Chapter 16.58 — DEVELOPMENT IMPACT FEES

For the purposes of this chapter, the following definitions shall apply:

(a) “Affordable residential housing” shall mean a purchase price or rental price that is affordable to a “moderate,” “low” or “very low” income household, as those terms are defined by the California Department of Housing and Community Development, as applicable to Santa Clara County.

(b) “New development” shall mean, with respect to residential development, any development that creates additional residential units. “New development” shall not mean replacement of an existing residential unit.

“New development” shall mean, with respect to nonresidential development, any development that creates additional square footage. Where a development project includes replacement of existing square footage, the “new development” shall mean only the portion that constitutes additional square footage.

(Ord. 4742 § 2 (part), 2002)

The following fees are hereby established and shall be imposed as a condition of the approval of, or permit for, any new development, whether residential or nonresidential, except as otherwise exempted by this chapter:

(a) A fee, known as a “park development fee,” to fund acquisition of land and improvements for neighborhood and district parks, in an amount as set forth in the municipal fee schedule.

(b) A fee, known as a “community center development fee,” to fund development and improvements to community centers, in an amount as set forth in the municipal fee schedule.

(c) A fee, known as a “library development fee,” to fund development and improvements to libraries, in an amount as set forth in the municipal fee schedule.

(Ord. 4742 § 2 (part), 2002)

The provisions of this chapter shall not apply to the following:

(a) City buildings or structures;

(b) Public school buildings or structures;

(c) Residential housing, either for sale or rental, which, by recordable means, is permanently obligated to be 100% affordable, as defined in Section 18.14.040(c);

(d) Retail service, eating and drinking service, personal service, or automotive service when the total additional square footage is 1,500 square feet or less. This exemption shall apply only when the additional square footage of new development does not exceed 1,500 square feet. New development that is larger than 1,500 square feet shall pay a fee for all square footage, including the first 1,500 square feet;

(e) Day care centers used for child care, nursery school or preschool education;

(f) Below market rate housing units above and beyond the minimum number required for projects subject to the City’s Below Market Rate (BMR) Housing program or other housing incentive programs. The additional units must be offered and constructed in a manner consistent with all requirements of the BMR program;

(g) Accessory dwelling units (ADU) less than 750 square feet in size. Any impact fees to be charged for an accessory dwelling unit of 750 square feet or more shall be proportional to the square footage of the primary dwelling unit;

(h) Junior accessory dwelling units (JADU);

(i) Any residential subdivision for which land dedication or fees in lieu thereof are required pursuant toChapter 21.50 of the Palo Alto Municipal Code. This exemption shall only apply to the park development fee described in Section 16.58.020(a).

(j) Below market rate housing units affordable to lower income households constructed pursuant to the El Camino Focus Area standards pursuant to Section 18.14.020, subdivision (c)(v)(B), of the Palo Alto Municipal Code.

(Ord. 5657 § 3, 2025: Ord. 5507 § 4, 2020: Ord. 5456 § 2, 2018: Ord. 5400 § 8 (part), 2016: Ord. 4907 § 3, 2006: Ord. 4763 § 3, 2002: Ord. 4742 § 2 (part), 2002)

The fee shall be paid as set forth inChapter 16.64 of this Code.

(Ord. 5400 § 8 (part), 2016: Ord. 4742 § 2 (part), 2002)

The city manager is hereby directed to establish and maintain the following special funds, into which all fees of each type described in Section 16.58.020, and any interest thereon, shall be deposited. Each fund shall be maintained as a separate capital facilities account in a manner to avoid any commingling of the fees with other revenues, funds or accounts of the city. Upon receipt and entry into the accounting records for each fund such monies shall be considered committed to the uses described in Section 16.58.020.

The special funds established by this section are:

(a) Park development fee fund;

(b) Community center development fee fund;

(c) Library development fee fund.

(Ord. 4742 § 2 (part), 2002)

On an annual basis following the enactment of this chapter, the city manager shall review the estimated cost of the described public improvements to be funded by the fees, the continued need for those improvements and the reasonable relationship between such need and the impacts of pending or anticipated new development within the city. The city manager shall report his or her findings to the city council at a noticed public hearing and recommend any adjustment to the fees or other action as may be needed.

(Ord. 4742 § 2 (part), 2002)

If any provision of this chapter or the applicability thereof to any person or entity is held to be invalid by a court of competent jurisdiction, such

invalidity shall not affect any other provision of this chapter which can be given effect without the invalid provisions or application; and to this end the provisions of this chapter are declared to be severable.

(Ord. 4742 § 2 (part), 2002)

(a) In addition to the fees established by Section 16.58.020, the following fees are hereby established and shall be imposed as a condition of the approval of, or permit for, any new development, whether residential or nonresidential, except as otherwise exempted by this chapter: (i) a Public Safety Facility Development Fee, to fund police and fire facilities (including fire apparatus and vehicles) and (ii) a General Government Facility Development Fee, to fund facilities associated with municipal administration.

(b) The fees imposed by this section shall be charged in in an amount as set forth in the municipal fee schedule.

(c) A Public Safety Facility Development Fee Fund and a General Government Facility Development Fee Fund are hereby established. Such funds shall be administered in connection with the fees imposed by this section in the manner set forth in Section 16.58.050.

(d) Any fee imposed by this section shall be effective on the sixty-first day following the adoption of an ordinance or resolution amending the municipal fee schedule to include a rate for that fee.

(Ord. 5320 § 3, 2015)

The rate of the fee shall be subject to annual adjustment for inflation pursuant to Section16.64.110.

(Ord. 5400 § 9, 2016)