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and aspects that contribute to the calculation of fees, such as construction costs for housing. As a result, a thoughtful approach to the timing and methodology for data collection will be important, to ensure that any anomalous market conditions are accounted for - it may also be beneficial to wait for these conditions to stabilize, before embarking on the comprehensive study, potentially during the first two to three years of the next Housing Element cycle if a decision is made to move forward with its preparation. This more comprehensive study could also look holistically at the overall structure of the LIHF, and consider changes such as introducing more gradation of fees based on unit size (i.e. either reducing fees for smaller units, or increasing them for larger units); and the non-residential fee categories (for example, if it would be appropriate to establish a tailored fee for low -intensity light industrial/warehouse uses, versus more intensive industrial uses; currently, both are charged fees at the same rate). It is noted that, if the City wished to modify the current LIHF rates, the new fee should also be established within these parameters — i.e. not exceed the maximum recommended fee levels identified in the 2018 study. If modified beyond this level, the City should update the existing nexus study, including an analysis of the fees compared to surrounding jurisdictions, impacts of new development, and costs to mitigate new housing demand. Finally, while staff notes there is the opportunity to consider raising the LIHF, there may be unintended consequences if they are set at an excessively high rate. For example, high impact fees imposed on market -rate housing projects may be viewed as an impediment or constraint on housing production. And, if commercial fees are set at too high of a rate, it may discourage investment in the community, and ultimately mean that there are fewer new and long-term sources of revenue available to the community, whether in the form of impact fees or ongoing revenues such as sales tax and property tax, that support essential government services, including support for housing programs. If included as a Housing Element policy, staff would likely need to caveat the policy to ensure that the fee levels not be set at a level that would act as a constraint to overall housing production. Allocation and Expenditure of the LIHF Existing General Plan policies regarding the LIHF allow the funds to be used for a variety of purposes, and in a relatively flexible manner, as outlined in this report and in Attachment 1. The priorities established in City policies help to guide to staff and City officials in making funding recommendations, and/or allocating incentives to projects (such as fee reductions or permit streamlining). Based on a review of the past 30 years of expenditures of the LIHF, approximately 45 percent of funds have been allocated to programs (e.g., housing counseling for both tenants and landlords, down payment assistance loan program, homeless intervention services, etc.); and the remaining 55 percent to supporting affordable housing projects, most often through direct contributions or low-cost loans to non-profit developers. Approximately $27 million in LIHF has been collected since 1990. Page 5 of 16