Fees & public finance
Development impact fee
A one-time charge on new development to fund public facilities serving it, governed by the Mitigation Fee Act's nexus, accounting, timing and protest rules.
Definition
A development impact fee is a monetary exaction — not a tax, special assessment, or processing charge — imposed as a condition of development approval to defray the cost of public facilities attributable to the project: traffic, parks, public safety, storm drainage, affordable housing and the like. In California every such fee lives under the Mitigation Fee Act (Gov. Code §§ 66000–66025), which requires findings connecting the fee's purpose, its intended use, and a reasonable relationship between the amount charged and the burden the project actually creates — the statutory version of the Nollan/Dolan nexus line, extended to legislatively set fees by Sheetz (2024).
Why it matters in an underwrite
Impact fees are usually the second-largest soft-cost line in a California multifamily budget, so three levers matter: an SB 330 preliminary application under the Housing Crisis Act freezes the fee schedule at submittal; § 66007 defers most residential collection to final inspection or certificate of occupancy; and the § 66020 pay-under-protest procedure preserves refund claims — but only for 90 days from imposition. Classify each line item first: CFD special taxes and § 66013 utility charges sit outside the Act entirely.
Sources & related guides
See also
See the term in the law itself
Read the controlling text in the Code Library, or ask the AI how it applies to your project.
Last reviewed 2026-07-29. General information, not legal advice.