Administrative
Report
N.3., File # 21-3300 Meeting Date: 4/12/2022
To: MAYOR AND CITY COUNCIL
From: BRANDY FORBES, COMMUNITY DEVELOPMENT DIRECTOR
TITLE
DISCUSSION AND POSSIBLE ACTION REGARDING REVISION TO THE CITY’S CAP FOR
DEVELOPER IN-LIEU PARK AND RECREATION FEES (QUIMBY FEES)
EXECUTIVE SUMMARY
On November 2, 2021, the City Council directed staff to research the impact of amending the current Quimby Fee and connecting it to project (construction cost) valuation. This administrative report provides information on the impacts of that potential change.
BACKGROUND
The State of California Government Code Section 66477 authorizes a city to require the dedication of land or impose a payment in lieu of dedication (or a combination of both) for park and recreational purposes as a condition to the approval of a tentative map or parcel map for residential development.
On September 7, 2004, the Redondo Beach City Council adopted an ordinance establishing park subdivision trust dedications and in-lieu fees (Quimby Fees) for new housing units in the City. At the time, a Quimby Fee cap of $7,500 was established, with an exemption for low-income and moderateincome housing developments.
On August 1, 2017, the City Council adopted, by Resolution No. CC-1708-163, an increase to the Quimby Fee cap, setting it at $25,000 per unit. The Administrative Report and Resolution from that August 1, 2017 meeting are attached.
During the Inclusionary Housing Ordinance agenda item N.1. at the September 21, 2021 City Council meeting, there was discussion regarding whether increases to the cap for developer in-lieu park and recreation fees, or Quimby Fees, would impact the inclusionary housing recommendations. At the September 21, 2021 City Council meeting, the City Council made a referral to staff to have a companion agenda item to the inclusionary housing discussion to consider Quimby Fees and other impact fees and possibly create a tiered fee amount for different levels of affordable housing.
The subsequent discussion took place at the City Council meeting of November 2, 2021, for which staff assembled information on the Quimby Fees of other municipalities in the region. At the November 2nd meeting, Council directed staff to research the impact of amending the Quimby Fee based on construction costs.
ANALYSIS OF CONSTRUCTION COST BASIS
The construction industry standard used for the basis of cost is called project “valuation.” Valuation is
N.3., File # 21-3300 Meeting Date: 4/12/2022
The construction industry standard used for the basis of cost is called project “valuation.” Valuation is the estimated hard cost of construction materials, and remains fairly consistent across the industry.
At the time the City’s Building and Safety Division receives an application for new construction, the applicant is required to state a project valuation. Based on that valuation, the permit fees are calculated. Staff recommends amending the Quimby fee to also be calculated based on valuation.
Staff researched the valuation of the most recent new residential construction submitted in calendar year 2021.
New single-family residential can vary widely, depending on the total square footage of the new home. In 2021, the lowest valuation was $172,403 (1,422-square foot house with detached garage) and the highest was $787,325 (2-story, 5,200-square foot house).
Valuation for multi-family condominium projects is not as varied, as the size of townhomes tend to be consistent among most developments. The lowest valuation of a condo unit in 2021 was $311,969 and the highest was $445,427.
Based on this analysis, staff recommends a new Quimby Fee of 10% of project valuation for the unit, with a minimum of $25,000. This would net an increase for any unit with a valuation over $250,000, and no decrease for any unit of a lower valuation. Since the majority of Quimby Fees are collected from multi-family developments, based on the 2021 valuation data for multi-family, the City is expected to collect a net increase for all projects.
To address the issue regarding affordable housing unit exemptions, the City’s current regulations under Redondo Beach Municipal Code Section 10-1.1422 states, “The City may, upon receipt of a written request, reduce or waive the requirements of this article for those dwelling units which are to be built as below market rate (BMR) units or senior housing units, as defined by the Redondo Beach General Plan.” Therefore, this exemption is already available and any increases to the cap for developer in-lieu park and recreation fees, or Quimby Fees, would not impact inclusionary housing.
COORDINATION
This item was prepared by the Community Development Department.
FISCAL IMPACT
Quimby Fees are collected on net new residential units. The fiscal year impact can fluctuate based on yearly trends for new development. Setting the fee at 10% of project valuation with a minimum of $25,000 should result in a net increase in Quimby revenue per average new unit.
APPROVED BY:
Mike Witzansky, City Manager
ATTACHMENTS
· City Council Administrative Report on Quimby Fee Increase 08-01-2017 · Resolution No. CC-1708-163 Adopting CAP for Developer In-Lieu Park and Recreation Fees QUIMBY
· Current Redondo Beach Development Impact Fees
· Comparative Quimby Fees by Jurisdiction