The ordinances require residential developers to pay a fee or dedicate a certain amount of land for park use to help offset the effect of increased development on parks. The fee is based on property values and the number of residential units being built. To the city staff's surprise, the fee is applicable to residents who want to erect a second unit, or granny quarters, on their property through the city's secondary-unit program.

"At first our attorneys advised us that the fee didn't apply to secondary units, but now they're advising us that it does," senior planner John Davidson said.

The fee is retroactive, making it applicable to homeowners who have already gone through the application process, he added.

Davidson said the planning department is looking into the situation, so it might just be a matter of time before the fees no longer apply.

The program to issue 100 permits for secondary units started as a pilot program on Jan. 2 and will run through Dec. 31. Only one permit has been issued, for a unit in the Willow Glen neighborhood. Seven other formal applications have been filed from three residents in Willow Glen, one in West San Jose, one in Berryessa, one in Evergreen and one in North San Jose.

The idea behind the program was that it would be an affordable way to house senior citizens or their caretakers. The program also allows the owners of existing granny units to obtain the permits needed to legalize their units. Permits issued for existing units do not count toward the program's100 limit.

The pilot program has gotten off to a slow start. While at first, Davidson projected he'd be scheduling 10 appointments per week, he actually was booking only about seven or eight. Recently, appointments have dropped to two or three per week, he said. Davidson said he believes one of the factors for the drop is the additional fee.