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IMPACT FEES Levying impact fees for ADUs smaller than 750 square feet is prohibited by state law. For ADUs that are 750 square feet and larger, impact fees may be charged , but must be proportional to the size (specifically, square footage) of the ADU compared to the primary unit; HCD guidance indicates that fees in excess of 50 percent of the typical impact fee may be considered disproportionate. For ADUs within multi-family developments, the guidance from HCD indicates that the proportionality must be based on the average square footage of the units within that multifamily structure. Based on these parameters, staff proposes that the Master Fee Schedule be modified in accordance with these requirements and has incorporated an approach that would use a formula to calculate the amount of the fee based on the size of the ADU and a percentage of the typical fee that would apply to the type of unit the ADU is accessory to. Attachment 2 to this agenda report includes a resolution and the modifications to the fee schedule to reflect these changes. Note that, per PMC Section 17.40.040, second units and accessory dwelling units are exempt from the City's affordable housing fee; this was not previously reflected in the Master Fee Schedule, and so it has been amended to reflect this requirement. PUBLIC NOTICE Notification of this code amendment has been published in The Valley Times as an upcoming agenda item for this City Council meeting . Additionally, staff sent a courtesy email notifying those interested in the update to the PMC as it relates to ADUs. After the October 28, 2020 Planning Commission meeting , the City received public comment suggesting that the City remove existing deed restrictions for properties that have them; this correspondence is included as part of Attachment 7. As mentioned in this report, the City will draft a document extinguishing the existing deed restriction and make this document available to any property owner that requests it. CONCLUSION The proposed text amendments will facilitate the development of ADUs and make the PMC consistent with state law. Staff believes the objectives and requirements of the state law have been integrated into the PMC, while maintaining to the maximum extent feasible protections for neighborhood compatibility and privacy. The approach proposed seeks to integrate the requirements of state law while allowing for flexibility for ADUs in Pleasanton. Submitted by: Approve by: Ellen Clark Nelson Fialho Director of City Manager Community Development Page 9 of 10