Chapter 15.72 — AFFORDABLE HOUSING IMPACT FEES

The purpose of this Chapter is to establish affordable housing impact fees in the City of Oakland to assure that market-rate residential Development Projects pay their fair share to compensate for the increased demand for affordable housing generated by such Development Projects within the City of Oakland.

(Ord. No. 13853, § 2(Exh. B), 7-15-2025; Ord. No. 13365, § 4, 5-3-2016)

A.

The lack of housing affordable to families of all incomes has been a statewide issue for nearly fifty (50) years. In 1977, the California legislature declared that there exists a serious shortage of decent, safe, and sanitary housing throughout the state. By 1982, the legislature stated that the lack of housing is a critical problem that threatens the economic, environmental, and social quality of life in California. By 2018, the legislature declared that the consequence of failing to effectively and aggressively confront the crisis was hurting millions of Californians, robbing future generations of the chance to call California home, stifling economic opportunities for workers and businesses, worsening poverty and homelessness, and undermining the state's environmental and climate objectives.

B.

The California Government Code mandates that cities like Oakland must assist in the development of adequate housing to meet the needs of extremely low-, very low-, low-, and moderate-income households to help address the housing crisis as part of the statutory obligation to adopt a general plan. This Chapter serves to help Oakland meet this obligation to combat this overall lack of affordable housing.

C.

The City of Oakland has determined that the Affordable Housing Impact Fee should be administered consistent with the requirements applicable to fees for public facilities in the California Government Code Section 66000 et seq., commonly referred to as the "Mitigation Fee Act," without determining that it is required to do so.

D.

The City of Oakland conducted a nexus study in March 2016 that examined the link between new market- rate residential development, the growth of employment associated with the consumer expenditures of new residents, and the demand for affordable housing to accommodate the new worker households in Oakland.

E.

According to the nexus study, new development of market-rate single-family housing, townhome housing, and multi-family housing supports growth of consumer expenditures by new homebuyer and renter households. Growth of household consumer expenditures supports job growth and new employment opportunities in Oakland. New employment opportunities will attract new workers to Oakland. Many of those new workers will seek housing and choose to live in Oakland. Many of those new worker households will qualify as moderate-, low-, and very low-income households and will increase the demand for

affordable housing in Oakland, particularly since the increase in jobs is generally in the lower-wage-paying sectors such as retail trade and services.

F.

Expansion of the supply of affordable housing will require funding to bridge the "gap" between the costs of developing new affordable housing and what new moderate- and lower-income households can afford to pay.

G.

The nexus study established maximum legal affordable housing impact fees per unit based on the level of impacts on the need for affordable housing from various types of market-rate housing Development Project based on the average affordability gap per new market-rate unit built. The impact fees imposed under this Chapter are lower than the maximum legal fees documented in the nexus study.

H.

The City of Oakland updated the nexus study in December 2021 in preparation for proposed refinements to the City's impact fee program and prepared an updated feasibility study in July 2024 in alignment with Action 3.3.7 of the City of Oakland 2023—2031 Housing Element. The impact fees imposed under this Chapter remain lower than the maximum legal fees documented in the updated nexus study.

I.

Through the payment of the impact fee, developers of market-rate housing will address at least a portion of the impact of their developments on the need for affordable housing, or alternatively may contribute to addressing the overall lack of affordable housing through the provision of on-site or off-site affordable housing, in accordance with the City's land use regulation authority to enhance the public welfare. Revenue from the impact fees will be used to preserve and expand the supply of affordable housing in Oakland.

J.

The affordable housing impact fee imposed under this Chapter serve the public interest and is necessary to protect the health, safety and welfare of the residents of Oakland. There is a legitimate public interest in the provision of affordable housing to address the crises of displacement, homelessness, and lack of housing affordability. There is a significant and increasing need for affordable housing to meet the City's regional share of housing needs under the California Housing Element Law. The public interest would best be served if either new affordable housing is integrated into new market-rate residential developments to facilitate economically diverse housing, or the payment of fees is made to supplement the City's Affordable Housing Trust Fund.

(Ord. No. 13853, § 2(Exh. B), 7-15-2025; Ord. No. 13365, § 4, 5-3-2016)

As used in this Chapter, the following terms have the following meanings, and to the extent a Planning Code and/or Municipal Code Chapter and/or Section is referenced herein, such reference shall also include future amendments, if any:

"Additional Housing Units" means the net increase in the number of housing units on a parcel of real property. Additional housing units equal the number of new housing units proposed to be developed on the parcel of real property by issuance of a building permit, less the number of housing units (a) legally removed from the same parcel of real property by authorized remodeling, demolition or relocation to another parcel of real property, or by accidental destruction or natural disaster, during the five-year period preceding the owner's filing for the building permit or (b) authorized to be removed prior to or during the construction for which the building permit is requested.

"Additional Residential Square Footage" means the increase in Residential Square Footage as a result of the Development Project which creates Additional Housing Units. Additional Residential Square Footage equals the difference between the Residential Square Footage proposed to be developed on the parcel of real property by issuance of a building permit and the total Residential Square Footage (a) legally removed from the same parcel of real property by authorized remodeling, demolition, or relocation to another parcel of real property, or by accidental destruction or natural disaster, during the five-year period preceding the owner's filing for the building permit or (b) authorized to be removed prior to or during the construction for which the building permit is requested.

"Affordable Housing" means each unit of housing that is restricted to occupancy at an affordable rent or an affordable housing cost to moderate-income households, low-income households or very low-income households. The terms "Affordable Rent" and "Affordable Housing Cost" shall be as defined in California Health and Safety Code Sections 50053 and 50052.5 and their implementing regulations.

"Affordable Housing Project" means a residential Development Project where one hundred percent (100%) of the housing units, other than manager's units, are restricted to very low-, low-, and moderate-income households.

"Applicant" means any individual, person, firm, partnership, association, joint venture, corporation, limited liability company, entity, combination of entities or authorized representative thereof, who undertakes, proposes or applies to the City for any Development Project.

"Building Official" shall be as defined in Section 15.04.085 of the Oakland Municipal Code.

"City" means the City of Oakland.

"City Administrator" means the City Administrator of the City of Oakland or their designee(s).

"Complete Building Permit Application" means an application for a building permit for vertical construction that is submitted after all necessary planning and zoning permits and approvals under Title 17 of the Oakland Planning Code are issued for the project and that contains all the application submittal materials required on the City's submittal checklist.

"Development Project" means any activity resulting in additional housing units in a new or existing building requiring the issuance of a building permit by the City.

"Fees Per Square Foot" means the impact fee per square feet of floor area for the Development Project imposed under this Chapter as contained in the City's Master Fee Schedule.

"Impact Fee" means the affordable housing impact fee imposed under this Chapter as set forth in the City's Master Fee Schedule, as the affordable housing impact fee may be adjusted for inflation pursuant to Section 15.72.050.

"Low-Income Household" shall be as defined in California Health and Safety Code Section 50079.5 and its implementing regulations.

"Moderate-Income Household" means persons and families of low or moderate income as defined in California Health and Safety Code Section 50093 and its implementing regulations.

"Multi-Family Housing" means those uses that fall under any of the following use facility types as defined in Chapters 17.10, 17.65, 17.101C, 17.101E and 17.102 of the Oakland Planning Code:

Multifamily dwelling residential facilities, except facilities that meet the definition of townhome housing;

Live/work residential facilities (as defined in Chapters 17.65 and 17.101E);

Work/live nonresidential facilities (as defined in Chapters 17.65 and 17.101E in a D-CE-3 or D-CE-4 Zone);

Micro living quarters facilities (as defined in Chapter 17.101C);

Joint living and work quarters (as defined in Section 17.102.190);

Residentially-oriented joint living and working quarters (in Section 17.102.195); or

Rooming house residential facilities that are not part of an institutional dormitory and are not associated with any the following activities:

Residential care residential activities;

Supportive housing residential activities;

Transitional housing residential activities;

Emergency shelter residential activities; or

Semi-transient residential activities.

"Residential Square Footage" means the floor area of usable and finished space within a residential unit enclosed by the inside surface of walls, windows, doors, and partitions, excluding balconies, garages, and, as defined in Section 17.09.040, the term "Unfinished understories, attics and basements."

"Single-Family Housing" means those uses that fall under any of the following use facility types as defined in Chapter 17.10 of the Oakland Planning Code:

One-Family Dwelling Residential Facilities consisting of individual, detached housing units (as defined in Section 17.10.640).

"Townhome Housing" means residential facilities consisting of multiple attached housing units with abutting sidewalls in a horizontal row.

"Use Fee Category" means multi-family housing, single-family housing or townhome housing.

"Very Low-Income Household" shall be as defined in California Health and Safety Code Section 50105 and its implementing regulations.

(Ord. No. 13853, § 2(Exh. B), 7-15-2025; Ord. No. 13666, § 5(Exh. C), 11-16-2021; Ord. No. 13365, § 4, 5- 3-2016)

The regulations, requirements and provisions of this Chapter shall apply to any Development Project, unless exempt from this Chapter. The applicant for any Development Project, unless exempt from this Chapter, as a condition of the building permit, must pay to the City the required impact fees, or the applicant may elect to comply with those requirements through the provision of on-site or off-site affordable housing units as permitted under Sections 15.72.100 and 15.72.110 of this Chapter.

A.

Effective Date. Any applicant for a Development Project who submits a complete building permit application on or after September 1, 2016, must pay the impact fee that is in effect at the time of building permit submittal. Whenever a new building permit application is required, the impact fees will be assessed based on the submittal date of the new building permit application. If more than five (5) years pass between the issuance of the building permit and the first major inspection (foundation, underfloor, frame) then the impact fee will be reassessed, and the applicant must pay the impact fee that was in effect at the time of the first major inspection.

B.

Exemptions Based on Submittal Date. Any Development Project for which a complete building permit application is submitted prior to September 1, 2016, shall be exempt from this Chapter if all of the following criteria are met:

The building permit is issued within one (1) year of submittal of the complete building permit application;

The Development Project is diligently pursued toward completion, as reasonably determined by the Building Official or designee;

The building permit does not expire, although it may be extended for up to one (1) year; and

A certificate of occupancy or temporary certificate of occupancy is issued within three (3) years of the building permit being issued.

In addition, Development Projects that obtain a vested right, as defined by California law, no later than sixty (60) days after the adoption of this Chapter are not subject to the impact fee.

C.

Exemptions Based on Project Type. The following shall be exempt from this Chapter:

Accessory Dwelling Units or ADUs, as defined in Section 17.09.040 of the Oakland Planning Code;

Vehicular Residential Facilities, as defined in Section 17.10.700 of the Oakland Planning Code;

Affordable Housing units and Affordable Housing Projects;

Missing Middle housing: Any combination of between two (2) and no more than four (4) units on a parcel that are part of a Development Project that is not subject to the Planned Unit Development (PUD) regulations in Chapter 17.142 of the Oakland Planning Code;

One-Family Dwelling Residential Facilities that are one thousand seven hundred fifty (1,750) square feet or less of Residential Floor Area and that are part of a Development Project that is not subject to the Planned Unit Development (PUD) regulations in Chapter 17.142 of the Oakland Planning Code;

A Development Project subject to State Law SB 684 as codified under California Government Code Sections 65852.28 and 66499.41.

D.

Other Requirements. Nothing in this Chapter shall be construed as waiving, reducing or modifying any other requirements for issuance of any permit, variance, approval or other entitlement by the City under any other law. The impact fee and requirements authorized by this Chapter are in addition to any other fees or mitigation measures otherwise authorized by law.

(Ord. No. 13853, § 2(Exh. B), 7-15-2025; Ord. No. 13666, § 5(Exh. C), 11-16-2021; Ord. No. 13365, § 4, 5- 3-2016)