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Updated Affordable Housing Impact Fees (HIF) in Unincorporated Areas of Napa County
The Napa County Board of Supervisors (BOS) recently approved significant updates to the Affordable Housing Impact Fee (HIF) on October 21, 2025.
The changes will take effect January 16, 2026 and apply only to properties located in unincorporated Napa County, not within city limits.
Here’s a brief overview of what this means and the questions we sought clarification on.
Per Napa County — What is an Affordable Housing Impact Fee?
“When new homes or businesses are built or existing buildings are expanded, they create jobs — some of which pay wages too low to afford local market-rate housing. This fee ensures that new growth contributes to affordable housing through impact cost recovery.”
This fee has existed for many years (shown in the yellow column of the table below). However, the recent update represents a substantial increase (shown in the magenta columns). Residential fees were last updated in 2010, and non-residential fees in 2014. After 11 to 15 years without adjustments, 3 of the 5 Board of Supervisors elected to bring Napa County’s fees up. See link at the very bottom for the link to the BOS meeting where staff presented, the discussion, public comments, and final decision process.
While we recognize and support the need for affordable housing, the magnitude of this increase comes at a time when the Valley is already facing economic challenges, with our primary industry in decline. To better understand how these changes will impact property owners, builders, and community projects, we followed up with the BOS and county staff with several clarifying questions.
Below is a summary of what we learned.
Click HERE for the Napa County Affordable Housing Impact Fee FAQ.
Summary of Fee Changes
The County provided the above comparison table:
Yellow column: 2025 fees
Green column: Fees originally proposed by staff
Magenta column: Final fees adopted by the Board (effective 1/16/26)
As you can see, the residential fees are increasing over a phased-in three-year period, and the size of home has changed.
We know building your home is already expensive, and this increase is this fee might be a deal breaker for you. This is why we wanted to answer some questions based on scenarios you may want to consider if this fee is impacting your project.
One major note is that homes that are 2,500 square feet and under are now exempt from the Affordable Housing Impact Fee (HIF). Previously it was subject to a HIF.
Note all other permit fees still apply; only the housing impact fee is waived.
Homes that are larger than 2,501 square feet, the fees increase substantially and at the end of 3 years, it will have gone from $12.25/sf to $86.00/sf.
The least expensive HIF residential option:
New 2500 sf home = $0 HIF (all three years) and build 1200sf ADU = $0 HIF (48% x $0.00 = $0.00) = $0 HIF
Total of 3700 sf with no HIF in this scenario. This was presented in the BOS mtg as a nice solution for moderate size homes and maximizing the allowed size of ADUs per the state.
Accessory Dwelling Units (ADUs):
750sf and under – no fee, 751sf + is proportionate to the SF of the main house. The proportion is a direct proportion, see examples below.
Example 1: A new 800 sf ADU with an existing main house of 2501 sf:
[800/2051=32%] ADU sf/Main house sf
ADU HIF would be 32% of the Main house HIF ($21.50*) = $6.88/sf (*using 2026 rates in this example, note this will rise each year.)
ADU 800 sf x $6.88 = $5,504.00
Example 2: A new 1200 sf ADU with and existing Main house of 3501sf
[1200/3501=34%] ADU sf/Main house sf
ADU HIF would be 34% of the Main house HIF ($43.00*) = $14.62/sf (*using 2026 rates in this example, note this will rise each year.)
ADU 1200 sf x $14.62 = $17,544.00
Example 3: A new 1200 sf ADU with and NEW Main house of 3501sf
[1200/3501=34%] ADU sf/Main house sf
ADU HIF would be 34% of the Main house HIF ($43.00*) = $14.62/sf (*using 2026 rates in this example, note this will rise each year.) )
ADU: 1200 sf x $14.62 = $17,544.00
New Main house 3501sf x $43.00* = $150,543
Total HIF: $168,087.00 (2026 fees)
Fire Rebuilds
Fire-damaged structures rebuilt like-for-like are exempt from the housing impact fee.
Example: A 3,000-sf home lost in a fire may rebuild 3,000 sf without additional impact fees; any added square footage above 3,000 sf would incur fees.
The same principle applies to commercial rebuilds, with per-square-foot rates varying by commercial type.
Timing and Permit Submittals
The impact fee is determined when the building permit application is submitted, not when planning permits or other related permits were filed.
Submit before January 15, 2026: Current 2025 impact fees apply.
Submit on or after January 16, 2026: New fee schedule takes effect.
Common Questions
Q: If I plan a new 2,600-sf home, do I pay only on the 100 sf over 2,500?
A: No. Newly constructed homes over 2,500 sf pay the impact fee on the entire square footage.
Example: A new 2,600-sf home is charged on all 2,600 sf.
An existing 2,500-sf home adding 100 sf pays the fee only on the added 100 sf.
Q: Do interior remodels incur impact fees?
A: No. Interior renovations without added square footage do not trigger the fee.
Q: What if a 1,500-sf home adds 2,500 sf?
A: The owner would pay the fee on the 2,500-sf addition.
If the homeowner added only 1,000 sf (bringing the total to 2,500 sf or less), no impact fee would apply.
Below is a summary of a few scenarios of new main residences for your ease in understanding the 3-year phased-in residential fee increase.
For commercial projects, there is no phase-in period. The updated fees will take effect on January 16, 2026. As shown in the table above, hotels face the most significant increase — from $9.00 per square foot to $100.00 per square foot, a $91.00 per-square-foot increase.
Office, restaurant, and retail projects also see substantial fee increases, as detailed in the table.
If you have a project you’re considering and would like to discuss how these new fees may impact your plans, feel free to reach out at michelle@covellarchitects.com
Some other notes:
District 2 and 3 voted no on this increase in fee. District 1, 4 and 5 voted yes.
District 2 and 3 combined appear to have much more unincorporated Napa County.
Click HERE for Link to BOS mtg October 21, 2025 Video and Agenda
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