Newark's Low Developer Impact Fees for Parks

Cities impose park impact fees on housing developers to cover the costs of parks for that new development. Those fees are ”locked” when the housing plan is approved by the city council. Developers should be expected to cover their impact at the current market rates when the project is approved.

Housing development projects take years. If the housing plan requires amendments, another vote of the city council is required, and fees should be re-assessed or re-negotiated at that time. Developers are continuously renegotiating the terms of their contracts. So should we! (Stay tuned for info on the Newark developer that's trying to weasel out of providing a public park in exchange for a low park impact fee.)

In a February 11, 2016 Newark City Council working session, the Treasurer of Newark Parks Foundation brought to the council’s attention the disparities in park impact fees between Newark and Hayward. Upon hearing this information, the council promptly asked city staff to look into the matter. Newark Parks Foundation performed a comparison of its own, though the Foundation's comparison only scratches the surface and does not and should not replace the city council's own due diligence.

Newark’s park impact fees haven’t increased since 2013, despite the huge increase in property values; the city is using an outdated land value of $346,000 per acre (see Newark’s 2013 Park Impact Fee Study) to calculate its park impact fees. Having a price tag that doesn't represent fair market value during a real estate boom can result in millions of dollars in lost revenue for the city.

Newark ranks last in park impact fees, behind Union City, Hayward, and San Leandro, all of which have lower API scores (www.cde.ca.gov) and lower property values (Trulia.com). The peers studied have between 30% to 295% higher park impact fees for single-family detached homes. A cursory look at park impact fees for multi-unit homes and other impact fees in general have similar disparities. An increase in the latter impact fees would help bring additional money to the library, aquatic center, civic center, and street improvements.

In that same working session, the council unanimously approved city staff’s recommendation for a Park Master Plan to help prioritize park projects for capital funding. Newark Parks Foundation commends the council for this decision and staff for the recommendation. If Newark moves quickly on increasing park impact fees, prioritization will be much easier.

If, at minimum, Newark were to set the park impact fees at $15,303 per dwelling, closer to San Leandro’s, Newark would have roughly 12M (not including the current park fund balance of 2M) at the end of the 2-year budget cycle instead of the forecasted 6M. Newark Parks Foundation believes that Newark is worth far more and should be ranked somewhere in the middle of its peers or higher, at around $18,663-19,100+ per dwelling, for a total of 15.3+M. (Ideally, Newark should have a dynamic park impact fee, much like Union City’s, so that the park impact fee is calculated in real-time.) More funds make way for more park investments in Newark, improving residents’ quality of life and providing park attractions that improve business climate.

Pleasanton is an outlier, though that city is due to update its fee schedule this April, but Newark has some nice amenities to give Pleasanton a run for its money. We are close to the Sillicon Valley—from two directions. We have great parks for toddlers and a cutting-edge aquatic center. We are close to some of the most fabulous regional and federal open spaces. A road-cycle commute from Newark to the peninsula is both scenic and convenient. We have some of the best family-friendly latin restaurants and markets in the Tri-City area, and in many cases a ¼ mile from our homes. We have the best farmers’ market around, with the cheapest prices and best produce variety. We have great weather—a nice Bay breeze. I could go on and on. Newark is a great value!

Developers want to build here and many want to live here—those benefits demand a fair price. Whether Newark treats low park impact fees as an urgent matter is unknown. Newark has an opportunity to increase park impact fees and remain competitive. Let’s not pass up this opportunity. Let them know what you think: city.council@newark.org.

Angela Akridge
Volunteer, Newark Parks Foundation
www.newarkparks.org

References:
• Fremont:
https://www.fremont.gov/documentcenter/view/25240
• Dublin:
http://dublin.ca.gov/documentcenter/view/12586
• Newark:
http://www.ci.newark.ca.us/images/uploads/pubwks/pdfs/BuildingInspection...
• Pleasanton:
http://www.cityofpleasantonca.gov/civicax/filebank/blobdload.aspx?BlobID...
• San Leandro:
https://www.sanleandro.org/civicax/filebank/blobdload.aspx?blobid=16125
• Union City:
http://www.ci.union-city.ca.us/home/showdocument?id=2
• Hayward:
http://www.hayward-ca.gov/sites/default/files/Ch-10_A-16_PropertyDevelop...