Construction in downtown San Diego is booming, which means developer impact fees (DIFs) that must be paid to the city could add up to as much as $49.2 million in the next five-year period.
The DIFs are paid by developers in order to contribute their portion of any impact their projects could have.
The increase in projected revenue is due in part to an increase in DIFs that went into effect last year. The fees were increased by 80%, which meant they went from $4,361 to $7,883 for each dwelling unit. Another $3.8m is expected to come from floor-area-ratio bonuses. Developers pay these fees willingly, since they are then able to increase building space provided they agree to construct affordable housing, or provide other benefits to the public.
Although $49m may look like a lot, experts point out it is dwarfed by the $1.6bn the city needs to complete all the projects on its wish list for downtown construction. The list reflects projections of the expected growth over the next two decades in the number of people living and working downtown.
Since 2001, nearly 3,700 hotel rooms, 16,000 new condos and apartments, and 2.2 million square feet of office and retail space have been built in the downtown area, but construction projects are still not even half finished.
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