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AB 874

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

2025-2026 Regular Session

California bill waives developer mitigation fees for affordable rental housing to reduce construction costs and increase below-market-rate housing production.

From committee: Filed with the Chief Clerk pursuant to Joint Rule 56.
#mitigationfeeact #developmentimpactfees #qualifiedresidentialownershipandqualifiedrentalprojects
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Bill Summary · AB 874

Legislative bill overview

AB 874 proposes to waive mitigation fees for affordable rental housing projects in California. Mitigation fees are charges developers must pay to offset environmental or infrastructure impacts of new construction. This bill would exempt affordable housing developments from these financial obligations.

Why is this important

Mitigation fees can represent significant costs for housing developers, often increasing per-unit expenses by thousands of dollars. By waiving these fees for affordable housing, the bill aims to reduce development costs and make affordable housing projects more financially viable, potentially accelerating production of below-market-rate units in a state facing severe housing shortages.

Potential points of contention

  • Infrastructure funding gap: Waiving fees reduces revenue local governments use for schools, roads, water systems, and other infrastructure needed to serve new residents and developments
  • Definition and scope: Questions about what qualifies as "affordable" housing, duration of affordability requirements, and which mitigation fees are covered (parking, traffic, environmental, etc.)
  • Equity concerns: Debate over whether exempting some projects while others pay full fees creates unfair competitive advantages or shifts costs disproportionately to non-affordable developments and existing residents

Compiled from official sources — confirm details with the bill’s official record.

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