Irvine Municipal Code Ch. 9 Development Impact Fees

This Chapter 9 of Division 7 of Title 2 of the Irvine Municipal Code may be referred to as the development impact fee ordinance and is adopted in accordance with the charter of the City and under Government Code Section 66000 et seq. (also known as the "Mitigation Fee Act"), as amended. All words, phrases, and terms used in this chapter shall be interpreted in accordance with the definitions set forth in the Mitigation Fee Act, unless otherwise specifically defined herein.

(Ord. No. 25-15, § 2(Exh. A), 6-24-25)

A. The City has prepared a fee nexus study. It demonstrates, and the City Council finds, that there is a reasonable relationship between the purpose for which the fees established by this chapter are to be used and the type of development projects on which the fees are imposed, and between the amount of the fees and the cost of the facilities attributable to the development on which the fees are imposed. The fee amount shall not exceed the costs of the public facilities necessitated by new development for which the fees are imposed.

B. It is the intent of the City that the fees required by this chapter shall be supplementary to any conditions imposed upon a development project pursuant to other provisions of the municipal code, the Subdivision Map Act, the California Environmental Quality Act, other state and local laws, which may authorize the imposition of project specific conditions on development.

C. This chapter shall apply to all development projects in the City.

(Ord. No. 25-15, § 2(Exh. A), 6-24-25)

For the purpose of this chapter, the following terms shall have the meaning set forth herein:

"Applicant" means the person(s) or legal entity or entities, who may also be the property owner, who is applying for a building permit.

"City" means the City of Irvine.

"Development" or "development project" means any manmade change to improved or unimproved real property, including, but not limited to buildings or other structures, mining, dredging, filling, grading, paving, excavation or drilling operations, or any other activity that requires issuance of an entitlement/discretionary application and/or building permit.

"Development impact fee" means each and all of the development impact fees established by this chapter.

"Development impact fee study" and "fee study," as used in this chapter, mean the final draft development impact fee study dated April 7, 2025 and any present and future amendments, additions, and updates to said fee study, all of which are deemed included in such definitions as used in this chapter, which is on file with the Administrative Services department, Community Development department, and the City Clerk.

"Public facilities" means public facilities identified in the study, including a capital improvement project list and cost estimates of the public facilities, which may be funded by the development impact fees, and may include traffic improvement, police, library and general government facilities.

(Ord. No. 25-15, § 2(Exh. A), 6-24-25)

A. It is the purpose and intent of this section to implement a citywide development impact fee (DIF) program to fund the acquisition, design, and construction of certain public facilities necessary to serve new development within the City.

B. The public facilities to be funded by the development impact fees are in the following categories:

1. Transportation facilities;

2. General Government facilities;

3. Police facilities;

4. Library facilities.

Residential uses are subject to all fee categories above and non-residential uses are subject only to fee categories that are Transportation, General Government, and Police facilities.

C. Except as otherwise provided in this chapter, an applicant obtaining a building permit for a development project shall pay the development impact fees according and pursuant to the procedure set forth in this chapter.

D. The amount of each development impact fee shall be as established by resolution of the City in accordance with the procedures set forth in state law.

E. The fee program shall apply to all development for which building permits are issued subsequent to the adoption of this Ordinance, regardless of when the development project was approved.

F. Development agreements, and projects for which building permits are issued prior to the effective date of this Ordinance, are exempt from the requirements of this fee program.

G. The development impact fees imposed under this chapter are in addition to any other fees, dedications, construction requirements, or other exactions imposed as a condition of approval for a development project, or under the provisions of any state or federal law, or other provisions of this code, or city resolutions and policies.

H. The City may impose such additional conditions of approval as are necessary or appropriate to implement the purposes of this chapter.

(Ord. No. 25-15, § 2(Exh. A), 6-24-25)

A. The DIFs established herein shall be due and payable in accordance with the law, upon the issuance of a building permit; provided, however, that development impact fees imposed on residential development may be deferred until the date of the final inspection, or the date the certificate of occupancy is issued, whichever occurs first, pursuant to a written agreement, entered into and recorded in accordance with Government Code Section 66007(c).

B. When improvement plans include more than one land use type, the impact fee shall be calculated by the gross square footage of each land use type.

C. If the new nonresidential development project does not change land use, but adds gross building square footage, then the increase in square footage shall be charged the corresponding development impact fees.

D. If the new nonresidential development project does not add square footage, but changes to a more intense land use, then the development impact fees charged shall be the difference between those charged to the existing land use and the fees charged to the more intense land use.

E. A new nonresidential development project is subject to paying the full development impact fee amount when the previous development did not pay impact fees.

F. Development impact fees shall be charged for new dwelling units added to a parcel of a new or existing residential project. Accessory dwelling units (ADUs) shall be subject to development impact fees per the Mitigation Fee Act and State law.

G. Development impact fees shall be charges at the current multifamily rate for each additional unit in a multifamily project.

(Ord. No. 25-15, § 2(Exh. A), 6-24-25)

A. For public facilities constructed as part of a development project, the City Council may establish policies and procedures for granting credit against a development impact fee or providing for reimbursement from development impact fees paid by other developers.

B. A credit against a development impact fee may be granted for nonresidential projects as follows:

1. If the new nonresidential development project does not add gross building square footage or intensity of land use, then it is exempt from paying additional development impact fees.

2. Gross square footage within the principal building(s) on a site or in a separate building(s) used for resident, employee or customer parking. This exemption does not apply to areas within a building(s) used for vehicle storage.

3. Gross square footage within a building used to provide recreation or services exclusively to employees who work within the building. The uses shall benefit the employees, and, by providing recreation or services on-site, have the potential to reduce the number of trips employees make to other locations. Examples of such uses include cafeterias, exercise facilities, and employee credit unions. Determination of whether or not a proposed use qualifies for this exemption shall be made by the Director of Community Development. This exemption can only be granted if the property owner enters into an agreement with the City and recorded against the property, ensuring that the square footage remains in the exempt use.

(Ord. No. 25-15, § 2(Exh. A), 6-24-25)

The Directors of Public Works and Community Development shall, on July 1 st of each year, commencing in 2026, apply an adjustment to the DIF rates according to the following methodology:

A. Adjustment in construction cost. The public facilities costs shall be adjusted annually, pursuant to the Construction Cost Index (CCI).

B. Adjustment in land cost. In addition to the annual adjustment in construction costs, the fee rates shall be adjusted to account for the projected land acquisition costs for the right-of-way necessary to construct the public facilities improvements. A land value appraisal assessment shall be conducted at least every five years. There will be no adjustment rate utilized in years in which no land value appraisals are conducted. As part of this review, the City shall also review the DIFs to ensure that the fees will not, over time, exceed the reasonable cost of constructing the required improvements.

C. Changes to fee methodology. Any change to the methodology for annual adjustment of fees for the DIF program shall be approved by the City Council.

(Ord. No. 25-15, § 2(Exh. A), 6-24-25)

An applicant for any project subject to the development impact fees described in this chapter may follow the protest procedure as specified Government Code Section 66020, as may be amended from time to time. Fees for such appeal shall be in accordance with the fees adopted by the City Council for appeals to City Council.

(Ord. No. 25-15, § 2(Exh. A), 6-24-25)

A. The City shall establish a development impact fee account immediately after the adoption of this development impact fee program.

B. The City shall maintain the funds in this account separate and apart from other funds of the City. Fees collected pursuant to this fee program shall be deposited at the time collected in the DIF account; and both the fees and the accrued interest and profit received from the investment thereof shall be expended only for the implementation of the projects outlined in the Nexus Study, and any amendments and revisions thereto.

C. On an annual basis, the Administrative Services Department shall present a report on the status of the DIF program to the City Council. The report shall provide information on the fee account revenues, expenditures and the project fee revenues and expenditure.

(Ord. No. 25-15, § 2(Exh. A), 6-24-25)

All fee revenues and interest earnings in each of the impact fee reserve accounts shall be expended on the acquisition of land, design and construction of facilities and buildings, and purchase of related equipment, furnishings, vehicles, and services used to serve new development, as well as the administrative costs. Such expenditures may include, but are not necessarily limited to the following:

A. All direct and indirect costs incurred by the City to construct facility improvements pursuant to this chapter, including but not limited to, the cost of land and right-of-way acquisition, planning, legal advice, engineering, design, construction, construction management, materials and equipment.

B. Costs of issuance or debt service associated with bonds, notes or other security instruments issued to fund facility improvements identified.

C. Administrative costs incurred by the City, including but not limited to the cost of establishing or maintaining the fee accounts required by this chapter, fee studies to establish the requisite nexus between the fee amount and the use of fee proceeds and yearly accounting and reports.

(Ord. No. 25-15, § 2(Exh. A), 6-24-25)

The City shall comply with the reporting requirements of the Mitigation Fee Act. For facilities to be funded by a combination of impact fees and other revenues, identification of the source and amount of these non-fee revenues shall be included in the report.

(Ord. No. 25-15, § 2(Exh. A), 6-24-25)

The amount of the development impact fees and the formula for the automatic annual adjustment established by this chapter may be reviewed and revised periodically by the City Council in accordance with the procedures set forth in state law. This chapter shall be considered enabling and directive in this regard.

(Ord. No. 25-15, § 2(Exh. A), 6-24-25)

The City Manager, or designee, is authorized to adopt written administrative regulations or guidelines that are consistent with and that further the terms and requirements set forth within this chapter.

(Ord. No. 25-15, § 2(Exh. A), 6-24-25)