City Council to discuss feasibility of development fees in Berkeley

At a special work session tonight, the Berkeley City Council will discuss implementing a new fee on development projects in the city that would go toward “public benefit” projects, such as expanded transit and beautification projects.

The city currently collects fees on new commercial developments to fund affordable child care and affordable housing. Unless developers of residential condominiums provide affordable housing at their site, they have to pay a fee that goes toward affordable housing development in the city.

At its meeting, the council will discuss a fee that would provide money to implement parts of the city’s Downtown Area Plan as well as a transportation fee that would increase public transportation in the area, including improved roadways in West Berkeley. The council will also consider a fee for developers who choose not to meet open space or parking standards in the city.

Patrick Kennedy, a developer and the owner of Panoramic Interests, said the prospect of development fees has a “chilling effect.” He added that other communities in the area, such as Emeryville and Oakland, do not have impact fees, and San Francisco has a “set aside” requirement for affordable housing, but the development fees would be essentially “doubling the price of land.”

“It’s just outlandish, really,” Kennedy said. “It’s hard enough to undertake any new enterprise in the current economic crisis with the banks restricting loans and credit crunch generally, and with adding on new fees, it will cripple the development community in Berkeley.”

Kennedy added that he is hoping “more rational, reasonable minds will prevail” in the discussion because infill development — the urban development that he specializes in — is a costly endeavor on its own.

According to Wendy Cosin, the city’s interim director for planning and development, the city has to estimate the total cost of a project and its improvements, and then an analysis has to be done to calculate what share of the total improvements is expected to be paid by new developers.

“Once people start paying the money, we have to start figuring out how to spend it,” she said. “You look at the projects and what can you afford to do given the money you have in hand.”

She added that new developers usually have a general understanding of what the fees they pay will fund.

Tuesday’s work session will include a public comment period on the potential fees.

Victoria Pardini covers development and capital projects.

Please keep our community civil. Comments should remain on topic and be respectful.
Read our full comment policy