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Development Impact Fees

Development Impact Fees: A Guide for San Mateo County

We all want our communities to be vibrant and prosperous places. We want opportunities for our children and safe, sustainable choices for our elders, employees and ourselves. To realize this vision, we need to address our most pressing challenge: The cost of renting or buying a home is too expensive in San Mateo County.

Unfortunately, the production of market-rate housing is not providing housing options for a significant portion of our workforce and communities. The purpose of Development Impact Fees, such as a housing impact fee and a commercial linkage fee, is to mitigate the impact of an increase in affordable housing demand due to new worker households associated with new market-rate residential or commerical development. By adopting significant development fees, cities can create an ongoing source of funding for the creation of affordable housing and other housing-related uses. 

Housing Leadership Council brings together information and advocates to help local governments adopt significant development impact fees that will help facilitate the construction of much-needed affordable housing. 

Background

The demand for housing continues to increase as our local jobs economy continues to experience explosive growth. Over the last three years, we've created over 40,000 jobs but only 3,000 units of new housings. According to a recent report published by CHPC, the gap between median rent and renter income has grown even wider:

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To view the full report, click here.

We are also experiencing a severe imbalance in a jobs-housing fit, which is a new metric that measures a city's total number of low-wage workers and the quantity of homes affordable to them. According to NPH, the current housing market is not producing enough homes for the largest growing sector of workers - those earning between $19,700 and $55,700 annually. Creating and sustaining a robust local economy will be difficult if these workers cannot find affordable housing choices near their workplaces. Click here to read NPH's factsheet on jobs-housing fit. 

Local governments are severely limited in their abilities to require or fund the production of affordable housing, specifically rental housing. We must look to other ways of creating new, steady sources of funding to build affordable housing. Impact fees are an important and legally tested way for communities to impact the collateral impacts of new growth. 

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Nexus Study

Before a city or county adopts a development impact fee, a nexus study must be conducted to show legal justification for charging such fees. A nexus study must establish a reasonable relationship or connection between the development project and the fee that is charged.

The results of a nexus study will show how much of a fee can be charged based on various housing or commercial prototypes and whether charging such fees will be economically feasible and profitable for a developer. In February 2014, as part of the 21 Elements collaborative, 15 jurisdictions in San Mateo County participated in a multi-city Grand Nexus Study. 

Learn More

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Act Now!

Want to get involved and advocate for more affordable homes in your community? Want to stay informed about local actions? 

Contact HLC staff at This email address is being protected from spambots. You need JavaScript enabled to view it.

Click here for a list of detailed list of cities who have adopted impact fees