County supervisors double ‘affordable housing’ fees

December 7, 2016

slo county signA divided San Luis Obispo County Board of Supervisors voted Tuesday to double in-lieu fees that developers must pay when they build homes that are not considered “affordable housing.” Supervisors Bruce Gibson, Adam Hill and Frank Mecham voted for the fee increase, while supervisors Debbie Arnold and Lynn Compton opposed it.

In 2008, following the housing market crash, the board of supervisors adopted the Inclusionary Housing Ordinance. The ordinance requires to developers to build homes that are sold at below-market prices or pay in-lieu fees.

The money raised from the fees is given to nonpfrofit developers, like Family Care Network and Habitat for Humanity, which build homes for people with low income. Nonprofit builders can leverage the money to obtain millions of dollars in federal and state housing funds, county staff say.

A county staff report states the fee on a $2,100 square foot house had been $1,575. On Tuesday, the supervisors’ 3-2 vote raised that fee to $3,150. For commercial builders, the fee on 10,000 square feet of retail space increased from $6,800 to $13,600.

Gibson and Hill said the fee increases was necessary and that nonprofit builders provide crucial services to the county. Arnold and Compton argued that development fees drive up the cost of homes, making housing less affordable.

Two weeks prior, Arnold and Compton voted in favor of a program aimed at providing more workforce housing, while Gibson and Hill voted against it. Gibson and Hill opposed the new program largely because it it exempts developers from meeting the requirements in the Inclusionary Housing Ordinance.

Nonetheless, the workforce housing program passed on a 3-2 vote.

Under the new program, lot size and design requirements are relaxed; there are no homeowner association fees; and the builder is not required to pay the inclusionary housing fees. In order to receive those benefits, developers must sell the houses they build at lower than average costs — which vary throughout the county — and buyers must occupy the homes as their primary residence.

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Reverse Darwinism.

It will never work.

They have just made housing LESS affordable.

Bad Decision.

Just saying,

Josey Wales

I’m curious of what the sticker price is on affordable housing? Affordable means what you pay not what I pay so you can pay!

Frank, I voted for you and I have come to really regret that decision. You are a sellout. Don’t let the door hit you on the way out!

The eleven words to be most wary of…”I’m from the government and I’m here to help.”…

Wow, what a classic example of government “logic”….”let’s raise a fee on the cost of a house to make a house more affordable.” I love the comment by the planner regarding his example, this $3,150 is only .03 % of the cost of a typical home. This is true… just as it is also true that regulatory cost of a single family home is now 24.3% . It is also true that regulatory cost has increased 29.8% since 2011. Our government blames the “evil developer” for not building affordable homes while every year they add to the cost of housing through “minimal” impact fees. Have no fear though, very nice, brand new, $350,000 single family homes are currently available for sale in Arroyo Grande ..the only catch is you just have to pay the additional government “fee” of $150,000. I love the latest solution….”Tiny Living in Tiny Homes”(you can check it out on HGTV) yes, you too can purchase the $100,000 dream home…Just take an old abandoned railroad car and put some cool finishes inside and out and you have your 300 sf “dream home”..but don’t forget your tip to Uncle Sam..just a measly $30,000.

Two options for government to reach their goal for “affordable Housing” They can make it more expensive to build an expensive home or less expensive to build an affordable home. Not surprised they chose the former.

The Developers don’t pay this fee….it’s paid by the Home Buyer.

Just another Big Government Solution that makes the problem they say they want to fix worse.

When will they learn…never…since he boobs just re-elected Hill.

Actually, Rich, that’s incorrect. Developers can only sell for what the market allows them to sell for. They will also only sell for the maximum the market will give them (meaning in a healthy economy, they don’t offer bargain pricing). It’s simple capitalism at work. Therefore, for commercial builders, there is no pass-along to buyers. Builders absorb it all. It just may lower their profit a bit, but they’re skilled at factoring fee costs into what they put into a house, so probably pretty much profit neutral.

The only time the fees raise the cost of housing for the occupant is in the case of an owner-builder. Then, indeed, the cost is borne by the owner.

Ricky, you are absolutely right and you are absolutely wrong. Yes the market will bare what the market will bare but the new home market can not absorb $150,000 on a single family $500,000 home without passing it along to your customer. The net profit margin is about 20% and if it’s any lower a developer and or builder stops developing if it’s any higher someone is selling it for less and it won’t sell. As far as commercial it is passed on in the form of increased rental cost. I have experienced both ends of this equation. Bottom line is the market has never in our history been more influenced by regulatory cost.