Planning commission: report shows sharp shortfall in impact-fee revenue after fee deferral and temporary reductions

San Francisco Planning Commission — The city’s Interdepartmental Plan Implementation Committee (IPIC) told the Planning Commission on April 25 that impact‑fee revenue tied to seven area plans has fallen well short of prior expectations after the Board of Supervisors and mayor enacted a fee‑deferral policy and a temporary fee reduction.

"The big story this past year is the passage of that fee reduction and deferral legislation," said Matt Snyder, who led the implementation team presentation. He said the fee deferral allows developers to pay most impact fees at the end of construction rather than at the start, and that the legislation also temporarily reduced many fees by about 33 percent. "That means we're not going to see that fee for at least three years from what we previously had thought," Snyder said.

Why it matters: IPIC said the combined effect of timing shifts and the temporary rate cut reduces projected FY25–29 revenue for several plan areas to roughly one‑third of earlier forecasts, producing multi‑million-dollar appropriations deficits in neighborhoods such as Central SoMa, the Transit Center District and Market/Octavia. The shortfall limits the commission’s ability to program new projects over the next two years and forces staff to prioritize previously appropriated projects as cash becomes available.

What staff presented: Snyder reviewed historical receipts and a revised five‑year projection. Examples cited include the Transit Center District (which historically benefits from a small number of very large projects) and Balboa Park (a modest revenue source). He told commissioners the revised projection anticipates raising about $113 million across shown plan areas in FY27–29, well below earlier expectations for FY25–29.

Commission questions and concerns: Commissioners pressed staff on how IPIC will coordinate infrastructure needs for major rezoning efforts and how the department will prioritize scarce funds. Commissioner Imperial cited a recent court decision and asked whether it requires reexamining nexus studies; Commissioner Braun flagged Sheets v. El Dorado County as a development that may affect fee calculations statewide. Vice President Moore summarized a common concern: "I’m sitting here with a slight knot in my stomach," she said, describing the prospect that delayed fee collections could fragment project delivery and ultimately erode the city’s ability to deliver the integrated infrastructure the area plans envisioned.

Staff response and next steps: Snyder and department staff said IPIC will focus on previously committed projects, work with departments to be strategic about small disbursements to move projects forward, and build a dynamic dashboard and story map to improve transparency. Staff offered to brief the Board of Supervisors’ land‑use committee on the IPIC findings to inform future decisions.

The commission had no formal vote on the IPIC report; the presentation concluded with commissioners asking staff to return with deeper information on infrastructure coordination for major rezonings and greater clarity about the timeline for fee outcomes.