Napa County Greatly Increases Its Affordable Housing Impact Fees

Napa County is significantly increasing its affordable housing impact fees on new residential and commercial construction, with the largest hikes targeting large homes and hotels. The fee for homes over 3,000 square feet will rise to $86 per square foot, up from $12.25, and fees for homes between 2,001-3,000 square feet are increasing to $43 per square foot from $10.75. These changes, approved by the Board of Supervisors in October 2025, are intended to fund affordable housing projects and will be phased in over three years.

Like Sonoma County and the City of Sonoma, Napa County assesses fees on new housing and commercial development to provide revenue to support the creation of Affordable Housing. Unlike Sonoma County and the city of Sonoma, however, Napa has just greatly increased those fees.

The City of Sonoma exempts housing projects of five or fewer units from its inclusionary housing requirement, and also allows payment of an in-lieu fee if required Affordable Housing is not built as part of a larger project. There are no fees established based upon the size of an individual home, and fees on commercial development, like hotels, are in the low range of fifteen dollars per thousand square feet, based upon construction costs determined in a Nexus Study conducted several years ago. That study indicated that such fees could range as high as ninety dollars but the City Council opted for the lower range.

Key changes to fees in Napa County:

• For homes over 3,500 square feet: The fee will be $86 per square foot, up from $12.25.
• For homes between 2,501 and 3,500 square feet: The fee will be $43 per square foot, up from $10.75.
• For homes between 1,200 and 2,000 square feet: The fee will be $21.50 per square foot, up from $9.
• For homes under 1,200 square feet: No fee will be charged.
• Accessory Dwelling Units (ADUs): ADUs under 751 square feet will be exempt from fees.
• Commercial development: Hotels, restaurants, and other businesses will also see increases, though the exact fees will vary.

Goals of the fee increase:

• Increase funding for affordable housing: The primary goal is to generate more revenue for affordable housing projects and programs.
• Disincentivize large homes: The fee structure aims to discourage the building of large homes on agricultural land.
  Encourage smaller housing and ADUs: By exempting smaller homes and certain ADUs, the county hopes to encourage the construction of more housing that meets the community’s needs.