Pasadena Mulls Slashing Development Fees to Boost Housing Affordability

Pasadena could dramatically reduce its transportation impact fees across multiple land use categories, with residential projects experiencing the most significant reductions.

On Tuesday, the Municipal Services Committee approved (with one member absent) a comprehensive update to the city’s Transportation Improvement Fee (TIF), which would lower fees for residential and commercial developments while maintaining a critical funding stream for transportation infrastructure projects.

The proposal will go to the full Council for final consideration.

Under the proposed fee structure, most single-family residential units would see fee reductions ranging from $4,474 to $5,722 depending on the home’s size, down from the current fee of $11,141.89. Most multi-family residential units could experience even more substantial cuts, with fees dropping from $4,314.10 to between $1,705 and $2,352 per unit (up to $3,047 for units larger than 1600 sq. ft.)

Ribeka Toda, a city engineer, explained that the fee update is mandated every eight years and driven by new state requirements, including Assembly Bill 602, which requires residential fees to be proportional to dwelling unit size.

“We wanted to ensure our fees are defensible and aligned with the actual transportation impacts of new development,” Toda told the committee.

The city’s transportation consultant, John Muggridge from Fehr & Peers, noted that the new fees represent approximately 12% of unfunded transportation improvement projects, totaling around $44 million of a $360 million infrastructure plan.

Councilmember Rick Cole praised the approach while expressing some skepticism about the underlying methodological assumptions.

“This goes in the right direction,” Cole said, acknowledging the fees’ importance in managing transportation impacts from new housing.

The committee also directed staff to further evaluate fees for Accessory Dwelling Units (ADUs), with Cole suggesting potential exemptions or a sliding scale to encourage additional housing development.

Comparative analysis with other regional jurisdictions showed Pasadena’s updated fees remain competitive, with most categories now more aligned with neighboring cities.