Cost Accounting in Local Government

Determining Development Impact Fee Land-Use Categories

The land-use database inventory is the spine of any Development Impact Fee (henceforth DIF) calculation effort.  It is a data table that identifies where in the “General Plan build-out” process your agency is at this point in time.  General Plan build-out is that theoretical point in time when a public planning agency has, for the most part, exhausted its inventory of vacant parcels or developable land.   Admittedly there will likely be a few parcels that never develop, or parcels that could be subdivided that are not currently, but for the most part, the agency has maximized it development potential.

The land-use database could indicate, as an example, that your public agency currently serves 5,436 existing detached dwellings but has room for 3,932 more, or its 58% developed.  This developed/vacant analysis is undertaken for each for the other land-uses (retail, hotel/motel, etc.) that the agency determines it needs.  As a result, you may find that your agency over all land-uses may be at 40%, half, 60%, 75% or even 95% developed.

The land-use database is the main data set needed to determine just how much development the agency can expect when reaching General Plan build-out.  It simply demonstrates how much development is left to occur. The development impact fee calculation effort must use this data to determine how this anticipated development will impact the agency’s ability to accommodate that new development with public safety services, street, storm drainage and utility system capacity, and that then supports the agency’s need for the DIF schedule.  These are the seven minimum land-uses that RCS staff begins with at the start of a DIF calculation process, they are:

  • Detached Dwellings
  • Attached Dwellings
  • Mobile Home Dwellings
  • Commercial Lodging
  • Commercial Uses
  • Industrial/Manufacturing Use
  • Institutional Uses

Detached Dwellings – AKA Single Family Residential (or SFRs).  It does not particularly matter what size they, a detached dwelling is a detached dwelling.  Available demand statistics for this category do not differentiate between a large detached dwelling and a smaller detached dwelling.  As an example, the Institute of Transportation Engineers indicates that a single detached dwelling generates about 9.5 trip-ends a day.  The data is based upon averages of all detached dwellings, and thus the ITE data does not and cannot make any distinction between large and small detached dwellings.  However, if you have a significant amount of detached dwellings on estate lots, you may wish to create an Estate Detached Dwelling DIF fee land-use category to recognize this.

Attached Dwellings – AKA Multiple Family Residential.   This DIF land-use category includes apartments, duplexes, condominiums and townhouses, or for that matter any residential dwelling unit constructed contiguous to another.

Mobile/Manufactured Dwellings (in a park setting) – While admittedly few agencies ever see a new application for mobile home dwelling parks, most agencies have a sizable inventory of them already.  Thus the data must be included to the existing, or developed, portion in the Land-use Database inventory.  Even though most planning agencies indicate that no more mobile/manufactured parks are anticipated, RCS always includes the development of one acre of mobile home dwelling construction (typically about 12 pads) because a mobile/manufactured dwelling park may apply to construct a few additional pads in an existing park.  A mobile home or manufactured residential dwelling not within a park-like setting would be considered the same as a detached dwelling on its own lot.

A brief word on the use of Detached and Attached Dwellings.  The use of these terms was recommended to me by a number of city attorneys.  They indicated that given current family living situations, along with rentals of portions of residential dwellings, these terms have little if any land-use relevance any longer.  They requested that RCS begin using terminology that is more consistent with or descriptive of the residential dwelling design (and zoning) than any social factors.

Commercial Lodging Keyed Units – AKA Hotel/Motel Units.  This category was expanded from the narrow “Hotel/Motel Units” to a broader “Commercial Lodging Units” to include resorts, hotels (more than two stories), motels (two stories or less), business suites and any other type of living unit intended to for short term rental use.  Some public agencies with beaches, lakes and other destination attractions within their boundaries may wish to break out the construction of “Resort Units” because there are a few nexus differences in the municipal service demands between a typical motel unit and a resort unit.

Commercial Uses It is common to have this land-use category for the development of retail, service and office space construction primarily because many public agencies allow construction of these uses within a more broadly-defined Commercial land-use zone.  However, some agencies have separate zones for office and service uses, if yours does than then you may wish to have separate impact fee land-use categories.

Industrial/Manufacturing Uses – This broad land-use DIF category comprises most industrial, manufacturing and commercial storage unit uses.  If your agency has a statistically significant amount of light industrial or commercial storage uses anticipated then there may be some utility in separating these two more specific uses out with separate DIF land-use fee categories.

Institutional Uses – This category would be applied to the development of private schools, fraternal organizations, churches and other non-profits.

So, if you are embarking on a first time DIF calculation effort or are updating an existing one, you may wish to look at your mix of DIF fee land-use categories.  Again, the seven identified above are the minimum recommended DIF land-use categories, or you can expand to the larger twelve mentioned about.

A simple recommendation would be that the smaller the agency, the fewer number of DIF land-use fee categories that are necessary.

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