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The ruling mentions "There is little caselaw interpreting this statutory definition." in regard to that question. It mentions one case where building 8 residential units was a "housing development project"

It then goes into the fact that the law in question refers to a "housing development project" in one of 3 ways, 2 of which definitely don't apply, leaving behind the phrase "Residential units only", which they then point "units" is plural, not singular.

So perhaps.. 2 residential units would have been a housing development project.

It wasn't mentioned from what I saw, but you seem interested in laws changing; SB9 went into effect Jan. 1, 2022 for the expressed purpose of promoting housing development by allowing landowners to end up with four houses from what used to be a single plot.

There's also some mention of the original plans calling for an ADU that was removed when the plan was scaled down at the request of the city, so the plaintiff was arguing they should have been covered because it was multi-unit. (If I skimmed it right.)