The California Environmental Quality Act (CEQA) is a state law from the 70's that requires an environmental impact report for any new development in order to determine what is the consequences of the development are going to be, what are the concerns of the public are, and what can be done to mitigate the impacts on the environment.
All development is subject to CEQA, however there are approximately 33 exemptions from this law, and one of them is Single Family Dwellings. There are also exceptions to these exemptions, such as "unusual circumstances" or "cumulative impacts."
Save the Arcadia Highlands is arguing that a 6000+ sq. ft. house in a neighborhood that has an average size home of approx. 2600 sf, and 98% of the 850 homes are under 6000 sq. ft., is evidence that the 2 proposed McMansion projects are "unusual circumstances." Obviously these homes will have substantial impacts on the environment. These include traffic, utilities, schools and the aesthetic of the neighborhood.
Save the Arcadia Highlands is also arguing that there is a cumulative impact on the environment when all the projects proposed in the last 2 years are taken as a whole, thereby creating a "development project" and not just two separate homes that happen to be immensely large.
In addition, these projects do not conform to the City of Arcadia's General Plan, which has designated the Highlands as a "Very Low Density Residential" area. This means only somewhere between 3 to 12 people per acre. Replacement of these homes changes this density to 6 to 24 people per acre because proposed projects are 4 to 5 bedrooms. Additionally, in homes as large as the two in question, there are additional rooms that are "habitable." Meaning they are capable of being easily converted into bedrooms. These include studios, lofts, dens and home gyms.
The Highlands voted to be a "Design Review Zone," Something that allows the neighborhood to determine what is "harmonious and compatible." This comes with the power to deny plans for new homes that do not conform. 2 years ago the City Council overturned a Home Owners Association denial, sending the message that HOAs could no longer deny because of size. Since then, the HOAs have been bombarded with development.
Save the Arcadia Highlands has put together a great website that you can find by clicking here. You will definitely need to check it out. This group is on the front lines of a fight that even now is spreading over the city lines and into Sierra Madre.
Here is an article from that site dealing with some of the disinformation being spread by certain parties hoping to turn the Arcadia Highlands into yet another unhappy McMansion zone.