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Board Adopts Ordinance Delaying Collection of Development Impact Fees to Certificate of Occupancy to Comply With State Law
Summary
The board passed an ordinance, 10–1, that amends the building and planning codes to delay collection of certain development impact fees for designated residential projects until the date of first certificate of occupancy, implementing state law (SB 937 / California Government Code §66007). Supervisors questioned the policy tradeoffs before voting.
The San Francisco Board of Supervisors on Oct. 7 passed an ordinance amending the building and planning codes to postpone collection of specified development impact fees for designated residential projects until the date of first certificate of occupancy (or first temporary certificate of occupancy), in order to comply with state law. The ordinance passed on first reading by a 10–1 vote, with Supervisor Fielder voting no.
The change implements state legislation commonly referenced as Senate Bill 937 and aligns local practice with California Government Code Section 66007 by deferring fee collection from the permit‑issuance stage to the certificate of occupancy stage. The ordinance summary presented at the hearing says the amendment postpones fee collection to “the date of first certificate of occupancy or first temporary certificate of occupancy, whichever occurs first,” and affirms the associated CEQA determination.
Discussion and clarification: Supervisor Walton asked for the ordinance’s intended purpose and whether the city would be waiving fees. A Department of Building Inspection representative, identified as Mr. Hanna, said the ordinance is “implementing Senate Bill 937 from last year. This is a state requirement. This is just conforming with state law.” Deputy City Attorney Bridal Russi clarified the local effect: “this ordinance and the state bill that it implements, just delays the collection of the fees until the certificate of occupancy is issued rather than collecting them at the time the permit application is, the permit is granted.”
President Mandelmann, who spoke in the discussion, described historic local practice and noted concerns about deferring fees late in development, saying that in some cases a developer might not pay and that could create alignment issues between developers and future occupants; Mandelmann said he nonetheless planned to vote for the ordinance after confirming it is a state requirement.
Vote: The clerk conducted a roll call. The board recorded 10 ayes and 1 no (Supervisor Fielder). The ordinance was passed on first reading and will follow the city’s next steps for ordinance adoption and implementation.
Implications: The measure brings the city into conformity with the cited state requirement and changes the timing of when administrative and impact fees are collected from permit issuance to occupancy. Local officials raised concerns about the administrative and risk implications of collecting fees later in the development process, but recorded statements indicate the action is driven by state law.
