California Developer Fees and Their Impact on School Districts
This case study explores the role of developer fees in supporting public education infrastructure in California, focusing on insights shared during a recent Facilitron University discussion. Developer fees—sometimes called school impact fees—are financial contributions levied on new construction projects to offset the impact of growth on local school districts. This practice, unique to California since 1986, has become a vital funding mechanism for school facilities amidst population growth and fluctuating state funding for education.
Key Themes
- History and Implementation
- Developer fees were authorized in California beginning January 1, 1986, allowing school districts to collect funds for addressing growth-related impacts.
- These fees are not mandated but are permitted under the oversight of the California State Allocation Board. Districts can choose to collect them based on local needs and a justification study.
- Funds are assessed on projects exceeding 500 square feet, covering residential and commercial developments, with fees calculated per square foot.
- Impact on Districts
- Developer fees provide essential funding for building and upgrading school facilities to accommodate growing student populations. For instance, the San Diego Unified School District collected approximately $29 million in 2023-24, using $27 million for classroom construction and modernization projects.
- These funds have supported the replacement of aging portable classrooms, the construction of entirely new schools, and comprehensive campus modernizations.
- Transparency is a priority, with districts required to submit annual and five-year reports detailing expenditures and project progress.
- Automation and Efficiency through Facilitron
- Facilitron has transformed how districts process developer fees, introducing an online platform that automates payments, reporting, and compliance certificates.
- Previously, manual processes and in-person transactions posed logistical challenges, especially during the COVID-19 pandemic. Automation now allows for 24/7 payments, reduces human error, and enables districts to focus on other strategic initiatives.
Challenges and Opportunities
- Developer Perspectives
- Developers may view these fees as an added cost of doing business. While the fees are necessary for community infrastructure, they often face resistance due to their financial implications.
- Accessory Dwelling Units (ADUs)
- The rising trend of ADUs or "granny flats" has introduced new complexities. These units, often built on existing properties, are also subject to impact fees, as they increase residential density and potential student enrollment.
- Affordable Housing Initiatives
- Beyond developer fees, the San Diego Unified School District has leveraged joint occupancy agreements to address housing affordability for staff. A recent project included 53 affordable units exclusively for district employees, alongside a STEAM lab for students.
- The district plans to scale its workforce housing program, aiming to provide housing for 10% of its workforce within the next decade through mixed-income developments on surplus properties.
Scalability and Replication
While California remains a pioneer in leveraging developer fees for education, other states have not widely adopted this model. Challenges include differing legal frameworks and funding priorities. For instance, in Georgia, impact fees cannot be allocated to schools, focusing instead on infrastructure like roads and bridges.
California’s experience highlights the importance of state policy support and the potential for cross-sector collaborations to maximize community benefits. The success of automated platforms like Facilitron underscores the value of innovation in streamlining these processes, reducing administrative burdens, and increasing accessibility for stakeholders.
Conclusion
Developer fees have proven to be a transformative tool for California school districts, addressing the financial demands of growth and providing critical infrastructure. By coupling these fees with innovative solutions like Facilitron’s platform and strategic housing initiatives, districts like San Diego Unified are not only meeting immediate needs but also paving the way for sustainable growth and development. This model offers valuable lessons for states and districts nationwide looking to enhance their educational infrastructure amidst growing communities.