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counterpoint noting she was unaware of a requirement for ADUs to be rented. Assistant City Manager Dolan confirmed this is true and the City does not monitor if the ADU is rented. He confirmed this scenario is plausible but the City has not encountered it. Councilmember Testa criticized the ministerial State legislation for its affordable housing mandates with no requirement of affordability or civic reimbursement through school fees and such. In response to Councilmember Testa's inquiry, Director Clark confirmed either "any" or "all" could work in the ordinance relative to an ADU meeting state exemptions and advised "all" may be slightly clearer although "any" is not incorrect. Councilmember Testa requested it be changed to "all." In response to Councilmember Testa's inquiry, Director Clark believes the intention of the State is for cities to create setback standards but they cannot be so drastic as to eliminate or prohibit an ADU. She concurred with Assistant City Manager Dolan's interpretation that, if there was nowhere to go but across a setback line, the City would have to allow that encroachment. She advised this provision would not give the homeowner carte blanche to build an ADU of any size as the City could request adjustments to better fit it within the property's area. Councilmember Testa called to revisit the City's 1,200 square foot limit, supporting maintaining the state minimum limits of 800 square feet for one-bedroom ADUs and 1,000 square feet for two-bedroom ADUs. She expressed support for pre-approved plans. Lastly, she expressed support for ADUs in new PUDs because ADUs will be vetted in the approval process and not be unexpected by neighbors. Mayor Brown commented that pre-approved designs and pre-approval in PUDs are easy to support. In response to Mayor Brown's inquiry, Councilmember Testa advised she would stick with the January 19th decision on the prohibition of two-story ADUs citing positive online feedback. She requested more information on the square footage component. In response to Councilmember Narum's previous example, Councilmember Arkin advised that if an ADU is initially disguised as a home addition there would be a design review. She expressed support for ADUs in new PUDs because there is a design review, corner lot setbacks, landscape/fence screening, pre-approved designs, and changing "any" to "all" in both instances. She believes the City should not go over 16 feet in height unless bound by law. She expressed support for the smaller state standards for square footage noting a 1,200 square foot design would probably not fit the definition of affordable. She supports keeping pre-2020 owner-occupancy requirements to help maintain the integrity of neighborhoods. In response to Mayor Brown's inquiry, Director Clark confirmed the State mandates there be no owner- occupancy requirement for any units approved from 2020-25. Councilmember Testa clarified the issue is with units approved before 2020 and those to be approved after 2025 if the State restriction goes away. She cited community feedback to keep the owner-occupancy in place for those currently subject to it. In response to Councilmember Balch's inquiry, Senior Planner Bonn advised a majority of existing ADUs are deed-restricted. She added many of those outliers are owner-occupancy mandated by PUDs and CC&Rs. Councilmember Balch addressed the Walnut Hills neighborhood confusion from the January 19th discussion clarifying it was a 75% restriction for the builder and it was locked in by the PUD once the development became live and this number was much lower than 75% when construction ceased. He added the confusion lies in whether or not the state law would override the PUD for second-story ADUs. City Council Minutes Page 8 of 17 February 16, 2021