'Unaffordability Crisis' Culprit Named

July 31, 2002

Developer To Pay $118,000 Per House In Northern California


Inman News Features

Development fees imposed by local governments have shattered the $100,000 per home barrier in one San Francisco Bay Area community, and if other cities and counties follow suit, the skyrocketing fee increases will make it even harder for working families to buy a home, according to the California Building Industry Association.

The CBIA-affiliated Home Builders Association of Northern California said fees charged by the city of Livermore, Alameda County and other local government agencies will add up to more than $118,000 on some of the homes in one new home subdivision in south Livermore.

The average total development fees in the Bay area typically are about $65,000 per house, according to the regional home builders group. But the group said more than $38,000 per home in new fees to fund programs to preserve farmland and purchase open space pushed the fees in the Livermore community higher than $100,000.

The statewide builders group said the higher fees are "a leading cause of California's high home costs and unaffordability crisis."

Michael D. Pattinson, a San Diego home builder and president of the industry group, said local governments need to understand that development fees are passed on to home buyers.

The Livermore developer also will pay $11,973 per home to subsidize housing for lower-income buyers and renters. Pattinson said those "inclusionary zoning" fees wouldn't be needed if local governments allowed more housing to be built and enacted reforms that would allow large-scale construction of affordable condominiums and townhouses in California.

"It's one thing for local governments to assess fees to cover costs like building inspections and a portion of new schools. It's quite another for them to levy tens of thousands of dollars in hidden taxes to promote broader goals that in many cases would take care of themselves if the government hadn't caused the problem in the first place," Pattinson said.

Copyright: Inman News Service


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