City Council members consider impact of development fees in Berkeley

At a special work session Tuesday night, the Berkeley City Council discussed implementing new fees on development projects in the city that would go toward beautification and transportation projects.

The city currently collects fees on new commercial developments to fund affordable child care and affordable housing — collected at $1 and $4 per square foot, respectively. Unless they provide affordable housing at their site, developers of residential condominiums have to pay a fee that goes toward affordable housing development in the city.

City council members discussed these existing fees, as well as two potential new fees. One would provide money to implement parts of the city’s Downtown Area Plan while the other would be a transportation fee geared toward expanding public transportation in West Berkeley. The council also considered a fee for developers who choose not to meet open space or parking standards in the city.

Councilmember Linda Maio, whose district encompasses West Berkeley, said at the meeting that she has received no negative feedback from either commercial interests or developers regarding the proposed transportation fee because they are both looking for better transit options in the area.

“There’s some really good bike options along the bay, but not everybody’s on a bike,” she said. “We need to be able to connect BART and transit, and a shuttle of some kind.”

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.”

However, Councilmember Kriss Worthington argued at the meeting that the council could not be manipulated by developers to bypass an imposed fee. He added that the council should aim to create affordable housing in all developments rather than allowing an option to opt out by paying an in-lieu fee.

“What’s been left out is that our goal should not be — must not be — how to get more money,” Worthington said at the meeting. “The goal, in my mind, is to get more affordable housing units — it’s not more money.”

Community members at the meeting primarily posed questions to representatives from AECOM, a global provider of management services who compiled a report addressing the financial feasibility of the potential fees, although some pushed for a faster turn around for fee decisions to be made.

“Studies are good, and studies are important, but we’ve been waiting months to have this meeting,” said Katherine Harr, commissioner for the Rent Stabilization Board, who spoke at the meeting during public comment. “This is people’s lives. Make it a priority.”

The meeting concluded with a decision to look at the long-term benefits of property tax on city revenue and SB 310, which addresses local development and infrastructure. Public hearings on the fees are set for November and December, according to the city’s Interim Planning Director Wendy Cosin.

“This is not an ending discussion; this is a beginning discussion,” Mayor Tom Bates said at the meeting.

Victoria Pardini covers development and capital projects.