City of Morgan Hill Impact Fees

Your project may be subject to impact fees. Impact fees offset the financial impact of new development or a new business on public infrastructure. Impact fees are calculated and due at building permit issuance. The Morgan Hill Business Portal offers a free Development Impact Fee Estimate calculation.

Alternatively, the City of Morgan Hill's Engineering Land Development Division can create an estimate for your project for a $357 fee. Fees are updated twice yearly. Final impact fees may vary from the estimate. For more information, contact Engineering Land Development at 408-778-6480.

Below are some general guidelines to determine if your project may be subject to impact fees. It is strongly recommended that you make an appointment with an engineer in the City's Land Development Engineering Division to fully understand the impact fees for your project.

Development Impact Fee Schedule as of January 15, 2024

Please contact the Land Engineering Development Department at 408-778-6480 with any questions or comments.

New Development
Any new development within the City of Morgan Hill’s city limit is required to pay impact fees based on the type of usage and size of the proposed project. Residential projects are assessed impact fees based on the number of dwellings. Impact fees for commercial and industrial projects are based on site acreage, building square footage and type of proposed usage.

Tenant Improvements
When there is a first-time occupant or change in occupancy or usage of the existing area, impact fees are calculated and compared to the previous impact. If there is greater impact than before, the applicant may be required to pay the difference.

Commercial & Industrial Additions / Remodels
Commercial and industrial additions are treated as new development and are assessed fees based on size and usage of the additional space. Commercial and industrial remodels are treated as tenant improvements.

Residential Additions / Remodels
Residential additions and remodels which increase the floor area of an existing dwelling by 25% or greater may be assessed certain impact fees including frontage charges. Existing homes with 2 bedrooms or less which are being increased to three bedrooms or greater are required to pay impact fees.