Blog Viewer

By: @Anthony Tannehill

Development related fees pay for the costs to install infrastructure necessary to build new homes and other development in livable, equitable, and thriving communities. These fees pay for critical services such as water, sewer, fire protection, parks and open space, flood protection, libraries, and other essential needs. Specifically, these fees and the infrastructure they fund make new housing and economic development possible.

Numerous measures were introduced in 2024 that sought to alter development related fee laws and most concerns have been resolved or improved through amendments. However, one remaining active measure deserves the attention of all special districts.

SB 937 (Wiener), to which CSDA has been a leader in opposing and seeking favorable amendments or outcomes, was amended without a hearing in the final hours prior to the deadline to amend measures last week. The amendments would create several new challenges for many special districts and other local agencies.

SB 937 shifts financial and legal risk from private developers to public agencies and their constituents. It restricts the timely funding of vital infrastructure and services necessary to build new homes in livable, equitable, and thriving communities. The legislation would, among other things, for certain developments, defer development impact fees until the certificate of occupancy or its equivalent, while drastically limiting exceptions to this rule.

Furthermore, SB 937 locks in development impact fees at a point prior to the issuance of a building permit and prohibits the charging on interest or indexing for inflation on those deferred fees to protect the buying power of public agencies between the start and completion of projects, which could be up to five years. 

Last-minute amendments create a new exclusive list of exceptions to the rule of collection at the completion of a project that omits many other key services not listed. Circumstances where collection of development related fees prior to the completion of the development project is permitted must fall into specific categories that include the following (abbreviated from the measure linked above):

• Reimbursement for expenditures previously made to the extent those expenditures have not been paid or reimbursed by another party.
• If the local agency has established an account and has appropriated funds for public improvements or facilities related to:

• • providing water service to residential development.
  • providing sewer or wastewater service to the residential development.
  • Public improvements or facilities related to providing fire, public safety, and emergency services to residential development.
  • Roads, sidewalks, or other public improvements or facilities for the transportation of people that serve the development.

Services that special districts provide that are not listed as an exception will not be able to collect prior to the completion of the project and issuance of a certificate of occupancy. 

The last-minute amendments to SB 937 create a new and conflicting standard for the collection of water and sewer connection and capacity fees, placing them in an inappropriate code section, putting local agencies and their ratepayers at risk of higher rates and potential liability.

Special districts may wish to review the amended SB 937 language linked above and share your concerns with your legislators.

You can locate your Assembly Member and your State Senator at Find Address (ca.gov).

Those in opposition to SB 937, may also wish to voice their concerns by sharing CSDA’s social media posts on X (Twitter) and Facebook:

X Post: #SB937 restricts the timely funding of vital #infastructure and #services necessary to build new homes in livable, equitable, and thriving #communities.

X Post: #SB 937 shifts financial risks from private developers to taxpayers.

X Post: #SB 937 increases costs for public #infrastructure.

Facebook Post: Development related fees pay for the costs to install infrastructure necessary to build new homes and other development in livable, equitable, and thriving communities.

To learn more about this issue, check out CSDA’s two-page handout on the importance of development related fees.

Should this measure be successful on the Assembly Floor, it will then go back to its house of origin, the State Senate, for a final vote on concurrence in Assembly amendments before it would be sent to the Governor for his signature or veto. All measures must be passed by August 31 and signed or vetoed by September 30.

If you have feedback, questions or comments please contact CSDA Legislative Representative Anthony Tannehill at anthonyt@csda.net.