AB 1820 Requires San Diego to Provide Development Fee Estimates Within 30 Days - New Transparency Law for Pacific Beach Builders in 2026

What Is AB 1820 and When Did It Take Effect?

AB 1820, officially titled "Housing development projects: applications: fees and exactions," was signed by Governor Newsom on September 22, 2024, and took effect January 1, 2026. The bill passed the California State Assembly unanimously (52-0) and the State Senate (38-0), demonstrating broad bipartisan support for development fee transparency.

The legislation amends California Government Code Section 65941.1 to mandate that cities, counties, and special districts provide good faith estimates of fees and exactions at two critical stages:

1. Preliminary application stage: Within 30 business days of request when developers submit preliminary applications
2. Final approval stage: Within 30 business days following project approval, an itemized list and total sum estimate

AB 1820 contains a sunset provision and expires January 1, 2030, unless extended by the legislature.

The Problem AB 1820 Solves: Hidden Fees That Kill Housing Projects

Development fees in California have become a significant barrier to housing production. According to UC Berkeley's Terner Center for Housing Innovation, impact fees in seven California cities added between 6% to 18% of the median home price. A 2018 study cited in the legislative analysis found that fees and exactions can reach more than $150,000 per home in some California jurisdictions.

California's average impact fee in 2019 was more than triple the national average at almost $30,000, compared to approximately $9,000 for typical U.S. homes. A 2025 RAND report found that municipal impact and development fees average $29,000 per unit in California, compared to less than $1,000 per unit in Texas.

For Pacific Beach and La Jolla developers specifically, the City of San Diego imposes development impact fees that vary by neighborhood:

• Pacific Beach: $3,923 per residential unit ($519 transportation, $2,931 parks, $278 fire, $195 libraries)
• La Jolla: $7,743 per residential unit ($1,266 transportation, $5,764 parks, $473 fire, $240 libraries)

The core problem: many cities historically failed to disclose these fees until construction was already underway, creating massive financial risk for developers. While state law previously required fee transparency, many municipalities did not comply with online posting requirements. Developers often discovered unexpected six-figure fee obligations after already investing in architectural plans, engineering studies, and preliminary approvals.

AB 1820 solves this by creating an enforceable timeline—30 business days—for cities to provide written estimates at the earliest stages of project planning.

What Fees Must Be Disclosed Under AB 1820?

AB 1820 requires the City of San Diego to provide estimates for specific "fees" and "exactions" categories:

Exactions (Non-monetary or in-lieu payments)

• Construction excise taxes: One-time taxes imposed on new construction based on square footage or valuation
• Public art requirements: Requirements to include public art installations or make in-lieu payments (typically 1-2% of project value for commercial/mixed-use developments)
• Parkland dedications or in-lieu fees: Requirements to dedicate land for parks or pay fees. San Diego County's Park Lands Dedication Ordinance (PLDO) requires this for projects with more than 50 dwelling units
• Community Facilities District (CFD) special taxes: Mello-Roos taxes that fund infrastructure improvements including streets, water/sewer lines, sidewalks, parks, and lighting. These can run $2,000-$5,000+ annually per unit for 30 years

Fees (Mitigation Fee Act)

Fees covered under California's Mitigation Fee Act (Government Code Chapters 5, 6, 8, 9) include:

• Development impact fees (DIF)
• Regional Transportation Congestion Improvement Program (RTCIP) fees
• Housing Trust Fund (HTF) fees for nonresidential development
• Active Transportation In-Lieu Fees (ATILF) - $1,834.57 per vehicle mile traveled in Mobility Zone 4
• School district developer fees (currently $0.84 per square foot for commercial/industrial construction as of 2026)

What's NOT Included

AB 1820 specifically excludes:

• Electrical and gas service connection costs
• Water and sewer connection fees and capacity charges (unless directly tied to permit issuance or development approval conditions)
• California Environmental Quality Act (CEQA) compliance charges

How Pacific Beach Builders Can Use AB 1820: Step-by-Step Process

Step 1: Submit a Preliminary Application

File a preliminary application with the City of San Diego Development Services Department for your housing development project. This application should include:

• Project address and assessor's parcel number (APN)
• Proposed number of residential units
• Total square footage (residential and non-residential for mixed-use projects)
• Project type (single-family, multi-family, ADU, mixed-use)
• Conceptual site plan showing building footprints and unit layout

Step 2: Include AB 1820 Fee Estimate Request

Within your preliminary application, explicitly request a preliminary fee and exaction estimate pursuant to AB 1820. Reference Government Code Section 65941.1 and state that you are requesting estimates for:

• Construction excise taxes
• Public art requirements or in-lieu payments
• Parkland dedications or in-lieu fees
• Community Facilities District (CFD) special taxes
• All applicable development impact fees

Step 3: City Must Respond Within 30 Business Days

Upon receiving your preliminary application, the City of San Diego has exactly 30 business days to provide a written preliminary estimate. This estimate must include itemized projections for each fee and exaction category.

The 30-business-day clock starts on the date you submit the preliminary application, not when the city deems it complete. However, providing complete information accelerates the process and ensures accurate estimates.

Step 4: Request Fee Schedules from Other Agencies

For fees imposed by other agencies (school districts, water districts, special districts), AB 1820 requires a different process. Developers must request fee schedules directly from these agencies, which must provide them "without delay."

For Pacific Beach projects, this typically means contacting:

• San Diego Unified School District (developer fees)
• City of San Diego Public Utilities Department (if applicable)
• Any relevant Community Facilities Districts in your project area

Step 5: Receive Post-Approval Itemized Estimate

After your project receives final approval from the City, you have the right to request a second, more detailed estimate. Within 30 business days of final approval, the City must provide "an itemized list and good faith estimate of the total sum amount of all fees and exactions."

This post-approval estimate is typically more accurate than the preliminary estimate because final project details (exact square footage, final unit count, specific site conditions) are confirmed.

Critical Limitations: Why Estimates Are Not Binding

AB 1820 contains an important caveat that all Pacific Beach builders must understand: estimates are for informational purposes only and are not legally binding.

The statute explicitly states that preliminary and post-approval estimates "shall not be legally binding on the agency" and do not affect the actual scope, amount, or timing of fee payments.

What This Means for Your Project

• Fees can increase: If the City of San Diego updates its fee schedule between your estimate and building permit issuance, you pay the current rate, not the estimated rate
• No price lock: The estimate does not freeze fees at a specific dollar amount
• Good faith only: Cities must provide "good faith" estimates based on current information, but are not liable if actual fees differ
• No enforcement mechanism: AB 1820 contains no penalties if cities miss the 30-day deadline or provide inaccurate estimates

Despite these limitations, AB 1820 estimates provide valuable financial intelligence for project feasibility analysis, securing financing, and negotiating land acquisition terms.

Example Fee Breakdown: 4-Unit Housing Project in Pacific Beach

Let's examine a hypothetical 4-unit multi-family housing project in Pacific Beach (not in a CFD zone) to illustrate AB 1820's practical value:

Project Details

• 4 residential units, 3,200 square feet total
• Estimated construction value: $1,200,000
• Location: Pacific Beach, not within a CFD boundary

Estimated Fees (Based on Current City of San Diego Schedules)

Fee Type	Calculation	Amount
Development Impact Fees (DIF)	$3,923 × 4 units	$15,692
Transportation (RTCIP)	$519 × 4 units	$2,076
Parks (included in DIF above)	$2,931 × 4 units	$11,724
Fire (included in DIF above)	$278 × 4 units	$1,112
Libraries (included in DIF above)	$195 × 4 units	$780
School District Developer Fees	3,200 sq ft × $0.68 residential rate	$2,176
Building Permit Fees	~1-1.5% of construction value	$12,000-$18,000
Total Estimated Fees		$29,868-$35,868

Note: This example excludes CFD special taxes, construction excise tax (if applicable), public art fees, and utility connection fees. Actual fees vary based on specific site conditions, zoning, and current fee schedules.

Without AB 1820, this builder might not discover the $30,000-$36,000 fee obligation until submitting for building permits—potentially months into the project after spending $50,000-$100,000 on architectural plans and engineering studies. With AB 1820, the builder receives this estimate within 30 business days of filing a preliminary application, enabling informed go/no-go decisions at the earliest planning stage.

How AB 1820 Helps Pacific Beach Developers Secure Financing

Lenders and investors evaluating housing projects demand accurate pro forma financial projections. Development fees represent a significant line item—often 10-15% of total development costs in California—that directly impacts project feasibility and return on investment.

AB 1820 estimates provide documentation that lenders can review during underwriting. When applying for construction financing, Pacific Beach builders can now attach the City's written fee estimate to their loan application, demonstrating that fee projections are based on official municipal estimates rather than developer guesswork.

This transparency reduces lender risk and can result in:

• Lower interest rates (reduced uncertainty premium)
• Higher loan-to-cost ratios
• Faster loan approval timelines
• More competitive financing terms from multiple lenders

Community Facilities District (CFD) Special Taxes Explained

Community Facilities Districts, also known as Mello-Roos districts, deserve special attention because they can add $60,000-$150,000+ to the total cost of ownership over 30 years for each housing unit.

What Are CFDs?

CFDs are special taxing districts established under California's Mello-Roos Community Facilities Act of 1982. Property owners vote to impose special taxes on themselves to finance public infrastructure improvements required for new development, including:

• New streets and street improvements
• Water and sewer lines
• Sidewalks and streetscaping
• Parks and recreational facilities
• Landscaping and lighting
• Governmental facilities (fire stations, libraries)

How CFD Taxes Work

Special taxes are assessed annually based on the "Rate and Method of Apportionment" (RMA) established at district formation. Tax rates typically vary by:

• Unit type (single-family vs. multi-family vs. commercial)
• Building square footage
• Land use classification

CFD special taxes appear as a separate line item on property tax bills and continue for up to 30 years after initial bond issuance or until bonds are fully repaid.

Why CFDs Matter for Pacific Beach Projects

If your Pacific Beach project is located within an existing CFD boundary or if the City establishes a new CFD for infrastructure serving your development, AB 1820 requires disclosure of estimated special taxes within the 30-day timeline. This information is critical for:

• Sales projections: CFD taxes reduce home affordability and must be disclosed to buyers under California law
• Competitive positioning: Homes subject to CFD taxes typically sell at 3-5% discounts compared to similar non-CFD properties
• Long-term planning: Understanding CFD obligations helps builders price units appropriately

San Diego Development Fees: Why They're Among California's Highest

San Diego's development fee structure reflects decades of infrastructure deficit and political decisions to shift infrastructure costs from general taxpayers to new development. A 2022-2023 San Diego County Grand Jury report examined the City's development impact fee program and found:

• San Diego collected $1.8 billion in developer impact fees between 2017-2022
• Fee revenue is often spent on infrastructure improvements throughout the city, not necessarily in the neighborhoods generating the fees
• Development impact fees have increased faster than inflation over the past decade

For coastal neighborhoods like Pacific Beach, La Jolla, and Mission Beach, additional factors drive fees higher:

• Coastal development permits: Projects in the Coastal Zone require California Coastal Commission approval, adding $5,000-$50,000+ in processing costs and consultant fees
• Park requirements: Coastal communities have high land values, making parkland dedication or in-lieu fees particularly expensive
• Infrastructure constraints: Aging water, sewer, and street infrastructure requires expensive upgrades to accommodate new development
• Environmental review: CEQA analysis for coastal and environmentally sensitive areas adds significant costs

How to Challenge Inaccurate Fee Estimates

While AB 1820 estimates are non-binding, they still must represent "good faith" calculations based on current fee schedules and known project information. If you believe the City of San Diego provided an inaccurate or inflated estimate, you can:

1. Request clarification in writing: Ask the City to explain the methodology and cite the specific municipal code sections or fee schedules used for each line item
2. Compare to published fee schedules: Review the City's official fee schedules available at sandiego.gov/development-services/fees and verify that estimated amounts match published rates
3. Request a revised estimate: If you identify calculation errors or misapplied fee categories, submit a written request for a corrected estimate with supporting documentation
4. Consult with a land use attorney: For significant discrepancies or if the City refuses to provide estimates within 30 days, legal counsel can assist with formal appeals

Best Practices for Pacific Beach Builders Using AB 1820

1. Submit AB 1820 Requests Early

Request preliminary fee estimates before spending money on detailed architectural plans or engineering studies. The 30-day response timeline allows you to evaluate project feasibility and walk away if fees make the project financially unviable.

2. Provide Complete Project Information

The more detailed your preliminary application, the more accurate the City's estimate. Include:

• Exact unit count and breakdown (studios, 1BR, 2BR, etc.)
• Total square footage for all buildings and uses
• Site plan showing building locations and parking
• Information about any affordable housing units (which may qualify for fee reductions)

3. Document Everything

Keep copies of:

• Your preliminary application and AB 1820 fee estimate request
• The City's written fee estimate response
• All correspondence regarding fees
• Current fee schedules from the City website

This documentation protects you if disputes arise later and provides a paper trail for lenders and investors.

4. Build in a Fee Contingency

Since AB 1820 estimates are non-binding, include a 10-15% contingency in your project budget for fee increases between estimate and permit issuance. Fee schedules typically update annually on July 1st or January 1st.

5. Request Post-Approval Estimates

After project approval, submit a second request for an itemized post-approval estimate. This updated estimate based on final approved plans provides a more accurate picture before you pull building permits.

6. Coordinate with Other Agencies Early

Don't forget to request fee schedules from school districts, water districts, and special districts. These agencies often impose significant fees that are easy to overlook during preliminary budgeting.

The Bigger Picture: How AB 1820 Supports California's Housing Goals

California faces a housing shortage estimated at 1.5-2.5 million units. Development fee uncertainty has been identified as a significant barrier to housing production, particularly for small and mid-size builders who lack the resources to absorb unexpected fee increases.

AB 1820's transparency requirements support state housing goals by:

• Reducing developer risk: Better information enables more builders to undertake housing projects
• Improving access to capital: Lenders can underwrite projects with greater confidence when fee estimates are documented
• Encouraging infill development: Older urban neighborhoods like Pacific Beach become more attractive when fee obligations are transparent upfront
• Supporting small builders: Mom-and-pop builders and local contractors benefit most from fee transparency
• Promoting affordable housing: Reducing uncertainty and soft costs helps projects pencil out at lower price points

While AB 1820 doesn't reduce fee amounts, it arms developers with information needed to make informed business decisions and factor fees accurately into project feasibility analysis.

What's Next: Potential Changes Before 2030 Sunset

AB 1820 includes a sunset provision expiring January 1, 2030. Between now and then, the California Legislature will likely evaluate the law's effectiveness and consider amendments or extensions.

Potential future changes could include:

• Binding estimates: Locking in fee amounts for a specific period (e.g., 18-24 months) after estimate issuance
• Enforcement mechanisms: Penalties for cities that miss the 30-day deadline or provide knowingly inaccurate estimates
• Expanded coverage: Including water/sewer connection fees and CEQA costs in required estimates
• Standardized formatting: Requiring estimates in a uniform format across all California cities for easier comparison
• Online portals: Mandating that cities provide fee calculators or online estimate tools

Pacific Beach builders should monitor these potential changes and provide feedback to state legislators about how AB 1820 is working in practice.