City Council Meeting
October 6, 2026
Development
Impact Fee Nexus
Study
• Governed by the LBMC, California Mitigation Fee Act and AB 602 • Paid by developers to offset additional infrastructure costs caused by new development
What are they?
Overview of Development Impact Fees (DIF)
2 The City collects impact fees for:
• Fire facilities
• Parks and Recreation facilities
• Police facilities
• Transportation improvements/public works
• Sensitive coastal resources
• Utilities sewer capacity
• LBUSD school fees (not set by the City)
How can they be used?
Overview of Development Impact Fees (DIF)
3 Development Impact Fees can help fund:
• New capital improvement projects
• Remodel and improvement projects that expand capacity • Facilities and equipment that provide expanded public services Development Impact Fees cannot fund:
• Staffing
• Projects that only fix a deficiency in level of service to existing residents • Routine operations and maintenance costs
How do they affect residents and property owners?
• Most residents and homeowners are not directly affected by fees • Only projects that are expected to add new workers or residents are subject to DIF • Development Impact Fees are meant to supplement other existing funding • Fees must be proportional to growth-related need
• Fees influence the cost and attractiveness of development in Long Beach Context in Development
Overview of Development Impact Fees (DIF)
4 Important to balance development cost with other development goals • Housing production
• Investment
• Economic development
• Keeping fees appropriate and competitive helps preserve this balance • Developers also pay permit and entitlement fees which have already risen in recent years
• Per state law most ADUs and some remodel/change-of-use projects are exempt from some or all fees
The Nexus Study focuses on four primary fees:
• Fire Facilities
• Fire facilities and capital projects
• Parks, Recreation and Marine Facilities
• New parks and resources such as playgrounds, recreational equipment, and sports fields
• Police Facilities
• Police Department facilities and capital improvements • Transportation Improvements/Public Works
• Facilities and capital projects needed due to increased traffic from growth Comprehensive Nexus Study
5 Comprehensive Nexus Study
6 What the Nexus Study does:
• Evaluates all four fees using more consistent and contemporary data • Shows compliance with Government Code sections 66001(a) and 66001(b) and Assembly Bill 602 (AB 602)
Nexus Findings Required 66001(a)/(b) AB 602 Requirements Identify purpose of the fee
Identify how the fee is to be used Adoption of a Development Impact Fee Capital Improvement Plan
Determine reasonable relationship between fee
use and type of project
Explanation of Level of Service
Determine reasonable relationship between
need for public facility and type of project
Residential fees must be charge proportionally
based on unit size (e.g. per square foot)
Demonstrate reasonable relationship between
fee amount and cost of public facility need
Comprehensive Nexus Study
7 What the Nexus Study shows:
• Anticipated growth will place significant demand on City infrastructure, public services and amenities through 2040
Summary of Maximum Allowable Development Impact Fees
Land Use Parks Police Fire Transportation Total
Residential
All Dwelling Units* $8.18 / sq. ft. $3.08 / sq. ft. $2.16 / sq. ft. $3.74 / sq. ft. $17.16 / sq. ft.
Non-Residential
Commercial/Retail $2.13 / sq. ft. $1.60 / sq. ft. $1.12 / sq. ft. $16.39 / sq. ft. $21.25 / sq. ft.
Office $2.84 / sq. ft. $2.14 / sq. ft. $1.50 / sq. ft. $5.05 / sq. ft. $11.52 / sq. ft.
Industrial $0.85 / sq. ft. $0.64 / sq. ft. $0.45 / sq. ft. $2.32 / sq. ft. $4.26 / sq. ft.
Hotel $852 / room $641 / room $450 / room $2,156 / room $4,099 / room * The fee will not be applied to Accessory Dwelling Units (ADUs) of less than 750 square feet and will be proportional to the primary unit for ADUs larger than 750 square feet
Comprehensive Nexus Study
Maximum Allowable vs. Policy Recommendations
The Nexus Study provides a legally
defensible maximum. As we prepare
recommendations for Council, we
should also evaluate how those
fees fit into the City’s broader
fiscal strategy
Development impact fees should be
seen within a larger ecosystem of
economic development carrots and
sticks such as zoning, businesses
assistance and infrastructure
investment
Policy Considerations
Fee increases may impact project feasibility
• Impact fees increase cost for developers, which may influence decisions to build in Long Beach
• Some cities charge much higher fees, but some of our neighboring cities charge low or no impact fees
• Lakewood, Compton, Downey, Norwalk and Santa Fe Springs • Setting rates around the mid-range between current and maximum allowable fees keeps fees comparable with surrounding cities Policy Recommendations
10 Proposed Development Impact Fees should balance these factors Proposed Development Impact Fees
Land Use Parks Police Fire Transportation Total
Residential
All Dwelling Units* $6.73 / sq. ft. $3.08 / sq. ft. $2.16 / sq. ft. $2.51 / sq. ft. $14.48 / sq. ft.
Non-Residential
Commercial/Retail $1.07 / sq. ft. $1.60 / sq. ft. $1.12 / sq. ft. $10.45 / sq. ft. $14.24 / sq. ft.
Office $1.42 / sq. ft. $2.14 / sq. ft. $1.50 / sq. ft. $4.03 / sq. ft. $9.09 / sq. ft.
Industrial $0.43 / sq. ft. $0.64 / sq. ft. $0.45 / sq. ft. $1.71 / sq. ft. $3.23 / sq. ft.
Hotel $0 / room $0 / room $0 / room $750 / room $750 / room • The fee will not be applied to Accessory Dwelling Units (ADUs) of less than 750 square feet and will be proportional to the primary unit for ADUs larger than 750 square feet • Fees will not immediately be set to full amount, but will be recommended to be phased-in over 5 or 10-years, depending on development need Policy Recommendations
11 Putting the proposed recommendation in context
• The fee will not be applied to Accessory Dwelling Units (ADUs) of less than 750 sf and will be proportional to the primary unit for ADUs larger than 750 sf • The Proposed amount is recommended to be phased-in over 5 or 10-years, depending on development need Comparison of Development Impact Fee Rates Land Use Current Maximum
Allowable
Proposed
(Year 1)
Proposed
(Phase-In)
Single Family (2500 SF) $6,937 $42,900 $20,325 $36,200
Townhomes (1750 SF) $5,603 $30,030 $14,228 $25,340
Multi Family (875 SF) $5,603 $15,015 $7,114 $12,670
Commercial/Retail $5.21 $21.25 $4.56 $14.24
Office $3.86 $11.52 $5.04 $9.09
Industrial $1.45 $4.26 $1.77 $3.23
Hotels (per room) $750.00 $4,099.00 $750.00 $750.00
Residential
Non-Residential (Per SF)
Policy Recommendations
12 • Impact Fees are set when permits are issued and paid at the end of a project • Expect revenue increases to increase over time with phase-in • Projected revenue is dependent on future economic conditions and building activity Development Impact Fee Revenue Projections (in Millions) Estimate
FY 21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32 FY33 Parks $2.39 $1.43 $2.73 $3.40 $1.53 $1.47 $2.22 $2.22 $2.46 $2.58 $2.85 $3.15 $3.48 Police $0.48 $0.33 $0.54 $0.66 $0.36 $0.35 $0.46 $0.46 $0.59 $0.75 $0.96 $1.22 $1.55 Fire $0.32 $0.22 $0.37 $0.45 $0.24 $0.23 $0.31 $0.88 $0.88 $0.88 $0.88 $0.88 $0.88 Transportation $0.90 $1.05 $1.34 $1.64 $0.41 $0.77 $1.05 $1.05 $1.18 $1.32 $1.48 $1.67 $1.87 TOTAL $4.09 $3.03 $4.96 $6.14 $2.54 $2.82 $4.05 $4.62 $5.11 $5.54 $6.18 $6.92 $7.79 Based on Proposed Fee Changes
Fees will be recommended at levels where the City
recovers an appropriate share of infrastructure costs
while preserving economically viable development
• Not all fees will rise by the same amount
• Some phase-in will be necessary
• Rate of phase-in will be based on development need
• Future increases (indexing) will be automatic based on CCCI Policy Considerations
13 The City has considerable
need for Fire facilities and few
other potential funding
sources.
Fire fees will rise more
than other impact fees
Each Fee is Different
Policy Considerations
14 For Parks, as well as
Transportation, the City
competes for grant funds, and
impact fees are a relatively
small portion of the overall
funding mix for projects
Policy Considerations
15 Subarea 1
Areas of high concentration of new
industrial square footage and
existing areas of concentrated
residential development
5- year phase-in recommended
Subarea 2
Remaining areas
10-year phase-in recommended
When fees are set appropriately and other economic
development tools are in place, development occurs and
creates recurring revenue for decades
One-time versus Recurring Revenue
Policy Considerations
16 • One-time revenues, such as impact fees, are important to the City’s overall financial wellbeing, however recurring revenue sources from property, utility, sales and other taxes from new development are generally more important because they continue indefinitely • A recent study (Kosmont, 2025) showed a 48-unit apartment building would pay $300,000 in one-time fees but also generate $166,600 each year in tax revenue
• Impact fees cannot pay for salaries or maintenance
• Impact fees do not buy new police officers, firefighters, lifeguards or park staff, and these costs are where the biggest City cost and need exists
• Each new facility, road, park or other improvement leads to City maintenance costs
• Impact fees pay for eligible growth-related capital
infrastructure
Legal Limits Matter
Policy Considerations
17 • The City should set impact fees appropriately and use them for allowed expenditures; however,
• Impact fees are highly dependent on the real estate
development market. Factors such as land costs, construction costs, interest rates, etc. are entirely out of City control • The City should continue to budget conservatively and rely on impact fee revenue only after it has been collected
Unpredictable Revenue Source
Policy Considerations
18 Process and Next Steps
19 Public Hearing scheduled for November 10, 2026
First fee increases effective January 10, 2027
Draft Nexus Study and Policy Recommendations will be posted online and publicly noticed 30-days prior to the public hearing Thank You!
longbeach.gov