FHWA Center for Innovative Finance Support - Value Capture Strategy Primers

Introduction to Development Impact Fees and Other Development Charges

TABLE OF CONTENTS

Fee type/facility category	Single family	Multi-family	Office/ Research and Deveopment	Retail	Industrial
Fee type/facility category	Per DU		Per 1,000 ft2
Development impact fee (DIF) schedules
Parks and trails
- Citywide fees	$4,133	$2,847	$1.15	$0.77	$0.46
Public facilities
- Citywide fees	$7,248	$4,993	$2.01	$1.34	$0.81
Transportation
- Citywide fees	$2,358	$1,775	$7.33	$7.33	$4.77
Storm drainage	Per DU	Per impervious acre
- Fees outside RBD	$2,800	$70,000
- Fees within RBD	$4,840	$121,000
Other development charges (not DIF)
Affordable housing commercial linkage fees
Citywide fees	$0.00	$0.00	$10.72	$0.00	$0.00
Housing impact in-lieu fees	Per sq. ft.
- Citywide fees: Single-family infill	$36.22	NA	NA	NA	NA
- Citywide fees: Town houses	$34.78	NA	NA	NA	NA
- Citywide fees: Rental units	NA	$25.35	NA	NA	NA
- Fees outside RBD: Condos	NA	$50.58	NA	NA	NA
- Fees within RBD: Condos	NA	$67.62	NA	NA	NA
Quimby Act in-lieu fees (parks)
- Citywide fees	Varies[1]		NA	NA	NA
Storm drainage fees
- Citywide fees	Varies[2]
Water capacity fees[3]
- Citywide fees	$8,147	$5,014	$3.45	$5.01	$3.45

Source: AECOM (2019), City of Palo Alto Development Impact Fee Program—Nexus Study

New Developments - column 2040 forecast

ITE (Baseline) - columns Trips/unit (ITE) and Total no. Trips (ITE)

Local Adjustments - Local Travel Demand, Inter-Zonal Trips, Non-Motor Trips, Transit Mode Share

Final Trips - Adjusted Trips/Unit, Adjusted No. Trips

Land use	ITE code	2040 forecast	Trips/unit (ITE)	Total no. trips (ITE)	Local Travel Demand	Inter-Zonal Trips	Non-Motor Trips	Transit Mode Share	Adjusted Trips/Unit	Adjusted No. Trips
Residential		DUs	Per DU						Per DU
- Town houses	230	1,486	0.52	773	76%	8%	NA	6%	0.34	508
-Multifamily	220	1,033	0.39	403	76%	8%	NA	6%	0.26	266
Nonresidential		Sq. Ft.	Per 1,000 ft2						Per 1,000 ft2
- Office/R&D	710	1,939,853	1.49	2,890	76%	0.5%	NA	6%	1.06	2,063
- Retail	820	333,406	3.73	1,244	76%	11%	19%	6%	1.93	643
- Industrial	110	267,987	0.97	260	76%	0.5%	NA	6%	0.69	185
Total				5,570						3,665

Source: AECOM (2019), City of Palo Alto Development Impact Fee Program-Nexus Study

DU = dwelling unit

Transportation Project Category (from CIP)	Project Cost (in $M)
Road/Interchange Improvements	$55.1
Bicycle/Pedestrian/Sidewalk	$19.0
Street Lights/Safety	$1.1
Plans/Studies/Assessments	$0.8
Other	$6.6
scope="row" Ravenswood SP Projects	$16.1
TOTAL	$98.6

Capital Costs Attributed to New Developments:
($98.6M x 25%) +
(4% Administrative Fee) = $25.3M

Unit Cost/Trip = $25.3M/3,665 (Adj.) = $6,869/Trip

Source: AECOM (2019), City of Palo Alto Development Impact Fee Program—Nexus Study

Land Use	Unit Cost ($/Trip)	AdjustedTrips/ Unit	Maximum Defensible Fee Schedule ($/Unit)	Adopted Fee Schedule ($/Unit)	Fee Range at Nearby Cities
Residential	$6,869	*(Per DU)*
- Townhouses		0.34	$2,358	$2,358	$1,800 - 2,600
- Multi-Family		0.26	$1,775	$1,775	$1,100 - 1,600
Non-Residential		(*Per 1,000 Sq. Ft.)*
- Office/R&D		1.06	$7.33	$7.33	$2.7 - $3.9
- Retail		1.93	$13.30	$7.33*	$3.3 - $3.9
- Industrial		0.69	$4.77	$4.77	n.a.

* Note: City adjusted this down from $13.30

Maximum ceiling adjusted based on local prevailing rate

DIFs are specifically designed for off-site public improvement needs for new developments that help trigger the local growth
Through local ordinance, DIFs can be directly incorporated into local planning process as part of formal CIP funding source

Julie Kim, Ph.D.
Founder & CEO, Benetellus
mjuliekim@gmail.com