APPROVED AS TO FORM AND LEGALITY
___________________________
CITY ATTORNEY’S OFFICE
OAKLAND CITY COUNCIL
ORDINANCE NO. ________________ C.M.S.
AN ORDINANCE
(1)
AMENDING TITLE 15 OF THE OAKLAND MUNICIPAL CODE
TO UPDATE AND REVISE THE REGULATIONS FOR THE
JOBS/HOUSING IMPACT FEE (C HAPTER 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 IMPA CT FEES FOR RESIDENTIAL
PROJECTS ON A SQUARE FOOTAGE BASIS; AND
(3)
MAKING APPROPRIATE CALIFORNIA ENVIRONMENTAL
QUALITY ACT FINDINGS.
WHEREAS, the City of Oakland (“City”) has a critical need to ensure impacts from new development to transportation, capital improvement, and affo rdable housing resources are addressed, and development impact fees are a commonly used mechanism to address this need; and
WHEREAS, Government Code Section 66000-66025 establish the legal requirements for a jurisdiction to implement a development impact fee program for fees that meet the terms of the Mitigation Fee Act, California Government Code Sections 66000 to 66025; and
WHEREAS, the City has determined that the Affo rdable Housing Impact Fee should be administered consistent with the requirements a pplicable to fees for public facilities in the California Government Code Section 66000 et seq., commonly referred to as the “Mitigation Fee Act,” without determining that it is required to do so; and
WHEREAS, on July 30, 2002, the City Council approved Ordinance No. 12442 C.M.S. adopting the City of Oakland J obs/Housing Impact Fee, supporte d by the report “Commercial Development Linkage Fee Analysis” prepared by David Paul Rosen & Associates to examine the 2 link between non-residentia l development and the need for affo rdable housing in the City, and subsequently amended the City of Oakland Jo bs/Housing Impact Fee on May 3, 2016, through Ordinance No. 13365 C.M.S. into the Oakland Municipal Code Chapter 15.68; and
WHEREAS, on May 3, 2016 the City Council a pproved Ordinance No. 13365 C.M.S. adopting the City of Oakland Affordable Housi ng Impact Fee into the Oakland Municipal Code Chapter 15.72; and
WHEREAS, on May 3, 2016, the City Council a pproved Ordinance No. 13366 C.M.S. adopting the City of Oakland Tr ansportation and Capital Improve ment Impact Fees into the Oakland Municipal Code Chapter 15.74; and
WHEREAS, in support of the adoption of the 2016 ordinances, the C ity, assisted by Hausrath Economics Group, Vernazza Wolfe Associ ates, Inc., BKF Engineers, and Fehr & Peers, conducted Nexus Studies examining the link between (1) new market-rate residential development, the growth of employment associ ated with the consumer expenditure of new residents, and the demand for affordable housing to accommodate the new worker households in Oakland (“Oakland Affordable Housing Imp act Fee Nexus Analysis”); and (2) new development and additional burdens on transpor tation and capital improvement infrastructure (“Oakland Transportation and Capital Improvements Impact Fee Nexus Analysis”); and
WHEREAS, the Affordable Housing Impact Fee is charged per unit and is based upon the Impact Fee Zone in which the Development Project is located; and
WHEREAS, there are three Impact Fee Zones in the City and the fee levels in these zones reflect differences in the cost of housing, the f easibility of market-rate development, and the demand for new housing; and
WHEREAS, an applicant for a development project that is otherwise subject to the Affordable Housing Impact Fee will be exempt fr om the fee if the applicant provides affordable housing units pursuant to Oakland Municipa l Code Section 15.72.100 – On-Site Affordable Housing Option; and
WHEREAS, in addition to providing affordable units pursuant to Oakland Municipal Code Section 15.72.100, an applican t for a development project ma y also utilize the provisions of Chapter 17.107 Density Bonus and Incentive Procedure in the Oakland Planning Code as well as the State Density Program in Government Code Sections 65915—65918; and
WHEREAS, the Transportation Improvement Impact Fees and Capital Improvement Fees for residential projects is based upon the Impact Fee Zone in which the Development Project is located and;
WHEREAS, on January 31, 2023, the City approved Resolution No. 89565 C.M.S., adopting the 2023-2031 Housing Element as a Genera l Plan Amendment to the Oakland General Plan, and the 2023-2031 Housing Element includes a program, referred to as the Housing Action Plan, that includes proposed ac tions to increase pr oduction of affordable housing, to allow for “missing middle” housing in existing neighborhoods, to pr oduce mixed-income housing 3 throughout the city, to address geographic ine quities, racial segreg ation, and associated disparities in housing opportunities and outcomes; and
WHEREAS, the State of California passed Assembly Bill 602 in 2021, which requires that a local jurisdiction calculate a fee levi ed or imposed on a housing development project proportionately to the square footage of the pr oposed units to lower th e relative burden on multifamily and other small units, or make specified findings explaining why the local jurisdiction will not be the appropriate metric to calculate the fees; and
WHEREAS, the State of California passed Sena te Bill 937 in 2024, which prohibits a local agency that imposes fees or charges on a residential development for the construction of public improvements or facilities from requiring the payment of those fees or charges until the date of the final inspection or the date the certif icate of occupancy is is sued, whichever occurs first, and exempts specified un its in a reside ntial development propo sed by a nonprofit housing developer if the housing development meets certain conditions; and
WHEREAS, on July 1, 2024, Senate Bill 684 (SB 684) , Land use: streamlined approval processes: development projects of 10 or fewer residential units on urban lots under 5 acres, took effect to incentivize and facilitate more types of ownership housing by simplifying the regulatory process and allowing for smaller lots; and
WHEREAS, California Government Code Secti on 66001(d) requires that for the fifth fiscal year following the first deposit into the account or fund, and every five years thereafter, the City shall make a five-year imp act fee report with respect to th at portion of the account or fund remaining unexpended, whether committed or uncommitted; and
WHEREAS, said five-year impact fee reports for transporta tion, capital improvements, jobs/housing, and affordable housing impact fees were prepared by Hausrath Economic Group in December 2021, made available to the public, a nd presented to the Community and Economic Development Committee (“CED”) of the City Council on June 28, 2022; and
WHEREAS, each five-year impact fee report additionally includes a review of the nexus analysis from the previously prepared Nexus Studi es, confirms that the fees have an essential nexus and reasonable relationshi p/roughly proportional to the im pacts of development, as provided in greater detail in th e five-year impact fee reports a nd which are hereby incorporated in full into these recitals, and identifies th e maximum legal affordable housing, jobs/housing, transportation, and capital improvements impact f ees on a per square footage basis based on the level of impacts on the need for affordable housing, transpor tation, and capital improvements from various types of development projects; and
WHEREAS, subsequent to preparation and presen tation of the statutorily required five- year impact fee reports, the City in coordi nation with Hausrath Ec onomic Group performed a development feasibility analys is and housing strategy study (“F easibility Analysis”) of the impact fees in alignment with Action 3.3.7 of the City of Oakland 2023-2031 Housing Element in July 2024; and
4 WHEREAS, the Feasibility Analysis analyzed development feasibility for office, housing, retail and dining, hotel , and warehouse development and has documented and confirmed that new construction is not feasible in most sect ors, except for modern warehouse facilities due to economic factors and its impact on the real estate market and development costs; and
WHEREAS, the Feasibility Analysis also found that applicants of development projects utilize the provisions of Chapte r 17.107 Density Bonus and Incentive Procedure in the Oakland Planning Code as well as the State Density Program in Government Code Sections 65915-65918 and provide higher percentages of on-site affordable units required by Oakland Municipal Code Section 15.72.100 – On-Site Affordable Housing Option; and
WHEREAS, City Staff analyzed six potential re finements to the City’s Impact Fee Program using the findings from the Feasibility Analysis; and
WHEREAS, the findings from the Feasibility Anal ysis and potential refinements to the City’s Impact Fee Program were discussed in Wo rking Group meetings which consisted of City staff and a broad group of Oakland stakeholders and subject matter experts for input; and
WHEREAS, City Staff presented the conclusions from the development feasibility analysis and the potential refinements to the City’s Impact Fee Program to the CED Committee on December 10, 2024 for input; and
WHEREAS, the CED Committee discussed the poten tial refinements to the City’s Impact Fee Program and provided feedback to City Staff; and
WHEREAS, City Staff considered feedback from the CED Committee and have proposed amendments to the City’s Impact Fee Program, that is legally compliant, and in alignment with the findings from Feasibility Analysis; and
WHEREAS, in conformance with Assembly Bill 602, City Staff have proposed updating the current Affordable Housing Impact Fee structure and the Transportation and Capital Improvements Impact Fee structures for residentia l development to be as sessed per square foot of residential development, and make related amendments to the Master Fee Schedule; and
WHEREAS, City Staff have proposed maintaining current level of impact fees, adjusting the fees only for inflation as the development feasibility study findings indicate that both the zone boundaries and impact fee levels are consis tent with and supported by the Feasibility Analysis; and
WHEREAS, City Staff have proposed maintain ing the current Impact Fee Zone boundaries as the development feas ibility study findings indicate that both the zone boundaries and impact fee levels are consistent with and supported by the Feasibility Analysis; and
WHEREAS, City Staff have proposed that the Affordable Housing Impact Fee, Transportation and Capital Improvement Impact F ee, and Jobs/Housing Impact Fee be due prior to the issuance of a Temporary Certificate of Occupancy for all or any portion of the 5 Development Project associated with the building permit, and sh all be in the amount of one hundred percent of the impact fee, in accordance with Senate Bill 937 and supported by the Feasibility Analysis; and
WHEREAS, City Staff have proposed modifying the percentage of affordable units required under Oakland Municipal Code Se ction 15.72.100 – On-Site Affordable Housing Option by zone, consistent with the different fee levels by impact fee zones, and supported by the Feasibility Analysis; and
WHEREAS, City Staff have proposed establishi ng project unit and size thresholds to encourage missing middle and multi-unit housing development, in alignment with Action 3.2.1 of the 2023-2031 Housing Element and State Law Se nate Bill 684 as codified under California Government Code Sections 65852.28 and 66499.41; and
WHEREAS, the potential refinements to the City’s Impact Fee Program were scheduled to be considered at regular, duly noticed (including newspaper ads published on May 16, 2025 and May 30, 2025) public meeting of the CED Committee of the City Council on June 10, 2025; and
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF OAKLAND DOES ORDAIN AS FOLLOWS:
SECTION 1. Recitals. The City Council finds and determ ines the foregoing recitals to be true and correct and an inte gral part of the City Council’s decision and hereby adopts such recitals as findings.
SECTION 2. Amendment of the Oakland Municipal Code. The Oakland Municipal Code Title 15, and regulations for the Jobs/Hous ing Impact Fee (Chapter 15.68), Affordable Housing Impact Fee (Chapter 15.72), and Trans portation and Capital Impr ovement Impact Fees (Chapter 15.74) is here by amended pursuant to Exhibits A through C attached hereto and incorporated by reference herein. Additions are shown as underline and deletions are shown as strikethrough.
SECTION 3. Amendment of the Master Fee Schedule. The City of Oakland Master Fee Schedule is hereby amended pursuant to Exhibit D attached hereto and incorporated by reference herein. Additions are shown as under line and deletions are shown as strikethrough. As shown in Exhibit D, the Affordable Housing Impact Fee rate for multi-family housing, townhome housing, and single-family housing in Zone 3 shall be ch arged at zero (0) percent of the listed square footage rate for remaining portion of Fiscal Year 2025-26 and during Fiscal Year 2026-27 and Fiscal Year 2027-28.
SECTION 4. California Environmental Quality Act. The City Council finds and determines the adoption of this Ordinance is (1) not a Project under the California Environmental Quality Act ("CEQA") and is therefore exem pt pursuant to CEQA Guidelines section 15378 (b)(4): (2) statutorily exempt pursuant to CEQA Guidelines section 15273(a)(4) (Rates, Tolls, Fares and Charges for obtaining funds for capital pr ojects necessary to maintain service within existing service area); (3) statutorily exempt pursuant to CEQA Guidelines section 15267 6 (Financial Assistance to Low or Moderate Income Housing); (4) not intended to apply to specific affordable housing projects and as such it is speculative to evaluate such future projects now and, moreover, they will be subject to appropriate environmental review at such time as approvals for those affordable housing projects are considered; (5) not intended to apply to specific capital improvement projects and as such it is specula tive to evaluate such projects now and any specifically identified transpor tation projects were already ev aluated under CEQA and imposed as mitigation measures in previously certif ied EIRs and/or adopted mitigated negative declarations; and/or (6) not intended to, nor does it, provide CEQA clearance for future development-related projects by mere payment of the fees. Each of the foregoing provides a separate and independent basis for CEQA complia nce and when viewed collectively provides an overall basis for CEQA compliance.
SECTION 5. Recording of Notice. The Environmental Review Officer, or designee, is directed to file a Notice of Exemption/Notice of Determination with the appropriate agencies.
SECTION 6. Effective Date. Except as noted herein, th is Ordinance shall become effective 60 days from the date of final passage by the City Council.
(a) This Ordinance shall not apply to projec ts that have obtained certificates of occupancy or temporary certificates of occupancy. The City will not grant any refunds for completed projects that have paid impact fees.
(b) Adoption of this Ordinance shall not result in reassessments of fees for projects under construction that have alr eady had fees assessed. Reassessment will only occur in accordance with the prov isions of Sections 15.72.040 and 15.74.040, as amended. This provision of the ordinance sh all become effective immediately on final adoption if the ordinance receives six or more affirmative votes; otherwise it shall become effective upon the seventh day after final adoption.
(c) If a project previously subject to any impact fee now meets an exemption to an impact fee program, the project applicant shal l not be granted a refund for payment of any previously paid installments but shall be exempt from payment of the subsequent installments of the fee. This provision of the Ordinance shall become effective immediately on final adoption if the ordinance receives six or more affirmative votes; otherwise it shall become effective upon the seventh day after final adoption.
(d) The Affordable Housing Impact Fee rate s applicable to Z one 3, as shown in Exhibit D, shall become e ffective immediately on final adoption if the Ordinance receives six or more affirmative votes; otherwise it shall become effective upon the seventh day after final adoption. Any applic ant who has submitted a complete building permit application prior to July 15, 2025 for a project located in Zone 3 shall not be granted a refund for payment of any previously paid installments but shall be exempt from payment of any subsequent installments of the fee.
(e) The provisions of newly added Section 15.72.050.C of the Oakland Municipal Code shall become effective immediately on fi nal adoption if the Ordinance receives six 7 or more affirmative votes; otherwise it sha ll become effective upon the seventh day after final adoption.
SECTION 7. Supporting Documentation. The record before this Council relating to this Ordinance and supporting the findings made herein includes, without limitation, the following:
1. All final staff reports, and other final documentation and information produced by or on behalf of the City, including without limitation supporting technical studies and all related/supporting final materials, and all final notices relating to the impact fee program;
2. All oral and written evidence received by the CED Committee and City Council during the public meetings and hearings on the impact fee program and this Ordinance; and all written evidence received by the relevant City staff before and during the public meetings and hearings on the impact fees;
3. All matters of common knowledge and all official enactments and acts of the City, such as (a) the City's General Plan; (b) the Oakland Municipal Code and Planning Code; (c) other applicable City policies and regulations; and (d) all applicable state and federal laws, rules and regulations.
The custodians and locations of the documents or other materials which constitute the record of proceedings upon which the City Council’s decision is based, are respectively: (a) Planning and Building Department – Bureau of Planning, 250 Frank H. Ogawa Plaza, Suite 3315, Oakland, California; and (b) Office of the City Clerk, One Frank H. Ogawa Plaza, 1st Floor, Oakland California.
SECTION 8 . Conflict with Laws. Nothing in this Ordinance shall be interpreted or applied so as to create any requirement, power, or duty in conflict with any Federal or State law.
SECTION 9. Severability. If any section, subs ection, sentence, clause or phrase of this Ordinance is for any reason held to be invalid or unconstitutional by decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of the Chapter. The City Council hereby declares that it would have passed this Ordinance and each section, subsection, clause or phrase thereof irre spective of the fact th at one or more other sections, subsections, clauses or phrases may be declared invalid or unconstitutional.
SECTION 10. Authority. This Ordinance serves the public interest and is necessary to protect the health, safety and/or general welf are of the citizens of Oakland and is enacted pursuant to the City of Oakland’ s general police powers, Section 106 of the Charter of the City of Oakland, Government Code Section 65852.2, and Article XI, Sections 5 and 7 of the California Constitution.
SECTION 11. Conforming Changes. The City Council hereby authorizes the City Administrator or designee to make nonsubstantive technical conforming changes (essentially correction of typographical and clerical errors), including omnibus cross-referencing conforming changes throughout the Oakland Municipal and Planning Codes, prior to formal publication of these amendments in the Oakland Municipal Code.
8 IN COUNCIL, OAKLAND, CALIFORNIA,
PASSED BY THE FOLLOWING VOTE:
AYES -
BROWN, FIFE, GALLO, HOUSTON, RAMACHANDRAN, UNGER, WANG, AND
PRESIDENT JENKINS
NOES –
ABSENT –
ABSTENTION –
ATTEST:
ASHA REED
City Clerk and Clerk of the Council of the
City of Oakland, California
3420855v2 / mcb
9 NOTICE AND DIGEST
AN ORDINANCE
(1) AMENDING TITLE 15 OF THE OAKLAND MUNICIPAL CODE
TO UPDATE AND REVISE THE REGULATIONS FOR THE
JOBS/HOUSING IMPACT FEE (C HAPTER 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 IMPA CT FEES FOR RESIDENTIAL
PROJECTS ON A SQUARE FOOTAGE BASIS; AND
(3) MAKING APPROPRIATE CALIFORNIA ENVIRONMENTAL
QUALITY ACT FINDINGS.
This Ordinance amends the Oakland Municipal C ode to update and revise regulations for the Jobs/Housing Impact Fee (Chapt er 15.68), Affordable Housi ng Impact Fee (Chapter 15.72), and Transportation and Capital Improvement Im pact Fees (Chapter 15.74). This Ordinance also amends the City's Master Fee Schedule to calculate impact fees fo r residential projects on a square footage basis. Finally, this Ordi nance adopts various findings including findings related to exemptions under the California Environmental Quality Act.