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National City council adopts updated development‑impact fees after public debate
Summary
The National City Council unanimously adopted a new development‑impact fee schedule that raises the city’s maximum residential DIFs from about $4,162 to a proposed maximum of roughly $15,761, while directing staff to consider phasing and collection timing to reduce market shock.
The National City Council unanimously adopted an updated set of development‑impact fees on Jan. 20 after a multihour public hearing in which city staff and a consultant defended a Nexus study that had not been updated in more than two decades. The consultant said the new fees reflect current costs for police, fire, parks, libraries, administration and multimodal infrastructure and represent the statutory maximums the city may charge.
"The fees generated by this fee study represented the maximum DIFs," said Lenny Zorati, vice president at DTA, during the presentation explaining the methodology and the requirement to base residential fees on square footage per AB 602. He told council the study also recommends an annual escalator tied to the California Construction Cost Index to account for inflation.
The change would raise the city’s single‑family residential maximum from about $4,162 to about $15,761, a figure Zorati said reflects current acquisition and construction costs after 22 years without a comprehensive update. He also noted that the consultant provided the maximum allowable fees and the council retains discretion to set lower rates.
Members of the development community urged a phased implementation to avoid disrupting projects in midstream. "I do wanna recommend a phased in approach ... 3 years would be great," said Stephen Gaspar of Keier Builders, who asked the council to allow market adjustment time and to consider collecting some fees later in a project’s financing to ease upfront burdens.
Council members debated the balance between recouping the city’s capacity costs and avoiding a shock to local housing finance. Several council members argued that undercharging new development shifts costs onto current residents and deferred maintenance. Staff clarified the adopted approach will grandfather projects that submit permit applications by April 20, 2026, so those projects remain subject to the old fees.
The council adopted staff recommendation Option 1 — the full 2025 DIF schedule as proposed — and unanimously approved direction to implement an escalation mechanism and to return with operational steps for how and when fees will be collected. Council also requested staff explore phased approaches and potential programs to help local builders finance projects.
The vote does not immediately change fees for projects already in plan check: staff said applications submitted on or before April 20 will remain under the prior schedule. The new DIFs apply to permit applications submitted on or after the stated effective date.
