Blogging Bayport Alameda

August 12, 2019

The fee is too damn high

Filed under: Alameda — Lauren Do @ 6:02 am

In no big surprise, a study commissioned by the state has confirmed that development fees increase the cost of housing.

 

I mean, it’s pretty obvious.  But sometimes not so obvious for your average citizen who knows little about development fees yet want to make pronouncements about what developers should pay for.

From the LA Times:

In California, local government fees on housing construction, which can be used on parks, traffic control, water and sewer connections and other services, were nearly three times the national average in 2015, according to a 2018 Terner Center report. In some cities, researchers found, fees can amount to 18% of median home prices.

Costs also fluctuate from city to city. In the Bay Area suburb of Fremont, the study said, fees cost $22,000 per unit for apartment and condominium complexes and $35,000 per unit in single-family projects. In Sacramento, those same fees are $8,500 and $13,000 per unit, respectively.

And

While the study recommends that lawmakers examine ways to reduce fees, it warns that cities and counties often need the revenue to pay for services because of property tax restrictions put in place by Proposition 13 in 1978. The initiative limits taxes for homes and businesses to 1% of a property’s taxable value. The initiative also restricts a property’s taxable value from increasing more than 2% each year, no matter how much its value rises on the market.

“If the state wishes to lower impact fees but also ensure sufficient infrastructure funding, it should consider pathways to adjust Proposition 13 in order to expand the capacity of localities to generate their own revenue,” the report says.

So if anyone wonders why new housing is so expensive.  Look no further than development fees and not just “developer greed” as some folks like to chalk it up to.

7 Comments »

  1. Funny….what raises costs are demands to add low cost housing. And apparently the city council doesn’t think landlords should make a profit so what incentive is there to add an ADU?

    Overcrowded BART, freeway commute, Ferry parking, city streets, public schools, but we “need” more housing? Economists point out that if America/California cuts immigration it will raise wages and free up current housing.

    And what schools have been recently built in Alameda with “developer fees?” AUSD constantly floats bond issues for that while closing schools at the same time.

    Thank God for Prop 13.

    Comment by Nowyouknow — August 12, 2019 @ 7:51 am

    • Comment by Rod — August 12, 2019 @ 9:01 am

    • Cite a real economist.

      Comment by BC — August 12, 2019 @ 10:03 am

  2. Would you accept a June 2019 article from the Wall Street Journal?

    “Locals Fume as Migrants Take Affordable Housing”

    https://www.wsj.com/articles/rising-rents-collide-with-immigration-in-california-agriculture-region-11559813400

    Or another June 2019 article from the LA Times?

    “California’s Immigrant Friendly Policies Are Not Helping the Housing Crisis”

    https://www.latimes.com/opinion/readersreact/la-ol-le-housing-crisis-homeless-immigrants-20190623-story.html

    Comment by Nowyouknow — August 12, 2019 @ 10:29 am

  3. Sorry, no.

    The first is about ag workers on the Central Coast. The second is a letter to the editor from some random guy called Steve in Huntington Beach.

    Here’s a suggestion. Maybe it’s the booming Bay Area economy.

    Comment by BC — August 12, 2019 @ 10:43 am

  4. If you must have a WSJ article, then this one sums it up……… – California Has the Jobs but Not Enough Homes – https://www.wsj.com/articles/california-has-the-jobs-but-not-enough-homes-11553007600

    Comment by Rand Rentschler — August 12, 2019 @ 1:18 pm

  5. Yes! Booming economy plus not enough houses–>affordability issues. Not complicated.

    Comment by BC — August 13, 2019 @ 11:29 am


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