Comparative Analysis of Soft Costs: 32-Unit Development in Sacramento vs. Charlotte

Introduction

This report provides a detailed comparison of soft costs for a new 32-unit residential development in Sacramento, CA and Charlotte, NC. Soft costs include all non-construction expenses such as permitting fees, impact fees, utility hookups, and professional services (architecture, engineering, legal, etc.). Both projects are assumed to be similar infill developments (zoning in place, land owned, ~1,500 sq ft per unit duplexes, ground-up construction). We break down city-specific fees – including permits, development impact fees (schools, transportation, water/sewer, parks, housing), utility connection charges, fire/planning reviews, and other city charges – and compare typical ranges for design and consulting services. The goal is to highlight differences in the regulatory cost environment between Sacramento and Charlotte using the latest available city data and industry benchmarks.

Soft Cost Categories Considered

For clarity, soft costs are organized into two groups:

• Regulatory Fees: Payments to government or utilities required to entitle and permit the project. This includes building permit and plan review fees, development impact fees (for infrastructure like schools, parks, roads, affordable housing, etc.), utility connection/capacity fees (water and sewer hookups), fire department and planning review fees, and miscellaneous city surcharges (business taxes, technology fees, green building fees, etc.). These are usually one-time upfront costs.

• Professional Services: Costs for architectural design, civil engineering, surveys, legal services, and entitlement/project consulting. These “soft” costs are project-specific and cover the planning and design work needed to execute the development. They are typically a significant percentage of total development cost and can vary by region based on market rates and local requirements.

Both categories are examined for Sacramento and Charlotte. Below, we first outline the fee breakdown for each city, then provide a side-by-side table of key fees (per unit and total for 32 units), followed by a discussion of professional service cost differences.

Fee Breakdown – Sacramento, CA

Building Permit & Plan Review: Sacramento’s building permit fees are generally based on project valuation and include plan check charges. For a ~1,500 sq ft unit valued around $250–300k, the building permit and plan review combined cost is roughly $4,500–$5,000 per unit. This assumes standard processing and includes the City’s plan check by building officials. (Sacramento’s plan review is billed at a full cost recovery rate of $205/hour for utility plan checks, and the building division similarly charges hourly for complex projects if needed.) In a 32-unit development, total permit+plan fees would be on the order of $150k–$160k.

Fire and Planning Review: Sacramento imposes separate Fire Department review fees and any applicable planning/design review fees. The Fire Department charges an inspection fee of $0.11 per sq ft (minimum $169 per project) and a fire plan review fee of $149 per hour For a 1,500 sq ft unit this equates to roughly $200–$300 per unit for fire safety review (the fee was about $209 for a 1,500 sq ft example in city documents) If the project requires a planning staff review (e.g. design review for infill), those fees would apply as well, but assuming zoning is already in place and the design conforms to standards, planning fees may be minimal. In total, we estimate around $250–$300 per unit in Sacramento for fire/life-safety and any minor planning review costs.

Development Impact Fees: Sacramento has numerous impact fees on new residential units to fund infrastructure and services:

• School Impact Fee: California law allows school districts to levy developer fees. In Sacramento City Unified School District, the rate is $5.13 per sq ft of new residential construction For a 1,500 sq ft unit, this is about $7,700 per unit. (This fee is paid directly to the school district at permit issuance and is not collected by the City)

• Housing Impact Fee (Affordable Housing): Sacramento charges a Housing Impact Fee (HIF) on most new market-rate units pursuant to its Mixed Income Housing Ordinance. The fee is assessed per square foot. As of FY2023/24 the rate was about $3.54/sq ft (automatically indexed annually). The City’s fee estimate for a 1,500 sq ft unit shows an HIF of about $5,340 per unit. (Higher-density projects over 40 units/acre are exempt, but our 32-unit duplex project is likely lower density and not exempt.)

• Park Development Impact Fee: Sacramento imposes park fees on new residential development to fund parkland and facilities. The fee can vary by area and unit type. In infill locations, multi-unit projects often get a reduced rate. For example, a single-family/duplex of 1,500 sq ft might incur roughly $5,200 per unit in park impact fees. (Sacramento’s fee schedule shows about $3,470 for a smaller 1,000 sq ft unit and up to $6,947 for a larger unit; ~$5.2k was charged for a 1,500 sq ft unit in a recent estimate) These fees may be lower in certain incentive zones, but we will use the standard range.

• Transportation Impact Fees: New developments in Sacramento pay into city and regional transportation improvements. The city’s Transportation Development Impact Fee (TDIF) is about $2,800 per unit for residential projects. In addition, the Sacramento Transportation Authority (STA) assesses a regional road mitigation fee (with a 2% admin surcharge) – roughly $1,480 per unit for a mid-sized unit. Combined, transportation-related impact fees are approximately $4,200–$4,300 per unit. (These fees support roadway, transit, and bike/ped infrastructure expansion to serve new growth.)

• Water & Sewer Impact (Connection) Fees: The City of Sacramento’s Department of Utilities charges development fees for new water and sewer connections. For a typical residential unit with a 1″ water meter, the water development fee is on the order of $6,200 per unit. The sewer development fee (for local sewer collection) is relatively modest – about $900 per unit in many infill areas. However, Sacramento is also within the regional Sacramento Area Sewer District and Sacramento Regional County Sanitation District, which levy their own capacity charges for treatment facilities. The Regional Sanitation Fee is approximately $6,479 per unit for a new dwelling. In total, the effective water+sewer capacity fees in Sacramento come to roughly $13,500 per unit (about $6.2k water + $0.9k local sewer + $6.5k regional sewer). (Credits may apply if previous services existed; also, infill incentive zones can lower these fees)

• Flood Control Fee: In Sacramento, developments in certain areas pay a one-time fee to the Sacramento Area Flood Control Agency. In our example this SAFCA fee was $2,100–$2,800 per unit (varies by size/location). We include it here as it appeared on the city’s fee sheet for residential projects.

• Other Impact Fees: Sacramento’s fee schedule also lists a citywide Affordable Housing Fee (covered above as HIF), and potentially charges like a Residential Construction Tax (e.g. a modest $385 per unit for 3+ bedroom units). The Residential Construction Tax is an older fee for roadway improvements; in our table we’ll note it under “other city charges” since it’s a fixed small amount.

Other City Surcharges and Taxes: Sacramento attaches several additional city fees on building permits: a City Business Operations Tax, a Construction Excise Tax, a General Plan Update fee, a Green Building fee, a Technology fee, and a Strong Motion (seismic) fee, among others. These are generally calculated as a percentage of project valuation or small fixed amounts. For a 1,500 sq ft duplex unit valued around $250k, these add up to roughly $1,100–$1,300 per unit in Sacramento. For instance, in a recent example these were: Business Operations Tax $110, Construction Excise (roadway) Tax $1,268, General Plan fee $720, Green Building fee $12, Tech fee $259, and state seismic fee $36. These charges fund city services (e.g. planning updates, technology systems) and state-mandated seismic mapping, etc. While individually modest, together they exceed $1k per unit. (Notably, Sacramento’s Construction Excise Tax is 0.8% of valuation and the General Plan fee is $2.60 per $1,000 valuation.) We will group these as “Other City fees” in the comparison table.

Total Regulatory Fees in Sacramento: Summing the above, the total city/regional fees for a single 1,500 sq ft unit in Sacramento are on the order of $45,000–$50,000 per unit (excluding land). This aligns with the City’s own fee estimate worksheet, which showed approximately $39,740 in city fees (not including school fees) for a 1,500 sq ft unit. After adding ~$7.7k for school fees, the total is around $47k for that unit. For 32 units, this would be roughly $1.5 million in fees. The table below provides a detailed breakdown per unit and for the 32-unit project.

(Sources: City of Sacramento fee schedule data and school district fee.)

Fee Breakdown – Charlotte, NC

By contrast, Charlotte (Mecklenburg County) has a much lighter fee burden for new residential developments, as North Carolina municipalities generally do not levy the myriad impact fees common in California. Most required costs are for permits and utility connections, with virtually no local impact fees for parks, roads, or schools in the City of Charlotte.

Building Permit & Plan Review: In Charlotte/Mecklenburg County, building permits for residential projects are issued by the county’s Code Enforcement. Fees are based on construction value on a sliding scale. Using Mecklenburg’s FY2024–25 fee ordinance, a duplex valued around $300k would pay roughly $1,900 in building permit fees. This fee typically includes plan review; minimum charges are relatively low (e.g. $59–$79 base, then a few dollars per $1,000 of value). Trade permits (electrical, plumbing, mechanical) are separate but also modest (often flat fees or small value-based fees). In total, a duplex (2 units) might incur about $2,500 in permit fees for all disciplines. That equates to roughly $1,250 per unit. Scaling to 32 units, the total permit-related fees are on the order of $40,000 in Charlotte – only about one-quarter of the permit costs in Sacramento. (Mecklenburg’s fee schedule is quite favorable: for example, $150k of construction value is about a $1,200 fee, whereas a similar permit in California could be several times that.) It’s worth noting Charlotte’s permit process has been streamlined via an online gateway (Accela) and most fees are paid to the county; the City of Charlotte itself does not add large surcharges on building permits.

Fire and Planning Review: Charlotte’s fire code review and inspections are handled as part of the building permit process by county code officials, so no separate fire department fee is charged to the developer as is done in Sacramento. Planning/Zoning review for infill projects in Charlotte is also minimal. For a residential lot, the Charlotte Planning Department requires a zoning compliance check (to ensure the duplex plans meet zoning and UDO requirements). The fee for a basic residential plan review is only $70 per lot. So for 16 duplex lots, that’s about $1,120 total (≈$35 per unit). If any variances or special use permits were needed, there would be fees (e.g. $820 for a residential variance), but we assume none required here. In short, Charlotte’s city planning review fees are negligible in this scenario (tens of dollars per unit, versus a few hundred per unit in Sacramento for fire/life safety).

Development Impact Fees: Unlike Sacramento, the City of Charlotte and Mecklenburg County generally do not impose direct impact fees for schools, parks, or roads on infill developments:

• School Fees: No school impact fees are charged in Charlotte. North Carolina does not have a statewide developer fee program for schools as California does, and local governments in NC cannot levy school fees without state legislative authority (which Mecklenburg County does not have). School capacity needs are funded through other means (bonds, property taxes). Thus, in our Charlotte project, school impact fees = $0.

• Parks and Recreation: Charlotte does not charge a per-unit park impact fee on residential construction. Developers may occasionally dedicate land or improvements for parks through the subdivision process, but there is no standard fee like Sacramento’s. In this infill case, no dedicated park fee applies ($0 per unit).

• Transportation: The City of Charlotte currently has no citywide transportation impact fee for new developments. Instead, developers may be required to make specific improvements (e.g. add a turn lane or sidewalk fronting the site) as part of project approval, but there is no set traffic mitigation fee per unit. For our comparison, we assume any required minor street improvements are part of construction costs, so transportation impact fee = $0 in Charlotte. (Mecklenburg County does levy transportation impact fees in a few suburban towns via special legislation, but Charlotte itself has not implemented such fees. As a reference, nearby jurisdictions in the metro have considered fees of $3k–$5k per unit but Charlotte has relied on case-by-case infrastructure requirements rather than fixed fees.)

• Affordable Housing Fees: Charlotte does not assess an affordable housing impact fee on market-rate units. Instead, the city uses incentive programs and general funds (e.g. the Housing Trust Fund) for affordable housing. So the housing impact fee = $0 in Charlotte (versus Sacramento’s $5k+ per unit).

• Water & Sewer Capacity Fees: New development in Charlotte does pay utility connection fees to Charlotte Water for capacity. These are known as System Development Fees (SDFs) and are charged per new meter per state law. For a typical residential unit with a 5/8″ or 3/4″ meter, Charlotte Water’s current SDFs are approximately $1,100 for water and $3,700 for sewer (per unit). For example: in FY2020 Charlotte’s capacity fees for a 5/8″ residential meter were $809 (water) and $2,541 (sewer); these have since increased by ~40–45% to roughly $1,136 (water) and $3,710 (sewer) per unit as of FY2024. So in our 2025 scenario, each new duplex unit owes on the order of $4,800 total for water/sewer capacity. For 32 units, that totals about $153,000. (Notably, these fees are dramatically lower than Sacramento’s ~$13.5k per unit for water/sewer capacity. Charlotte’s fees reflect the lower cost basis of their utility systems – they are calibrated via a state-required analysis of system capacity costs and are uniform across the city.)

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  • In addition to capacity fees, meter/tap installation fees are charged if Charlotte Water performs the physical connection. Charlotte Water’s “New Service” charges depend on the service size and involve a tap fee and meter fee. These are generally a few hundred dollars for a small residential connection (often on the order of $500–$1,000 for a 3/4″ service). Developers can have Charlotte Water do the tap or hire private utility contractors. For simplicity, we include an allowance of about $500 per unit for actual hook-up installation in Charlotte (versus Sacramento’s city-installed water tap fee of ~$2,208 plus $723 meter for a 1″ service which was included in the above Sacramento water fee).

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• Stormwater: Charlotte does not levy a specific impact fee for storm drainage on small private developments, whereas Sacramento’s utility impact fees include storm drainage in combined sewer areas (Sacramento’s combined system fee was $0.08–$2.72 per sq ft in some zones). In Charlotte, stormwater management is addressed through on-site requirements (and an ongoing stormwater utility fee paid by property owners, not a one-time charge).

Other City Charges: Charlotte has minimal miscellaneous fees on development. There is no local business tax on construction like Sacramento’s Business Operations Tax. No general plan fee or tech surcharge is added to building permits by the city. The primary “other” fee that does apply universally is a small charge for erosion control permitting, if land disturbance exceeds certain thresholds, but for a project of this scale that might be handled under building permit or a simple grading permit. Mecklenburg County’s erosion control permit for a subdivision could be a few hundred dollars (if applicable), but often individual lot builds don’t pay a separate erosion fee. Overall, Charlotte’s “other” category is effectively $0 per unit in our scenario (perhaps a few dollars per unit if we prorate any minor environmental permit fees).

Total Regulatory Fees in Charlotte: Adding up the Charlotte costs: building permits ~$1.25k/unit, water/sewer fees ~$4.8k/unit, minor zoning/other ~$0.05k – the total is roughly $6,000 per unit. For 32 units, that’s on the order of $192,000 in fees. This is only about 12–15% of the equivalent Sacramento total. The absence of impact fees for schools, parks, roads, and affordable housing in Charlotte yields a huge cost advantage. The lion’s share of soft costs in Charlotte comes from the utility hookup fees (capacity charges), whereas in Sacramento the fees are distributed across many categories.

The following table summarizes key regulatory fees for the 32-unit project in each city, on both a per-unit and project total basis:

Comparative Fee Table: Sacramento vs. Charlotte (32-Unit Development)

Fee Category	Sacramento (per unit)	Sacramento (32 units total)	Charlotte (per unit)	Charlotte (32 units total)
Building Permits & Plan Reviews	$4,700 (approx.)	$150,400	$1,250 (approx.)	$40,000
Fire Dept. & Planning Reviews	$250	$8,000	$~0 (included in permit)	$0
School Impact Fees	$7,695 (1,500 sq ft @$5.13/sf)	$246,240	$0	$0
Affordable Housing Impact Fee	$5,340 (at $3.54/sf)	$170,880	$0	$0
Park Development Fees	$5,205 (typical)	$166,560	$0	$0
Transportation Impact Fees	$4,280 (STA+city)	$136,960	$0	$0
Water Capacity Connection Fee	$6,196 (per meter)	$198,272	$1,136 (per meter)	$36,352
Sewer Capacity Connection Fee	$7,381 (local + regional)	$236,192	$3,710 (per unit)	$118,720
Utility Meter/Tap Installation	$723 (water meter) (+ City tap in fee above)	$23,136	$500 (est.)	$16,000
Flood Control Impact Fee	$2,200 (avg)	$70,400	$0	$0
Other City Fees & Surcharges	$1,100 (Bus. tax, tech, etc.)	$35,200	$~0 (none significant)	$0
Subtotal: Regulatory Fees	~$44,000	~$1.41 million	~$6,100	~$195,000

Table Notes: Sacramento figures are based on City of Sacramento fee schedules and estimates for a 1,500 sq ft duplex unit (effective Jan 2025). Charlotte figures are based on Mecklenburg County/City of Charlotte FY2024–25 fee schedules and typical charges (5/8″ residential meter). Some values are rounded; “Other City Fees” in Sacramento include General Plan fee, Construction Excise tax, permit issuance fees, etc., while Charlotte has negligible equivalents. The Sacramento water/sewer fees include both city utility connection fees and regional sewer fees (SASD/Regional San) – these are grouped under Water/Sewer above for clarity. Charlotte’s water/sewer fees are capacity charges to Charlotte Water; a small installation fee is included separately. Fire and planning fees in Charlotte are included in base permit costs (no separate line-items). A “$0” indicates no fee is charged for that category in the jurisdiction.

As shown, Sacramento’s total fees per unit are roughly 7–8 times higher than Charlotte’s. School, park, housing, and road fees that add ~$20k+ per unit in Sacramento are absent in Charlotte. Utility fees are also higher in Sacramento. Even building permit costs are modestly higher in Sacramento. These regulatory cost differences can significantly impact the project’s financial feasibility.

Soft Costs: Architecture, Engineering, and Consulting

Beyond official fees, both projects will incur soft costs for design and professional services. These can include: architectural design fees; civil engineering for site plans, grading, and utilities; land surveying; permit expediting or entitlement consulting; legal fees for contracts or any land use issues; and other consultants (e.g. energy modeling for code compliance in California, geotechnical or environmental studies if needed).

Sacramento (California) Soft Costs: Professional services in California tend to be relatively expensive, and code requirements are complex (e.g. California’s Title 24 energy code necessitates energy consultants, and stringent seismic codes require structural engineering expertise). For a 32-unit infill development, architecture and engineering fees in Sacramento might typically range from 8% to 12% of construction costs. If we assume a construction cost of about $300,000 per unit (hypothetical), design/engineering could be $24k–$36k per unit. In absolute terms, architectural design for a multi-unit project of this size could be on the order of $300k–$500k total (covering schematic design through construction administration). Civil engineering and surveying for infill (improvements to on-site utilities, drainage, mapping the parcels) might add another $100k+. There may also be entitlement or permit consultants to navigate the process; while our assumption is zoning is straightforward, developers in California often hire expediters or planning consultants especially if neighborhood outreach or design review is involved. Legal costs for contracts, possibly forming a homeowners’ association or condo maps (if the duplexes are to be sold separately), etc., can also be higher in California. Overall, the soft costs (professional) in Sacramento could easily be 15–20% of total project cost. On a per-unit basis, that might be around $70k–$90k per unit (including financing soft costs) for a typical market-rate project Excluding financing, pure professional fees might be on the order of $20k–$30k per unit in Sacramento.

Charlotte (North Carolina) Soft Costs: Charlotte’s professional service market generally has lower billing rates than California. Architect and engineer fees for a similar 32-unit project might range 5% to 10% of construction cost, slightly lower on average than Sacramento. The code compliance process in NC can be somewhat simpler (for example, energy code requirements, while present, are not as demanding as California’s, and certain tasks like Title 24 documentation are not applicable). An experienced local architect in Charlotte might charge a lower hourly rate or percentage; likewise, civil engineering for a relatively flat infill site in Charlotte could be less intensive (stormwater requirements exist, but the developer may not need to provide on-site retention if connecting to city systems). We might estimate $15k–$25k per unit in design and consulting fees in Charlotte. So for 32 units, perhaps $480k–$800k total in professional services. Charlotte developers typically do not need dedicated “entitlement consultants” for by-right projects – the permitting process is more straightforward – which can save some consulting costs. Legal fees in NC (for property and contract work) also tend to be lower.

In summary, Sacramento’s professional soft costs are somewhat higher due to both higher service rates and additional requirements (e.g. specialized consultants for California codes). Charlotte’s soft costs benefit from a lower-cost professional pool and a less burdensome pre-development process. Both cities would require architecture and engineering stamped plans; the difference is in the ancillary consultants and level of effort needed for compliance.

To put it in perspective: If hard construction costs are similar in both cities, the total soft costs (including fees and services) diverge sharply: Sacramento might see 25–30% of the development budget consumed by soft costs, whereas Charlotte might be around 15–20%. A recent analysis by UC Berkeley’s Terner Center noted that soft costs in Sacramento have been rising and contribute significantly to overall project cost increases. Conversely, jurisdictions like Charlotte that impose fewer fees help keep soft cost percentages lower, improving the viability of new housing projects.

Conclusion

This comparison highlights the contrast in soft cost burden between Sacramento and Charlotte. Sacramento’s 32-unit infill project faces an extensive roster of city and regional fees – from permits and utility hookups to impact fees for schools, parks, transportation, and affordable housing – totaling in the tens of thousands of dollars per unit. Charlotte’s project, on the other hand, benefits from a fee-light environment, with no impact fees for schools, parks, or roads, and significantly lower connection charges. The result is a regulatory cost difference of nearly $40k per unit (Sacramento ~$45k vs. Charlotte ~$5–6k). Over 32 units, Sacramento’s development would pay roughly $1.4–$1.5 million more in fees than the equivalent Charlotte project – a substantial cost gap that could affect project feasibility and housing affordability.

When adding professional design and consulting costs, Sacramento still remains more expensive, partly due to California’s higher service costs and stringent requirements. However, these professional fees, while not trivial, are overshadowed by the stark difference in government-imposed fees. For developers and investors, the takeaway is that building in Sacramento requires budgeting for a much heavier soft cost load up front, whereas Charlotte’s process is comparatively streamlined and cost-efficient in terms of fees.

Ultimately, these differences stem from policy choices and funding mechanisms: California cities rely on development impact fees to finance infrastructure and mitigate growth impacts (hence the higher fees in Sacramento), while North Carolina’s framework limits such fees, preferring alternative funding or infrastructure requirements in lieu of fees. This analysis underscores how location and local regulations can dramatically affect the soft cost profile of a project. Stakeholders should carefully review the latest city fee schedules and engage local experts when planning a development budget, as fee rates and requirements evolve over time. (Sacramento, for instance, has planned phased fee increases through 2027 for certain utility impact fees, and Charlotte periodically adjusts its water/sewer SDFs based on system analyses.) By understanding these soft cost components, developers can make more informed decisions and potentially advocate for policies that balance infrastructure funding with housing production goals.

Sources: Official fee schedules and documents from the City of Sacramento, Sacramento City Unified School District Mecklenburg County Code Enforcement, and Charlotte Water, as well as industry studies on development costs. The above figures represent the most recent data (2024–2025) available for each city and are subject to change with new fiscal year budgets or ordinances.