Development Impact Fee Policy Recommendation
Summaries for Consideration
The following is a summary of staff policy recommendations and potential options for consideration. Staff intend to return to the City Council within 60 days with a resolution to implement the preferred policy options for fee reduction or elimination.
Lodging Recommendation
• Eliminate all development impact fees (School fees excluded) • Must be a 3-star equivalent or better product. Extended stay hotels not eligible. • A portion of the Transient Occupancy Taxes (TOT) revenue, equivalent to the equivalent impact fees, be directed to backfill through an internal and RAFD loan to be established at time of development.
• No predefined program sunset
Affordable Housing Recommendation
• Impact fees be 100% eliminated by policy in market rate developments for deed restricted affordable housing units only.
o Must meet the City’s Regional Housing Needs Allocation (RHNA) o No more than the approximately 15% (included rounding of fractional units) o There are sufficient funds in the Inclusionary Housing or Linkage Funds to backfill the loss of impact fees.
• Impact fees to be reduced or waived by the City Council on a case-by-case basis for 100% affordable projects.
• No defined program sunset, but would pause if there are insufficient funds available in the Inclusionary Housing or Linkage Funds.
• Fees eliminated on a unit-by-unit basis (not project), at time of building permit issuance (vertical construction)
• Other policy options to discuss:
o Fee Amounts
▪ Set lower fee amounts rather than eliminating 100% of fees. ▪ Only target certain levels of affordability (i.e. Low, Very Low, or Moderate).
▪ Only eliminate certain development impact fees rather than all fees. o Program “Certainty”
Development Impact Fee Policy Recommendation
Summaries for Consideration
▪ Allocate at time of entitlement, rather than at building permit, with a 12- month term to pull the building permits for all affordable units. Allocation window is intended to provide time to produce construction level documents, obtain financing and account for construction seasonality.