AB-874 • 2026

Mitigation Fee Act: development impact fees: qualified residential ownership and qualified rental projects.

Education Housing

Passed Legislature

This bill passed both chambers and reached final enrollment, even if later executive action is not shown here.

Sponsor: Ávila Farías
Last action: 2026-02-02
Official status: From committee: Filed with the Chief Clerk pursuant to Joint Rule 56.
Effective date: Not listed

Plain English Breakdown

The official source material did not provide specific details on implementation by local agencies, leaving some uncertainty in this area.

Mitigation Fee Act: Housing Development Fees

This act changes how local agencies charge fees for housing developments that meet specific income and affordability requirements.

What This Bill Does

Requires local agencies to waive certain fees for residential projects with income and affordability agreements, excluding school construction or code enforcement costs.
Allows qualified rental housing projects to choose between paying no development impact fee or getting a loan agreement instead.
Gives qualified ownership housing projects the option of zero development impact fees or a loan agreement per homebuyer based on income qualifications.

Who It Names or Affects

Local agencies that impose fees on residential developments
Developers of affordable rental housing projects
Homebuyers in qualified ownership projects

Terms To Know

Development impact fee: A charge by local agencies to fund the construction of public improvements and facilities for new development.
Qualified residential rental project: An affordable housing project that meets specific income and affordability requirements.

Limits and Unknowns

The bill does not cover fees related to school construction or code enforcement costs.
It is unclear how local agencies will implement these changes.

Bill History

2026-02-02 California Legislative Information
From committee: Filed with the Chief Clerk pursuant to Joint Rule 56.
2026-01-31 California Legislative Information
Died pursuant to Art. IV, Sec. 10(c) of the Constitution.
2026-01-13 California Legislative Information
In committee: Set, first hearing. Hearing canceled at the request of author.
2026-01-08 California Legislative Information
(Pending re-refer to Com. on L. GOV.)
2026-01-08 California Legislative Information
Assembly Rule 56 suspended. (Page 3717.)
2026-01-05 California Legislative Information
Re-referred to Coms. on H. & C.D. and L. GOV. pursuant to Assembly Rule 96.
2026-01-05 California Legislative Information
Re-referred to Com. on L. GOV.
2026-01-05 California Legislative Information
From committee chair, with author's amendments: Amend, and re-refer to Com. on L. GOV. Read second time and amended.
2025-03-10 California Legislative Information
Referred to Coms. on L. GOV. and H. & C.D.
2025-02-20 California Legislative Information
From printer. May be heard in committee March 22.
2025-02-19 California Legislative Information
Read first time. To print.

Official Summary Text

AB 874, as amended, Ávila Farías.
Mitigation Fee Act:
waiver of fees: affordable rental housing.
development impact fees: qualified residential ownership and qualified rental projects.
Existing law, the Mitigation Fee Act, imposes certain requirements on a local agency that imposes a fee as a condition of approval of a development project that is imposed to provide for an improvement to be constructed to serve the development project, or a fee for public improvements, as specified. The act also regulates fees for development projects and fees for specific purposes, including water and sewer connection fees, among others. The act, among other things, requires local agencies to comply with various conditions when imposing fees, extractions, or charges as a condition of approval of a proposed development or development project. The act prohibits a local agency that imposes fees or charges on a residential development for the construction of public improvements or facilities from requiring the payment of those fees or charges until the date of the final inspection or the
date the certificate of occupancy is issued, whichever occurs first, except for utility service fees, as provided.
This bill would require a local agency to waive fees or charges that are collected by a local agency to fund the construction of public improvements or facilities for residential developments subject to a regulatory agreement with a public entity, as provided, that includes certain income and affordability requirements. The bill would exclude from this requirement those fees or charges, as applicable, for the construction or reconstruction of school facilities or that cover the cost of code enforcement, inspection services, or other fees collected to pay for the cost of enforcement of local ordinances or state law.
This bill would require a local agency to provide a qualified residential rental project, as defined, with the option of either or both (1) development impact fees set at a rate of $0 or (2) a development impact fee deferral agreement loan, subject to certain requirements. The bill would also require a local agency to provide a qualified residential ownership project, as defined, with the option of either or both (1) development impact fees set at a rate of $0 or (2) a development impact fee deferral agreement loan for each income-qualified homebuyer, subject to certain requirements. The bill would define “development impact fee” for these purposes to mean a fee collected by a local agency to fund the construction of public improvements or facilities, with certain exceptions.

Current Bill Text

Read the full stored bill text

Download Bill PDF