California Urged to Reform Local Housing Fees

Study finds fees prevented 5,000 affordable homes, calls for state action

Published on Feb. 4, 2026

Got story updates? Submit your updates here. ›

A new study by UC Berkeley's Terner Center found that local impact fees added an average of almost $20,000 per unit to affordable housing projects in California from 2020-2023, preventing the construction of 5,000 low-income homes. The editorial calls for the state to require fee waivers due to the housing crisis and reimburse cities for actual cost impacts, while avoiding incentives to keep fees high.

Why it matters

The high local fees are hindering the construction of much-needed affordable housing in California, exacerbating the state's housing shortage. Reforming these fees could unlock thousands of additional affordable units each year.

The details

The study looked at 691 affordable housing projects built under the federal Low Income Housing Tax Credit program. It found the local 'impact fees' charged by cities, counties, schools and other districts to pay for infrastructure totaled $1.2 billion. Absent these fees, the program could have funded 1,250 additional affordable units annually. Officials say the fees are needed due to Prop 13's limits on property tax growth, but critics argue local governments use it as a pretext to extract money from development.

  • The study covered the period from 2020 to 2023.

The players

Terner Center for Housing Innovation

A research center at UC Berkeley that studies housing policy and affordability issues.

Jon Coupal

President of the Howard Jarvis Taxpayers Association, which advocates for lower taxes in California.

John Moorlach

A former California state senator who commented on how the fees reduce housing development and property tax revenues for cities.

Nolan Gray

Senior director of legislation and research at California YIMBY, a pro-housing advocacy group.

Got photos? Submit your photos here. ›

What they’re saying

“California is not a low property tax state. We rank 18th out of 50 states in per capita property tax collections.”

— Jon Coupal, President, Howard Jarvis Taxpayers Association

“Impact fees should be rooted in actual fiscal impacts. The fees should use to benefit the actual units, not just generate extra revenues for governments, which is how they are used today.”

— Nolan Gray, Senior Director of Legislation and Research, California YIMBY

What’s next

The editorial calls for the state to require fee waivers due to the housing crisis and reimburse cities for actual cost impacts, while avoiding incentives to keep fees high.

The takeaway

Reforming California's local housing impact fees could unlock thousands of additional affordable homes each year, helping to address the state's severe housing shortage. However, any changes must be carefully designed to ensure the fees are tied to actual infrastructure costs rather than used as a revenue source for local governments.