Despite opposition from the California Apartment Association, the Sacramento City Council has unanimously approved a sweeping increase in fire inspection fees that will significantly raise costs for rental housing providers and other local businesses.

Under the adopted schedule, fire prevention inspection fees will rise between 71% and 117% depending on the size of the apartment property. These increases, recommended by the Sacramento Fire Department, are among more than 300 fee hikes being considered citywide as officials seek ways to address a $62.2 million budget shortfall. The increases are expected to generate an additional $3.2 million annually for the city’s fire prevention program.

CAA opposed the fire inspection fee hike and has led a coalition of business groups urging the city to consider alternatives to placing more financial strain on housing providers and other employers.

CAA: Price-controlled housing can’t absorb steep new fees

At the May 20 meeting, Matt McDonald, CAA’s vice president of local public affairs, warned that the new fees will be especially burdensome for the city’s many small, mom-and-pop rental housing providers.

“Rental housing is price controlled,” McDonald told the council. “So, when government decides to hike its fees, it’s very likely those costs cannot ever be recovered by a housing provider.”

He cautioned that the growing list of city-imposed fees—ranging from building permits to plan checks to fire inspections—will gradually push housing providers out of the market.

“When housing inventory drops and you wonder why, you can look at this proposal and know at least part of the answer,” he said.

According to the city’s staff report, the steepest percentage increases apply to smaller apartment properties—those most commonly owned by mom-and-pop landlords. CAA warns that this disproportionate impact could jeopardize the sustainability of small-scale rental housing.

Although the council approved the citywide fee schedule update on Tuesday, city staff clarified that individual fees within the schedule could still be adjusted during budget deliberations, which will continue through June.

CAA continues push for fiscal reform

In addition to CAA, the coalition opposing the opposition to the fee hikes came from groups such as the Sacramento Metro Chamber of Commerce, Sacramento Association of Realtors, North State Building Industry Association, Sacramento Hispanic Chamber of Commerce, and several of the city’s property-based business improvement districts.

CAA has submitted multiple letters to the council outlining how the increased fees will impact rental housing providers and calling on the city to pursue long-term fiscal reforms instead of piecemeal revenue measures. On June 10, council is expected to consider the remaining 300 proposed fees