Ventura County city suspends affordable housing fees for at least one year to encourage homebuilding
May 18, 2009 – (RealEstateRama) —The city of Thousand Oaks is the latest jurisdiction to reduce development fees in an effort to jump-start homebuilding and its local economy, which the California Building Industry Association noted is a move that is paying off for a growing number of communities around the state.
The City Council voted last week to eliminate its affordable housing fees until June 30, 2010, after hearing from its staff that builders cannot afford to pay the fees – $9,000 per single-family home and $25,000 per condominium or townhome – given current market conditions. The council is expected to adjust the fees to more sustainable levels next year based on the economic climate at that time.
Mick Pattinson, a San Diego County-based homebuilder and Chair of CBIA’s Impact Fee Task Force, said the council’s action was welcome and should be followed by other city and county governments.
“During the housing boom, many cities and counties sharply raised the fees they charge new-home builders – and thus new-home buyers – by tens of thousands of dollars per home. The average impact fee today is about $50,000 statewide, and there are many jurisdictions where the fees total more than $100,000 – nearly as much as it costs to actually build many homes,” Pattinson said.
“With home prices today half of what they were three or four years ago and builders struggling to compete against repossessed homes being sold well below the cost it took to build them in the first place, it’s welcome news to hear that Thousand Oaks recognizes market realities and is trying to jump-start construction, which is such an important component of the state and local economy.”
Housing production plummeted from nearly 213,000 homes and apartments in 2004 to just 65,000 in 2008, and is projected to fall to less than 45,000 units this year. That has cost the state an estimated 363,000 jobs, $46 billion in economic output, $2.2 billion in tax revenues to the state and $426 million in revenues to local government.
Other communities around the state that have reduced fees in recent months include Fremont and Dublin in Alameda County; Oakley in Contra Costa County; Orange County and the cities of Irvine and Santa Ana; Beaumont and Corona in Riverside County; San Diego County; and Woodland in Yolo County.
In addition, nearly 50 jurisdictions statewide have deferred their fees from the time the building permit is pulled until the home is sold, which reduces the up-front costs to builders and helps make more projects pencil out financially.
Pattinson noted that fee reductions or deferrals have sparked increased construction in many communities as the reduced costs made homebuilding projects financially feasible. For example, after Chula Vista in San Diego County deferred its fees in March, builders quickly obtained more than 80 building permits. During the first two months of the year, only two permits had been pulled in the city.
###
The California Building Industry Association is a statewide trade association representing thousands of homebuilders, remodelers, subcontractors, architects, engineers, designers, and other industry professionals. More information is available on the Association’s Web site, www.cbia.org.
To subscribe to CBIA press releases and receive them as they are distributed, please visit the newsroom section of our Web site and click on the RSS subscription button.
Contact:
Michael Castillo
Communications Specialist
(916) 443-7933 ext. 346
mcastillo (at) cbia (dot) org
