City Discusses Increasing Development Fees

First published in the Dec. 18 print issue of the Burbank Leader.

The Burbank City Council this week moved toward raising the fees charged for new development, a change that would boost funding for public improvements.
Burbank has not updated its development impact fees — or DIFs — since 1993, though they rise annually with the cost of inflation. Cities can set DIFs, a Community Development Department official told council members on Tuesday, to compensate for the burden a project has on their systems. For example, Burbank used DIF funds to pay for designs for a new central library, which representatives said is needed to accommodate the city’s projected population and job growth.
Money acquired through DIFs can only go toward public projects cities determine are necessary because of anticipated development. A 2019 study on Burbank’s DIFs indicated that through 2035, the municipality will need about $38.5 million for facilities and equipment, as well as $77.5 million for transportation improvements, to address projected growth. DIFs could fund about 30% of that need, the analysis said.
The study found that Burbank could charge developers far more than it currently does, though David Kraske, CDD director for transportation, cautioned that maxing out DIFs could discourage housing development.
Burbank currently assesses less than $2,200 for each unit of a multi-family housing project, even though the city could require more than $7,500 per unit. A medium-density project with 40 units would currently net the city about $86,000. With DIFs updated to the maximum limit, the same project would bring the city roughly $300,000.

Data: city of Burbank
Funds raised through development impact fees must go toward public benefits made necessary because of anticipated population and job growth. Burbank officials said raising fees could help pay for those improvements, but making them too high could discourage construction.

Burbank’s residential DIFs are also substantially below those of Glendale’s and Pasadena’s — the former’s, for instance, are about $18,800 per multi-family unit — but Kriske warned against making a direct comparison. Both cities, he explained, assess fees to pay for the costs of acquiring new land for parks, while Burbank focuses on improving existing parks. Kriske maintained that, without the park fee, the other cities’ DIFs would be lower than Burbank’s.
City Council members encouraged Kriske and his colleagues to move forward with updating Burbank’s DIFs, a process that is expected to conclude in early- to mid-2022.
“That’s the biggest perception from the residents every time there’s a big development, is that it’s a free giveaway,” Councilman Bob Frutos said.
Councilman Nick Schultz expressed interest in charging an additional impact fee to subsidize affordable housing, while Vice Mayor Konstantine Anthony suggested a policy that would give developers a discount on DIFs in return for including other community benefits such as environmentally friendly building designs or units for low-income households.
Burbank has at times negotiated with developers to receive public benefits in return for certain concessions — such as increased density or upgraded infrastructure. Some council members noted that some recent state laws have given housing developers more leeway in cities’ approval processes, potentially limiting municipal negotiating power. DIFs, they maintained, could ensure developers still pay their fair share of improvement costs.
“I personally believe,” Anthony added, “that looking back at how little we’ve charged over the years, ‘fair share’ today is probably a little bit higher than what our neighbors’ [fees] are.”