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Palo Alto hikes development 'impact fees' for first time in 20 years

Original post made on Apr 15, 2021

Developers looking to build in Palo Alto will have to pay significantly more to support local parks, libraries and community centers under a fee revision that the City Council voted to adopt on Monday.

Read the full story here Web Link posted Thursday, April 15, 2021, 9:13 AM

Comments (14)

Posted by Allen Akin
a resident of Professorville
on Apr 15, 2021 at 9:40 am

Allen Akin is a registered user.

Good moves, and long overdue, though I agree with Vice Mayor Burt that the land-value estimate is too low. As density increases the price of land will also increase, so it makes no sense to set the starting point too low.

I'm really interested in seeing the new estimates for employee density. Those should help determine how much housing construction is needed to balance or exceed office construction.


Posted by Judith Wasserman
a resident of Leland Manor/Garland Drive
on Apr 15, 2021 at 10:52 am

Judith Wasserman is a registered user.

I would like to see a distinction between spec houses and houses built by the owners/residents. Some people rebuild their own houses and create no difference in load on city services. $64,504 is a huge fee to start with, and that doesn't cover utilities, either.


Posted by Annette
a resident of College Terrace
on Apr 15, 2021 at 11:04 am

Annette is a registered user.

Good move, City Council.

As for the concern that this is a big change, that would not be the case if there hadn't been a 20 year hiatus in fee review and adjustment. Not doing that is just one of the ways that past CC majorities were developer-friendly.


Posted by commonsense
a resident of Professorville
on Apr 15, 2021 at 11:17 am

commonsense is a registered user.

If housing is needed this will not encourage multifamily developers. This is a huge fee in relation to overall cost/unit. If projects are built, this cost one way or the other will be passed on to the tenant.


Posted by Name hidden
a resident of Downtown North

on Apr 15, 2021 at 11:20 am

Due to repeated violations of our Terms of Use, comments from this poster are automatically removed. Why?


Posted by RPopp
a resident of Monroe Park
on Apr 15, 2021 at 11:21 am

RPopp is a registered user.

"someone building a single-family home would have to pay $64,504 in impact fees for the three categories, up from the current level of $16,883. For a small unit in a multifamily residence, the total cost goes up from $5,557 to $47,707"

That's an additional $1,000,000 for a 25 unit project. Outrageous.

And this was the moment every person considering building multifamily housing in Palo Alto decided to go somewhere else... Queue the RHNA penalties and state regulation take-over.


Posted by Online Name
a resident of Embarcadero Oaks/Leland
on Apr 15, 2021 at 12:05 pm

Online Name is a registered user.

I'm glad that this CC is finally addressing the inaction of the past developer-supporting city council majorities but I don't understand why "community centers" are getting so much more much money than libraries. Serious question: besides Cubberly and the "community center" part of the Mitchell Park "library" complex, what other "community centers" do we have?

"While park fees represent by far the largest change, impact fees for libraries and community centers are also going up. Today, a single-family home pays $3,321 in community center fees and $1,126 in library fees. These would go up to $4,438 and $2,645, respectively, under the new schedule."


Posted by Local Resident
a resident of Community Center
on Apr 15, 2021 at 2:20 pm

Local Resident is a registered user.

Is the City also charging the impact fees when replacing an old house with a new house on the same lot or just adding a new house where one did not exist before?


Posted by Allen Akin
a resident of Professorville
on Apr 15, 2021 at 2:40 pm

Allen Akin is a registered user.

@RPopp: Did you take a look at the Staff Report? The proposed library and community-center fees are roughly the same as those already in effect in Morgan Hill, and only somewhat higher than those in Fremont.

If there's a similar comparison for park fees, I missed it. However, the Terner Center says Fremont's park impact fees are about $20K for multifamily units, and about $30K for single-family homes.

Zillow says the median home price in Fremont is about $1.2M, and in Palo Alto is about $3.1M. So the proposed new fees are quite comparable to those in other cities, as a percentage of home price.

I think that's pretty reasonable, given that so much of the cost for all these things is driven by the price of land.


Posted by Resident
a resident of Another Palo Alto neighborhood
on Apr 15, 2021 at 3:40 pm

Resident is a registered user.

[Post removed.]


Posted by Consider Your Options.
a resident of Another Palo Alto neighborhood
on Apr 15, 2021 at 10:53 pm

Consider Your Options. is a registered user.

What other community centers do we have? Lucie Stern Community Center, the Junior Museum and Zoo and the Palo Alto Art Center...for starters. Though not all called community centers, They provide community services as a community center would. All of our liberaries were updated with community meeting spaces in the last round of upgrades. I view this as community service, not library service. The city has used the buildings it has to provide community services in various parts of the city--well-connected to neighborhoods. That's smart.


Posted by Free truth
a resident of College Terrace
on Apr 16, 2021 at 6:58 am

Free truth is a registered user.

I read the comments and most of them seem to be from wealthy and well settled folks in Palo Alto. Good luck if you are in the group of people that are still building your financial future. One more option is being taken away: of extensive renovation/rebuild of very old homes in our PA neighborhoods so those who cannot afford the market priced homes can actually take something old and small and remake it. The council obviously cares little for the fact that most developers are just going to pass this fee along as part of the cost of new units on the market. Then to compensate for the fact that people are further priced out, we institute failed rent control.... The city council seems to only know the playbook of the 70s that has been disastrous for most US cities - and instead of promoting diversity it actually ensured the established wealth to thrive on a parallel world and the others to live in expensive slums.


Posted by Dick D.
a resident of Crescent Park
on Apr 19, 2021 at 4:39 pm

Dick D. is a registered user.

I agree with those that appreciate the CC move on the impact fees needing to go up. To say they'll frighten away builders of new home because it's SO much should reconsider what the real impact is on town's services . . . and the new, one time fees don't cover the impacts when viewed over just a few years. The cost of additional pupils alone is hardly covered by these one time fees.

Given the very high prices on new homes in Palo Alto, no matter how big they appear, the fees are a "drop in the bucket". Given the extraordinary demand for homes seeing multiple offers at sky high prices are no going to be put off with thr price being jacked up by several percentage points.

The same reasoning should also apply to the ever increasing office space - do builders or the developers "pay their fair share" - no way! WHY?


Posted by palo altan
a resident of Midtown
on Apr 23, 2021 at 10:31 am

palo altan is a registered user.

Wow, that's quite a steep and sudden jump in development fees. Could they not have stepped it every year or so?

From a multi-family perspective, maybe that would have even served as incentive for developers to build housing more quickly.

And for single family, I guess we'll start to see a lot of new homes now being called "major remodels".

Yikes. Not good for construction.


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