Fremont City Council Meeting: 11/04/25 07:00 PM
3300 Capitol Avenue Div/Dept: Community Development
Fremont, CA 94538 Category: Fees & Rates
SCHEDULED
Sponsors:
COUNCIL STAFF REPORT (ID # 5402) DOC ID: 5402
Updated: 10/31/2025 8:55 AM by Dina Lewis Page 1
AMENDMENT TO MASTER FEE SCHEDULE – Public Hearing (Published Notice) to Consider an Amendment to Master Fee Resolution 8672 (Master Fee Schedule) to Make Minor Adjustments to Building User Fees and Establish Affordable Housing Processing Fees and Making Findings of CEQA Exemption.
Contact Persons:
Name: Jennifer Craven Joel Pullen
Title: Business Manager Community Development Director
Div/Dept: Community Development Community Development
Phone: 510-494-4554 510-494-4436
E-Mail: [email protected] [email protected]
Executive Summary: Staff is proposing to amend the Master Fee Schedule to make minor adjustments to Building user fees, including clean-up to the valuation-based fee categories, which were not included in the most recent Building fee update in May 2024. Staff is also proposing to establish processing fees for certain transactions related to affordable housing units, including transfer of property and refinancing.
Staff recommends that the City Council approve the master fee schedule changes described in this report and attached in the draft resolution.
BACKGROUND: The following describes how Building and Affordable Housing are funded, how their fees are structured, and the services the City provides.
Building Fees: In May 2024, City Council last authorized an update to the development- related fee schedule. Prior to May 2024, fees had not been updated since 2014. Fees charged to applicants requesting Building-related services directly fund the services provided.
The Building Division’s core responsibility is enforcing the California Building and Fire Codes, including local amendments, through its construction/plan review, permitting, and inspection services. Building’s operations are funded entirely by three types of fees: 1) fees based on the project’s construction valuation; 2) flat fees based on the number of “widgets” being installed (e.g., switches, circuits) and the average time required to provide the service; and, 3) hourly rate fees for certain plan checks and inspections.
Fees based on construction valuation generate about 70% of Building’s revenue, with flat and hourly rate fees comprising the remaining 30%.
Affordable Housing Processing Fees: The affordable housing program is funded by loan repayments made by holders of existing City-funded affordable housing loans, as required by the various loan agreements for each of the projects. A portion of these repaid monies are required to be reinvested into affordable housing unit production. The majority of City funding distributed for affordable housing construction comes from affordable housing in - lieu fees and jobs-housing linkage fees paid by market-rate development.
Council Staff Report (ID # 5402) Meeting of November 4, 2025 Updated: 10/31/2025 8:55 AM by Dina Lewis Page 2
Two of the affordable housing programs offered by the City require significant amounts of staff time to administer, including:
Below Market Price Program: The below market rate price (BMP) program provides home ownership opportunities to low/moderate-income buyers at affordable prices. These units are typically provided by developers of market-rate housing projects to comply with the City’s Affordable Housing Ordinance. Staff and consultant time is required for many activities related to the BMP program, including:
• Creating and executing an affordable housing agreement with the developer • Coordinating/reviewing sales of affordable units by developer • Processing BMP homeowner refinance requests
• Conducting required inspection for resales of BMPs
• Processing resales
Deed-restricted Multi-family Rental Program: The deed-restricted multi-family rental program provides affordable rental units to income-qualified tenants. These units are typically built by developers who specialize in affordable housing and typically require funding from the City to be financially viable. Staff and consultant time are required for many activities related to the multi-family rental program, including:
• Preparation/processing of loan documents for initial loan • Preparation/processing of revisions to loan documents for loan conversion, re-syndication, refinance, rehabilitation, or recapitalization • Transfer of ownership
• Annual monitoring of units to ensure compliance with regulatory requirements.
Costs for outside consultants related to these transactions as well as annual monitoring fees are typically passed on to the homeowner/developer. Staff is recommending that these pass-through fees be added to the fee schedule for full transparency.
Costs for staff time related to these transactions are not currently being passed on to homeowners/developers. Staff is recommending establishing fees to recover staff costs for several transaction types, for reasons described in more detail below.
DISCUSSION/ANALYSIS: The following describes the proposed adjustments to the Building fee schedule and the establishment of new affordable housing processing fees.
Proposed fee charges are provided in Attachment 1 (Draft Resolution).
Building Fee Adjustments: The proposed building fee adjustments described below are minimal in nature and generally result in cleaning up existing ambiguity in the presentation of the fees in the Master Fee Schedule.
Minimum Valuation Fee: This update proposes establishing a minimum valuation-based fee amount for both plan review and inspection services. Similar to other permit fees, the proposed minimum plan review and inspection fees are based on one hour of time to provide these services, which is the minimum average time required to complete a plan check and an inspection. Currently, the minimum plan review and inspection fee for valuation-based permits is $22, which is equal to about 9 minutes of a plan reviewer’s time and 10 minutes of an inspector’s time, which does not cover the minimum cost to provide Council Staff Report (ID # 5402) Meeting of November 4, 2025 Updated: 10/31/2025 8:55 AM by Dina Lewis Page 3
these services. Establishing a minimum fee ensures that the cost to provide these services is recovered.
Valuation Fees: This update also includes a clean-up of the valuation fees so that cumulative fee amounts are accurately reflected. Generally, this clean-up results in very small fee reductions (e.g., a few cents per 1,000 square feet of valuation).
Clarifying Swimming Pool and Retaining Wall Valuation Table Categories: Staff is recommending clarifying the swimming pool and retaining walls valuation categories. The updated valuation table is provided in Attachment 1 (Draft Resolution).
Kitchen/Bath Remodel Fees: The Master Fee Schedule currently has a number of Express permit fees for a range of kitchen/bath remodel projects. Express permits are for home improvement projects that are simple in nature and do not require a plan review but must be inspected to verify conformance with Building Code requirements. Because no permit processing or plan review is required, Express permits are automatically issued and only require applicants to pay applicable inspection fees.
This update adds three kitchen/bath remodel scenarios to the list of projects qualifying for Express permits. These include: 1) kitchen or bathroom(s) with window replacement; 2) kitchen or bathroom(s) with electrical panel replacement; and 3) kitchen or bathroom(s) with both window replacement and electrical panel replacement. Proposed fees for these scenarios are consistent with the existing kitchen/bath remodel Express permit fees, which are based on the amount of inspection time required to verify Building Code compliance.
Electrical Charging Unit Fees: The update would add Electrical Vehicle Charging Unit to the list of various electrical inspection fees. An electrical vehicle charging unit (EVCU) is a type of electrical circuit. Currently, EVCU are charged as a general circuit. Adding the EVCU category enables the City to more accurately query and report how many EVCUs are issued.
Proposed EVCU fees are identical to those for the more general circuit.
Environmental Services Plan Review Fee (when Design Review is not required): This update adds an hourly rate fee for Environmental Services staff to charge their time to building permits that do not require design review. This would be added to the building permit in the instances when consultation on a storm water or solid waste issue may be required. Similar plan review fees exist for Planning and Engineering staff charges.
Affordable Housing Processing Fees:
As noted previously, two of the most administratively heavy programs operated by the Housing Division are the Below Market Price (BMP) home ownership program and the Affordable Multi-Family rental program. For both programs, staff is proposing new fees to offset staff time, which will preserve affordable housing funds for creation of new affordable units.
Below Market Price (BMP) Program
Developers/Lenders: In the BMP home ownership program, City staff enters affordable housing agreements with developers and participates in the sale of affordable units. Staff also reviews applications from lenders wanting to participate in the program. Currently, fees Council Staff Report (ID # 5402) Meeting of November 4, 2025 Updated: 10/31/2025 8:55 AM by Dina Lewis Page 4
for consulting services are passed on where applicable; however, City staff time and outside legal fees are not reimbursed and are funded out of other affordable housing revenues.
Staff propose to establish flat fees to cover the average staff costs and pass-through legal fees for these services. Staff surveyed surrounding cities and found that many charge comparable fees (Attachment 3).
BMP Homeowners: Owners of BMP units require City participation when they refinance or sell their property. Resales, in particular, demand considerable staff time (an estimated 47 hours to oversee the resale process, which includes, but is not limited to, coordinating with the sellers and the listing agents on timing and procedures, facilitating marketing efforts, determining eligibility, meeting with prospective buyer(s), and processing legal documents). Currently, this staff time is not reimbursed and is funded out of other affordable housing revenues. Staff is proposing to establish flat fees to cover staff costs related to these transactions.
Restricted Multi-family Rental Program
Affordable housing projects developed under the Restricted Multi-family Rental Program typically receive funding from City affordable housing funds as well as other non -City sources. Currently, fees for outside legal services are passed on to developers. However, consulting services and City staff costs (with the exception of required annual monitoring) have not been reimbursed. For every affordable Multi-family Rental Program project, staff expects to spend time preparing an initial loan agreement and regulatory agreement.
However, developers sometimes request changes to the project’s financial structure or other modifications to the previously executed agreements, requiring legal/technical review and significant staff time. While staff is not proposing fees for preparing the initial agreements, staff is proposing fees to cover the staff costs related to subsequent requested changes.
Affordable housing owners often request City assistance with various financial transactions for projects that have been operational for years. Examples include refinances, rehabilitations, re-syndications, and loan restructurings. Staff is proposing to establish fees to cover consultant and staff costs related to these and other post-occupancy transactions.
Again, this will preserve affordable housing funds for creation of new affordable units.
FISCAL IMPACT: Development services provided by Building and Affordable Housing are funded by a variety of fees. Establishing new processing fees for affordable housing will preserve funds for production of new affordable housing by covering the City’s costs for a number of transaction types. The minor adjustments to the Building fees proposed would ensure that the fees for Building services reflect the City’s actual costs.
Consistent with current practice for the City’s Building fees, this update would authorize staff to administratively update hourly rate fees annually on January 1 for the new affordable housing fees to reflect any cost-of-living adjustments implemented the prior July 1. This annual update will ensure that fees based on hourly rates keep pace with hourly rate increases.
ENVIRONMENTAL REVIEW: The proposed action to update the Master Fee Schedule is exempt from the California Environmental Quality Act (CEQA), pursuant to, without limitation, CEQA Guidelines Section 15378(b)(2), (4) and/or (5), as it is a fiscal or administrative action that does not have the potential to cause a significant direct or indirect Council Staff Report (ID # 5402) Meeting of November 4, 2025 Updated: 10/31/2025 8:55 AM by Dina Lewis Page 5
on the environment. The action also is exempt pursuant to CEQA Guidelines Section15061(b)(3), in that it does not have the potential for causing a significant effect on the environment. Each of the foregoing provides a separate and independent basis for CEQA exemption.
PUBLIC NOTICE: Public hearing notice was published in the Tri-City Voice for the proposed fee adjustments on October 21, 2025. Also, on October 21, notice of this public hearing was sent via email and SMS text notification to the 5,157 persons registered on the City’s Builders Interest List. Lastly, public hearing notices were mailed to the current 301 owners of Below Market Rate/Price (BMR/BMP) units.
ATTACHMENTS:
• Attachment 1 - Draft Resolution- Amendment to Master Fee Schedule • Attachment 2 - Master Fee Schedule_Section II_Development Fees_Effective 01-05- 2026
• Attachment 3 - Survey of Affordable Housing Processing Fees
RECOMMENDATION: Adopt a resolution approving an amendment to Master Fee Resolution 8672 (Master Fee Schedule) as drafted in Attachment 1.