City Council

(12) 26-0163 PLANNING AND LAND USE MANAGEMENT COMMITTEE REPORT and BUDGET AND FINANCE COMMITTEE REPORT relative to proposed rate adjustments for building permit and inspection fees, Board of Building and Safety Commissioners (BBSC) fees, and Residential Property Report fees. A. PLANNING AND LAND USE MANAGEMENT COMMITTEE REPORT Recommendations for Council action: 1. AUTHORIZE the Department of Building and Safety (DBS) to take the necessary steps to implement the recommended changes to the Los Angeles Municipal Code (LAMC) and any associated Code sections to update the fees as shown in revised Attachment A, List of Fees and Recommended Changes of the DBS report dated February 24, 2026, attached to the Council file. 2. REQUEST the City Attorney to prepare and present an Ordinance amending various sections of the LAMC and any associated Code sections to update the fees as shown in revised Attachment A (List of Fees and Recommended Changes) and Attachment B (Building and Safety User Fee Study) of the DBS report dated February 24, 2026. 3. DIRECT relevant departments, as needed, to assist the DBS with the implementation of the fee adjustments outlined in the DBS report dated February 24, 2026, attached to the Council file. 4. AUTHORIZE the DBS to make technical changes as needed to implement Mayor and City Council intentions. B. BUDGET AND FINANCE COMMITTEE REPORT Recommendations for Council action: 1. AUTHORIZE the DBS to take the necessary steps to implement the recommended fee updates to the LAMC and any associated Code sections to update the fees, including but not limited to adjustments for building permit and inspection fees, BBSC fees and Residential Property Report fees, as shown in revised Attachment A, List of Fees and Recommended Changes of the DBS report dated February 24, 2026. 2. REQUEST the City Attorney to prepare and present Ordinances to institute rate adjustments for building permit and inspection fees, BBSC fees, and Residential Property fees to more accurately align with full cost recovery associated with providing building and safety services, as shown in revised Attachment A (List of Fees and Recommended Changes) and Attachment B (Building and Safety User Fee Study) of the DBS report dated February 24, 2026, with fees to be adopted in multiple phases. 3. APPROVE the DBS report dated June 15, 2026, attached to the Council file, in order to implement a phased approach for the fee adjustments; and, AUTHORIZE Phase 1: Fees Applicable to Express Permits as detailed in said DBS report. 4. INSTRUCT the DBS, with the assistance of the City Administrative Officer, to report back on the average timeline for commercial and residential permits issued in Phase 1, Phase 2, and Phase 3. 5. INSTRUCT the DBS to report back on ways to become revenue neutral without raising fees, such as efficiencies in self-certification, technological efficiencies, and elimination of any processes. Fiscal Impact Statement: The BBSC reports that the changes proposed in the User Fee Study attached to said BBSC report are for Enterprise Fund services, and do not impact the General Fund. Approval of the recommended changes to fees in said User Fee Study report will ensure full cost recovery for building permit and inspection-related services funded by the Enterprise Fund. The DBS estimates a net annual revenue increase of $42 million to the Enterprise Fund as a result of the proposed user fee updates. The DBS reports that implementing the proposed fee changes in phases will shorten the time it takes to prepare the necessary ordinance amendments to adjust the fees impacting the majority of permits issued by the DBS, and ensure the services provided for these permits are fully cost recovery. The DBS expects splitting the fee adjustment into several ordinances to accelerate cost recovery for essential services and mitigate the structural deficit of the Enterprise Fund. While the exact fiscal impact to the Enterprise Fund in Fiscal Year 2026-27 will depend on when the fee changes go into effect, the DBS estimates the proposed fee changes will result in an increase in Enterprise Fund revenue of approximately $42 million annually. While this projected increase in revenue does not fully restore the revenue and expenditure balance in the Enterprise Fund, the recommended fee adjustments for plan check fees is forthcoming, which will recommend the remaining fee adjustments necessary to make the Enterprise Fund fully cost recovery. Delaying fee adjustments pending the completion of a benchmarking study, a process which may take one year or more, would result in the loss of at least $42 million in projected Enterprise Fund revenue, further exacerbating the current fiscal imbalance.