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BACKGROUND At its May 20, 2008 meeting, the Council requested a report be prepared regarding the impact and effects of the Save Pleasanton's Hills & Housing Cap initiative (per Elections Code §9212), as well as discuss issues raised regarding hillside regulations. As required by law, this report is being presented within thirty days. DISCUSSION (Note: The Executive Summary of the report is reproduced here.} The Save Pleasanton's Hills & Housing Cap Initiative, if adopted by the City Council or approved by the voters, would amend the City's General Plan by adding new policies to the Land Use Element under Open Space and Growth Management. In its simplest terms, the Initiative would: (a) prohibit (subject to certain exemptions) the placement of housing units and structures, as well as grading to construct residential and commercial structures, on properties with slopes greater than 25% or within 100 vertical feet of a ridgeline; and (b) define a housing unit to include any residence that has a kitchen and a bathroom. Some terms of the Initiative, however, are not defined and therefore, in the absence of an implementing ordinance that would define certain terms with more specificity, will be subject to City Council interpretation when the terms of the Initiative are applied to specific development projects. Hillside Development: Similar to some of the existing policies in the General Plan limiting development in areas of 25% or greater slope, the Initiative will create a general prohibition on placing housing units and structures on slopes of 25% or greater, or within 100 vertical feet of a ridgeline, as well as a general prohibition on grading to construct residential or commercial structures in those areas. However, the critical terms of "slope", "structure", and "ridgeline" are not defined in the Initiative itself. Although the Initiative creates an exemption for developments of 10 or fewer units on a "legal parcel", the Initiative also prohibits the subdivision of a "legal parcel". This language is open to several interpretations, with significantly different results. As applied, the Initiative's hillside development restrictions may result in the reduction of 119-224 housing units from hillside areas, generally west of Foothill Road and in the Happy Valley and North Sycamore areas. It is, however, expected that those units will shift to other places in the City, but likely be replaced by smaller homes or apartments through infill projects or redevelopment of already developed property. Housing Units: The second policy proposed by the Initiative defines housing units. This definition also presents questions of interpretation. The Initiative indicates (in its "statement of reasons" for the Initiative) that the Pleasanton definition of housing unit should be Page 2 of 5