Existing law, the Permit Streamlining Act, which is part of the Planning and Zoning Law, requires each public agency to provide a development project applicant with a list that specifies the information that will be required from any applicant for a development project. The act requires a city, county, or special district that has an internet website to make available on its internet website certain information, as applicable, including its current schedule of fees and exactions.

This bill would require a city or county that has an internet website to make a fee estimate tool that the public can use to calculate an estimate of fees and exactions, as specified, for a proposed housing development project available on its internet website. The bill would authorize the city or county to choose the format of the fee estimate tool. The bill would require a city or county with a population of greater than 500,000 to meet these requirements on or before July 1, 2031. The bill would require a city or county with a population of 500,000 or fewer to meet these requirements on or before July 1, 2032. By requiring a city or county to include a fee estimate tool on its internet website, the bill would impose a state-mandated local program.

Existing law requires the Department of Housing and Community Development to develop specifications for the structure, functions, and organization of a housing and community development information system for this state. Existing law requires the system to include statistical, demographic, and community development data that will be of assistance to local public entities in the planning and implementation of housing and community development programs. Existing law required the department, on or before January 1, 2024, to create an impact fee nexus study template that may be used by local jurisdictions.

This bill would require the department, on or before July 1, 2028, to create a fee schedule template for proposed housing development projects that may be used by cities and counties, as specified, and a list of best practices regarding presenting information for fees and exactions levied by local jurisdictions. The bill would authorize the department to create a fee estimate tool that may be used by cities and counties for the purpose of meeting the above-described requirements. The bill would authorize the department to contract with nonprofit or academic institutions to complete the fee schedule template, list of best practices, and fee estimate tool.

The bill would include findings that changes proposed by this bill address a matter of statewide concern rather than a municipal affair and, therefore, apply to all cities, including charter cities.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law, the Permit Streamlining Act, which is part of the Planning and Zoning Law, requires each public agency to provide a development project applicant with a list that specifies the information that will be required from any applicant for a development project. The act requires a city, county, or special district that has an internet website to make available on its internet website certain information, as applicable, including its current schedule of fees and exactions.

This bill would require a city or county that has an internet website to make a fee estimate tool that the public can use to calculate an estimate of fees and exactions, as specified, for a proposed housing development project available on its internet website. The bill would authorize the city or county to choose the format of the fee estimate tool. The bill would require a city or county with a population of greater than 500,000 to meet these requirements on or before July 1, 2031. The bill would require a city or county with a population of 500,000 or fewer to meet these requirements on or before July 1, 2032. By requiring a city or county to include a fee estimate tool on its internet website, the bill would impose a state-mandated local program.

Existing law requires the Department of Housing and Community Development to develop specifications for the structure, functions, and organization of a housing and community development information system for this state. Existing law requires the system to include statistical, demographic, and community development data that will be of assistance to local public entities in the planning and implementation of housing and community development programs. Existing law required the department, on or before January 1, 2024, to create an impact fee nexus study template that may be used by local jurisdictions.

This bill would require the department, on or before July 1, 2028, to create a fee schedule template for proposed housing development projects that may be used by cities and counties, as specified, and a list of best practices regarding presenting information for fees and exactions levied by local jurisdictions. The bill would authorize the department to create a fee estimate tool that may be used by cities and counties for the purpose of meeting the above-described requirements. The bill would authorize the department to contract with nonprofit or academic institutions to complete the fee schedule template, list of best practices, and fee estimate tool.

The bill would include findings that changes proposed by this bill address a matter of statewide concern rather than a municipal affair and, therefore, apply to all cities, including charter cities.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law, the Permit Streamlining Act, which is part of the Planning and Zoning Law, requires each public agency to provide a development project applicant with a list that specifies the information that will be required from any applicant for a development project. The act requires a city, county, or special district that has an internet website to make available on its internet website certain information, as applicable, including its current schedule of fees and exactions.

This bill would require a city or county that has an internet website to make a fee estimate tool that the public can use to calculate an estimate of fees and exactions, as specified, for a proposed housing development project available on its internet website. The bill authorizes would authorize the city or county to choose the format of the fee estimate tool. The bill would require a city or county with a population of greater than 500,000 to meet these requirements on or before July 1, 2031. The bill would require a city or county with a population of 500,000 or less fewer to meet these requirements on or before July 1, 2032. By requiring a city or county to include a fee estimate tool on its internet website, the bill would impose a state-mandated local program.

Existing law requires the Department of Housing and Community Development to develop specifications for the structure, functions, and organization of a housing and community development information system for this state. Existing law requires the system to include statistical, demographic, and community development data that will be of assistance to local public entities in the planning and implementation of housing and community development programs. Existing law required the department, on or before January 1, 2024, to create an impact fee nexus study template that may be used by local jurisdictions.

This bill would require the department, on or before July 1, 2028, to create a fee schedule template for proposed housing development projects that may be used by cities and counties, as specified, and a list of best practices regarding presenting information for fees and exactions levied by local jurisdictions. The bill would authorize the department to create a fee estimate tool that may be used by cities and counties for the purpose of meeting the above-described requirements. The bill would authorize the department to contract with nonprofit or academic institutions to complete the fee schedule template, list of best practices, and fee estimate tool.

The bill would include findings that changes proposed by this bill address a matter of statewide concern rather than a municipal affair and, therefore, apply to all cities, including charter cities.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law, the Permit Streamlining Act, which is part of the Planning and Zoning Law, requires each public agency to provide a development project applicant with a list that specifies the information that will be required from any applicant for a development project. The act requires a city, county, or special district that has an internet website to make available on its internet website certain information, as applicable, including its current schedule of fees and exactions.

This bill would require a city or county that has an internet website to make a fee estimate tool that the public can use to calculate an estimate of fees and exactions, as specified, for a proposed housing development project available on its internet website. The bill authorizes the city or county to choose the format of the fee estimate tool. The bill would require a city or county with a population of greater than 500,000 to meet these requirements on or before July 1, 2031. The bill would require a city or county with a population of 500,000 or less to meet these requirements on or before July 1, 2032. By requiring a city or county to include a fee estimate tool on its internet website, the bill would impose a state-mandated local program.

Existing law requires the Department of Housing and Community Development to develop specifications for the structure, functions, and organization of a housing and community development information system for this state. Existing law requires the system to include statistical, demographic, and community development data that will be of assistance to local public entities in the planning and implementation of housing and community development programs. Existing law required the department, on or before January 1, 2024, to create an impact fee nexus study template that may be used by local jurisdictions.

This bill would require the department, on or before July 1, 2028, to create a fee schedule template for proposed housing development projects that may be used by cities and counties, as specified, and a list of best practices regarding presenting information for fees and exactions levied by local jurisdictions. The bill would authorize the department to create a fee estimate tool that may be used by cities and counties for the purpose of meeting the above-described requirements. The bill would authorize the department to contract with nonprofit or academic institutions to complete the fee schedule template, list of best practices, and fee estimate tool.

The bill would include findings that changes proposed by this bill address a matter of statewide concern rather than a municipal affair and, therefore, apply to all cities, including charter cities.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law relating to the government of cities authorizes the legislative body of a city to engage in specified acts relating to municipal water supply and infrastructure.

This bill would make nonsubstantive changes to this provision.

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 3012

Author:(Grayson)

As Amended Ver:June 12, 2024

Majority vote

SUMMARY

Requires cities and counties to make available on their internet websites a fee estimate tool that the public can use to calculate an estimate of fees and exactions for a proposed housing development, and requires the Department of Housing and Community Development (HCD) to create a fee schedule template and a list of best practices, as specified.

Senate Amendments

1. Make a technical change.
2. Make changes to the findings and declarations.

COMMENTS

1. Mitigation Fee Act. When approving development projects, counties and cities can require the applicants to mitigate the project's effects by paying fees—known as mitigation fees, impact fees, or developer fees. The California courts have upheld impact fees for sidewalks, parks, school construction, and many other public purposes.

When establishing, increasing, or imposing a fee as a condition of approving a development project, the Mitigation Fee Act requires local officials to:

• 1. Identify the fee's purpose.
  2. Identify the fee's use, including the public facilities to be financed.
  3. Determine a reasonable relationship between the fee's use and the development.
  4. Determine a reasonable relationship between the public facility's need and the development.

When imposing a fee as a condition of approving a development project, the Mitigation Fee Act also requires local officials to determine a reasonable relationship between the fee's amount and the cost of the public facility. In its 1987 Nollan decision, the U.S. Supreme Court said there must be an "essential nexus" between a project's impacts and the conditions for approval. In the 1994 Dolan decision, the U.S. Supreme Court said that conditions on development must have a "rough proportionality" to a project's impacts.

In the 1996 Ehrlich decision, the California Supreme Court distinguished between "legislatively enacted" conditions that apply to all projects and "ad hoc" conditions imposed on a project-by- project basis. Ehrlich applied the "essential nexus" test from Nollan and the "rough proportionality" test from Dolan to "ad hoc' conditions. The Court did not apply the Nollan and Dolan tests to the conditions that were "legislatively enacted." In other words, local officials have generally faced greater scrutiny when they impose conditions on a project-by-project basis. As a result of these decisions and the Mitigation Fee Act, local agencies have conducted nexus studies to ensure any proposed impact fees meet these legal tests for most impact fees. Other requirements in the Mitigation Fee Act ensure that impact fees are appropriately levied and spent.

1. AB 1483 of 2019. In response to a 2019 Terner Center for Housing Innovation report that studied fee transparency, among other issues, AB 1483 (Grayson), Chapter 662, Statutes of 2019, required cities, counties, and special districts to post specified housing related information on their websites. This information included the following:
   1. A current schedule of fees, exactions, and affordability requirements imposed by the city, county, or special district, including any dependent special districts, of the city or county applicable to a proposed housing development project, which must be presented in a manner that clearly identifies the fees, exactions, and affordability requirements that apply to each parcel.
   2. All zoning ordinances and development standards, which must specify the zoning, design, and development standards that apply to each parcel.
   3. A list that cities and counties must develop under existing law of projects located within military use airspace or a low-level flight path.
   4. Specified annual fee reports or specified annual financial reports.
   5. An archive of impact fee nexus studies, cost of service studies, or equivalent, conducted by the city, county, or special district on or after January 1, 2018.

Since the passage of AB 1483, the information required to be posted on a local agency's website has changed. AB 1473 (Senate Committee on Governance and Finance), Chapter 371, Statutes of 2020, required local agencies to separately post their connection fees and capacity charges, without being tied to specific parcels, and made technical fixes to ensure that special districts were properly accounted for by AB 1483. Additionally, AB 602 (Grayson), Chapter 347, Statutes of 2021, required local agencies, among other things, to do the following:

• 1. Post a written fee schedule or a link directly to the written fee schedule on its internet website.
  2. Request from a development proponent, upon issuance of a certificate of occupancy or the final inspection, whichever occurs last, the total amount of fees and exactions associated with the project for which the certificate was issued. The city or county must post this information on its website, and update it at least twice per year. A city or county is not responsible for the accuracy of the information received by the development proponent.

According to the Author

According to the author, "AB 1483 (Grayson, 2019) was a significant step forward in providing greater transparency on development impact fees, and it required jurisdictions to provide information on impact fee schedules, nexus fees studies, and other information that could help inform a developer of a jurisdiction's impact fees. Despite the progress made on providing greater transparency on development impact fees, recent reports by SPUR and the Terner Center found that there were significant shortcomings in compliance with the requirements of AB 1483 by many jurisdictions. While many jurisdictions have provided the information required by AB 1483, fee schedules often did not provide all applicable fees and calculating fees remained confusing.

AB 3012 will help improve impact fee transparency and eliminate inconsistencies that may exist by requiring HCD to develop a fee schedule template and list of best practices that jurisdictions can utilize. This will harmonize State law with HCD's goals on data sharing, and make it easier for the public and for developers to understand the potential fees that may be encountered during the development process. Additionally, this bill would help advance transparency by requiring that jurisdictions provide a fee estimate calculator by 2032. This will help ensure that developers can arrive at a more accurate estimate for the fees that are required during the development process. This bill will further remove barriers to development by helping ensure that impact fee information is accurate and easy to understand."

Arguments in Support

According to a coalition of supporters, "Currently, cities impose development fees on developers to pay for services necessary to build new housing or to offset impacts of growth in a community. The fees can become a large portion of the cost to build new housing throughout the state. UC Berkeley's Terner Center for Housing Innovation found in previous studies that development fees for multifamily housing in California can be as high as $75,000 per unit. In some areas, fees for a single family home can total about $157,000 per unit.

"To help tackle issues regarding impact fee transparency, AB 1483 was passed in 2019 to ensure that local jurisdictions make information revolving housing impact fees more accessible. The bill mandated that localities post impact fee schedules, impact fee nexus studies, and other information on their websites for developers to stay informed of that jurisdiction's impact fees. Additionally, the Department of Housing and Community Development ('HCD') released the Statewide Housing Plan in 2022, which outlines the state's strategy to address its housing crisis. Included in the plan was a 10-year Housing Data Strategy that looked to reduce barriers to building more housing.

"This bill aims to improve impact fee transparency and eliminate inconsistencies by ensuring HCD develops a fee schedule template and list of best practices that jurisdictions can use on their websites. Many jurisdictions currently post fee schedules but they do not cover all the applicable impact fees that are charged. Many jurisdictions also lack consistency about how they present the information, making it hard for a developer to calculate the amount of impact fees that could affect the project. This bill will enable state law and HCD's goals to be better synthesized when it comes to data sharing. It will also allow for the public and developers to better understand fees they might face throughout the development process."

Arguments in Opposition

None on file.

FISCAL COMMENTS

According to the Senate Appropriations Committee:

1. HCD estimates one-time contract costs of approximately $100,000 to develop a list of best practices that cities and counties can use to present information regarding fees and exactions. There could be additional costs of a similar magnitude to create the specified fee schedule template, but HCD indicates that is has already developed a fee estimate tool that may be used by local agencies, so there would not be additional costs to develop that tool. (General Fund)
2. Unknown, potentially significant local costs for cities and counties to develop and make available on their websites a fee estimate tool that the public can use to calculate fees and exactions for a proposed housing development. To the extent HCD creates a tool for use by local agencies, these costs would likely be minor. Local costs are not reimbursable by the state because local agencies have general authority to charge and adjust planning and permitting fees to cover their administrative expenses associated with new planning mandates. (local funds)

VOTES:

ASM LOCAL GOVERNMENT: 9-0-0

YES: Juan Carrillo, Waldron, Alanis, Haney, Kalra, Pacheco, Ramos, Ward, Wilson

ASM HOUSING AND COMMUNITY DEVELOPMENT: 9-0-0

YES: Ward, Joe Patterson, Grayson, Kalra, Lee, Quirk-Silva, Reyes, Sanchez, Wilson

ASM APPROPRIATIONS: 15-0-0

YES: Wicks, Sanchez, Arambula, Bryan, Calderon, Wendy Carrillo, Dixon, Mike Fong, Grayson, Haney, Hart, Jim Patterson, Pellerin, Ta, Villapudua

ASSEMBLY FLOOR: 71-0-9

YES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Juan Carrillo, Wendy Carrillo, Chen, Connolly, Davies, Dixon, Essayli, Flora, Mike Fong, Vince Fong, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Reyes, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Robert Rivas

ABS, ABST OR NV: Calderon, Cervantes, Megan Dahle, Friedman, Gabriel, Holden, Mathis, Papan, Luz Rivas

SENATE FLOOR: 39-0-1

YES: Allen, Archuleta, Ashby, Atkins, Becker, Blakespear, Bradford, Caballero, Cortese, Dahle, Dodd, Durazo, Eggman, Glazer, Gonzalez, Grove, Hurtado, Jones, Laird, Limón, McGuire, Menjivar, Min, Newman, Nguyen, Niello, Ochoa Bogh, Padilla, Portantino, Roth, Rubio, Seyarto, Skinner, Smallwood-Cuevas, Stern, Umberg, Wahab, Wiener, Wilk

ABS, ABST OR NV: Alvarado-Gil

UPDATED

VERSION: June 12, 2024

CONSULTANT: Jimmy MacDonald / L. GOV. / (916) 319-3958 FN: 0004630

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 3012

Author:(Grayson)

As Amended Ver:June 12, 2024

Majority vote

SUMMARY

Requires cities and counties to make available on their internet websites a fee estimate tool that the public can use to calculate an estimate of fees and exactions for a proposed housing development, and requires the Department of Housing and Community Development (HCD) to create a fee schedule template and a list of best practices, as specified.

Senate Amendments

1. Make a technical change.
2. Make changes to the findings and declarations.

COMMENTS

1. Mitigation Fee Act. When approving development projects, counties and cities can require the applicants to mitigate the project's effects by paying fees—known as mitigation fees, impact fees, or developer fees. The California courts have upheld impact fees for sidewalks, parks, school construction, and many other public purposes.

When establishing, increasing, or imposing a fee as a condition of approving a development project, the Mitigation Fee Act requires local officials to:

• 1. Identify the fee's purpose.
  2. Identify the fee's use, including the public facilities to be financed.
  3. Determine a reasonable relationship between the fee's use and the development.
  4. Determine a reasonable relationship between the public facility's need and the development.

When imposing a fee as a condition of approving a development project, the Mitigation Fee Act also requires local officials to determine a reasonable relationship between the fee's amount and the cost of the public facility. In its 1987 Nollan decision, the U.S. Supreme Court said there must be an "essential nexus" between a project's impacts and the conditions for approval. In the 1994 Dolan decision, the U.S. Supreme Court said that conditions on development must have a "rough proportionality" to a project's impacts.

In the 1996 Ehrlich decision, the California Supreme Court distinguished between "legislatively enacted" conditions that apply to all projects and "ad hoc" conditions imposed on a project-by- project basis. Ehrlich applied the "essential nexus" test from Nollan and the "rough proportionality" test from Dolan to "ad hoc' conditions. The Court did not apply the Nollan and Dolan tests to the conditions that were "legislatively enacted." In other words, local officials have generally faced greater scrutiny when they impose conditions on a project-by-project basis. As a result of these decisions and the Mitigation Fee Act, local agencies have conducted nexus studies to ensure any proposed impact fees meet these legal tests for most impact fees. Other requirements in the Mitigation Fee Act ensure that impact fees are appropriately levied and spent.

1. AB 1483 of 2019. In response to a 2019 Terner Center for Housing Innovation report that studied fee transparency, among other issues, AB 1483 (Grayson), Chapter 662, Statutes of 2019, required cities, counties, and special districts to post specified housing related information on their websites. This information included the following:
   1. A current schedule of fees, exactions, and affordability requirements imposed by the city, county, or special district, including any dependent special districts, of the city or county applicable to a proposed housing development project, which must be presented in a manner that clearly identifies the fees, exactions, and affordability requirements that apply to each parcel.
   2. All zoning ordinances and development standards, which must specify the zoning, design, and development standards that apply to each parcel.
   3. A list that cities and counties must develop under existing law of projects located within military use airspace or a low-level flight path.
   4. Specified annual fee reports or specified annual financial reports.
   5. An archive of impact fee nexus studies, cost of service studies, or equivalent, conducted by the city, county, or special district on or after January 1, 2018.

Since the passage of AB 1483, the information required to be posted on a local agency's website has changed. AB 1473 (Senate Committee on Governance and Finance), Chapter 371, Statutes of 2020, required local agencies to separately post their connection fees and capacity charges, without being tied to specific parcels, and made technical fixes to ensure that special districts were properly accounted for by AB 1483. Additionally, AB 602 (Grayson), Chapter 347, Statutes of 2021, required local agencies, among other things, to do the following:

• 1. Post a written fee schedule or a link directly to the written fee schedule on its internet website.
  2. Request from a development proponent, upon issuance of a certificate of occupancy or the final inspection, whichever occurs last, the total amount of fees and exactions associated with the project for which the certificate was issued. The city or county must post this information on its website, and update it at least twice per year. A city or county is not responsible for the accuracy of the information received by the development proponent.

According to the Author

According to the author, "AB 1483 (Grayson, 2019) was a significant step forward in providing greater transparency on development impact fees, and it required jurisdictions to provide information on impact fee schedules, nexus fees studies, and other information that could help inform a developer of a jurisdiction's impact fees. Despite the progress made on providing greater transparency on development impact fees, recent reports by SPUR and the Terner Center found that there were significant shortcomings in compliance with the requirements of AB 1483 by many jurisdictions. While many jurisdictions have provided the information required by AB 1483, fee schedules often did not provide all applicable fees and calculating fees remained confusing.

AB 3012 will help improve impact fee transparency and eliminate inconsistencies that may exist by requiring HCD to develop a fee schedule template and list of best practices that jurisdictions can utilize. This will harmonize State law with HCD's goals on data sharing, and make it easier for the public and for developers to understand the potential fees that may be encountered during the development process. Additionally, this bill would help advance transparency by requiring that jurisdictions provide a fee estimate calculator by 2032. This will help ensure that developers can arrive at a more accurate estimate for the fees that are required during the development process. This bill will further remove barriers to development by helping ensure that impact fee information is accurate and easy to understand."

Arguments in Support

According to a coalition of supporters, "Currently, cities impose development fees on developers to pay for services necessary to build new housing or to offset impacts of growth in a community. The fees can become a large portion of the cost to build new housing throughout the state. UC Berkeley's Terner Center for Housing Innovation found in previous studies that development fees for multifamily housing in California can be as high as $75,000 per unit. In some areas, fees for a single family home can total about $157,000 per unit.

"To help tackle issues regarding impact fee transparency, AB 1483 was passed in 2019 to ensure that local jurisdictions make information revolving housing impact fees more accessible. The bill mandated that localities post impact fee schedules, impact fee nexus studies, and other information on their websites for developers to stay informed of that jurisdiction's impact fees. Additionally, the Department of Housing and Community Development ('HCD') released the Statewide Housing Plan in 2022, which outlines the state's strategy to address its housing crisis. Included in the plan was a 10-year Housing Data Strategy that looked to reduce barriers to building more housing.

"This bill aims to improve impact fee transparency and eliminate inconsistencies by ensuring HCD develops a fee schedule template and list of best practices that jurisdictions can use on their websites. Many jurisdictions currently post fee schedules but they do not cover all the applicable impact fees that are charged. Many jurisdictions also lack consistency about how they present the information, making it hard for a developer to calculate the amount of impact fees that could affect the project. This bill will enable state law and HCD's goals to be better synthesized when it comes to data sharing. It will also allow for the public and developers to better understand fees they might face throughout the development process."

Arguments in Opposition

None on file.

FISCAL COMMENTS

According to the Senate Appropriations Committee:

1. HCD estimates one-time contract costs of approximately $100,000 to develop a list of best practices that cities and counties can use to present information regarding fees and exactions. There could be additional costs of a similar magnitude to create the specified fee schedule template, but HCD indicates that is has already developed a fee estimate tool that may be used by local agencies, so there would not be additional costs to develop that tool. (General Fund)
2. Unknown, potentially significant local costs for cities and counties to develop and make available on their websites a fee estimate tool that the public can use to calculate fees and exactions for a proposed housing development. To the extent HCD creates a tool for use by local agencies, these costs would likely be minor. Local costs are not reimbursable by the state because local agencies have general authority to charge and adjust planning and permitting fees to cover their administrative expenses associated with new planning mandates. (local funds)

VOTES:

ASM LOCAL GOVERNMENT: 9-0-0

YES: Juan Carrillo, Waldron, Alanis, Haney, Kalra, Pacheco, Ramos, Ward, Wilson

ASM HOUSING AND COMMUNITY DEVELOPMENT: 9-0-0

YES: Ward, Joe Patterson, Grayson, Kalra, Lee, Quirk-Silva, Reyes, Sanchez, Wilson

ASM APPROPRIATIONS: 15-0-0

YES: Wicks, Sanchez, Arambula, Bryan, Calderon, Wendy Carrillo, Dixon, Mike Fong, Grayson, Haney, Hart, Jim Patterson, Pellerin, Ta, Villapudua

ASSEMBLY FLOOR: 71-0-9

YES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Juan Carrillo, Wendy Carrillo, Chen, Connolly, Davies, Dixon, Essayli, Flora, Mike Fong, Vince Fong, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Reyes, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Robert Rivas

ABS, ABST OR NV: Calderon, Cervantes, Megan Dahle, Friedman, Gabriel, Holden, Mathis, Papan, Luz Rivas

UPDATED

VERSION: June 12, 2024

CONSULTANT: Jimmy MacDonald / L. GOV. / (916) 319-3958 FN: 0004630

 THIRD READING  

Bill No: AB 3012

Author: Grayson (D)

Amended: 6/12/24 in Senate

Vote: 21

SENATE LOCAL GOVERNMENT COMMITTEE: 7-0, 6/11/24

AYES: Durazo, Seyarto, Dahle, Glazer, Skinner, Wahab, Wiener

SENATE HOUSING COMMITTEE: 10-0, 7/2/24

AYES: Skinner, Ochoa Bogh, Blakespear, Caballero, Cortese, Menjivar, Padilla, Seyarto, Umberg, Wahab

SENATE APPROPRIATIONS COMMITTEE: 7-0, 8/15/24

AYES: Caballero, Jones, Ashby, Becker, Bradford, Seyarto, Wahab

ASSEMBLY FLOOR: 71-0, 5/21/24 (Consent) - See last page for vote

SUBJECT: Development fees: fee schedule template: fee estimate tool

SOURCE: Author

DIGEST:

This bill requires cities and counties to create a fee estimate tool the public can use to calculate an estimate of fees and exactions for a proposed housing development project and make the tool available on its internet website.

ANALYSIS:

Existing law:

1. Allows local governments to require applicants for development projects to pay fees to mitigate the project’s effects, known as mitigation or development impact fees.
2. Requires, under the Mitigation Fee Act, local officials that are establishing, increasing, or imposing a fee as a condition of approving a development project to:
   1. Identify the fee's purpose.
   2. Identify the fee's use, including the public facilities to be financed.
   3. Determine a reasonable relationship between the fee's use and the development.
   4. Determine a reasonable relationship between the public facility's need and the development.
   5. Determine a reasonable relationship between the fee's amount and the cost of the public facility.
   6. Hold at least one open and public meeting prior to levying a new fee or increasing an existing one.
   7. If they decide to adopt capital improvement plans, indicate the approximate location, size, time of availability, and estimates of cost for all facilities or improvements to be financed with the fees.
   8. Deposit and spend the fees within five years of collecting them.
   9. Refund fees or make specific findings on when and how the fees will be spent for construction, if the fees aren’t spent within five years of collection.
3. Requires local agencies to deposit mitigation fees to fund a capital improvement associated with a development in a separate account or fund.
4. Requires local agencies that impose mitigation fees to produce an annual report within 180 days of the end of the fiscal year that includes specified information.
5. Requires a city, county, or special district that has an internet website to post and update on their websites specified information, including a current schedule of housing development project costs, zoning ordinances and development standards, annual impact fee reports, and an archive of specified impact fee nexus studies.
6. Requires local agencies to conduct and adopt a nexus study prior to the adoption of an impact fee, and specified standards and practices.
7. Provides that cities and counties cannot collect impact fees before they conduct the final inspection or issue a certificate of occupancy, whichever occurs first. However, utilities can collect impact fees at the time the utility receives an application for service, which can happen before a final inspection.

This bill:

1. Defines “housing development project” as a use consisting of any of the following:
   
   1. Residential units only
   2. Mixed-use developments with at least 2/3 residential square footage.
   3. Transitional or supportive housing.
2. Requires a local government with a web site to make a fee estimate tool that the public can use to calculate an estimate of fees and exactions for a proposed housing development permit. A local government shall not be responsible for the accuracy of the estimate provided by the fee estimate tool.
3. Requires the fee tool to calculate an estimate of fees for a housing project including but not limited to the following:
   
   1. A fee or charge descried in the Mitigation Fee Act, as specified.
   2. In-lieu fees for affordability requirements
   3. A construction excise tax.
   4. In-lieu fees for a requirement that the housing development project provide public art
   5. In-lieu fees for dedications of parkland, as specified.
   6. A special tax levied on new units pursuant to the Mello-Roos Act.
4. Requires a local government with a population of 500,000 to comply with the provisions of this bill by July 1, 2031.
5. Requires a local government with a population of 500,000 or fewer to comply with the provision of this bill by July 1, 2032.
6. Requires the Department of Housing and Community Development (HCD), on or before July 1, 2028, to create both of the following:
   
   1. A fee schedule template for proposed housing development projects that local governments may use. The template shall contain, at a minimum, the following:
      

A list of fees and exactions with the approximate cost per unit or square foot.

• • 1. The districts or neighborhood where each fee applies.
    2. The uses that applies to each fee.
    3. Who should be contacted to calculate the fees.
       
  1. A list of best practices regarding presenting information for fees and exactions levied by local governments

1. Requires, to the extent practicable, the template to include the fees identified in (3) above.
   
2. Provides that HCD may create a fee estimate tool for local governments to use, and may contract with specified groups to create the tool.

Background

Local government finance after Proposition 13. A series of propositions have drastically cut into local revenue sources, requiring local governments to look elsewhere to fund services that the public demands. First, Proposition 13 (1978) capped property tax rates at 1% of assessed value (which only changes upon new construction or when ownership changes) and required 2/3 voter approval for special taxes; as a result local governments turned to general taxes to avoid the higher voter threshold. When Proposition 62 (1986) required majority voter approval of general taxes, local agencies imposed assessments that were more closely tied to the benefit that an individual property owner receives. Subsequently, Proposition 218 (1996) required voter approval of parcel taxes, assessments, and property-related fees.

In response to the reduction in property tax revenues from Proposition 13 and the difficulty of raising taxes, local agencies have turned to other sources of funds for general operations, including sales taxes and transient occupancy taxes, also known as hotel taxes. Commercial enterprises generate sales tax and hotel tax revenue, and simultaneously pay property taxes and demand relatively few services (such as public safety or parks). Residential developments, by contrast, do not directly generate sales or hotel tax revenue, and the new residents demand a wider variety of more intensive services. As a result, cities and counties face a disincentive to approve housing because of the higher net fiscal cost of residential development, particularly if they have the option to instead permit commercial development that may produce net fiscal benefits, also known as the fiscalization of land use.

Since they cannot impose broad-based taxes without great difficulty, cities and counties follow a simple principle: new developments should pay for the impacts they have on the community and the burden they impose on public services.

Mitigation Fee Act. When imposing a fee as a condition of approving a development project, the Mitigation Fee Act also requires local officials to determine a reasonable relationship between the fee’s amount and the cost of the public facility. In its 1987 Nollan decision, the U.S. Supreme Court said there must be an “essential nexus” between a project's impacts and the conditions for approval. In the 1994 Dolan decision, the U.S. Supreme Court said that conditions on development must have a "rough proportionality" to a project's impacts.

Comments

1. Purpose of the bill. According to the author, “AB 1483 (Grayson, 2019) was a significant step forward in providing greater transparency on development impact fees, and it required jurisdictions to provide information on impact fee schedules, nexus fees studies, and other information that could help inform a developer of a jurisdiction’s impact fees. Despite the progress made on providing greater transparency on development impact fees, recent reports by SPUR and the Terner Center found that there were significant shortcomings in compliance with the requirements of AB 1483 by many jurisdictions. While many jurisdictions have provided the information required by AB 1483, fee schedules often did not provide all applicable fees and calculating fees remained confusing. AB 3012 will help improve impact fee transparency and eliminate inconsistencies that may exist by requiring HCD to develop a fee schedule template and list of best practices that jurisdictions can utilize. This will harmonize State law with HCD’s goals on data sharing, and make it easier for the public and for developers to understand the potential fees that may be encountered during the development process. Additionally, this bill would help advance transparency by requiring that jurisdictions provide a fee estimate calculator by 2032. This will help ensure that developers can arrive at a more accurate estimate for the fees that are required during the development process. This bill will further remove barriers to development by helping ensure that impact fee information is accurate and easy to understand.”
   
2. No free lunch. This bill imposes new requirements on local agencies that impose fees without any additional resources to help them comply with new requirements. Absent additional resources, local agencies may have to increase fees to satisfy new requirements. So, while fees may be more readily known to developers, they could end up higher than they would be absent the bill.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes

According to the Senate Appropriations Committee, HCD estimates one-time contract costs of approximately $100,000 to develop a list of best practices that cities and counties can use to present information regarding fees and exactions. There could be additional costs of a similar magnitude to create the specified fee schedule template, but HCD indicates that is has already developed a fee estimate tool that may be used by local agencies, so there would not be additional costs to develop that tool. (General Fund) Unknown, potentially significant local costs for cities and counties to develop and make available on their websites a fee estimate tool that the public can use to calculate fees and exactions for a proposed housing development. To the extent HCD creates a tool for use by local agencies, these costs would likely be minor. Local costs are not reimbursable by the state because local agencies have general authority to charge and adjust planning and permitting fees to cover their administrative expenses associated with new planning mandates. (local funds)

SUPPORT: (Verified 8/15/24)

Abundant Housing LA
California Building Industry Association
California YIMBY
Eden Housing
Housing Action Coalition
Housing Leadership Council of San Mateo County
Housing Trust Silicon Valley
Midpen Housing Corporation
SPUR
YIMBY Action

OPPOSITION: (Verified 8/15/24)

None received

ASSEMBLY FLOOR: 71-0, 5/21/24

AYES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Juan Carrillo, Wendy Carrillo, Chen, Connolly, Davies, Dixon, Essayli, Flora, Mike Fong, Vince Fong, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Reyes, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Robert Rivas

NO VOTE RECORDED: Calderon, Cervantes, Megan Dahle, Friedman, Gabriel, Holden, Mathis, Papan, Luz Rivas

Prepared by: Jonathan Peterson / L. GOV. / (916) 651-4119

8/18/24 17:50:28

**** END ****

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anna Caballero, Chair

2023 - 2024 Regular Session

AB 3012 (Grayson) - Development fees: fee schedule template: fee estimate tool

Bill Summary:

AB 3012 would require cities and counties to make a tool available on their websites that the public can use to calculate an estimate of fees and exactions for a proposed housing project, as specified. The bill would also require the Department of Housing and Community Development (HCD), by July 1, 2028, to create a fee schedule template that may be used by cities and counties, and list of best practices for presenting information regarding fees and exactions. HCD would also be authorized to create a fee estimate tool that cities and counties can provide for public use.

Fiscal Impact:

• HCD estimates one-time contract costs of approximately $100,000 to develop a list of best practices that cities and counties can use to present information regarding fees and exactions. There could be additional costs of a similar magnitude to create the specified fee schedule template, but HCD indicates that is has already developed a fee estimate tool that may be used by local agencies, so there would not be additional costs to develop that tool. (General Fund)
  
• Unknown, potentially significant local costs for cities and counties to develop and make available on their websites a fee estimate tool that the public can use to calculate fees and exactions for a proposed housing development. To the extent HCD creates a tool for use by local agencies, these costs would likely be minor. Local costs are not reimbursable by the state because local agencies have general authority to charge and adjust planning and permitting fees to cover their administrative expenses associated with new planning mandates. (local funds)

Background:

When approving development projects, cities and counties can charge various fees to mitigate the impacts of a proposed project. Existing law, the Mitigation Fee Act, generally prohibits permit fees charged by a local agency from exceeding the estimated reasonable cost of providing the service for which the fee is charged, as specified. Permit fees generally are set at a level sufficient to cover a local agency’s cost to review and approve project plans and perform a site inspection, and may include additional administrative costs related to the permit process.

Existing law requires a city, county, or special district that has an internet website to post specified information, including: a current schedule of mitigation fees, exactions, and affordability requirements applicable to a housing development project; all zoning ordinances and development standards; the current and five previous annual fee reports or annual financial reports; and an archive of impact fee nexus studies, cost of service studies, or their equivalent, as specified. Local agencies must update this information on their websites within 30 days of any change, and produce an annual report on developer and other fees.

Proposed Law:

AB 3012 would require a city or county that has a website to develop a fee estimate tool that the public can use to calculate an estimate of fees and exactions for a proposed housing development and make the tool available on its website. Cities and counties with a population of over 500,000 must meet this requirement by July 1, 2031, while smaller cities and counties must comply by July 2032. The fee estimate tool must account for all of the following fees for a proposed project:

• Fees or charges described in the Mitigation Fee Act, as specified.
• In-lieu fees for affordability requirements.
• A construction excise tax.
• In-lieu fees for a requirement that the housing project provide public art.
• In-lieu fees for dedications of parkland, as specified.
• A special tax levied on new units pursuant to the Mello-Roos Act.
  

The bill would require HCD to create both of the following by July 1, 2028:

• A fee schedule template for proposed housing development projects for use by cities and counties that includes the fees notes above for the estimate tool. The template must contain the following, at a minimum:
  • A list of fees and exactions with the approximate cost per unit or square foot.
  • The districts or neighborhood where each fee applies.
  • The uses that applies to each fee.
  • Who should be contacted to calculate the fees.
• A list of best practices regarding presenting information for fees and exactions levied by local jurisdictions.

The bill would also authorize HCD to create a fee estimate tool that may be used by cities and counties to allow the public to calculate the estimated fees and exactions for a proposed housing project. HCD may contract with a nonprofit or academic institution to complete the fee schedule template, list of best practices, and fee estimate tool.

Related Legislation:

AB 1820 (Schiavo), which is currently pending in this Committee, would require cities and counties, upon request, to provide developers with a preliminary good faith estimate of the total amount of fees and exactions imposed in connection with the project, and an itemized list and estimate of the total sum of all fees and exactions, upon final approval of a project.

AB 1483 (Grayson), Chap. 662/2019, required a local jurisdiction to disseminate publicly information about its zoning ordinances, development standards, fees, exactions, and affordability requirements, and required HCD to develop and update a 10-year housing data strategy.

Staff Comments:

The bill’s mandated local costs related to the requirement for cities and counties to develop and post a fee estimate tool for use by the public would not be subject to state reimbursement because local agencies have the authority to charge and adjust planning and permitting fees as necessary to cover administrative costs. Existing law authorizes planning and zoning fees to “include the costs reasonably necessary to prepare and revise the plans and policies that a local agency is required to adopt before it can make any necessary findings and determinations.” Case law and previous decisions by the Commission on State Mandates support the position that local governments’ planning costs are not reimbursable when the state imposes new planning mandates. To the extent HCD develops a fee estimate tool that includes full functionality, as specified in the bill, and the too can be made available on local agencies’ websites for public use, local costs to comply with this requirement would likely be relatively minor.

-- END --

SENATE COMMITTEE ON HOUSING

Senator Nancy Skinner, Chair

2023 - 2024 Regular

Bill No: AB 3012 Hearing Date: 7/2/2024

SUBJECT: Development fees: fee schedule template: fee estimate tool

DIGEST: This bill requires local governments to create a fee estimate tool the public can use to calculate an estimate of fees and exactions for a proposed housing development project and make the tool available on its internet website. Requires HCD, on or before July 1, 2028, to create a fee schedule template for proposed housing development projects that local governments may use, and a list of best practices for presenting information related to fees and exactions.

ANALYSIS:

Existing law:

1. Establishes, under the Mitigation Fee Act, specific requirements a city must follow in establishing or imposing development fees and sets forth a process by which a developer may challenge the imposition of a fee.
2. Requires a city, county, or special district (as applicable), pursuant to AB 1483 (Grayson, 2019), to post on its Web site specified information including: a current schedule of mitigation fees, exactions, and affordability requirements applicable to a housing development project; all zoning ordinances and development standards; the current and five previous annual fee reports or annual financial reports; and an archive of impact fee nexus studies, cost of service studies, or equivalent, as specified. Requires this information to be updated within 30 days of any changes.

This bill:

1. Defines “housing development project” as a use consisting of any of the following:
   
   1. Residential units only
   2. Mixed-use developments with at least 2/3 residential square footage.
   3. Transitional or supportive housing.
2. Requires a local government with a web site to make a fee estimate tool that the public can use to calculate an estimate of fees and exactions for a proposed housing development permit. A local government shall not be responsible for the accuracy of the estimate provided by the fee estimate tool.
3. Requires the fee tool to calculate an estimate of fees for a housing project including but not limited to the following:
   
   1. A fee or charge descried in the Mitigation Fee Act, as specified.
   2. In-lieu fees for affordability requirements
   3. A construction excise tax.
   4. In-lieu fees for a requirement that the housing development project provide public art
   5. In-lieu fees for dedications of parkland, as specified.
   6. A special tax levied on new units pursuant to the Mello-Roos Act.
4. Requires a local government with a population of 500,000 to comply with the provisions of this bill by July 1, 2031.
5. Requires a local government with a population of 500,000 or fewer to comply with the provision of this bill by July 1, 2032.
6. Requires HCD, on or before July 1, 2028, to create both of the following:
   
   1. A fee schedule template for proposed housing development projects that local governments may use. The template shall contain, at a minimum, the following:
      

A list of fees and exactions with the approximate cost per unit or square foot.

• • 1. The districts or neighborhood where each fee applies.
    2. The uses that applies to each fee.
    3. Who should be contacted to calculate the fees.
       
  1. A list of best practices regarding presenting information for fees and exactions levied by local governments

1. Requires, to the extent practicable, the template to include the fees identified in (3) above.
2. Provides that HCD may create a fee estimate tool for local governments to use, and may contract with specified groups to create the tool.

COMMENTS:

1. Author’s statement. “AB 1483 (Grayson, 2019) was a significant step forward in providing greater transparency on development impact fees, and it required jurisdictions to provide information on impact fee schedules, nexus fees studies, and other information that could help inform a developer of a jurisdiction’s impact fees. Despite the progress made on providing greater transparency on development impact fees, recent reports by SPUR and the Terner Center found significant shortcomings in compliance with the requirements of AB 1483 by many jurisdictions. AB 3012 will help improve impact fee transparency and eliminate inconsistencies that may exist by requiring HCD to develop a fee schedule template and list of best practices that jurisdictions can utilize. This will harmonize State law with HCD’s goals on data sharing, and make it easier for the public and for developers to understand the potential fees that may be encountered during the development process. Additionally, this bill would help advance transparency by requiring that jurisdictions provide a fee estimate calculator by 2032. This will help ensure that developers can arrive at a more accurate estimate for the fees that are required during the development process, and will help make impact fee information more accurate and easier to understand.”
2. Impact fees. Local governments can charge a variety of fees to a development. These fees, commonly known as impact fees or mitigation fees, go toward infrastructure development (such as adding lanes to roads or supporting additional traffic) or other public benefits (such as new parks, schools, or affordable housing). In the wake of the passage of Proposition 13 in 1978 and the resulting loss of significant property tax revenue, local governments have also turned to development fees as a means to generate revenue. Given that California cities have tightly restricted funding sources, fees are one of the few ways cities can pay for the indirect costs of growth. The Mitigation Fee Act requires local officials, when establishing, increasing, or imposing a fee as a condition of approving a development project, to make a number of determinations including to: identify the purpose of the fee; identify the use of the fee, including the public facilities that the fee will finance; determine a reasonable relationship between the use of the fee and the development; and determine a reasonable relationship between the public facility’s need and the development. Local agencies must also produce an annual report on developer and other fees.
3. Do impact fees drive up housing construction costs? Concerned that mitigation fees could be increasing the cost of housing, the Legislature passed AB 879 (Grayson, Chapter 374, Statutes of 2017), which required HCD to complete a study to evaluate the reasonableness of local fees charged to new developments. In August 2019, HCD released the study, performed by UC Berkeley’s Terner Center for Housing Innovation (Terner Center).^[1] Among other conclusions, the report argued that fees can be a barrier to development and can raise prices of both new and existing homes; however, it also noted that local governments face substantial fiscal constraints and thus have turned to fees as a source of revenue to fund public services for new developments. The report found that fee transparency could be substantially improved. According to the study, many jurisdictions do not post their fee schedules or their nexus studies online, making it difficult for developers to estimate project costs, while other jurisdictions have adopted best practices such as offering an estimate of the fees that a project would pay. The study recommended requiring local governments to post fees and nexus studies online, as well as annual reports on fee collections, and requiring jurisdictions to provide fee estimates. In response, the Legislature passed AB 1483 (Grayson, Chapter 662, Statutes of 2019), which required cities and counties to post specified housing-related information on their website and required HCD to establish a workgroup to develop a strategy for state housing data.

AB 1483 also requires a city, county, or special district that has an internet website to post on their websites the following information, as applicable:

1. A current schedule of mitigation fees, exactions, and affordability requirements imposed by the city, county, or special district, including any dependent special districts of the city or county, applicable to a housing development project, in a manner that clearly identifies the fees that apply to each parcel.
2. All zoning ordinances and development standards, including which standards apply to each parcel.
3. A list that cities and counties must develop under existing law of projects located within military use airspace or low-level flight path.
4. The current and five previous annual fee reports or the current and five previous annual financial reports that local agencies must compile pursuant to existing law.
5. An archive of impact fee nexus studies, cost of service studies, or equivalent, conducted by the city, county, or special district on or after January 1, 2018.

A city, county, or special district must update this information on their website within 30 days of any change. The measure also required cities and counties to request the total amount of fees and exactions associated with the project from a developer after construction, but the developer does not have to respond. The city or county must post this information on its internet website, and update it at least twice per year.

1. More certainty for developers. This bill seeks to create more public transparency around fees. Specifically, it requires a local government that has an website to create a fee estimate tool the public can use to calculate an estimate of fees and exactions for a proposed housing development project and make the tool available on its internet website. Cities and counties must comply with these requirements on or before July 1, 2031 if they have more than 500,000 residents. Cities or counties at or under 500,000 residents have until July 1, 2032.

This bill also requires HCD to create, on before July 1, 2028, both a fee schedule template and a list of best practices regarding how to present information for fees and exactions. Additionally, the bill allows HCD to create a fee estimate tool that cities and counties can use to comply with the measure’s requirements. HCD can contract with nonprofit or academic institutions to complete the fee schedule template, list of best practices, and the fee estimate tool.

1. Incoming! This bill passed out of Local Government Committee on June 11, 2024 on a 7-0 vote.

Related Legislation:

AB 1483 (Grayson, Chapter 662, Statutes of 2019) — required local jurisdiction to disseminate publicly information about its zoning ordinances, development standards, fees, exactions, and affordability requirements, and requires HCD to develop and update a 10-year housing data strategy.

AB 879 (Grayson, Chapter 374, Statutes of 2017) — directed HCD to complete a study evaluating the reasonableness of local fees charged to new developments, as defined.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes

POSITIONS: (Communicated to the committee before noon on Wednesday,

June 26, 2024.)

SUPPORT:

Abundant Housing LA
California YIMBY
Eden Housing
Housing Action Coalition
Housing Leadership Council of San Mateo County
Housing Trust Silicon Valley
SPUR
YIMBY Action

OPPOSITION:

None received.

-- END --

1. Hayley Raetz, David Garcia, and Nathaniel Decker. Residential Impact Fees in California (Terner Center for Housing Innovation, UC Berkely, August 2019). https://ternercenter.berkeley.edu/wp-content/uploads/pdfs/Residential_Impact_Fees_in_California_August_2019.pdf ↑

SENATE COMMITTEE ON LOCAL GOVERNMENT

Senator María Elena Durazo, Chair

2023 - 2024 Regular

Development fees: fee schedule template: fee estimate tool

Requires cities and counties to create a fee estimate tool the public can use to calculate an estimate of fees and exactions for a proposed housing development project and make the tool available on its internet website.

Background

Local government finance after Proposition 13. A series of propositions have drastically cut into local revenue sources, requiring local governments to look elsewhere to fund services that the public demands. First, Proposition 13 (1978) capped property tax rates at 1% of assessed value (which only changes upon new construction or when ownership changes) and required 2/3 voter approval for special taxes; as a result local governments turned to general taxes to avoid the higher voter threshold. When Proposition 62 (1986) required majority voter approval of general taxes, local agencies imposed assessments that were more closely tied to the benefit that an individual property owner receives. Subsequently, Proposition 218 (1996) required voter approval of parcel taxes, assessments, and property-related fees.

In response to the reduction in property tax revenues from Proposition 13 and the difficulty of raising taxes, local agencies have turned to other sources of funds for general operations, including sales taxes and transient occupancy taxes, also known as hotel taxes. Commercial enterprises generate sales tax and hotel tax revenue, and simultaneously pay property taxes and demand relatively few services (such as public safety or parks). Residential developments, by contrast, do not directly generate sales or hotel tax revenue, and the new residents demand a wider variety of more intensive services. As a result, cities and counties face a disincentive to approve housing because of the higher net fiscal cost of residential development, particularly if they have the option to instead permit commercial development that may produce net fiscal benefits, also known as the fiscalization of land use.

Since they cannot impose broad-based taxes without great difficulty, cities and counties follow a simple principle: new developments should pay for the impacts they have on the community and the burden they impose on public services.

Mitigation Fee Act. When approving development projects, counties and cities can require the applicants to mitigate the project's effects by paying fees—known as mitigation fees, impact fees, or developer fees. The California courts have upheld impact fees for sidewalks, parks, school construction, and many other public purposes.

When establishing, increasing, or imposing a fee as a condition of approving a development project the Mitigation Fee Act requires local officials to:

• Identify the fee’s purpose;
• Identify the fee’s use, including the public facilities to be financed;
• Determine a reasonable relationship between the fee’s use and the development; and
• Determine a reasonable relationship between the public facility’s need and the development.

When imposing a fee as a condition of approving a development project, the Mitigation Fee Act also requires local officials to determine a reasonable relationship between the fee’s amount and the cost of the public facility. In its 1987 Nollan decision, the U.S. Supreme Court said there must be an “essential nexus” between a project's impacts and the conditions for approval. In the 1994 Dolan decision, the U.S. Supreme Court said that conditions on development must have a "rough proportionality" to a project's impacts.

In the 1996 Ehrlich decision, the California Supreme Court distinguished between “legislatively enacted” conditions that apply to all projects and “ad hoc” conditions imposed on a project-by- project basis. Ehrlich applied the “essential nexus” test from Nollan and the “rough proportionality” test from Dolan to “ad hoc’ conditions. The Court did not apply the Nollan and Dolan tests to the conditions that were “legislatively enacted.” In other words, local officials face greater scrutiny when they impose conditions on a project-by-project basis.

As a result of these decisions and the Mitigation Fee Act, local agencies must conduct a nexus study to ensure any proposed impact fees meet these legal tests for most impact fees. Other requirements in the Mitigation Fee Act ensure that impact fees are appropriately levied and spent, including that a local agency must:

• Hold at least one open and public meeting prior to levying a new fee or increasing an existing one;
• If it decides to adopt capital improvement plans, indicate the approximate location, size, time of availability, and estimates of cost for all facilities or improvements to be financed with the fees;
• Deposit and spend the fees within five years of collecting them; and
• Refund fees or make specific findings on when and how the fees will be spent for construction, if the fees are not spent within five years of collection.

If a local agency levies an impact fee to fund a capital improvement associated with a development, it must deposit the fees with any other fees for that improvement in a separate account or fund.

Local officials must also produce an annual report within 180 days of the end of the fiscal year that includes information on the fee amounts, how they used the revenue, and any unspent funds, broken up by each separate fund. The local agency must review this information at the next regularly scheduled public meeting at least 15 days from when it makes the information available to public. It must also provide notice to the public at least 15 days prior to the meeting.

Impact fee audit requirements. Any person may request an independent audit of how the impact fees have been collected and spent, including an assessment of whether the fees exceed the amount reasonably necessary to cover the costs of the stated projects or services. If a person makes that request, the local agency retains an independent auditor to conduct the audit, provided that an audit has not been performed on the same fee within the previous 12 months and the requestor deposits funds necessary to cover the estimated cost for the audit with the local agency. A local agency must adjust its fees if the audit finds that the fees are set too high.

Impact fee transparency legislation. To increase transparency around impact fees, the Legislature enacted AB 1483 (Grayson, 2019). AB 1483 requires cities and counties to post specified housing-related information on their web sites and requires HCD to establish a workgroup, as specified, to develop a strategy for state housing data.

AB 1483 also requires a city, county, or special district that has an internet website to post on their websites the following information, as applicable:

• A current schedule of mitigation fees, exactions, and affordability requirements imposed by the city, county, or special district, including any dependent special districts of the city or county, applicable to a housing development project, in a manner that clearly identifies the fees that apply to each parcel.
• All zoning ordinances and development standards, including which standards apply to each parcel.
• A list that cities and counties must develop under existing law of projects located within military use airspace or low-level flight path.
• The current and five previous annual fee reports or the current and five previous annual financial reports that local agencies must compile under to existing law.
• An archive of impact fee nexus studies, cost of service studies, or equivalent, conducted by the city, county, or special district on or after January 1, 2018.

A city, county, or special district must update this information on their website within 30 days of any change. The measure also required cities and counties to request the total amount of fees and exactions associated with the project from a developer after construction, but the developer does not have to respond. The city or county must post this information on its internet website, and update it at least twice per year.

Nexus studies. Subsequently, AB 602 (Grayson, 2021) added new impact fee requirements. This bill amended the law to require the preparation of nexus studies to follow certain standards and practices including:

• When applicable, identify the existing level of service and proposed new level of service, explain the metric being used, and include an explanation of why the new level of service is necessary;
• In calculating the fee, require the fee to be proportionate to the square footage of the proposed units, unless the local agency makes a finding that another standard is more appropriate. Local agencies can still establish different fees for different types of developments;
• Adopt a capital improvement plan in jurisdictions located in counties with over 250,000 residents;
• Adopt studies at a public hearing with at least 30 days’ notice, which must be provided to members of the public that request it;
• Calculate fees using standards that comply with existing law, including, but not limited to, vehicle miles traveled; and
• Update studies every eight years, from the period beginning on January 1, 2022.

Importantly, AB 602 exempted sewer and water connection fees and capacity charges. The next year AB 2536 (Grayson, 2022) imposed new requirements when a local agency imposes a connection fee or capacity charge. Prior to levying a new connection fee or capacity charge, the local agency must evaluate the amount of the fee or charge, which must include evidence the fee or charge amount does not exceed the estimated reasonable cost of providing service. The local agency must make all the information included in the evaluation available at least 14 days prior to the public meeting it must hold. The measure also provided it must not be construed to relieve a local agency of complying with existing law, the Constitution, or applicable case law.

The author wants to increase impact fee transparency.

Proposed Law

Assembly Bill 3012 requires a city or county that has an internet website to create a fee estimate tool the public can use to calculate an estimate of fees and exactions for a proposed housing development project and make the tool available on its internet website. A city or county may choose the format of the fee estimate tool.

The measure provides that a city or county is not be responsible for the accuracy of the estimate provided by the fee estimate tool, and can include a disclaimer regarding the accuracy of the estimate on its internet website.

Cities and counties must comply with these requirements on or before July 1, 2031 if they have more than 500,000 residents. Cities or counties at or under 500,000 residents have until July 1, 2032.

AB 3012 requires HCD to create the following on or before July 1, 2028:

• A fee schedule template for proposed housing development projects, which must include:
  • A list of the fees and exactions with the approximate cost per unit or per square foot;
  • The districts or neighborhoods where each fee applies;
  • The uses that each fee applies to; and
  • Who should be contacted in order to calculate total fees.
• A list of best practices regarding how to present information for fees and exactions.

Additionally, the bill allows HCD to create a fee estimate tool that cities and counties can use to comply with the measure’s requirements. HCD can contract with nonprofit or academic institutions to complete the fee schedule template, list of best practices, and fee estimate tool.

AB 3012 also defines its terms and includes findings and declarations to support its purposes.

Comments

1. Purpose of the bill. According to the author, “AB 1483 (Grayson, 2019) was a significant step forward in providing greater transparency on development impact fees, and it required jurisdictions to provide information on impact fee schedules, nexus fees studies, and other information that could help inform a developer of a jurisdiction’s impact fees. Despite the progress made on providing greater transparency on development impact fees, recent reports by SPUR and the Terner Center found that there were significant shortcomings in compliance with the requirements of AB 1483 by many jurisdictions. While many jurisdictions have provided the information required by AB 1483, fee schedules often did not provide all applicable fees and calculating fees remained confusing.

“AB 3012 will help improve impact fee transparency and eliminate inconsistencies that may exist by requiring HCD to develop a fee schedule template and list of best practices that jurisdictions can utilize. This will harmonize State law with HCD’s goals on data sharing, and make it easier for the public and for developers to understand the potential fees that may be encountered during the development process. Additionally, this bill would help advance transparency by requiring that jurisdictions provide a fee estimate calculator by 2032. This will help ensure that developers can arrive at a more accurate estimate for the fees that are required during the development process. This bill will further remove barriers to development by helping ensure that impact fee information is accurate and easy to understand.”

2. No free lunch. AB 3012 imposes new requirements on local agencies that impose fees without any additional resources to help them comply with new requirements. Absent additional resources, local agencies may have to increase fees to satisfy new requirements. So, while fees may be more readily known to developers, they could end up higher than they would be absent the bill.

3. Cart, horse. AB 3012 requires every city and county to create their own fee estimate tool. While some local agencies already have fee estimate tools that may comply with these requirements, including Berkeley, Concord, San Francisco, and Turlock, other local agencies will have to start from scratch. The bill also allows HCD to create a fee estimate tool, but does not require it to do so. If HCD develops a useful tool, local agencies may adopt it and avoid the need for additional resources and, potentially, commensurate fee increases. But the bill doesn’t provide sufficient certainty: local agencies may not know if HCD is going to develop a tool until close to the deadline to comply. Should HCD have a deadline to develop the tool?

4. Choppy waters ahead? The U.S. Supreme Court recently decided Sheetz vs. County of El Dorado. In this case, an El Dorado County resident challenged the county’s legislatively enacted traffic impact mitigation fee arguing the county should only charge him based on the impact associated with his specific parcel. In other words, legislatively enacted fees should be subject to the same standards as ad hoc fees. The decision concluded that the federal constitution does not distinguish between legislatively enacted and ad hoc fees, and remanded the case back to the California Court of Appeals’ Third District for a decision in line with its holding. Should the Committee consider Mitigation Fee Act legislation before the California Court of Appeals makes its final decision?

5. Mandate. The California Constitution requires the state to reimburse local governments for the costs of new or expanded state mandated local programs. Because AB 3012 adds to the duties of local officials, Legislative Counsel says the bill imposes a new state mandate. AB 3012 disclaims the state’s responsibility for providing reimbursement by citing local governments’ authority to charge for the costs of implementing the bill's provisions.

6. Charter city. The California Constitution allows cities that adopt charters to control their own “municipal affairs.” In all other matters, charter cities must follow the general, statewide laws. Because the Constitution does not define “municipal affairs,” the courts determine whether a topic is a municipal affair or an issue of statewide concern. AB 3012 says its statutory provisions regarding development entitlements apply to charter cities. However, the bill does not state any specific reason why its provisions extending development entitlements are a matter of statewide concern. The Committee may wish to consider amending the bill to specify a clear reason why these provisions constitute a matter of statewide concern.

7. The song that never ends. The Legislature is considering several other pieces of legislation concerning the Mitigation Fee Act:

• SB 937 (Wiener, 2024), which this Committee approved on a 6-0 vote at its April 3^rd hearing, makes various changes to the process for local agencies to collect development impact fees, and extends development entitlements. The measure is awaiting referral in the Assembly.
• SB 1210 (Skinner, 2024), which this Committee approved on a 5-2 vote at its April 17^th hearing, requires electrical, gas, sewer, and water service utilities to post fee schedules and estimated timeframes for new service connections and capacity upgrades needed to connect new housing construction projects. The measure is awaiting referral in the Assembly.
• AB 1820 (Schiavo, 2024) requires a city or county to provide an estimate of fees and exactions for the project within 30 days of receiving a preliminary application for a housing development project upon a request from the project applicant for an estimate. The measure is also scheduled for this Committee’s June 11^th hearing.
• AB 2553 (Friedman, 2024) redefines “major transit stop” for purposes of exempting housing developments within ½ mile of a major transit stop from specified impact fees. The measure is also scheduled for this Committee’s June 11^th hearing.
• AB 2663 (Grayson, 2024) requires local agencies to post certain information regarding affordable housing impact fees on their websites. The measure is also scheduled for this Committee’s June 11^th hearing.
• AB 2729 (Joe Patterson, 2024) removes the requirement on local agencies that fees must be paid prior to the date of final inspection or issuance of the certificate of occupancy, whichever occurs first. The measure is also scheduled for this Committee’s June 11^th hearing.
• AB 3177 (W. Carrillo, 2024) prohibits land dedications for the purpose of mitigating vehicular traffic on housing developments. The measure is also scheduled for this Committee’s June 11^th hearing.

Assembly Actions

Assembly Local Government Committee: 9-0
Assembly Housing and Community Development Committee: 9-0
Assembly Appropriations Committee: 15-0
Assembly Floor: 71-0

Support and Opposition

(6/7/24)

Support: Abundant Housing LA
California Yimby
Eden Housing
Housing Action Coalition
Housing Leadership Council of San Mateo County
Housing Trust Silicon Valley
Spur
Yimby Action

Opposition: None submitted.

-- END --

Date of Hearing: May 15, 2024

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

ABPCA Bill Id:AB 3012

Author:(Grayson) – As Amended Ver:April 18, 2024

Urgency: No State Mandated Local Program: Yes Reimbursable: No

SUMMARY:

This bill requires a city or county to make available on its internet website a fee estimate tool the public may use to calculate an estimate of fees and exactions for a proposed housing development. The bill also requires the Department of Housing and Community Development (HCD) to create a fee schedule template for use by cities and counties for this purpose.

Specifically, this bill:

1. Requires a city or county to make available on its internet website a fee estimate tool the public may use to calculate an estimate of fees and exactions for a proposed housing development. A city or county may choose the format for the fee estimate tool.
2. Requires the fee estimate tool to calculate an estimate of fees for a proposed housing development project, including a fee or charge described in the Mitigation Fee Act, in-lieu fees for affordability requirements, a construction excise tax, in-lieu fees for a requirement that the housing development project provide public art, in-lieu fees for dedications of parkland pursuant to the Quimby Act, and a special tax levied on new housing units pursuant to the Mello-Roos Community Facilities Act of 1982.
3. Provides a city or county is not responsible for the accuracy of the estimate provided by the fee estimate tool. A city or county may include a disclaimer regarding the accuracy of the estimate calculated on its website.
4. Requires a city or county with a population greater than 500,000 to meet the requirements of this bill by July 1, 3031. All other cities and counties must meet the requirements by July 1, 2032.
5. Requires HCD, by July 1, 2028, to create a fee schedule template for proposed housing development projects and a list of best practices regarding presenting information for fees and exactions levied by local jurisdictions, as specified.
6. Authorizes HCD to create a fee estimate tool that may be used by cities and counties for the purpose of meeting the requirements above. Allows HCD to contract with nonprofit or academic institutions for this purpose and the purposes in 5, above.

FISCAL EFFECT:

1. HCD estimates minor and absorbable costs.
2. Local costs resulting from this bill are not reimbursable by the state because local agencies have general authority to charge and adjust planning and permitting fees to cover their administrative expenses associated with new planning mandates.

COMMENTS:

1. Purpose. According to the author:

AB 1483 (Grayson, 2019) was a significant step forward in providing greater transparency on development impact fees, and it required jurisdictions to provide information on impact fee schedules, nexus fees studies, and other information that could help inform a developer of a jurisdiction’s impact fees. Despite the progress made on providing greater transparency on development impact fees, recent reports by SPUR and the Terner Center found that there were significant shortcomings in compliance with the requirements of AB 1483 by many jurisdictions. While many jurisdictions have provided the information required by AB 1483, fee schedules often did not provide all applicable fees and calculating fees remained confusing.

1. Background. The Mitigation Fee Act governs fees a local agency may levy on a development project to mitigate the project's effects on the local community. These fees are commonly known as mitigation fees, impact fees, or developer fees.

The Mitigation Fee Act requires local officials, when establishing, increasing, or imposing a fee as a condition of approving a development project, to identify the fee's purpose, identify the fee's use, including the public facilities to be financed, determine a reasonable relationship between the fee's use and the development, and determine a reasonable relationship between the public facility's need and the development.

In an effort to improve local fee transparency, AB 1483 (Grayson), Chapter 662, Statutes of 2019, required all local agencies to post fees applicable to new housing developments under the Mitigation Fee Act on their websites. However, a 2021 policy brief prepared by the San Francisco Bay Area Planning and Urban Research Association (SPUR) in consultation with the University of California Berkeley Terner Center for Housing Innovation analyzed compliance with AB 1483 and found that less than half of the jurisdictions examined complied with this requirement.

According to the author, the general lack of compliance with AB 1483 on behalf of local agencies makes it difficult for housing development proponents to gain the certainty around which fees apply to their development proposals. The author and advocates believe this bill will provide developers with a reasonable estimate of the fees they will be expected to pay for a housing development proposal at the onset of the project. The author and advocates assert this certainty will help mitigate delays in advancing a project, or in some instances, the inability to pay for unexpected fees associated with housing projects under the Mitigation Fee Act.

Analysis Prepared by: Jennifer Swenson / APPR. / (916) 319-2081

Date of Hearing: April 24, 2024

ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT

Christopher M. Ward, Chair

ABPCA Bill Id:AB 3012 (

Author:Grayson) – As Amended Ver:April 18, 2024

SUBJECT: Development fees: fee schedule template: fee estimate tool

SUMMARY: Requires cities and counties to make a fee estimate tool available on their internet websites that the public can use to calculate an estimate of fees and exactions for a proposed housing development, and requires the Department of Housing and Community Development (HCD) fee schedule template and a list of best practices, as specified. Specifically, this bill:

1. Defines the following terms:
   1. “Affordability requirement” as a requirement imposed as a condition of a development of residential units, that the development include a certain percentage of the units affordable for rent or sale to households with incomes that do not exceed the limits for moderate-income, lower income, very low income, or extremely low income households, as specified in existing law.
   2. “Housing development project” as a use consisting of any of the following:
      1. Residential units only;
      2. Mixed-use developments consisting of residential and nonresidential uses with at least two-thirds of the square footage designated for residential use; or
      3. Transitional housing or supportive housing.
2. Requires a city or county that has an internet website to make a fee estimate tool that the public can use to calculate an estimate of fees and exactions for a proposed housing development project available on its internet website. A city or county may choose the format for the fee estimate tool.
3. Specifies that the fee estimate tool shall calculate an estimate of fees for a proposed housing development project including, but not limited to, the following:
   1. A fee or charge described in the Mitigation Fee Act, as specified;
      1. Utility fees for water connections, sewer connections, and capacity charges are exempt from this requirement.
   2. In-lieu fees for affordability requirements;
   3. A construction excise tax;
   4. In-lieu fees for a requirement that the housing development project provide public art;
   5. In-lieu fees for dedications of parkland pursuant to the Quimby Act; and
   6. A special tax levied on new housing units pursuant to the Mello-Roos Community Facilities Act of 1982.
4. Provides that a city or county shall not be responsible for the accuracy of the estimate provided by the fee estimate tool. A city or county may include a disclaimer regarding the accuracy of the estimate calculated on its website.
5. Specifies that a city or county with a population of greater than 500,000 shall meet the requirements of this bill on or before July 1, 3031, and a city or county with a population of 500,000 or less shall meet the requirements of this bill on or before July 1, 2032.
6. Requires on or before July 1, 2028, the HCD to create a fee schedule template for proposed housing development projects that may be used by cities and counties.
7. Provides that the template in 6) above, shall, at a minimum, contain the following:
   1. A list of the fees and exactions, as specified, with the approximate cost per unit or per square foot;
   2. The districts and neighborhoods where each fee applies;
   3. The uses that each fee applies to; and
   4. Who should be contacted in order to calculate total fees.
8. Specifies that, to the extent practicable, the template in 6) above, shall include, but not be limited to, the following:
   1. A fee or charge described in the Mitigation Fee Act, as specified;
   2. In-lieu fees for affordability requirements;
   3. A construction excise tax;
   4. In-lieu fees for a requirement that the housing development project provide public art;
   5. In-lieu fees for dedications of parkland pursuant to the Quimby Act; and
   6. A special tax levied on new housing units pursuant to the Mello-Roos Community Facilities Act of 1982.
9. Requires on or before July 1, 2028, HCD to create a list of best practices regarding presenting information for fees and exactions levied by local jurisdictions.
10. Authorizes HCD to create a fee estimate tool that may be used by cities and counties for the purpose of meeting the requirements of 2) through 5) above.
11. Allows HCD to contract with nonprofit or academic institutions to complete the fee schedule template, list of best practices, and fee estimate tool.

EXISTING LAW:

1. Establishes the Mitigation Fee Act (GOV 66000-66025) that requires a local agency to do all of the following when establishing, increasing, or imposing a fee on a development project:
   1. Identify the purpose of the fee;
   2. Identify the use to which the fee is to be put;
   3. Determine how there is a nexus between the fee’s use and the type of development project on which the fee is imposed; and
   4. Determine how there is a nexus between the need for a public facility and the type of development project on which the fee is imposed.
2. Requires a city, county, or special district that has an internet website to make information available on its internet website, including the current schedule of fees, exactions, and affordability requirements imposed by that city, county, or special district, applicable to a proposed housing development project. (GOV 65940.1)
3. Requires a city or county to request from a development proponent, upon certificate of occupancy or final inspection, whichever occurs last, the total amount of fees and exactions associated with the project, and post that information on its internet website. (GOV 65940.1)

FISCAL EFFECT: Unknown.

COMMENTS:

Author’s Statement: According to the author, “AB 1483 (Grayson, 2019) was a significant step forward in providing greater transparency on development impact fees, and it required jurisdictions to provide information on impact fee schedules, nexus fees studies, and other information that could help inform a developer of a jurisdiction’s impact fees. Despite the progress made on providing greater transparency on development impact fees, recent reports by SPUR and the Terner Center found that there were significant shortcomings in compliance with the requirements of AB 1483 by many jurisdictions. While many jurisdictions have provided the information required by AB 1483, fee schedules often did not provide all applicable fees and calculating fees remained confusing.

AB 3012 will help improve impact fee transparency and eliminate inconsistencies that may exist by requiring HCD to develop a fee schedule template and list of best practices that jurisdictions can utilize. This will harmonize State law with HCD’s goals on data sharing, and make it easier for the public and for developers to understand the potential fees that may be encountered during the development process. Additionally, this bill would help advance transparency by requiring that jurisdictions provide a fee estimate calculator by 2032. This will help ensure that developers can arrive at a more accurate estimate for the fees that are required during the development process. This bill will further remove barriers to development by helping ensure that impact fee information is accurate and easy to understand.”

Cost of Building Housing: It is expensive to build housing in California. The UC Berkeley Terner Center finds that challenging macroeconomic conditions, including inflation and high interest rates, affect the availability and cost of capital, resulting in rising costs for labor and materials.^[1] Furthermore, workforce and supply shortages have exacerbated the already high price of construction in Cali­fornia, and economic uncertainty has made equity partners and lenders apprehensive about financing new housing development proposals.^[2]

An analysis by the California Housing Partnership compares the cost of market rate development prototypes developed by the Terner Center with the median cost of developing affordable rental homes. In the four regions analyzed, the study found that the cost of developing one unit of affordable housing ranged from approximately $480,000 to $713,000, while the cost of developing one unit of market rate housing in the state ranged from approximately $508,000 to $637,000.^[3]

Impact Fees and Exactions – Added Uncertainty and Costs: Development fees serve many purposes and can be broadly divided into two categories: service fees and impact fees. Service fees cover staff hours and overhead, and are used to fund the local agency’s role in the development process such as paying for plan reviews, permit approvals, inspections, and any other services related to a project moving through various local departments. Impact fees refer generally to fees that offset the public costs of new infrastructure incurred by the larger community. In the wake of the passage of Proposition 13 in 1978 and the loss of significant property tax revenue, local governments have also turned to development fees as a means to pay for new infrastructure. According to the UC Berkeley Terner Center for Housing Innovation, between 2008 and 2015, California fees rose 2.5%, while the national average decreased by 1.2%.^[4] Development fees can comprise 17% of the total development costs of new housing, and in California in 2015, impact fees were nearly three times the national average.^[5]

The Mitigation Fee Act governs the imposition, collection, and use of impact fees collected by local governments when reviewing and approving development proposals.

Key aspects of the Mitigation Fee Act include:

1. Nexus Requirement: The Act requires a clear "nexus" or connection between the fee charged and the impact created by the development. This means that the fees collected must be used to address the specific impacts that the new development is expected to have on public facilities and services.
2. Proportionality: The fees charged must be proportional to the impact of the development.
3. Accountability: Local governments are required to establish separate accounts for the fees collected and to use the funds solely for the intended purposes. They must also provide annual reports on the status of the fees, including the balance and how the funds have been used.
4. Timing of Fee Payment: The Act specifies when fees can be collected, generally at the time of final inspection or when certificate of occupancy is issued, with some exceptions.
5. Refunds: If the fees collected are not used within five years, and specific findings are not made, the Act provides for the refund of the fees.

The Mitigation Fee Act plays a crucial role in ensuring that new developments contribute to the cost of expanding and maintaining public infrastructure and services, while also providing a legal framework to ensure that fees are fair, transparent, and directly related to the impacts of the development.

AB 1483 (Grayson), Chapter 662 Statutes of 2019, required all local agencies to post fees applicable to new housing developments under the Mitigation Fee Act on their website. This information included the following:

1. A current schedule of fees, exactions, and affordability requirements imposed by the city, county, or special district, including any dependent special districts, of the city or county applicable to a proposed housing development project, which must be presented in a manner that clearly identifies the fees, exactions, and affordability requirements that apply to each parcel.
   
2. All zoning ordinances and development standards, which must specify the zoning, design, and development standards that apply to each parcel.
   
3. A list that cities and counties must develop under existing law of projects located within military use airspace or a low-level flight path.
   
4. Specified annual fee reports or specified annual financial reports.
   
5. An archive of impact fee nexus studies, cost of service studies, or equivalent, conducted by the city, county, or special district on or after January 1, 2018.

Additionally, AB 602 (Grayson), Chapter 347, Statutes of 2021, required local agencies, among other things, to do the following:

1. Post a written fee schedule or a link directly to the written fee schedule on its internet website.
   
2. Request from a development proponent, upon issuance of a certificate of occupancy or the final inspection, whichever occurs last, the total amount of fees and exactions associated with the project for which the certificate was issued. The city or county must post this information on its website, and update it at least twice per year. A city or county is not responsible for the accuracy of the information received by the development proponent.

However, a 2021 policy brief prepared by SPUR in consultation with the UC Berkeley Terner Center for Housing Innovation analyzed compliance with AB 1483 and found that less than half of the jurisdictions examined complied with this requirement.^[6] A Terner Center study found that even when local jurisdictions did post the nexus fee studies mandated under the Mitigation Fee Act, those studies were often difficult to find or outdated.^[7]

The fees and exactions charged from local agency to local agency vary, but often add up to between 6% and 18% of total construction cost for a housing development project.^[8] Various local agencies, including cities and counties, utility districts, and special districts (of which there are over 5,000 in the state) all may levy their own fees and exactions, and have varied approaches to complying with the posting requirements established in AB 1483.^[9] This lack of transparency around fees and exactions, particularly at the outset of a project, result in unforeseen project costs, increased risks for developers, and project delays – all of which may result in fewer homes ultimately being built. This especially creates barriers for smaller and newer community-led developers, who often lack the experience, connections, and up-front capital to navigate the uncertainty associated with local fees and exactions.^[10]

As such, although AB 1483 requires transparency around fees to help developers assess costs, the general lack of compliance with that bill on behalf of local agencies makes it difficult for housing development proponents to gain the certainty around which fees will apply to their development proposals. Even if all fees were posted to a local agency’s website in compliance with AB 1483, it would be difficult for the development proponent to verify the accuracy of the posted materials, or in some instances, even to locate those materials.

AB 3012 would provide developers with a ballpark estimate of the fees that they will be expected to pay for their housing development proposal at the onset of their project. This certainty will help to mitigate delays in advancing a project, or in some instances, the inability to pay for unexpected fees associated with housing projects under the Mitigation Fee Act.

Arguments in Support: According to the California Home Building Alliance coalition, “Currently, cities impose development fees on developers to pay for services necessary to build new housing or to offset impacts of growth in a community. The fees can become a large portion of the cost to build new housing throughout the state. UC Berkeley’s Terner Center for Housing Innovation found in previous studies that development fees for multifamily housing in California can be as high as $75,000 per unit. In some areas, fees for a single family home can total about $157,000 per unit.

To help tackle issues regarding impact fee transparency, AB 1483 was passed in 2019 to ensure that local jurisdictions make information revolving housing impact fees more accessible. The bill mandated that localities post impact fee schedules, impact fee nexus studies, and other information on their websites for developers to stay informed of that jurisdiction’s impact fees. Additionally, the Department of Housing and Community Development (‘HCD’) released the Statewide Housing Plan in 2022, which outlines the state’s strategy to address its housing crisis. Included in the plan was a 10-year Housing Data Strategy that looked to reduce barriers to building more housing.

This bill aims to improve impact fee transparency and eliminate inconsistencies by ensuring HCD develops a fee schedule template and list of best practices that jurisdictions can use on their websites. Many jurisdictions currently post fee schedules but they do not cover all the applicable impact fees that are charged. Many jurisdictions also lack consistency about how they present the information, making it hard for a developer to calculate the amount of impact fees that could affect the project. This bill will enable state law and HCD’s goals to be better synthesized when it comes to data sharing. It will also allow for the public and developers to better understand fees they might face throughout the development process.”

Arguments in Opposition: None on file.

Related Legislation:

AB 1820 (Schiavo), 2024. This bill would establish a process through which development proponents can request preliminary project fee and exaction estimates when submitting a preliminary application, and receive a final list of all fees and exactions related to the project after final approval, within a specified timeframe. This bill passed out of the Assembly Housing Committee as amended 9-0, and is pending hearing in the Assembly Committee on Local Government.

AB 602 (Grayson), Chapter 347, Statutes of 2021. This bill established several new requirements for local governments in connection with adopting and imposing fees and exactions, including new nexus study and capital facilities planning obligations. The bill also requires local governments to request fee and exaction information from developers and then post whatever information is voluntarily provided on the local agency's to increase transparency with respect to the overall level of fees and exactions imposed on new housing in the jurisdiction. 

AB 1483 (Grayson), Chapter 662, Statutes of 2019. This bill requires a city, county, or special district to maintain on its internet website, as applicable, a current schedule of fees, exactions, and affordability requirements imposed by the city, county, or special district, including any dependent special district and annual fee reports or annual financial reports, as specified. The bill requires a city, county, or special district to provide on its internet website an archive of impact fee nexus studies, cost of service studies, or equivalent, as specified. 

AB 1484 (Grayson), 2019: This bill would have required local agencies to publish fees for housing development projects on their internet website, and would have frozen “impact and development fees that are applicable to housing developments” for two-years after a development application was deemed complete. This bill died in the Senate Committee on Rules.

SB 330 (Skinner), Chapter 654, Statutes of 2019. This bill established a process for a project applicant to file a preliminary application for a housing development project, and established that a housing development project that has submitted a preliminary application must be subject only to the ordinances, policies, and standards adopted and in effect when the preliminary application was deemed to be complete.

Double referred: This bill is double referred. It was heard in the Assembly Committee on Local Government and passed on a vote of 9-0 on April 17, 2024.

REGISTERED SUPPORT / OPPOSITION:

Support

Abundant Housing LA

California YIMBY

Housing Action Coalition

Housing Action Coalition

Housing Trust Silicon Valley

MidPen Housing Corporation

SPUR

YIMBY Action

Opposition

None on file.

Analysis Prepared by: Dori Ganetsos / H. & C.D. / (916) 319-2085

1. David Garcia, Ian Carlton, Lacy Patterson, and Jacob Strawn, Making It Pencil: The Math Behind Housing Development (2023 Update), Terner Center for Housing Innovation, December 2023, https://ternercenter.berkeley.edu/research-and-policy/making-it-pencil-2023/ ↑

2. IBID. ↑

3. Mark Stivers, Affordable Housing Compares Favorably to Market-Rate Housing From a Cost Perspective, California Housing Partnership, January 2024: https://chpc.net/affordable-housing-compares-favorably-to-market-rate-housing-from-a-cost-perspective/#:~:text=It%20turns%20out%20that%20costs,market%2Drate%20developments%20do%20not. ↑

4. Sarah Mawhorter, David Garcia and Hayley Raetz, It All Adds Up: The Cost of Housing Development Fees in Seven California Cities, Terner Center for Housing Innovation, March

   2018, https://ternercenter.berkeley.edu/research-and-policy/it-all-adds-up-development-fees ↑

5. IBID. ↑

6. SPUR. How Much Does It Cost to Permit a House? May 2021, www.spur.org/sites/default/files/2021-07/SPUR_How_Much_Does_It_Cost_To_Permit_A_House_0.pdf. ↑

7. Hayley Raetz et al., Residential Impact Fees in California, Terner Center for Housing Innovation, August 2019, https://ternercenter.berkeley.edu/wp-content/uploads/pdfs/

   Residential_Impact_Fees_in_California_August_2019.pdf ↑

8. Sarah Mawhorter, et al. ↑

9. SPUR. ↑

10. SPUR. ↑

Date of Hearing: April 17, 2024

ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT

Juan Carrillo, Chair

ABPCA Bill Id:AB 3012 (

Author:Grayson) – As Amended Ver:March 11, 2024

SUBJECT: Development fees: fee schedule template: fee estimate tool.

SUMMARY: Requires cities and counties to make available on their internet websites a fee estimate tool that the public can use to calculate an estimate of fees and exactions for a proposed housing development, and requires the Department of Housing and Community Development (HCD) fee schedule template and a list of best practices, as specified. Specifically, this bill:

1. Defines the following terms:
   1. “Affordability requirement” as a requirement imposed as a condition of a development of residential units, that the development include a certain percentage of the units affordable for rent or sale to households with incomes that do not exceed the limits for moderate-income, lower income, very low income, or extremely low income households, as specified in existing law.
   2. “Housing development project” as a use consisting of any of the following:
      1. Residential units only.
      2. Mixed-use developments consisting of residential and nonresidential uses with at least two-thirds of the square footage designated for residential use.
      3. Transitional housing or supportive housing.
2. Requires a city or county that has an internet website to make a fee estimate tool that the public can use to calculate an estimate of fees and exactions for a proposed housing development project available on its internet website. A city or county may choose the format for the fee estimate tool.
3. Specifies that the fee estimate tool shall calculate an estimate of fees for a proposed housing development project include, but not be limited to, the following:
   1. A fee or charge described in the Mitigation Fee Act, as specified.
   2. In-lieu fees for affordability requirements.
   3. A construction excise tax.
   4. In-lieu fees for a requirement that the housing development project provide public art.
   5. In-lieu fees for dedications of parkland pursuant to the Quimby Act.
   6. A special tax levied on new housing units pursuant to the Mello-Roos Community Facilities Act of 1982.
4. Provides that a city or county shall not be responsible for the accuracy of the estimate provided by the fee estimate tool. A city or county may include a disclaimer regarding the accuracy of the estimate calculated on its website under this bill.
5. Specifies that a city or county with a population of greater than 500,000 shall meet the requirements of this bill on or before July 1, 3031, and a city or county with a population of 500,000 or less shall meet the requirements of this bill on or before July 1, 2032.
6. Requires on or before July 1, 2028, HCD to create a fee schedule template for proposed housing development projects that may be used by cities and counties.
7. Provides that the template in 6) above, shall, at a minimum, contain the following:
   • 1. A list of the fees and exactions, as specified, with the approximate cost per unit or per square foot.
     2. The districts and neighborhoods where each fee applies.
     3. The uses that each fee applies to.
     4. Who should be contacted in order to calculate total fees.
8. Specifies that, to the extent practicable, the template in 6) above, shall include, but not be limited to, the following:
   1. A fee or charge described in the Mitigation Fee Act, as specified.
   2. In-lieu fees for affordability requirements.
   3. A construction excise tax.
   4. In-lieu fees for a requirement that the housing development project provide public art.
   5. In-lieu fees for dedications of parkland pursuant to the Quimby Act.
   6. A special tax levied on new housing units pursuant to the Mello-Roos Community Facilities Act of 1982.
9. Requires on or before July 1, 2028, HCD to create a list of best practices regarding presenting information for fees and exactions levied by local jurisdictions.
10. Authorizes HCD to create a fee estimate tool that may be used by cities and counties for the purpose of meeting the requirements of 2) through 5) above.
11. Allows HCD to contract with nonprofit or academic institutions to complete the fee schedule template, list of best practices, and fee estimate tool.
12. Finds and declare that provisions in this bill that apply to cities and counties address a matter of statewide concern rather than a municipal affair as that term is used in Section 5 of Article XI of the California Constitution. Therefore, these provisions apply to all cities, including charter cities.
13. Provides that no reimbursement is required by this bill because a local agency or school district has the authority to levy service charges, fees, or assessment sufficient to pay for the program or level of service mandated by this bill, as defined.

FISCAL EFFECT: This bill is keyed fiscal and contains a state mandated local program.

COMMENTS:

1. Bill Summary. This bill requires cities and counties to make available on their internet website a fee estimate tool that the public can use to calculate an estimate of fees and exactions for a proposed housing development. This bill requires the estimate tool to include certain fees, including impact fees, certain in-lieu fees, construction excise taxes, and Mello-Roos special taxes. This bill also requires the estimate tool to be available on a city’s or county’s website by 2031 or 2032 depending on the city’s or county’s population. Additionally, this bill requires HCD, by July 1, 2028, to create a fee schedule template with specified information and a list of best practices regarding presenting information for fees and exactions levied by local jurisdictions. This bill is sponsored by the author.
   
2. Author’s Statement According to the author, “AB 1483 (Grayson, 2019) was a significant step forward in providing greater transparency on development impact fees, and it required jurisdictions to provide information on impact fee schedules, nexus fees studies, and other information that could help inform a developer of a jurisdiction’s impact fees. Despite the progress made on providing greater transparency on development impact fees, recent reports by SPUR and the Terner Center found that there were significant shortcomings in compliance with the requirements of AB 1483 by many jurisdictions. While many jurisdictions have provided the information required by AB 1483, fee schedules often did not provide all applicable fees and calculating fees remained confusing.

“AB 3012 will help improve impact fee transparency and eliminate inconsistencies that may exist by requiring HCD to develop a fee schedule template and list of best practices that jurisdictions can utilize. This will harmonize State law with HCD’s goals on data sharing, and make it easier for the public and for developers to understand the potential fees that may be encountered during the development process. Additionally, this bill would help advance transparency by requiring that jurisdictions provide a fee estimate calculator by 2032. This will help ensure that developers can arrive at a more accurate estimate for the fees that are required during the development process. This bill will further remove barriers to development by helping ensure that impact fee information is accurate and easy to understand.”

1. Mitigation Fee Act. When approving development projects, counties and cities can require the applicants to mitigate the project's effects by paying fees—known as mitigation fees, impact fees, or developer fees. The California courts have upheld impact fees for sidewalks, parks, school construction, and many other public purposes.

When establishing, increasing, or imposing a fee as a condition of approving a development project, the Mitigation Fee Act requires local officials to:

• 1. Identify the fee’s purpose.
     
  2. Identify the fee’s use, including the public facilities to be financed.
     
  3. Determine a reasonable relationship between the fee’s use and the development.
     
  4. Determine a reasonable relationship between the public facility’s need and the development.

When imposing a fee as a condition of approving a development project, the Mitigation Fee Act also requires local officials to determine a reasonable relationship between the fee’s amount and the cost of the public facility. In its 1987 Nollan decision, the U.S. Supreme Court said there must be an “essential nexus” between a project's impacts and the conditions for approval. In the 1994 Dolan decision, the U.S. Supreme Court said that conditions on development must have a "rough proportionality" to a project's impacts.

In the 1996 Ehrlich decision, the California Supreme Court distinguished between “legislatively enacted” conditions that apply to all projects and “ad hoc” conditions imposed on a project-by- project basis. Ehrlich applied the “essential nexus” test from Nollan and the “rough proportionality” test from Dolan to “ad hoc’ conditions. The Court did not apply the Nollan and Dolan tests to the conditions that were “legislatively enacted.” In other words, local officials have generally faced greater scrutiny when they impose conditions on a project-by-project basis. As a result of these decisions and the Mitigation Fee Act, local agencies have conducted nexus studies to ensure any proposed impact fees meet these legal tests for most impact fees. Other requirements in the Mitigation Fee Act ensure that impact fees are appropriately levied and spent.

On April 12 of this year, the United States Supreme Court decided Sheetz v. County of El Dorado, California. The case involved the takings clause of the Fifth Amendment to the U.S. Constitution. An El Dorado County resident challenged the county’s legislatively enacted traffic impact mitigation fee, arguing the county should only charge him based on the impact associated with his specific parcel. The main question was whether or not the same standards of “essential nexus” and “rough proportionality” apply to legislatively enacted fees as they do to ad-hoc fees.

In the Sheetz decision, the Court stated, “A legislative exception to the Nollan/Dolan test ‘conflicts with the rest of our takings jurisprudence,’ which does not otherwise distinguish between legislation and other official acts. Knick v. Township of Scott, 588 U. S. 180, 185 (2019).” The Court also proclaimed that, “...as we have explained, a legis­lative exception to the ordinary takings rules finds no sup­port in constitutional text, history, or precedent. We do not address the parties’ other disputes over the va­lidity of the traffic impact fee, including whether a permit condition imposed on a class of properties must be tailored with the same degree of specificity as a permit condition that targets a particular development. The California Court of Appeal did not consider this point—or any of the parties’ other nuanced arguments—because it proceeded from the erroneous premise that legislative permit condi­tions are categorically exempt from the requirements of Nollan and Dolan. Whether the parties’ other arguments are preserved and how they bear on Sheetz’s legal challenge are for the state courts to consider in the first instance.”

In addition, Justice Kavanaugh filed a concurring opinion, in which Justices Kagan and Jackson joined saying that, “I join the Court’s opinion. I write separately to underscore that the Court has not previously decided—and today explicitly declines to decide—whether ‘a permit condition imposed on a class of properties must be tailored with the same degree of specificity as a permit condition that targets a particular development.’ Ante, at 10–11. Importantly, therefore, today’s decision does not address or prohibit the common government practice of imposing permit conditions, such as impact fees, on new developments through reasonable formulas or schedules that assess the impact of classes of development rather than the impact of specific parcels of property. Moreover, as is apparent from the fact that today’s decision expressly leaves the question open, no prior decision of this Court has addressed or prohibited that longstanding government practice."

1. Connection and Capacity Charges. Connection fees and capacity charges are one-time fees assessed on new customers that reflect the reasonable cost of providing service, typically for water or sewer systems. A local agency assesses a connection fee when it physically connects a structure to the water or sewer system, which pays for the physical facilities necessary to make a water connection or sewer connection, such as meters, meter boxes, pipelines, and the estimated reasonable cost of labor and materials for their installation of those facilities. A local agency assesses a capacity charge on the customer to cover the proportional cost of maintaining or constructing system wide infrastructure necessary to meet the additional water or sewer demand for new users of the system. The Mitigation Fee Act governs connection fees and capacity charges, but state law provides separate provisions related to their oversight and accounting.
   
2. In-Lieu Fees. Local governments also use in-lieu fees when requiring a developer to dedicate land is not optimal or feasible. For example, requiring each developer to dedicate land for school or recreation purposes might not achieve the goal of providing facilities for large, developing suburban areas if the sites are either inadequate in size or not in the best locations. Imposing an in-lieu fee instead substitutes a monetary payment for a dedication of land or property. Fees collected from multiple developers can then be used at a later date to purchase an appropriate site and construct the necessary public improvements.
   
3. AB 1483 of 2019. In response to a 2019 Terner Center for Housing Innovation report that studied fee transparency, among other issues, AB 1483 (Grayson), Chapter 662, Statutes of 2019, required cities, counties, and special districts to post specified housing related information on their websites. This information included the following:
   
   1. A current schedule of fees, exactions, and affordability requirements imposed by the city, county, or special district, including any dependent special districts, of the city or county applicable to a proposed housing development project, which must be presented in a manner that clearly identifies the fees, exactions, and affordability requirements that apply to each parcel.
      
   2. All zoning ordinances and development standards, which must specify the zoning, design, and development standards that apply to each parcel.
      
   3. A list that cities and counties must develop under existing law of projects located within military use airspace or a low-level flight path.
      
   4. Specified annual fee reports or specified annual financial reports.
      
   5. An archive of impact fee nexus studies, cost of service studies, or equivalent, conducted by the city, county, or special district on or after January 1, 2018.

Since the passage of AB 1483, the information required to be posted on a local agency’s website has changed. AB 1473 (Senate Committee on Governance and Finance), Chapter 371, Statutes of 2020, required local agencies to separately post their connection fees and capacity charges, without being tied to specific parcels, and made technical fixes to ensure that special districts were properly accounted for by AB 1483. Additionally, AB 602 (Grayson), Chapter 347, Statutes of 2021, required local agencies, among other things, to do the following:

• 1. Post a written fee schedule or a link directly to the written fee schedule on its internet website.
     
  2. Request from a development proponent, upon issuance of a certificate of occupancy or the final inspection, whichever occurs last, the total amount of fees and exactions associated with the project for which the certificate was issued. The city or county must post this information on its website, and update it at least twice per year. A city or county is not responsible for the accuracy of the information received by the development proponent.

1. Policy Considerations. The Committee may wish to consider the following:
   
   1. Is Existing Law Insufficient? Existing law already requires local agencies to post a written fee schedule on their websites. The author and supporters argue that, while progress with fee transparency has been made, inconsistencies in posting practices can make it difficult for developers to calculate fee costs. This bill requires HCD to create a fee schedule template. Would the creation of a template ameliorate the issues with inconsistent posting practice? The Committee may wish to consider if an additional fee calculation tool is needed or if the enhancement of existing requirements is more appropriate.
      
   2. Connection Fees and Capacity Charges. Connection fees and capacity charges are often collected differently than other impact fees. Most public agency water and sewer providers are separate from a city or a county, and water agencies do not have land use authority. The water agency often needs to know information such as the pipeline size, meter sizes, and whether or not additional infrastructure (i.e. a new water treatment facility) is necessary to serve a new development. Therefore, it could be difficult for a city or county to anticipate the costs associated with providing a new development with the water related services they need. The Committee may wish to consider if connection fees and capacity charges should be included in the requirements of this bill.
      
   3. Recent Litigation. The United States Supreme Court issued its decision in the Sheetz case on April 12 of this year. How the decision ultimately effects a local government’s ability to impose fees is not entirely clear at the moment. The Committee may wish to consider if it is premature to consider impact fee legislation due to the recent decision in the Sheetz case and if more time is needed to determine the case’s full impact.
      
2. Committee Amendments. In order to address policy consideration b) above, and to make a technical change, the Committee may wish to amend the bill as follows:
   
   65940.2. (a) A city or county that has an internet website shall make a fee estimate tool that the public can use to calculate an estimate of fees and exactions for a proposed housing development project available on its internet website. A city or county may choose the format of the fee estimate tool.
   (1) The fee estimate tool shall calculate an estimate of fees for a proposed housing development project include, project, including, but not be limited to, the following:
   (A) A fee or charge described in the Mitigation Fee Act (Chapter 5 (commencing with Section 66000), Chapter 6 (commencing with Section 66010), Chapter 7 (commencing with Section 66012), except Section 66013, Chapter 8 (commencing with Section 66016), and Chapter 9 (commencing with Section 66020).

Due to timing constraints, these amendments should be adopted in the Housing and Community Development Committee.

1. Arguments in Support. According to a coalition of supporters, “Currently, cities impose development fees on developers to pay for services necessary to build new housing or to offset impacts of growth in a community. The fees can become a large portion of the cost to build new housing throughout the state. UC Berkeley’s Terner Center for Housing Innovation found in previous studies that development fees for multifamily housing in California can be as high as $75,000 per unit. In some areas, fees for a single family home can total about $157,000 per unit.

“To help tackle issues regarding impact fee transparency, AB 1483 was passed in 2019 to ensure that local jurisdictions make information revolving housing impact fees more accessible. The bill mandated that localities post impact fee schedules, impact fee nexus studies, and other information on their websites for developers to stay informed of that jurisdiction’s impact fees. Additionally, the Department of Housing and Community Development (‘HCD’) released the Statewide Housing Plan in 2022, which outlines the state’s strategy to address its housing crisis. Included in the plan was a 10-year Housing Data Strategy that looked to reduce barriers to building more housing.

“This bill aims to improve impact fee transparency and eliminate inconsistencies by ensuring HCD develops a fee schedule template and list of best practices that jurisdictions can use on their websites. Many jurisdictions currently post fee schedules but they do not cover all the applicable impact fees that are charged. Many jurisdictions also lack consistency about how they present the information, making it hard for a developer to calculate the amount of impact fees that could affect the project. This bill will enable state law and HCD’s goals to be better synthesized when it comes to data sharing. It will also allow for the public and developers to better understand fees they might face throughout the development process.”

1. Arguments in Opposition. None on file.
2. Double-Referral. This bill is double-referred to the Assembly Committee on Housing and Community Development.

REGISTERED SUPPORT / OPPOSITION:

Support

Abundant Housing LA

California YIMBY

Housing Action Coalition
Housing Trust Silicon Valley

Midpen Housing

SPUR

YIMBY Action

Opposition

None on file

Analysis Prepared by: Jimmy MacDonald / L. GOV. / (916) 319-3958