Apartment developers to pay into city’s Park Fund
September 08, 2016
By Elizabeth Hsing-Huei Chou
City News Service
Apartment developers, who typically construct the majority of residential units in Los Angeles, will join condominium builders in paying into the city's park fund, under a set of updated requirements approved this week by the City Council.
Cities are allowed to collect fees from developers under the state's Quimby Act and use that money on nearby park projects. Los Angeles has long had a park fee policy in place, but city officials and park advocates complain that the rules, which have not been updated for more than 30 years, have fallen short on paying for the city's green space and recreation needs.
The changes approved by the council are expected to bring in more money through the addition of apartment developments, which were generally excluded from the fees. In past years, the fees have brought in about $22 million annually, according to council aides.
The new rules will also let the city spend the funds in a wider area than previously allowed by increasing the two-mile radius for park projects to a five-mile radius of the development.
Councilman Jose Huizar, who pushed to update the park fees policy, said the more restrictive radius made it difficult to use the funds where they were needed.
"This is something that is really going to change the lives of thousands, if not millions of Angelenos," he said of the new policy.
Huizar staffers estimate that with the added fee payments from the apartment projects, the annual park fee revenue could increase by another $30 million. City officials, however, have avoided settling on any specific, projected figure.
The rough estimate from Huizar's office was calculated using the 10,000 apartment units that are typically permitted annually, but assuming revenue will only come from about half of them. The total number of units permitted each year, including condos and some single-family homes, has been roughly 15,000.
The council also adopted a new fee structure. Instead of the existing process in which developers pay fees in the range of about $2,800 to $8,000 per unit, they will now pay flat amounts.
Under the new structure, developers of condo projects will owe the city $10,000 per unit, following an initial year when the fee will be $7,500 per unit. Apartments units, which are rented out instead of sold, will cost developers $2,500 per unit in the first year, after which a $5,000-per-unit fee kicks in. Both the condo and apartment fees are set to rise along with inflation, following the second year.
Developers will have some options for avoiding paying the fees under the rules, including giving away or "dedicating" land to the city or offering to pay for improvements to existing park space and facilities, in place of paying the park fee. Developers are also exempted from the park fees for each affordable housing unit included in their projects.
The park fee update was supported by the Los Angeles Neighborhood Land Trust and other park advocacy groups, and in recent months won the support of pro-developer groups like the Central City Association.
The requirements, which still require approval from the mayor, are set to go into effect 120 days after adoption.