In an information item on Tuesday’s agenda, the city’s Recreation and Parks Commission will hear a staff recommendation to oppose an increase in the city’s Residential Impact Fee (RIF).
“Staff is proposing not to raise the fee,” said Public Works Director Ara Maloyan.
The recommendation is being made despite a nexus study that shows the city could justifiably raise the fee.
“Evidence assembled by this study indicates that the city could adopt a park impact fee at a rate of $39,598 for a three-bedroom unit, which is approximately $13,151 or 49.7 percent more than the current fee for a three-bedroom unit,” a staff report reads.
The city can charge a lower fee than the rate calculated by the Nexus Study but it cannot charge a higher rate.
The city is not recommending an increase due to the economic downturn caused by the Coronavirus.
“Although the Nexus Study shows a justification for a 49.7 percent increase, given the current Covid-19 emergency situation and the economic uncertainties, staff does not recommend increasing the RIF rates at this time,” according to a city staff report.
The Park and Recreation Residential Impact Fee Nexus Study Update provides the technical analysis required by the principles of the Mitigation Fee.
The fee was created in 1988 to mitigate the impact on new residential development on city parks and park facilities.
The RIF ranges from $19,622 for a studio to $36,321 for a home with five or more bedrooms and affordable housing units, skilled nursing units and student housing units pay $1,016 per unit.
If the lnclusionary Housing Ordinance is applied to the development, the non-affordable units receive a 30 percent discount on the RIF. The resolution also provides an incentive for developers to build workforce housing by offering a rebate of the RIF for eligible unit
From 2014 through 2020, the city has collected a total of $38.8 million through the fee, which is reviewed every five years.
“This analysis demonstrates that the city’s current impact fee per bedroom is justifiable and meets the requirements of nexus as required by the MFA,’ the study states. “It also indicates that the current fee is lower than the true cost of providing for new parks and recreation facilities, given the current high land cost in the City and an increase in land cost since the fee was updated in 2013.”