Development fees and charges: deferral.
This legislation will significantly alter the financial landscape for qualified developments, which are defined as projects that allocate at least 40% of total units for occupancy by low- or moderate-income families. For local agencies that fail to meet their housing production requirements, the bill effectively creates a longer payment timeline, thereby enhancing cash flow for developers as they seek to balance construction costs and affordability. The bill also provides for contracts to be established before the issuance of building permits, ensuring that the obligations to pay these fees can be reasonably tracked and enforced according to specific terms outlined in the future.
Assembly Bill No. 2722, introduced by Assembly Member McCarty, aims to amend Section 66007.5 of the Government Code to address the deferral of development fees and charges imposed on housing developments. The bill intends to ease financial pressure on developers of qualified mixed-income residential rental developments, particularly those backed by nonprofit housing organizations. Under the bill, local agencies categorically designated as noncompliant due to their failure to meet regional housing needs cannot demand the payment of such fees or charges until 20 years post-final inspection or issuance of a certificate of occupancy, with certain conditions applying.
While this bill is positioned as a means to stimulate affordable housing development, it does raise concerns about the long-term financial viability of local agencies, which may rely on these fees to support public improvements and infrastructure. Critics may argue that extending the payment timeline could hinder the resources available to local agencies, potentially affecting service provision and community services. The conditions under which fees may be deferred also seem to create a bifurcation between compliant and noncompliant jurisdictions, possibly leading to disparities in development practices and community resources depending on local agency performance.