AB 1820
The fees that local jurisdictions in California charge when they permit new housing developments are variable, unpredictable, and often punitively high; not only do fees vary from city to city, but even from project to project. These development fees, also known as “impact fees,” can reach more than $150,000 per home. In many cases, homebuilders don’t even know the total fees they must pay until after they’ve begun the development process – which can delay or even kill new housing projects, by springing unexpected costs on projects with tight budgets.
AB 1820 will require cities to provide a precise estimate of the fees required for a proposed housing development at the time of building permit application.
High impact fees increase the cost of new housing and reduce new homebuilding, which results in higher rents and mortgages for tenants and homeowners. While existing state law requires these fees to be posted online, many cities have not complied; home builders still face a lack of fee transparency, which makes it difficult or impossible to create accurate budgets for their projects. Many cities don’t disclose fees until projects are already under construction — which means home builders take on huge financial risk when cities impose large, unexpected fees late in the development process.
AB 1820 will require cities to provide an estimate of the fees homebuilders will be required to pay within 10 days of the preliminary building application, at the developer’s request. Increasing the transparency of impact fees will allow home builders to better understand their total costs before beginning construction.
Updates: AB 1820 was passed out of Assembly Housing Committee on a 9-0 vote on April 10. It will be heard next in Assembly Local Government Committee.
Authors: Schiavo (D, AD 40)
Co-Authors: Grayson (D, AD 15)
Co-Sponsors: California YIMBY, California Building Industry Association (CBIA), SPUR
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