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The Village Santa Ana Specific Plan Entitlements & Development Agreement (1561 W. Sunflower Avenue) August 11, 2025 Page 12 Key Issue Analysis Affordable Housing and Opportunity Creation Ordinance (AHOCO) The City’s inclusionary housing ordinance, known as AHOCO, generally applies to housing projects proposing five or more units that are also requesting an increase in allowable density or are located in certain sections of the City that were “up-zoned,” such as through zone change or general plan amendment to allow additional residential development after November 28, 2011. As the Project is located in a section of the City that meets this threshold (SBSFA), the Applicant’s request is subject to the AHOCO requirements of production of affordable housing or payment of in- lieu fees. Pursuant to Sections 41-1903 (Exempt Projects) and 41-1904 (Options to Satisfy Inclusionary Requirements) of the SAMC, the Applicant has indicated intent to select the option to pay in-lieu fees at a rate of $5 per square foot of habitable residential area through the requested development agreement. Based on available figures for the Project and under the current ordinance, staff’s analysis of the Project indicates the Project could generate approximately $7,100,000 in in-lieu fees, based on 1,583 units proposed, unit types/mix, and square footages. Any in-lieu fees generated by the Project must be spent on production of affordable housing in the City of Santa Ana. Regional Housing Needs Allocation (RHNA) The State has placed an urgent emphasis on housing of all types. Santa Ana’s RHNA for the current General Plan Housing Element cycle (6th Cycle), which extends from 2021-2029, includes 3,137 housing units. This allocation is for housing units to be constructed to support the anticipated growth in the City over this period. The City has a proven track record of not only planning for housing but issuing building permits for the construction of housing at all affordability categories as demonstrated by exceeding its 5th Cycle (2014-2021) RHNA by over 2,300 percent. The City is also on pace to meet or well exceed its affordable housing and other residential development requirements for the 6th Cycle, far outpacing any city in Orange County, as evidenced by issuing 4,441 permits for housing units across all affordability categories, as detailed in the latest (2024) Housing Element Annual Progress Report, fulfilling 100 percent of its RHNA for above moderate housing. However, very-low, low, and moderate housing numbers have not been met and the Project would assist with AHOCO in-lieu fees that can be utilized to target the remaining housing categories. SP-6 would assist the City in achieving its housing goals in a location where high intensity urban development is both achievable and consistent with the current and envisioned surrounding urban form. Amendment Application No. 2025-01 Pursuant to Sections 41-659 through 41-667 of the SAMC, the approval of an amendment application (zone change) requires approval of an ordinance by the City Council, with the Planning Commission serving as an advisory body. Amendment applications may be granted when it can be shown that the request is consistent with the intent and purpose of Chapter 41 (Zoning) of the SAMC, with previous amendments, and it is in substantial conformance with the General Plan. The Applicant is requesting approval of AA No. 2025- 01 in order to change the zoning designation of the Project Site from SD-48 to SP-6 in order to guide future development of the Project Site consistent with the GPU and SBSFA.