Development impact fees are a commonly used method of collecting a proportional share of funds from new development for infrastructure improvements and other public facilities to offset the impact of new development. Pursuant to the Mitigation Fee Act, California Government Code Section 66000, et seq. (also known as AB 1600), adoption of impact fees requires documentation of the “nexus” or linkage between the fees being charged, the benefit of the facilities to mitigate new development impacts, and the proportional cost allocation. Impact fees must be adopted by the Oakland City Council.
Included in the Impact Fee Nexus Study and Implementation Strategy is an economic feasibility analysis so that any impact fee program appropriately balances the need to accommodate development impacts without creating a disincentive for real estate investment in Oakland. Economic constraints are likely to preclude adoption of the maximum justified impact fees under the nexus analyses, the level of fees that are economically feasible may be substantially lower than the maximum justifiable fees. Furthermore, the allocation of a feasible level of impact fees to transportation, affordable housing, and/or capital facilities is a policy decision that will need to be addressed.