Key Amendments Include:
Temporary Elimination of Affordable Housing Impact Fee in Zone 3
As per Councilmember Jenkins’ introduced amendments at City Council on July 1, 2025, the Affordable Housing Impact Fee (AHIF) is reduced to $0 per square foot in Impact Fee Zone 3 through the end of Fiscal Year 2027–28 to incentivize market-rate development, of which very little has been built in recent years. Effective immediately, this change is based on analysis showing that market-rate housing is currently less financially feasible in this zone.
Impact Fee Zone Map Revisions
As per Councilmember Wang’s introduced amendments at City Council on July 1, 2025, portions of the San Antonio and East Lake neighborhoods have been reclassified from Zone 2 to Zone 3 (see maps below). Effective immediately, this re-designation makes development in these areas eligible for the same temporary elimination of Affordable Housing Impact Fees as written above for Zone 3, encouraging market-rate housing near transit corridors and job centers while supporting goals related to climate resilience, walkability, and housing equity. Market-rate development is down in this area as well.
Map showing revisions to Impact Fee Zones
Map detail - revisions to area formerly Impact Zone 2, now Impact Zone 3
Square Footage-Based Fee Assessment for Residential Projects
Effective 60 days after adoption, residential impact fees will be calculated based on the square footage of new housing rather than the number of units, as required by AB 602. This approach ensures a fairer distribution of fees, especially for smaller or more affordable units.
Shift in Impact Fee Payment Timing - Due at Certificate of Occupancy
Effective 60 days after adoption, all impact fees - AHIF, TIIF, CIIF and JHIF will now be due prior to the issuance of a Temporary Certificate of Occupancy or Certificate of Occupancy. This change reduces upfront financial burdens and contributes to maintaining project viability.
Updated On-Site Affordable Unit Requirements
Effective 60 days after adoption, the percentage of affordable units required under the On-Site Affordable Unit Option (OMC Section 15.72.100) will vary by impact fee zone as shown in the table below. This allows an applicant to tailor requirements based on localized development economics, supporting project feasibility while maintaining affordability goals.
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New Incentives for “Missing Middle” Housing
The ordinance creates thresholds that promote “missing middle” housing development based on unit count and size to encourage development of small, multi-unit ownership housing types such as duplexes, triplexes, and townhomes.
Effective immediately, projects exempt from the Affordable Housing Impact Fee (AHIF) now include:
Please Note:
These exemptions apply only to future projects. Projects that have already received Certificates of Occupancy (C/O) or are under construction and have paid their first installment will not be refunded those payments. Two-to-Four unit residential projects that have applied for their building permit but have not paid their first installment (at Building Permit issuance) will not be required to pay an Affordable Housing Impact Fee for the first or second installment (at C/O). And Two-to-Four unit residential projects that have paid their first installment but have not yet paid their second installment (at C/O) because they have not yet received their Certificate of Occupancy, will be excused from paying their second installment.
More Info:
The full ordinance and exhibits are available in this link.
For questions, or to determine how these changes may affect your project, contact the Planning & Building Department at impactfees@oaklandca.gov
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