Traffic Reduction and Transportation
Improvement Fee Update
City Council
July 14, 2025
MSC Approval
• July 8, 2025 MSC Meeting
> Staff presented recommendations to update the Traffic Reduction and Transportation Improvement Fee (TR/TIF)
• MSC approved the staff recommendations with an
amendment
• Amendment:
> No TIF be assessed for Accessible Dwelling Units (ADUs); or > Staff provide recommendations to City Council for an alternate approach
2 Analysis – TIF for ADUs
• ADUs generate trips similar to other residential uses • Senate Bill 13
> ADUs < 750 SF: no impact fees
> ADUs ≥ 750 SF: fees proportional to size of main dwelling • Certain ADUs exempted from Residential Impact Fees
(RIF) (May 2025)
> 900 square feet or less
> ADUs with Housing Agreement
• ADUs in Pasadena
> Average size is 600 SF
> 22% are 750 SF or greater
> 10% are greater than 900 SF
3 Recommendations
• Revised Recommendations:
> Expand the TIF exemption threshold for ADUs ≤ 900 SF
> Waive the TIF for ADUs with Housing Agreement
• Two Options for City Council to Consider
> Option 1: Taper TIF for ADUs based on a tiered fee approach < 900 SF: no impact fees
900 - 1,200 SF: 50% of fee proportional to size of main dwelling > 1,200 SF: 100% of fee proportional to size of main dwelling > Option 2: Waive TIF for all ADUs, regardless of size
4 Traffic Reduction and Transportation
Improvement Fee Update
City Council
July 14, 2025
Recommendations
It is recommended that the City Council:
1. Find that the actions proposed herein are not a
“project” subject to the California Environmental Quality Act (CEQA) pursuant to State CEQA Guidelines Section
21065 and within the meaning of Section 15378(b) and
statutorily exempt from CEQA pursuant to State CEQA
Guidelines Section 15273 (Rates, Tolls, Fares, and
Charges).
6 Recommendations
2. Amend PMC Section 4.19.040 (A)- Fees of Chapter 4.19 – Traffic Reduction and Transportation Improvement Fee
(TR/TIF) to set the Fee at:
a. $5,202 to $5,722 per dwelling use of net new single-family residential, i. No fee for ADU 900 SF or less, ADUs over 900 SF assessed a fee proportional to size of main dwelling,
b. $2,158 to $2,352 per dwelling use of net new multi-family residential, i. No fee for ADU 900 SF or less, ADUs over 900 SF assessed a fee proportional to size of main dwelling,
c. $1.15 per square foot of net new light industrial use, d. $11.89 per square foot of net new retail use,
e. $7.57 per square foot of net new office use,
7 Recommendations cont.
3. Amend PMC Section 4.19.040 (A)- Fees of Chapter 4.19 to include the following land use categories to the TR/TIF fee:
a. $20.66 per square foot of net new medical office use, b. $1.62 per square foot of net new hospital use,
c. $1,437 per room of net new lodging use,
d. $5.15 per square foot of net new research and development use,
4. Amend PMC Section 4.19.050 to include a TIF waiver for ADUs governed by a Housing Agreement
5. Amend PMC Section 4.19.060 to enumerate the list of
transportation improvements funded through the fee as
set forth in Attachment “A” hereto.
6. Direct the City Attorney to prepare an ordinance within 60 days amending PMC Sections 4.19 as set forth above.
8 Transportation Advisory Commission (TAC)
• TAC recommendation: Support the fees as
recommended, and urge the Council to consider if
the reallocation of the fee categories may provide
better outcomes for future development.
Commission Recommendation
9 What is Traffic Reduction and Transportation
Improvement (TR/TIF)?
A Traffic Reduction and Transportation Improvement
Fee is used to pay for specific transportation projects needed to accommodate the demands on the City’s
transportation system created by new development.
The TR/TIF anticipates and mitigates the impacts of
growth on City streets, including protecting
neighborhoods from increased traffic.
10 Other names: mobility fees, transportation impact fees; mitigation fees; etc.
How Does the TR/TIF Work?
DOT administers the fee program and builds projects as
fees are collected.
11 • Developers pay a one-time fee prior to receiving a Certificate of Occupancy
• Impact fees only apply to new development
• Fees are based on net new square footage/units
(existing use credit applied)
• Developers are still required to conduct
transportation studies and construct improvements
if localized impacts are found
• FY 25 CIP Transportation Project Funding
> TIF funds 1%
> Grants fund 90%
How Much Does TR/TIF Fund?
Local Return
7%
TR/TIF
1% Gas Tax
1%
Other Local
1%
Grants
90%
Private
Capital
<1%
• TIFs funds
fluctuate
because
they’re
dependent on
development
occurring
12 Why Update the Fee Now?
13 • Mitigation Fee Act requires regular updating
of the fee (now every 8 years under AB 602)
• New State requirements for impact fee
programs to be incorporated in the update
> AB 602: Fees for residential uses must be based on the size of the unit
> SB 13: Fees can only be assessed on ADUs ≥ 750 SF; fees must be proportional in relation to the primary
residence
• US Supreme Court Case Decision Brings
Additional Scrutiny to Impact Fees
> Sheetz v. County of El Dorado (2024)
Existing TR/TIF Overview
14 TR/TIF UpdateAdopted Ordinance No. 7309: Existing TR/TIFEstablished Original Fee Nov 2006 Jul 2017 2024
Current TR/TIF FY 2025 Rate
New Industrial use per square foot $ 1.38
New Office use per square foot $ 10.14
New Retail use per square foot $ 13.48
Single family (per dwelling unit) $ 11,141.89
Multi-family (per dwelling unit) $ 4,314.10
Source: City of Pasadena Fiscal Year 2025 Revised Schedule of Taxes, Fees, and Charges https://www.cityofpasadena.net/finance/wp-content/uploads/sites/27/FY-2025-Schedule-of- Taxes.-Fees-and-Charges-Revised-.pdf?v=1740609435142
Nexus Analysis – Fair Share
Land Use Growth
Forecasts
Traffic Demand Forecasting
Model
Baseline 2024
Future Year 2035
Growth in PM Trips
New vehicle trips estimated
during PM peak hour
Increase in Travel Demand
New PM peak hour trips
assigned to project list
based on location and
expected travel patterns
Fair Share Calculation
Percentage of new PM peak
hour trips in relation to
baseline traffic volumes
15 Fair Share Calculation
16 The latest City of Pasadena TDF Model was used for nexus analysis, which forecasts the City’s adopted 2015 General Plan build-out conditions in Future Year 2035.
PM Peak Hour Traffic Volume Forecast Growth
Scenarios
Total Traffic Volumes Generated by Anticipated
Growth along/on Project Locations (PM Peak Hour
Trips)
[A] 2024 Baseline 65,523
[B] 2035 Future Year 73,424
[C] Volume Change 7,901
[D] New Development % Fair Share
(D = C/A) 12.10%
Fee per Average PM Peak Hour Trip
17 Table 2: Mobility Impact Fees per Average PM Peak Hour Trip Measure Pasadena
[E] Total Project Cost (Include 5% Admin Fee) $ 361,377,277 [F] 12.1% of Total Cost
(F = E * 12.1%) $ 43,726,651
[G] PM Traffic Volume Growth (Vehicle Trips) 7,901
[H] Average Cost per PM Peak Hour Trip
(H = F/G) $ 5,534
Apply this to PM peak hour trips
generated by different land uses
Nexus Analysis
Nexus Analysis - Fee
18 Average
cost per
PM peak
hour trip
Land Use
Category
PM trip
rate (from
ITE*)
Pass-by
trips (from
ITE*)
VMT
Factor
Results in
the Fee
*Institute of Traffic Engineers
TR/TIF Project List
• Essential to Pasadena’s long-term transportation
planning goals
• Must be identified in existing plan:
> Capital Improvement Program (FY 2026)
> Local Roadway Safety Plan
> Pedestrian Transportation Action Plan
• Capital projects to accommodate growth, NOT
maintenance/operational projects to address existing
deficiencies
• Can only account for unfunded amount of project cost
> Since impact fees only cover a portion of project costs, Pasadena DOT secures additional funding
19 Proposed Changes with New
TR/TIF
20 1. Updated Land Use Categories:
• Lodging (previously under Multifamily
Residential)
• Medical Office (previously under
Office)
• Hospital (previously under Office)
• Research and Development
(previously under Office)
2. Tiers of Residential Uses per AB 602:
• Single Family Units
• < 2,000 SF
• 2,000 – 2,999 SF
• 3,000 – 3,999 SF
• ≥ 4,000 SF
• Multi-Family Units
• ≤ 800 SF
• 801 – 1,600 SF
• ≥ 1,601 SF
• ADU [>900 SF]
• Data from the National Household Travel
Survey and American Housing Survey
were used to establish fee by size
Proposed TR/TIF
21 Notes:
1) Units = Dwelling Units (DU), Hotel (Rooms), School (Students) and Square Feet (KSF). 2) Trip Generation, 11th Edition, Institute of Transportation Engineers. Setting/Location: General Urban/Suburban; Not Close to Rail Transit. PM peak hour trip rate per DU, Room, Student, or KSF.
3) Pass‐by Trips are accounted for retail uses.
4) Impact Fee = [PM Trip Rate] x [EDU/% New Trips] x [VMT Factor] x [Average Cost per PM Trip] *New land use categories
Land Use Category Unit1 Fee per Unit4
Residential
Single Family DU $5,202 per DU
< 2,000 SF $4,474 per DU
2,000 – 2,999 SF $5,202 per DU
3,000 – 3,999 SF $5,358 per DU
≥ 4,000 SF $5,722 per DU
Multi-Family DU $2,158 per DU
≤ 800 SF $1,705 per DU
801 – 1,600 SF $2,158 per DU
≥ 1,601 SF $2,352 per DU
ADU [>900 SF] DU
Proportional to
single family
unit
Land Use Category Unit1 Fee per Unit4
Non-Residential
Lodging Room $1,437 per
Room
Retail/Service SF $11.89 per SF
Office SF $7.57 per SF
Medical Office SF $20.66 per SF
Hospital SF $1.62 per SF
Research and
Development SF $5.15 per SF
Light Industrial SF $1.15 per SF
Compared to Current TR/TIF
22 Existing TR/TIF Category Current FY 2025 Rate Proposed TR/TIF Rate
Single family (per dwelling unit) $ 11,141.89 $ 5,202 - $5,722 Multi-family (per dwelling unit) $ 4,314.10 $ 2,158 - $2,217 Industrial use per square foot $ 1.38 $ 1.15
Office use per square foot $ 10.14 $ 7.57
Retail use per square foot $ 13.48 $ 11.89
*Lodging use (per room) $4,314.10 (treated as MF
residential)
$ 1,437 per room
*Medical Office use per square
foot
$10.14 (treated as office) $ 20.66
*Hospital use per square foot $10.14 (treated as office) $1.62 *R&D use per square foot $10.14 (treated as office) $5.15 *Recategorized land use
Fee and Methodology Comparison
23 Impact fee programs from the following cities were
compared to Pasadena’s current TR/TIF program:
• Burbank
• Santa Monica
• West Los Angeles
• Culver City
• Orange
• Anaheim
• Fremont
• Palo Alto
Purpose for comparison
analysis:
• Is Pasadena relatively
comparable to other cities?
• Is there a need to add categories
to improve the applicability and
administration of the fee
• How do they apply fees for
specific types of land uses (for
example, lodging: per bed, or
square footage)?
• Met with key stakeholders and TAC to present
methodology and proposed fee structure.
• They reviewed and provided comments to
the Municipal Services Committee and City
Council
• The fee cannot be changed arbitrarily; it
needs to be defensible.
Targeted Stakeholder Outreach
24 Traffic Reduction and Transportation
Improvement Fee Update
City Council
July 14, 2025
ADU Sample TIF Calculations
26 If the main dwelling is 1,600 square feet for a Single Family Unit ADU Size (SF)
Housing
Agreement
Market Rate Unit
(without Housing Agreement)
Staff
Recommendation
Staff
Recommendation
Option 1
(50% taper)
Option 2
(No Fee)
900 $0 $0 $0 $0
1150 $0 $3216 $1608 $0
1250 $0 $3495 $3495 $0
Example TIF Calculations
27 100,000 SF New Research & Development Building
• Current Fee: based on Office use
$10.14/SF x 100,000 SF = $1,014,000
• Proposed Fee: based on R&D use
$5.15/SF x 100,000 SF = $515,000
100,000 SF New Medical Office Building
• Current Fee: based on Office use
$10.14/SF x 100,000 SF = $1,014,000
• Proposed Fee: based on Medical Office use
$20.66/SF x 100,000 SF = $2,066,000
20-unit Apartment Building (each unit under 800 SF)
• Current Fee: based on Multifamily Residential use
$4,314/unit x 20 units = $86,280
• Proposed Fee: based on MF Res use and unit size
$2,158/unit x 20 units = $43,160