Oakland is a diamond, but greedy developers want to convince her she's cubic zirconia. The people pushing for the City Council to impose the highest developer impact fees possible for new residential construction are like the family that had the goose that laid golden eggs -- and then foolishly chopped its head off.

Those were some of the more colorful public comments at the council's community and economic development committee meeting Tuesday. They represent the extremes in the debate over housing impact fees. The fees are one tool that Oakland officials are considering to tackle the affordable housing crisis.

The exterior of Strawberry Creek Lodge in Oakland, Calif., Oct. 28, 2015. The 150 renovated affordable homes for low-income seniors have been seismically retrofitted and received updated security systems. (Dan Honda)

The idea is that by requiring developers to pay a certain amount for every new unit of residential construction, the city can raise funds to build more affordable housing, in addition to helping mitigate the impacts more residents bring to traffic, transit and parks, libraries, and police and fire services.

Some 30 Bay Area cities already have impact fees. Oakland, which has emerged as one of the most expensive rental markets in the country, has been preparing to adopt its own fee for more than two years.

Now, finally, city staff has produced a long-awaited plan. The hearing was the public's first chance to give feedback on two studies that purport to determine -- based on increasing market rents and other economic conditions -- just how high a fee Oakland can charge developers of new market-rate housing projects without putting a chill on construction altogether.


"If you set the fee too low, the city may miss the opportunity to collect funds to offset impacts," Darin Ranelletti, deputy director of the city's planning department, said during a presentation to the committee. "However, if we set the fee too high, it could slow development, which would in turn result in less fees being collected."

The staff proposal calls for dividing Oakland into three zones, each with a different impact fee schedule. The one-time fee would start in December. It would gradually increase to the maximum amount in 2018. Zone 1, including parts of downtown, North Oakland and the Oakland hills would have the highest fees. They would start at $5,000 per unit and gradually increase to $20,000 in 2018.

Zone 2, in West Oakland, would start at $4,000, then rise to $16,000. And Zone 3, in East Oakland, would have fees beginning at $3,000 before rising to $12,000 in 2018.

Developers would pay the fee when they apply for a building permit. The fees would generate $60.8 million for affordable housing over a 10-year period, based on projections of 10,000 new residential units built over that time, and 3.6 million square feet of nonresidential space. An additional $6.7 million would go toward capital improvements and $12.8 million for transportation.

Ranelletti called the fees "economically feasible" and said that phasing them in would give developers time to take the fees into account when planning future projects.

Advocates for affordable housing, low-income seniors, young people, neighborhood groups, supporters of the parks and many others filled the council chamber. There were 112 people signed up to speak, but a lot of people didn't get their allotted time. Most speakers said the fees were too low and that the city should start collecting them in July rather than waiting until December.

"I would ask for at least $25,000," said Maeve Elise Brown, director of Housing and Economic Rights Advocates. "We have a moment in time to pull in the necessary funds that we will need in the long term.

City staff is recommending a maximum fee of $20,000.

Meanwhile, the few speakers representing builders and developers warned the council that if they set the fees too high there wouldn't be any development projects to collect from.

Greg McConnell, CEO of the Jobs and Housing Coalition, called those who crowded the council chamber "inside players."

He said many voters don't even know what impact fees are.

The committee will meet once more before the full council takes up the proposal.

Expect the rhetoric to heat up in the coming weeks.

Tammerlin Drummond is a columnist for the Bay Area News Group. Her column runs Thursday and Sunday. Contact her at tdrummond@bayareanewsgroup.com or follow her at Twitter.com/tammerlin.