California Multifamily Impact Fees Nearly Triple National Average at $21,703

California faces a significant challenge in housing affordability, with the average impact fee on a multifamily unit reaching $21,703, a figure nearly three times the national average of $8,034. This stark disparity was highlighted by California YIMBY, which stated in a recent social media post, "> The average impact fee on a multifamily unit in California is $21,703, nearly triple the national average of $8,034." These fees, levied by local jurisdictions on new construction, contribute substantially to the high cost of developing housing in the state.

Impact fees are charges imposed on developers as a condition for approving new housing projects, intended to cover the costs of public infrastructure and services necessitated by new development. The widespread use and high rates of these fees in California are largely attributed to the fiscal constraints introduced by Proposition 13 in 1978, which significantly reduced local property tax revenues. This led local governments to increasingly rely on impact fees as an alternative funding source, a practice often referred to as the "fiscalization of land use."

These elevated fees translate into higher costs for both developers and, ultimately, for renters and homeowners. A RAND report released in April 2025 indicated that building multifamily housing in California is more than twice as expensive as in Texas, with municipal impact and development fees averaging $29,000 per unit in California, compared to less than $1,000 in Texas and $12,000 in Colorado. The report emphasizes that these costs are driven by state and local policies, including lengthy permitting processes and high local development fees.

The California YIMBY Education Fund's research further notes that developers transfer these impact fee costs to consumers, potentially increasing multifamily unit costs by up to $60,000 and single-family unit costs by up to $100,000. Moreover, many jurisdictions charge higher fees per square foot on multifamily units than on single-family homes, inadvertently discouraging the construction of denser, more affordable housing options.

Recent legal developments, including an April 2024 U.S. Supreme Court ruling, suggest that California courts will now scrutinize development impact fee schedules more rigorously. This ruling, coupled with proposed legislative reforms like ACA 1, aims to address the issue by potentially capping impact fees and exploring alternative revenue streams for local governments. Policy recommendations from California YIMBY include stronger enforcement of state laws requiring fees to be calculated on a per-square-foot basis and a cap on impact fees, alongside efforts to replace lost municipal revenue.