OCEANSIDE — Residential developers who build in Oceanside after the new year will face higher park development impact fees following the City Council’s approval of a significant increase last month.
The fee will rise from the current $4,431 per unit to an average of about $11,500 for single-family homes and $9,439 for multi-family homes.
Park development impact fees are paid by developers to fund the cost of providing parks and recreation services to new residents. The fees can be used to acquire new parkland and improve parks and recreation facilities, but they cannot be used to address existing deficiencies or to cover operations and maintenance costs.
Oceanside first adopted its park development impact fee in 1991, when developers paid $2,200 per dwelling unit. At the time, the cost to acquire an acre of parkland was about $2,000.
The fee structure has not changed since then and has only increased in small increments. The most recent update came in 2015, raising the fee to $4,431 per unit.
In 2019, the city hired Economic and Planning Systems (EPS) to prepare a nexus study to update the fee. That effort was paused in 2023 after feedback from residents and building industry leaders. The city then hired another consultant, Harris and Associates, to review the EPS study, which led to several changes that resulted in the newly approved fee structure.
The recommendations increased the potential revenue from new fees from $13 million to more than $47 million by 2035.
Today, it costs about $1.13 million to develop an acre of parkland — roughly $4,105 per new resident.
A 2021 state law also changed how park development impact fees are calculated. Instead of a per-unit basis, fees are now based on each square foot of a new unit.
The updated study establishes separate fees for single-family and multi-family homes. Single-family units will be charged $6.03 per square foot, while multi-family units will be charged $9.24 per square foot.
Because single-family homes are generally larger, the average fee per single-family unit will be $11,500, while the average multi-family unit will cost developers $9,439.
Townhomes will be assessed as single-family homes because their amenities typically include more recreational options, reducing reliance on city parks.
With the increase, Oceanside will shift from having one of the lowest park development impact fees in the county to one of the highest. The new fees are comparable to Encinitas, which charges an average of $11,928 for single-family homes and $8,013 for multi-family dwellings, and Carlsbad, which charges about $10,772 for single-family homes and $8,111 for multi-family homes.
San Diego charges developers an average of $20,124 for single-family and $15,852 for multi-family homes. The county charges $9,295 for single-family and $8,062 for multi-family.
The projected $47 million in revenue is based on anticipated population growth through 2035, which estimates 11,478 new residents in Oceanside.
Despite the new revenue, it still falls well short of the roughly $219 million in parks and recreation capital improvement costs identified for the city.
“The city will have to identify other revenue sources, such as grants or general fund revenues, to fill the funding gaps,” said Julie Cooper with EPS at the Nov. 19 council meeting.
Several residents spoke in favor of the fee increase.
“All we’re doing is getting up to Encinitas’ current level, and they’re going to raise it,” said Joan Bockman with Friends of El Corazon.
Parks and Recreation Commission member Kelyn Hsu also supported the increase. She pointed to the $219 million in unfunded capital improvement projects, including Park Site 1 at El Corazon Park.
“We have eight more parks at El Corazon to plan, we’re short hundreds of miles of trails, an aquatic center, gymnasium, and that’s just for current residents,” she said. “By delaying an increase, you’re choosing to leave these unfunded. Perhaps you’re concerned about developers not wanting to build; however, Oceanside is not desperate for developers. If one developer doesn’t want to pay the fees, they can go find another coastal community with space that is vibrant and soulful, has Michelin-awarded restaurants and hosts excellent events year-round. They might have a hard time though.”
Diane Nygaard of Preserve Calavera acknowledged that while the increase is “hefty,” the goal is for new development to “simply pay their fair share.”
“We’ve been waiting over 30 years for this while the list of unfunded park projects gets longer every year,” she said.
GT Wharton, co-founder of Strong Towns Oceanside, said council members need to reconsider their opposition to downtown residential development, which could generate revenue to help close the gap in unfunded projects.
Although some council members have been hesitant or opposed to downtown mixed-use development, the council has recently approved hundreds of new units in and near downtown, including the 273-unit 901 Mission Avenue project, the 332-unit 401 Mission Avenue project that will redevelop the Regal Theater, the 206-unit 810 Mission Avenue project, the 179-unit affordable housing project at 712 Seagaze Drive and the 547 units planned for the Oceanside Transit Center redevelopment.
While the council unanimously approved the ordinance replacing the former impact fee structure, it narrowly approved how the new fees would be implemented.
The original proposal included a maximum fee of $24,712 per single-family unit and recommended phasing in the increase over two years.
Deputy Mayor Eric Joyce proposed eliminating the maximum fee, which he called the “mansion carve out,” and removing the phased-in approach in favor of going straight to the full fee on Jan. 1.
He also added a minimum fee of $4,105 — the cost of developing parkland per new resident — to capture more revenue from developers building “micro-units.” Joyce noted that the 712 Seagaze Drive project includes 300-square-foot studios, smaller than the nexus study’s calculated average minimum size of 444 square feet for multi-family homes.
“They would be paying less than the current fees if we use that calculation,” Joyce said. “If we don’t have a minimum, we’d be giving away to some developments.”
Accessory dwelling units smaller than 750 square feet are exempt from park development impact fees under state law.
The council adopted the new fees with Joyce’s changes in a 3-2 vote, with Councilmembers Rick Robinson and Peter Weiss opposed.
Robinson said he could not support eliminating the maximum fee, arguing that building a larger home does not necessarily mean more people will live in it.
Parks and Recreation Director Manuel Gonzalez confirmed the new fees could fund amenities such as gyms, recreation centers, and trails.
The city has been considering two new gyms, one at John Landes Park and another at Joe Balderrama Park. Gonzalez said the city has identified funding for the gyms, but if construction costs rise, Oceanside could amend its capital improvement plan to use park development impact fee revenue to help cover the costs.
