California home builders today recognized the city of Corona as the latest jurisdiction to reduce development fees in an effort to jump-start home building and its local economy.
The Corona City Council voted last week to slash development impact fees by 40 percent for the next two years. The Council took its action in an effort to stimulate the city’s economy and to put people back to work. The move is expected to reduce the cost to build a new home by an average of $7,700.
Mick Pattinson, a San Diego County-based home builder 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 Corona officials understand market realities and are trying to jump-start construction, which is such an important component of the state and local economy.”
Housing production has 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; Beaumont in Riverside County; the city of San Diego; and Woodland in Yolo County. Nearly 50 jurisdictions statewide have so far deferred fees, which reduce the up-front costs to builders and help make more projects pencil out financially.
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