City Considers Cutting Development Fees for Traffic Reduction and Transportation Improvement

The City of Pasadena will consider cutting transportation fees for new development projects while adding new categories to the fee structure.

On Tuesday, July 8, the Municipal Services Committee will review a recommendation to amend Section 4.19.040 of the Pasadena Municipal Code that pertains to the Traffic Reduction and Transportation Improvement Fee (TR/TIF). The full City Council will vote on the amendments on July 14.

The TR/TIF helps fund capital projects for traffic control, transportation management and street improvements. The city established the fee in 2006 to replace an earlier development impact fee from 1981.

Under the proposed changes, single-family homes would pay $5,202 to $5,722 per dwelling unit, an Agenda Report prepared by the Department of Transportation showed. The current fee is $11,141.89 per unit.

Multi-family residential projects would pay $2,158 to $2,352 per dwelling unit, down from $4,314.10.

Other fee reductions in the report include retail use dropping from $13.48 to $11.89 per square foot. Office use would fall from $10.14 to $7.57 per square foot.

Light industrial use would decrease slightly from $1.38 to $1.15 per square foot.

The city also plans to add four new land use categories. Medical office space would pay $20.66 per square foot. Hospital use would cost $1.62 per square foot.

The report showed lodging facilities would pay $1,437 per room. Research and development projects would pay $5.15 per square foot.

The fee structure includes different tiers based on square footage. Single-family homes under 2,000 square feet pay the lowest rate. Units over 4,000 square feet pay the highest rate.

Accessory dwelling units under 800 square feet pay no fee. Larger ADUs pay a proportional fee based on the main dwelling’s size.

The city hired consultant Fehr & Peers to conduct a required nexus study. The study analyzes the relationship between new development and transportation infrastructure needs.

State law requires cities to update these studies every eight years. New state requirements also mandate that residential fees be based on unit size.

The Transportation Advisory Commission reviewed the proposal in March and April. The commission approved the fees and urged the council to consider whether fee reallocation might improve development outcomes.

Transportation Department staff met with local business groups to discuss the changes, the report said. The groups included the Pasadena Foothill Association of Realtors, South Lake Business Association and Old Pasadena Management District.

The fee is expected to generate about $43.7 million for transportation projects through 2035. The amount depends on actual development levels reaching forecasted amounts.

The report said the city compared its fees to eight similar jurisdictions including Burbank, Santa Monica and Culver City. Pasadena’s fees were found to be relatively comparable to other cities.

Projects funded by the fee include bicycle infrastructure, pedestrian safety improvements and roadway efficiency upgrades. The fee does not cover all transportation needs or immediate project impacts.