AMENDMENTS TO
CITYWIDE IMPACT FEE
REGULATIONS
Planning and Building Department
CED COMMITTEE
June 10, 2025
1 Agenda
Background and Context
Proposed Amendments to Citywide Impact Fee Regulations
1. Impact Fee Assessment for Residential Projects
2. Projects Subject to Impact Fees
3. Impact Fee Levels and Impact Fee Zones for Residential Projects
4. Impact Fee Payment Timing
5. On -site Affordable Housing Requirements
6. Other Related Changes
Recommendation
2 Background and Context
3 Oakland’s Impact Fee Program
• Four impact fees
• Affordable Housing Im pact
Fee (AHIF) on residential
development
• Transportation Im pact Fee
(
TIF) on all development
• Capital Improvements
Im
pact Fee (CIIF) on all
development
• Jobs/Housing Im pact Fee
(
JHIF) on office and
warehouse development
4 • 3 Impact Fee Zones for
Residential Projects
• JHIF adopted earlier and in
effect since 2002
• AHIF, TIF, CIIF in effect sinc
e
S
ept. 2016
• Phased in: July 2020
r
eached full adopted
amount
• Impact fees increase with
inflation
.
Impact Fee Zones – Residential Projects
5 Key Findings - Development Feasibility Analysis
and Housing Strategy Study
Phase 2 Analysis completed in July 2024
• Development Feasibility Analysis and Housing Strategy Study • Potential Refinements to the City’s Impact Fee Program K
ey Findings
• Current economic conditions are different from the strong market context prior to
the pandemic.
• Reduced demand, hi gher vacancies, and lower rents
• Higher capital an d construction costs, loan defaults, property seizures, and low-value sales.
• Perceived concerns with safety add additional impact on the desirability and costs of
Oakland locations
6 Key Findings (cont’d) - Development Feasibility
Analysis and Housing Strategy Study
• The Density Bonus program offers sig nificant cost savings and, in most cases, revenue enhancements that offset the additional costs of providing on-site affordable units.
• Developers o ften provide more than the required affordable units to • Be exempt from the AHIF under the on-sit e option
• Get a dditional concessions and waivers
• Affordable units are produced wit hout public subsidy. 7 Key Findings (cont’d) - Development Feasibility
Analysis and Housing Strategy Study
Conclusion
• New construction is n ot feasible in most sectors
• While impact fee levels are not the only key determinant of project f
easibility, scheduling of construction period costs, such as impact fees, affects the amount of construction financing required and the interest cost on that funding.
• Cu
rrent development feasibility context supports production of a higher percentage of on-site affordable units
8 Impact Fee Program Refinements - CED Committee
Study Session
9 Impact Fee Program
Refinement – Staff
Recommendation
Comments from CED Committee
1) Fee Assessment for
Residential Projects -
Convert the AHIF from
Fee per Unit to Fee per
Sq.Ft
Acknowledged the requirement under AB 602
2) Fee Levels – Maintain
fees at current impact fee
levels with inflationary
adjustments
Asked clarifying questions regarding fee reductions in neighboring jurisdictions
CM Fife - Emphasized the need to protect revenues
from critical developments like the Coliseum project
CM Jenkins - Potentially lower fees in Zone 3
Impact Fee Program Refinements - CED Committee
Study Session
10 Impact Fee Program
Refinement – Staff
Recommendation
Comments from CED Committee
3) Fee Zone Boundaries –
Maintain current fee zone
boundaries
Concurred with study findings that the original
justifications for the fee zones still hold
CM Kalb - Adjust zone boundaries – portions of MLK Way from Zone 2 into Zone 1 and Santa Fe into Zone 1 - one
year after adoption of the revised ordinance
4) Payment Timing -
Change timing of Impact
Fee Payment to Certificate
Of Occupancy in alignment
with SB 937
No comments from the Committee
Impact Fee Program Refinements - CED Committee
Study Session
11 Impact Fee Program
Refinement – Staff
Recommendation
Comments from CED Committee
5) On-Site Affordable
Percentage Requirements -
Increase on- site affordable
percentage requirements
by impact fee zone
Supported the proposed increases
Proposed including flexible options that allow
developers to meet affordability requirements
through various combinations of affordable units.
6) Project Unit and Size
Thresholds – Exempt 2-4 unit
projects, single-family homes
under 1,750 square feet (for
AHIF only) and projects subject
to Senate Bill 684 (SB 684).
Asked clarifying questions on the exemptions
specifically related to exempting single-family homes
under 1,750 square feet.
Proposed Amendments to
Citywide Impact Fee
Regulations
12 1. Impact Fee Assessment for Residential
Projects
Staff Recommendation:
• Update the current fee structures for the Affordable Housing Impact Fees (AHIF), Transportation Impact Fees (TIF), and Capital Improvements Impact Fees (CIF) for residential
development to assess fees on a per square foot basis
instead of fees
per unit.
• Amend the City’s Master Fee Schedule to reflect this square footage- based methodology for calculating impact fees on residential projects.
13 1. Impact Fee Assessment for Residential
Projects
Rationale for Recommendation:
• Conforms with AB 602 (2021) - Impact fees updated after 2021 should be assessed per square foot of residential development to be proportional to the proposed unit size.
• Ensures a fairer, more equitable fee structure.
• Reduces costs for smaller units.
• Supports the production of naturally occurring affordable housing.
14 2. Projects Subject to Impact Fees
Staff Recommendation:
In accordance with the Mitigation Fee Act, staff recommend tha t th
e proposed ordinances take effect 60 days after City Council adoption .
A. Pr
ocedures for projects subject to the fee ordinance s:
• Impact fees will be based on the fees in effect at the tim e a co
mplete building permit application is submitted.
• If more than five years pass between the issuance of a buildin g pe
rmit and the first major inspection (foundation, underfloor, or framing ), the applicant must pay the fee in effect at the time of that first major inspection.
15 2. Projects Subject to Impact Fees
Staff Recommendation:
B. Expand Projects Exempt from AHIF
• Missing Middle Housing: Projects with 2 to 4 units that are not subject to Planned Unit Development (PUD) regulations under Chapter 17.142 of the Oakland Planning Code.
• Sm all Single-Family Homes: One-Fam il y Dwel ling Residential Facilities with 1,750 square feet or less of residential floor area, not subject to PUD regulations.
• SB 684 Projects: Developments qualifying under SB 684 California Government Code Sections 65852.28 and 66499.41.
• Additionally, exempt the four smallest units in residential developments proposing more than four units.
16 2. Projects Subject to Impact Fees
Rationale for Recommendation:
• Aligns with Housing Element Actions
• HE 3.2.1: Reduce pre -d evelopment costs and expedite planning approval for missing middle housing types – new construction an d c
onversion of existing structures.
• HE 3.6.1: Reduce costs and streamline the planning approval an d bu
ilding permit processes for small infill development.
• Incentivize developers to utilize State Law (SB 684) – en courag e m
ore affordable home ownership opportunities - projects 5 acres or l
ess, subdivisions up to ten parcels as small as 600 sq. ft. with for sale homes/townhomes that are 1,750 sq. ft. or smaller. 17 2. Projects Subject to Impact Fees
• Incentivize affordable homeownership opportunities
• Currently, h omeowners who add 1 to 3 Accessory Dwelling Units (ADUs) are exempt from paying impact fees on those units.
However, ADUs cannot be sold.
• Exempting Projects with 2 -4 units – incentivize homeowners to add a second, third, or fourth regular dwelling unit that can be sold as condo units - that would be more affordable than single family housing
• Exempting the first four smallest units in projects proposing more than four units prevents disincentives for building five or more units to avoid triggering higher fees, similar to provision in Chapter
15.68 -Jobs/Housing Impact Fee.
18 3. Impact Fee Levels and Impact Fee
Zones for Residential Projects
19 Staff Recommendation:
• Maintain current impact fee levels, with adjustments for inflation only.
• Maintain current impact fee zone boundaries.
Rational e for Recommendation:
• Supported by Development Feasibility Analysis Fi ndings and City’s acknowledgment of current real estate m arket conditions. • Avoids adding pressure to development costs and provides stability for the development community while allowing time for the m arket to recover.
3. Impact Fee Levels and Impact Fee
Zones for Residential Projects
20 Rationale for Recommendation (cont’d ):
• Existing fee zones are based on distinct geographic areas with varying market conditions, price points, and developmen t f
easibility. Preserving these zone boundaries and fee variation s ens
ures that impact fees remain aligned with each area’s
economic capacity to support new developmen t.
• A
djusting zone boundaries for Martin Luther King Way from Zo ne 2 into Zone 1, and Santa Fe into Zone 1 would be considered an in
crease in impact fees in this area if this change wa s
in
corporated .
4. Impact Fee Payment Timing
21 Staff Recommendation:
• 100 percent of the AHIF, TIF, CIIF, and JHIF be due in one installment prior to the issuance of a Temporary Certificate of Occupancy or a Certificate of Occupancy, whichever occurs first, for all or any portion of the Development Project associated with the building permit.
R
ationale for Recommendation:
• Conforms with SB 937 - Delays payment of certain impact fee s u
ntil certificate of occupancy is issued for a project, to lower financing costs and allow more projects to pencil.
4. Impact Fee Payment Timing
22 Rationale for Recommendation (cont’d):
• Minimizes upfront costs and interest paid on borrowed funds. The total fee amount remains unchanged, and the reduced holding period translates into measurable cost savings and improved project feasibility.
• Aligns with Housing Element Action 3.3.9 - Reduce cost burden of City fees and payment timing to significantly increase affordable housing development and provide meaningful cost reductions that enhance the viability of these critical projects.
• Streamlines implementation and increases administrative efficiency.
5. On-site Affordable Housing Requirements
23 Staff Recommendation:
• Increase the AHIF on-site alternative by zone
• Expand the requirements to allow developers to meet affordability requirements through various affordability combinations Income Levels Current
Requirement
Zone 1 and 2 Zone 3
Very Low Income (VLI) 5% 10% 5% (keep as is)
Low Income (VLI) 10% 12% 10% (keep as is)
Moderate Income (MI) 10% 15% 15%
Combination None Combination of Moderate, Low, and Very Low-Income Units = Total Housing Units ×
15%; or
Combination of Low and Very Low-Income
Units = Total Housing Units × 12%
Combination of Moderate, Low, and Very Low-
Income Units = Total Housing Units × 15%; or
Combination of Low and Very Low-Income Units =
Total Housing Units × 10%
5. On-site Affordable Housing Requirements
24 Rationale for Recommendation:
• Supported by findings from the Housing Strategy Study, which sho w th
at most multifamily projects are already leveraging the Density Bonus program to provide affordable units at levels higher than currently required under the City’s AHIF on- site alternative requirements.
• Reflects the variation in market conditions, price points, developmen t fe
asibility and the area’s economic capacity to support ne w d
evelopment and value of incentives (bonus market- rate units) an d co
st savings (concessions and waivers) associated with the densit y b
onus program
6. Other Related Changes
25 Staff Recommendation:
• Targeted amendments to improve clarity, consistency, and administrative efficiency
• Updates to defi niti ons and references, as well as the addition of new definitions for “Addi tional Residenti al Square Footage”, “Affordable Housing Project”, “Fees Per Square Foot”, and “Residential Square Footage” in OMC Sections 15.68.030, 15.72.030, and 15.74.030. • Revisions to O.M.C Sections 15.68.070, 15.72.080, and 15.74.080 to clarify and streamline the procedures for requesting impact fee reductions or wai vers.
Rationale for Recommendation:
• Provides regulatory and procedural clarity while maintaining the integrity of the impact fee program
• Ensures a transparent and accessible process for applicants Recommendation
26 Staff Recommendation
Conduct A Public Hearing, And Upon Conclusion, Adopt An Ordinance:
(1) Amending Title 15 Of The Oakland Municipal Code To Update And Revise The Regulations For The Jobs/Housing Impact Fee (Chapter
15.68), Affordable Housing Impact Fee (Chapter 15.72), and Transportation And Capital Improvement Impact Fees (Chapter 15.74); (2) Amending The City Of Oakland Master Fee Schedule (Adopted By Ordinance No. 13799 C.M.S., as amended) To Calculate Impact Fees For Residential Projects On A Square Footage Basis; And
(3) Making Appropriate California Environmental Quality Act Findings. 27 Questions?
28