receive proper notifications.

9. Develop a plan that incentivizes and promotes the creation of ADUs that can be offered at affordable rent, as defined in Section 50053 of the Health and Safety Code, for very low, low-, or moderate-income households. For purposes of this 48839
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paragraph, “accessory dwelling units” has the same meaning as “accessory dwelling unit” as defined in paragraph (4) of subdivision (i) of Section 65852.2. (Gov. Code, § 65583, subd. (c)(7).)
The element is required to include a program that incentivizes or promotes ADU development for very low-, low-, and moderate-income households. This can take the form of flexible zoning requirements, development standards, or processing and fee incentives that facilitate the creation of ADUs, such as reduced parking requirements, fee waivers and more. Other strategies could include developing information packets to market ADU construction, targeted advertising of ADU development opportunities or establishing an ADU specialist within the planning department.

D. Quantified Objectives
Establish the number of housing units, by income level, that can be constructed, rehabilitated, and conserved over a five-year time frame. (Gov. Code, § 65583, subd. (b)(1 & 2).)
The element must include quantified objectives to establish an estimate of housing units by individual income category that can be constructed, rehabilitated, and conserved over the planning period.

E. Public Participation
Local governments shall make a diligent effort to achieve public participation of all economic segments of the community in the development of the housing element, and the element shall describe this effort. (Gov. Code, § 65583, subd.(c)(8).) While the element includes a general summary of the public participation efforts, it must also demonstrate diligent efforts were made to involve all economic segments of the community in the development of the housing element. The element should be revised to discuss outreach to lower-income and special needs groups during the public participation efforts, solicitation efforts for survey responses, and participation in community workshops. In addition, the element should also summarize the public comments and describe how they were considered and incorporated into the element.

For additional information, see the Building Blocks at http://www.hcd.ca.gov/communitydevelopment/building-blocks/getting-started/public-participation.shtml. 48940
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Review and Revision
A. As part of the evaluation of programs in the past cycle (Appendix A: 5th Cycle Review), the element must
provide an explanation of the effectiveness of goals,
policies, and related actions in meeting the housing needs of special needs populations (e.g., elderly, persons with disabilities, large households, female headed households, farmworkers and persons experiencing homelessness).

Appendix A, various Policy
Actions
The following listed Policy Actions provide specific
quantified accomplishments completed by the City
between 2016 and 2020. There is no additional
information available for the following programs outside of what has been included in the document.
 Policy Action 5: Development of Housing for
Large Families
 Policy Action 6: Provision of Senior Housing
Opportunities
 Policy Action 14: Coordinate with Chapman
University to Address Student Housing
 Policy Action 16: Homeless Services
 Policy Action 18: Section 8 Rental Assistance
 Policy Action 19: Support for Persons with
Developmental Disabilities
 Policy Action 20: Single Room Occupancy Units
 Policy Action 21: Revise Ordinance to Comply
with State Law Regarding Transitional and
Supportive Housing
Housing Needs, Resources, and Constraints
B1. The element includes information on pages H-79 to H85 on AFFH. However, additional information is required as follows:

A statement has been added noting there are no current
fair housing cases in the City, and no data is available from the Fair Housing Foundation.

Mapping of candidate sites in relation to AFFH overlays (R/ECAP, RCAAs, and TCAC) has been added to Section
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simply reporting information at a city-wide level will not fully display patterns and impacts on protected
characteristics. Examples of appropriate geographic levels include census tracts, block groups, neighborhoods,
housing development, or any other sub-section of a
locality.” Additionally, there are some missing required pieces of the FHEO section:
 Lawsuits
 Enforcement actions
 Settlements
 Judgments related to fair housing or civil rights
Pursuant to page 29 of the AFFH Guidance Memo, the
element should include a description of state and local fair housing laws and how the locality complies with
these laws. This page gives an example list of state and local fair housing laws.

3.K – Analysis of Sites Pursuant to AB 686 – providing
geographic-level trends.

Table 1-1 includes a list of Housing Element
requirements, including AFFH requirements, and where
they are referenced throughout the Document.

B1. Integration and Segregation: The housing element
only analyzes integration/segregation patterns & trends for race and ethnicity. Per page 31 of the AFFH Guidance Memo, “At minimum, the analysis must discuss levels of
segregation and integration for race and ethnicity,
income, familial status, persons with disabilities, and identify the groups that experience the highest levels of segregation.”
Section 3.J.1 and 3.J.3 Segregation analysis is provided within Section 3.J.1.

Additional mapping and analysis has been added to
show percentages of persons with disabilities, familial statuses, and income.

B1. Racially/Ethnically Concentrated Areas of Poverty
(R/ECAP): While there are no R/ECAPs in the jurisdiction, the element must describe whether there are any Racially Concentrated Areas of Affluence (RCAAs). Page 33 of the AFFH Guidance Memo gives more information about
RCAAs.

Section 3.K A section on RCAAs has been added; it includes background, analysis, and maps illustrating ethnicity
concentrations and Median Income. RCAAs have been
identified in the City of Orange and the requisite analysis with identified census tracts has been added.

Local and regional context has also been added by
comparing the median income and population
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representation of White households versus all
households, for both the City and the County.

B1. Disproportionate Housing Needs: The element needs
a disproportionate housing needs analysis on
homelessness. Please refer to page 39 of the AFFH
Guidance Memo for more information on this.

Section 2.E.7 This analysis is included in the Community Profile Section 2.E.7. The existing section includes background on homelessness as well as local and regional context
based on the County’s Point in Time study.

Data has been added to this section to provide
demographic background on persons experiencing
homelessness – count of families, transitional age youth, race and ethnicity, and sheltered or unsheltered
homelessness.

B1. Access to Opportunity: The element discusses the
overall high/low opportunity indicators based on census tract but doesn’t give an in-depth discussion of the
opportunity variables nor compare to Opportunities at a regional level. Please refer to page 35 of the AFFH
Guidance Memo for more info to include to strengthen
this section.

In addition, the element is missing an analysis on
Disparities in Access to Opportunity for Persons with
Disabilities. Pages 36-38 of the AFFH Guidance Memo give more information on what’s required for this part of the analysis.

Section 3, Table 3-22 and
Figure 3-5
Section 3.J.5
Data and analysis has been added (Table 3-22 and Figure 3-5) providing a regional and local comparison to
opportunities.

Housing needs for persons with disabilities is detailed in depth in the Community Profile pages 2-21 to 2-24.

Additional information and mapping is provided in the
Discussion of Disproportionate Housing Needs section
on pages 3-80 to 3-81.

B1. Contributing Factors: On pages 3-82 of the housing
element, it mentions that the County’s Analysis of
Impediments (AI) identifies the regional goals for
mitigating impediments to fair housing. However, the City must create its own list of contributing factors resulting from the AFFH analysis and must prioritize them. Per
page 49 of the AFFH Guidance Memo, “The housing
element must include an identification and prioritization Section 3.H.7 Additional information on contributing factors has been added to the Affirmatively Furthering Fair Housing
Section 3.H.7. This includes the identification of 4
contributing factors.
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of significant contributing factors to segregation, racially or ethnically concentrated areas of poverty, disparities in access to opportunity, and disproportionate housing
needs.”
B1. Local Data and Knowledge and Other Relevant
Factors: The element generally does not address this
requirement. Although the element provides some data
in the areas of Fair Housing Enforcement and Capacity,
Segregation and Integration, Racially/Ethnically
Concentrated Areas of Poverty (R/ECAP), Access to
Opportunity, and Disproportionate Housing Needs and
Displacement Risk, the City’s analysis for each of these areas must also be informed by regional and local data
and knowledge from stakeholders within the City. For
example, the analysis could utilize outreach as described above through surveys, interviews, etc. from local nonprofit organizations and advocacy groups engaged in housing issues. In addition, the element must include
other relevant factors that contribute to fair housing
issues in the jurisdiction. For instance, the element can analyze historical governmental and nongovernmental
land use, zoning, and investment practices (e.g.,
infrastructure) or other information and demographic
trends.

Section 3.H.2
Appendix C
Section 3.H.2 includes an overview on outreach that
informed the data and information used in the Housing
Element. Additional details on the outreach is provided in Appendix C.

Additional analysis on contributing factors has been
added.

B1. Sites Inventory: The element discusses the proposed number of sites and units relative to racial segregation (p. 3-84) but must also address other components of the
assessment of fair housing (e.g., R/ECAP, Access to
Opportunity, Disproportionate Housing Need, including
Displacement). The analysis must also include discussion of all regional housing needs allocation (RHNA)
categories, including above moderate-income
households, in relation to areas with a higher proportion Section 3.J.2 References to candidate sites in relation to R/ECAP, RCAAs, and Opportunity areas has been added.
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of white residents and higher median incomes and
address how the sites are identified to improve
conditions (or if sites exacerbate conditions, how a
program can mitigate the impact), whether the sites are isolated by income group and should be supported by
local data and knowledge.

B1. Goals, Priorities, Metrics, and Milestones: The
element must be revised to add or modify goals and
actions based on the outcomes of a complete analysis.

Goals and actions must specifically respond to the
analysis and to the identified and prioritized contributing factors to fair housing issues and must be significant and meaningful enough to overcome identified patterns and
trends. Actions must have metrics and milestones as
appropriate and must address housing mobility
enhancement, new housing choices and affordability in
high opportunity areas, place-based strategies for
community preservation and revitalization and
displacement protection.

Section 4, Policy Action 4A
Section 3.J.7
Section 4 includes programs which address the fair
housing issues identified in Section 3.

Contributing factors to fair housing have been identified and added in Section 3.J.7. Including the housing policy actions which address each fair housing issue.

B2. The element identifies the age of the housing stock (p. 2-32). However, this data is insufficient to estimate the number of units in need of rehabilitation and
replacement. The analysis could supplement this
information with estimates from a recent windshield
survey or sampling, estimates from the code enforcement agency, or information from knowledgeable
builders/developers, including non-profit housing
developers or organizations. For additional information, see the Building Blocks at
http://www.hcd.ca.gov/communitydevelopment/building-blocks/housing-needs/housingstock-characteristics.shtml.

Section 2.F.4 A statement has been added to Section 2.F.4 noting there are currently no ongoing code enforcement cases
for units needing rehabilitation or replacing.
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B3. The City has a RHNA of 3,936 housing units, of which 1,671 are for lower-income households. To address this
need, the element relies on sites that are residentially zoned or in a mixed-use zone that permits residential
uses. To demonstrate the adequacy of these sites and
strategies to accommodate the City’s RHNA, the element
must include complete analyses:

Realistic Capacity: For sites in commercial and mixed-use zones, the element must consider the likelihood of
residential development of the estimated number of
residential units determined for each site. To
demonstrate the likelihood for residential development in nonresidential zones, the element could describe any
performance standards mandating a specified portion of
residential and any factors increasing the potential for residential development such as incentives for residential use, and residential development trends in the same
nonresidential zoning districts. For additional
information, see the Building Blocks at
http://www.hcd.ca.gov/communitydevelopment/building-blocks/site-inventoryanalysis/analysis-of-sites-and-zoning.shtml#zoning.

Appendix B, Table B-2
Appendix B, Section B
Table B-2 describes past residential development on
Urban Mixed Use sites. Mixed-use zoned sites comprise
all of the City’s identified capacity for the lower income RHNA categories.

Added UMU zoning code language in support of
residential development for affordable units and
supporting residential as a freestanding use.

Added Chapter 17.19.060 language which requires
findings to be made for development in the UMU zone
which will maintain the City’s inventory of sites to meet its RHNA.

B3. Suitability of Nonvacant Sites: While the element
provides a description of existing uses on nonvacant and underutilized sites, the element needs to also analyze the extent that existing uses may impede additional
residential development. For example, the element
includes sites owned by the Regents of the University of California, shopping and commercial centers with active retail, and an Outlet Mall. The element can summarize
past experiences converting existing uses to higher
density residential development (Table B-2), include
Appendix B, Table B-2
Appendix B, Section B &
Table B-3
Removed UC Regents sites from sites inventory
Table B-2 contains an analysis of the City’s past
experiences converting existing uses to higher density
residential development, including the use prior to
redevelopment and a project analysis of the approved
and/or constructed project.
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current market demand for the existing use, provide
analysis of existing leases or contracts that would
perpetuate the existing use or prevent additional
residential development and include current information on development trends and market conditions in the City and relate those trends to the sites identified. The
element could also consider indicators such as age and
condition of the existing structure expressed developer interest, low improvement to land value ratio, and other factors. In addition, the element should indicate if the sites owned by the Regents of the University of California are expected to be put on a surplus list or if conversations with the Regents have occurred related to potential
residential development of this site.

For your information, if the housing element relies upon nonvacant sites to accommodate more than 50 percent
of the RHNA for lower-income households, the housing
element must demonstrate that the existing use is not an impediment to additional residential development in the planning period (Gov. Code, § 65583.2, subd. (g)(2).). This can be demonstrated by providing substantial evidence
that the existing use is likely to be discontinued during the planning period (Gov. Code, § 65583.2, subd. (g)(2).

Revised assumed density in UMU area to 55 du/ac per
analysis in Table B-2 of past development of non-vacant sites within UMU.

Added Lease Analysis, Existing Uses on Candidate Sites
and Redevelopment Opportunity, Housing Market
Analysis to Appendix B, Section B
Added analysis of improvement to land value ratio and
buildable area analysis – most sites showed lower than
10% utilization of full site based on max FAR and current use
B3. Large Sites: The 1547 W Katella Ave site is 13.37
acres, and 1 City Blvd West is 11.30 acres. Sites larger than ten acres in size are deemed inadequate to
accommodate housing for lower-income housing unless it
is demonstrated that sites of equivalent size were
successfully developed during the prior planning period for an equivalent number of lower-income housing units
as projected for the site or unless the housing element describes other evidence to HCD that the site is adequate to accommodate lower-income housing (Gov. Code, §
Appendix B, Table B-4 1547 W Katella Avenue site: Analysis at 13.37 is the net acreage (23.01 gross acres). Only considers existing
surface parking which may be put into a parking
structure to accommodate residential uses. Existing
commercial uses anticipated to remain. Anticipated net
yield adjusted to be based on 9.95 acres.
1 City Blvd West: City has an on hold application for
residential uses and past interest in development. There 49647
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65583.2, subd. (c)(2)(A).). As part of this analysis the element could indicate if a part or whole of the site will be developed and how the site is expected to be
redeveloped.
is a past DA on this site. Anticipated net yield adjusted to be based on 9.95 acres.

Summary tables updated to reflect
B3. Accessory Dwelling Units (ADU): The element projects 320 ADUs over the planning period or approximately 40
ADUs per year over the eight-year planning period.

According to HCD records, ten units were permitted in
2018, ten were permitted in 2019, and 39 permitted in
2020. These trends do not support an assumption of 40
ADUs per year. To support assumptions for ADUs in the
planning period, the element should reconcile trends with HCD records, adjust assumptions as appropriate and
include additional information such as more recent
permitted units and inquiries, resources and incentives, other relevant factors and modify policies and programs as appropriate.

Appendix B, Section A Added the total permitted ADUs and applications for 2021.
 27 permitted in 2020
 56 permitted so far in 2021 / 64 total
applications
Also added reference in Appendix B to the Housing
Programs in Section 4.

B3. Sites with Zoning for a Variety of Housing Types:

Emergency Shelters: While the element notes emergency
shelters are allowed in the M-1 and M-2 zones, it must
demonstrate the City still has sufficient capacity to
accommodate the identified housing need for emergency
shelters and evaluate the available acreage for
characteristics like parcel size or potential redevelopment or reuse opportunities, proximity to services and describe development standards.

Accessory Dwelling Units: The element should clarify
whether ADUs are permitted in all zones that allow
residential uses. Table 3-6 on page 3-22 appears to
indicate that ADUs are only allowed in single family
residential zones.

Section 3.B.6, Table 3-6 Section 3.B.6 has been updated to include additional information on M1 and M2 zones, as well as the
requirements for emergency shelters.

ADUs updated in Table 3-6 – they are permitted in all
Residential zones.
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B4. Processing and Permitting Procedures: While the
element describes the application process, it must
describe and analyze the City permit processing and
approval procedures by zone and housing type (e.g.,
multifamily rental housing, mobilehomes, housing for
agricultural employees, supportive housing). The analysis must evaluate the processing and permit procedures’
impacts as potential constraints on housing supply and
affordability. For example, the analysis should consider processing and approval procedures and time for typical single- and multi-family developments, including type of permit, level of review, approval findings and any
discretionary approval procedures.

Section 3.B.11 General permit processing time for SFRs and MFRs has been added to Section 3.B.11.

Each housing type listed in Section 3.B.6 includes the
zones that permit the development and potential
permits required.

B4. Design Review: The element must describe and
analyze the design review guidelines and process,
including approval procedures and decision-making
criteria, for their impact as potential constraints on
housing supply and affordability. For example, the
analysis could describe required findings and discuss
whether objective standards and guidelines improve
development certainty and mitigate cost impacts. The
element must demonstrate this process is not a
constraint or it must include a program to address this permitting requirement, as appropriate.

Section 3.B.11 A statement has been added to Section 3.B.11 – Design Review to reference the programs in Section 4 noting
the City will be evaluating review procedures and
evaluate the feasibility of objective development
standards.

B4. Zoning and Fees Transparency: The element must
clarify its compliance with new transparency
requirements for posting all zoning and development
standards for each parcel on the jurisdiction’s website pursuant to Government Code section 65940.1,
subdivision (a), paragraph (1).

Section 3, Table 3-6 and
Table 3-7
A statement has been added stating the City’s Zoning is available in the Municipal Code online.

An existing statement noted the availability of
permitting fees on the City’s website.

B4. Constraints on Housing for Persons with Disabilities:

The element currently details that residential care
facilities serving six or fewer persons are permitted in all Section 4, Policy Action 4F A new Policy Action 4F has been added to amend the Municipal Code in compliance with State law.
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residential zones. However, residential care facilities serving seven or more persons are limited to the same
zones with the approval of a conditional use permit. The element should analyze the process as a potential
constraint on housing for persons with disabilities and add or modify programs as appropriate to ensure zoning
permits group homes objectively with approval certainty.

B4. Local Ordinances: The element must specifically
analyze locally adopted ordinances such as inclusionary ordinances or short-term rental ordinances that directly impact the cost and supply of residential development.

The analysis should demonstrate local efforts to remove governmental constraints that hinder the locality from
meeting its share of the regional housing need and from meeting the need for housing for persons with
disabilities, supportive housing, transitional housing, and emergency shelters.

Section 3.B.5 A new section on Local Ordinances has been added to include the existing Growth Management Measures
analysis and new analysis on the City’s Short Term
Rental Ordinance.

B5. The element must be revised to include analysis of
requests to develop housing at densities below those
anticipated, and the length of time between receiving
approval for a housing development and submittal of an
application for building permits that potentially hinder the construction of a locality’s share of the regional
housing need. The analysis must also include an analysis regarding local efforts to address nongovernmental
constraints.

Section 3.E.4 Additional information on developing at lower densities has been added to the analysis of non-vacant sites to be redeveloped for residential uses. This includes existing examples of projects proposed at lower densities but
developed at a high density due to the City’s assistance in facilitating mixed-use developments.

B6. While the element quantifies the City’s special needs populations, it must also analyze their special housing needs. The element does not include analysis of available resources nor draw any conclusions on housing need that would lead towards programs. For a complete analysis of each population group, the element should discuss
challenges faced by the population, the existing resources Section 2.E
Section 2.E.7
Additional information on resources has been added to
Section 2 for each identified special needs group.

Including City-provided resources and those provided by local community organizations.

Section 2.E.7 on persons experiencing homelessness
includes a list of organizations and agencies which
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to meet those needs (e.g., availability senior housing
units, number of large units, number of deed restricted units, etc.), an assessment of any gaps in resources, and proposed policies, programs, and funding to help address those gaps. In particular, the element should analyze and address how the City is addressing the housing and
service needs of the 341 persons identified as
experiencing homelessness. It is HCD’s understanding
that the City is terminating its contract with Mary’s
Kitchen which provides meals and other services within
the City of Orange. The element should discuss how the
City will be replacing these services or filling the needs gap resulting from the of loss of Mary’s Kitchen within the City.
provide assistance to persons experiencing
homelessness. These organizations are well suited to
cover services lost by the closure of Mary’s Kitchen.

B7. According to the California Housing Partnership, four properties that are at-risk: Friendly Center (8 units), Casas Del Rio (40 units), Walnut-Pixley (Site A) (22 units), and the Knolls Apartments (260 units) of converting to market rate within a ten-year period. As a result, the element must provide an analysis on units identified as at-risk of converting to market-rate housing. The analysis of “atrisk” units must include the following (Gov. Code, § 65583, subd. (a)(9).):
 Listing of each development by project name and
address
 Type of governmental assistance received
 Earliest date of change from low-income use
 Total number of elderly and non-elderly units
 Estimated total cost for producing, replacing, and
preserving the units at-risk
 Identification of public and private non-profit
corporations known to the City to have the legal
Section 3.J.6
Section 3, Table 3-32b
Updated the list of at-risk units. The following properties are not at-risk:
 Walnut-Prixley
 Knolls Apartments
A note has been added to Table 3-32b stating the
Friendly Center is planning on maintaining its
affordability.
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and managerial capacity to acquire and manage
at-risk units
 Identification and consideration of use of federal,
state, and local financing and subsidy programs.

For additional information and sample analysis, see the Building Blocks at http://www.hcd.ca.gov/communitydevelopment/building-blocks/housing-needs/assistedhousing-developments.shtml and for more information on identifying units at-risk, see the California Housing Partnership Corporation at
http://www.chpc.net.

Housing Problems
C1. Programs must demonstrate that they will have a
beneficial impact within the planning period. Beneficial impact means specific commitment to deliverables,
measurable metrics or objectives, definitive deadlines, dates, or benchmarks for implementation. Programs
containing unclear language (e.g., “Evaluate”; “Consider”; “Encourage”; etc.) should be amended to include more
specific and measurable actions. Deliverables should
occur early in the planning period to ensure actual
housing outcomes.

Section 4, Policy Actions
2G, 4B, and 4E
Specific timeframes added to each program in Section 4.

Policy Action 2G has been updated with a reference to
the section containing the resources and entities that
may assist in preserving affordable units.

Policy Action 4B states the City provides financial
support to the Buena Park and Placentia navigation
centers for operations. This provides regional assistance to Orange County individuals experiencing
homelessness; individuals who may be from the City of
Orange and who may otherwise come to Orange in the
future.

The City assists local individuals experiencing
homelessness by coordinating with local organizations,
2-1-1 Orange County, Orange County Housing Authority
and other government agencies to provide services and
assistance directly to individuals.
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(2) definitive implementation timelines (e.g., December 31, 2024);
(3) objectives, quantified where appropriate; and
(4) identification of responsible agencies and officials (e.g., Planning Assistant, Community Development, etc.).

For example, Policy Action 1A (Acquisition/Rehabilitation of Multifamily Residential Development), Policy Action 2C (Development of Housing for Large Families), 2L
(Candidate Sites Used in Previous Housing Elements) all requires specific timeframes for identified actions. In addition, the following programs require additional
information:

Policy Action 2G (Support Community Housing
Development Organization New Construction Projects):

The element must describe how the City will seek
qualified organizations and more general information on this program.

Policy Action 4B (Homeless Services). The Policy Action states the City provides support for navigation centers in Buena Park and Placentia. The element must describe
how the City supports these navigation centers and how
these navigation centers address and support the housing and service needs of those individuals experiencing
homelessness in the City of Orange.

Policy Action 4E (Support for Persons with Disabilities):

Describe how the City will support housing for persons
with disabilities and work with the regional center to
promote opportunities for supportive living services.

Policy Action 4E – the support supports by working with the Regional Center of Orange County to identify the
housing needs of persons served by the Center,
promoting opportunities for supportive living services
and supporting efforts to eliminate barriers to housing for persons with developmental disabilities.
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C2. As noted in Finding B3, the element does not include a complete site analysis; therefore, the adequacy of sites and zoning were not established. Based on the results of a complete sites inventory and analysis, the City may
need to add or revise programs to address a shortfall of sites or zoning available to encourage a variety of housing types. In addition, the element should be revised as
follows:

Policy Action 2E (Facilitate Infill Construction): Provide a specific timeline for evaluating provisions in the Zoning Code for feasibility of providing additional regulatory relief (i.e., streamlined review, reduced and objective development standards, lot consolidations, etc.) In
addition, this program could be expanded to provide
specific provisions to support development of housing on the sites identified in the inventory including the
redevelopment of sites with existing uses identified to accommodate the lower-income RHNA. As existing leases
have been identified as a potential constraint to
developing the nonvacant sites for the lower-income
RHNA, the program could also monitor development on
sites with existing leases as it relates to the provision of housing affordable to lower-income households and
commit to the provision of additional actions as necessary to facilitate development or identify additional sites.

Policy Action 2K (Create ADU Monitoring Program): The
program states that the City will monitor ADU
development progress after 2 years of adopting the 6th
cycle housing element and will take action within six
months to ensure adequate capacity at each income
Section 4, Policy Actions
2E and 2K
See responses to B3 for additional justification and
revisions to the City’s Site Analysis. This did not result in the need for additional programs.

Policy Action 2E updated to include 12 month timeline.

The program has also been revised to include: “The City will monitor the development of infill sites with existing leases as it relates to the provision of housing affordable to lower-income households. The City will review and
establish additional actions or identify additional sites should it be deemed necessary when reviewing the
monitored sites annually.”
Policy Action 2K language clarified to track in relation to affordability assumptions within the Housing Element.
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level. The program should also commit to monitor by
affordability assumptions.

C3. Policy Action 2B (Promotion of Affordable Housing)
indicates the development of housing for lower- and
moderate-income households will be assisted primarily
by applying state density bonus law (SDBL). However, in addition to complying with SDBL, the element must
include a program(s) describing specific actions the City will take to assist in the development of housing
affordable to lower- and moderate-income households,
including extremely low-income households (ELI). For
example, programs could prioritize some funding for the development of housing affordable to ELI households and offer financial incentives or regulatory concessions to encourage the development of a variety of housing types, such as multifamily, SRO units, and supportive housing, to address the identified housing needs for ELI households.

The inclusion of specific programs to assist in the
development of housing affordable to lower-income
households is critical as, per third party comments
received from the Kennedy Commission, the number of
units affordable to moderate- and above moderateincome households approved in the last seven years was 23 times greater than those approved for low- and very
low-income households.

Section 4, Policy Action
2M
Housing Policy Action 2M has been added. The program
stats:
“The City recognizes the importance of supporting the
development of housing for low and extremely low income households. While the City does not build housing, it is a primary goal of the Housing Element to support developers and increase the feasibility of development of housing for extremely low and low income households. Actions for this program include the following:
 When funding is available, the City shall subsidize up to 100 percent of the City’s application processing fees
for qualifying developments where all units affordable
to 80% AMI or lower.
 Promote the benefits of this program to the
development community by posting information on its
webpage and creating a handout to be distributed with
land development applications.”
C4. As noted in Findings B4 and B5, the element requires a complete analysis of potential governmental and
nongovernmental constraints. Depending upon the
results of that analysis, the City may need to revise or add programs and address and remove or mitigate any
identified constraints.

See responses to B4 for additional analysis and programs relating to governmental and nongovernmental
constraints.
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C8. The element includes Policy Action 1B (Monitoring
and Preservation of “at-risk” Units) to monitor the units and provide technical assistance. However, the element
must include specific and proactive actions to preserve the at-risk units.

For example, the program could support applications by
non-profits for funding to purchase at-risk units,
strengthen relationships with the listed non-profits and develop a plan or strategy for quickly moving forward in the case units are noticed to convert to market-rate uses in the planning period, and consider pursuing funding on at least an annual basis. The program could also commit to contacting non-profits immediately to develop a
preservation strategy by a date certain and be ready to quickly act when notice of conversion is received and
monitoring the units to ensure tenants receive proper
notifications.

Section 4, Policy Action 1B Housing Policy Action 1B has been updated to include additional actions.

C9. The element is required to include a program that
incentivizes or promotes ADU development for very low-, low-, and moderate-income households. This can take the form of flexible zoning requirements, development
standards, or processing and fee incentives that facilitate the creation of ADUs, such as reduced parking
requirements, fee waivers and more. Other strategies
could include developing information packets to market
ADU construction, targeted advertising of ADU
development opportunities or establishing an ADU
specialist within the planning department.

Section 4, Policy Action 2J Housing Policy Action 2J has been updated to include provisions for the creation of an information packet on ADUs to be available at City Hall.

The program states: “The City of Orange will continue to permit construction of accessory dwelling units
consistent with State law. The City has incorporated new legislation regarding ADU development into the
Municipal Code and will continue to make updates to the City’s Municipal Code to reflect new State laws as
required.

The City will develop an informational packet to be
available to the public at City Hall. The packet will
include processes and key information regarding ADU
development opportunities. The City will continue to
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work with property owners who come forward with
interest in developing ADUs and/or questions regarding
ADUs.”
Quantified Objectives
D. The element must include quantified objectives to
establish an estimate of housing units by individual
income category that can be constructed, rehabilitated, and conserved over the planning period.

Section 4, Table 4-1 Quantified objectives are provided by income category in Table 4-1.

Public Participation
E. While the element includes a general summary of the
public participation efforts, it must also demonstrate
diligent efforts were made to involve all economic
segments of the community in the development of the
housing element. The element should be revised to
discuss outreach to lower-income and special needs
groups during the public participation efforts, solicitation efforts for survey responses, and participation in
community workshops. In addition, the element should
also summarize the public comments and describe how
they were considered and incorporated into the element.

For additional information, see the Building Blocks at
http://www.hcd.ca.gov/communitydevelopment/building-blocks/getting-started/publicparticipation.shtml.

Section 4, Policy Action 3D
Appendix C
Section 2.E
Housing Policy Action 3D has been added to extend
community outreach effort beyond the Housing Element
Update period with a focus on traditionally underrepresented communities.

A matrix of responses to public review draft comments
has been created and added to Appendix C.

In addition, outreach and resources for special needs
populations has been added to Section 2.
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City of Orange
Planning Commission
January 03, 2022

MINUTES - DRAFT
The Planning Commission of the City of Orange, California convened on January 3, 2022, at 7:15 p.m. in a Regular Meeting in the Council Chamber, 300 E. Chapman Avenue, Orange, California.

1. OPENING/CALL TO ORDER
Chair Simpson called the meeting to order at 7:15 p.m.

1.1 PLEDGE OF ALLEGIANCE
Vice-Chair Vazquez led the flag salute.

1.2 ROLL CALL

Present: Simpson, Vazquez, Glasgow, Martinez, and Trapesonian

Absent: None

2. PUBLIC COMMENTS
Adrienne Gladson spoke about the important role of the Planning Commission in major project reviews for 2022.

3. CONSENT CALENDAR
All matters listed under the Consent Calendar are considered to be routine by the Planning Commission and will be enacted by one motion. There will be no separate discussion of said items unless members of the Planning Commission, staff or the public request specific items removed from the Consent Calendar for separate action.

3.1. Approval of meeting minutes of the Planning Commission of the City of Orange for the December 6, 2021 Regular Meeting.

ACTION: A motion was made by Vice-Chair Vazquez, seconded by Commissioner Glasgow to approve the Consent Calendar, with revisions.

The motion carried by the following vote:

Ayes: Vazquez, Glasgow, Martinez, and Trapesonian
Noes: None

Absent: None
Abstain: Simpson

4. ASSISTANT COMMUNITY DEVELOPMENT DIRECTOR REPORTS
None

Page 1 of 3 ends

Orange City CouncilFebruary 8, 2022

Orange City Council
February 8, 2022