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Response: The Legal Aid Society letter declares that "A Second Amendment is a finding of blight.. .which must satisfy a two-pronged test: (1) the area must constitute a serious social or economic burden on the community, which cannot be alleviated by private enterprise alone, and (2) one or more of the characteristics of blight...must exist." This statement is not accurate because Section 33030 of the Health and Safety Code in fact states that "A blighted area is one which is characterized by one or more of those conditions set forth in Sections 33031 or 33032, causing a reduction of, or lack of, proper utilization of the area to such an extent that it constitutes a serious physical (emphasis added), social or economic burden on the communi ty which cannot reasonably be expected to be reversed or alleviated by private enterprise acting along." The discussion of social maladjustment in the Report to City Council does not conclude the following, as implied by the Legal Aid Society letter: that low and moderate income households are detrimental and that affordable rental housing is a negative factor. The discussion of social maladjustment in the Report to City Council suggest that the income levels of Amendment Area residents and a lack of affordable housing has led to overcrowded housing conditions in the Amendment Area and that these same conditions could not support new private investment into the area's housing stock. Parts III and IV of the Report identify the Agency's set-aside of 20 percent of all tax increment funds as a redevelopment tool that will help to improve housing conditions in the Amended Project Area. The Report to City Council does not attempt to justify the Second Amendment solely on the basis of building deterioration and dilapidation. Deterioration and dilapidation is only one of several types of physical conditions such as, defective design and character of physical construction, age and obsolescene, mixed character of buildings and shifting uses, faulty interior arrangement and exterior spacing, lots of irregular form, shape and size and inadequate public improvements, which is examined in the Report and which are shown to adversely affect the Amendmen t Area. For examp Ie , 10 percent 0 f the structures surveyed require major rehabilitation and another 31 percent exhibit a lack of proper 3 11191