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Archive for the ‘Impact Fees’ Category

Reduced East Dublin Development Fees

mainpic_316The Dublin City Council met this past Tuesday and voted unanimously to decrease the fees that developers pay to acquire land, construct roads, and make other improvements to minimize traffic impacts in east Dublin. The previous impact fee schedule was established in 2004 and needed to be updated to reflect the drastically lower cost of land, changes in land use (i.e., higher density than expected), and higher construction costs. With this approval, the traffic impact fees for residential projects will decrease by a combined 11% and non-residential fees will decrease by 3% effective June 7th. This should help to encourage development in Dublin.

The calculation of impact fees is based on the estimated number of “trips” generated by building new projects (e.g., trips to the grocery store, trips to/from home). The most significant reason for the decrease in fees is that Dublin has built at a higher density than what was initially forecast. Higher density means more people will be generating more car trips. With fixed traffic costs and more people than expected, the cost per “trip” has been less than expected.

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Community Benefit Payment

money-useCommunity Benefit Payments are sizable contributions made by developers to cities in addition to the standard building and impact fees required by new development. Developers usually make these payments to compensate the cities for making exceptions to the General or Specific plan guidelines, city ordinances, as well as other design policies for specific projects.
Community benefit payments should be used to improve the areas surrounding the new developments that generated the payments, as illustrated by the Schaeffer Ranch community benefit payment plan, where $1.5M was dedicated for improvements at the nearby Dublin Historic Park. Additionally, the developers of Schaeffer Ranch committed funding to build the new School of Imagination building.

Following that example, the City should use the Wallis Ranch community benefit payment to fund the completion of Emerald Glen Park and the astro turfs at Fallon Sports Park. The previous City Council had voted to fund the astro turfs at Fallon Sports Park through a surplus in the general fund. Instead of pulling money directly from the general fund, that popular optional upgrade can be more appropriately subsidized through a community benefit payment generated by a project in the vicinity like Wallis Ranch.

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Striking the Right Balance in Residential Density

high-density housingAlthough higher density residential projects may seem like a cost-effective way for Dublin to become an Entitlement Community at first, the accounting method used to justify this growth strategy often overlooks the impact higher density housing has on surrounding neighborhoods and underestimates the true cost of higher density to current residents. The increase in revenue generated by the initial burst of one-time impact fees from more units sold may be offset over time by the depreciation in property values from nearby homes and the slower appreciation rate of the high-density products themselves. The cost to provide the same level of service to a greater number of residents brought in by the higher density will continue to rise at a rate consistent with inflation, yet the City will have to contend with meeting the higher demand on a lower overall property tax base.

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