Development Impact Fees
Development impact fees are a one-time charge to new development imposed under the Mitigation Fee Act. These fees are charged to new development to mitigate impacts resulting from the development activity and cannot be used to fund existing deficiencies. This means that for improvements that benefit existing as well as new development, impact fees can only pay for the portion of the improvement that benefits the new uses. Cities must find other funding sources to cover the costs that benefit existing uses. Impact fees must be adopted based on findings of a reasonable relationship between the development paying the fee, the size of the fee, and the use of fee revenues. Development impact fees do not require voter approval and are commonly used by California cities to address the impact of new development on schools, parks, transportation, etc. However, because impact fees are dependent on new development projects, they are not usually consistent or predictable enough to serve as security for the issuance of bonds.