Builders call move a new blow to the new-home market. "When you address fees like this, look at the big picture, at how this 'prices-out' the middle class," Cris Alarcon told the board.
By Cathy Locke - Bee Staff Writer 14.6% TIM fee increase, up to $42,400. A view of the Serrano neighborhood at dusk. Some builders say a new increase in traffic-impact fees will hurt home construction in the county. El Dorado County supervisors last week approved a 14.6 percent increase in traffic-impact fees for new construction in the county.
Builders predicted the move would further depress the market for new homes.
The fee, required under the county general plan, is designed to cover the cost of traffic improvements for new development. Beginning Nov. 24, the fees for new single-family homes will range from $13,670 to $42,400, depending on location.
The increase, an annual adjustment for inflation, is based on the state Department of Transportation's Construction Cost Index as well as actual costs of ongoing and recently completed transportation projects in the county, said Richard Shepard, transportation director.
But John Costa, legislative advocate for the North State Building Industry Association, questioned boosting the fees during a downturn in the housing market.
Costa also questioned the figures used to arrive at the fee increase. He said he understood that current Caltrans bids were coming in lower than expected.
"It's unfortunate the inflationary adjustment is going forward as the market continues to go down," he said.
Costa asked the Board of Supervisors to postpone action on the increase for 30 days to allow building industry representatives to review cost estimates with the county staff members.
He also asked the supervisors to reconsider the distribution of fees between residential and commercial development. Currently, 84 percent of the cost of traffic improvements required for new development are assigned to residential construction, and 16 percent to commercial construction.
Kirk Bone of Parker Development Co. also questioned the costs used to justify the fee hike, but he noted the traffic-impact fee is only one of many fees that contribute to the cost of new homes.
"As a practical matter, no- body's pulling building permits anymore. ... We're just not producing housing right now, and a lot of it has to do with these costs," Bone said.
Transportation Director Shepard said some recent bids for El Dorado County projects have come in below engineers' estimates, but the department's estimates typically fall in the middle of the bid range.
Placerville resident Kathi Lishman urged the board to approve the fee increase. She noted that supervisors who campaigned for a 2005 ballot measure asking voters to ratify the 2004 general plan touted the document as a plan that would provide for managed growth and traffic relief.
"I think (the Department of Transportation) has done a marvelous job of doing exactly what they were asked to do," Lishman said.
Others urged the board to consider the financial effect that higher fees would have on the average county resident.
Chris Alarcon of Placerville said he grew up in El Dorado County and attended Tuesday's hearing "to defend the survival of the middle class."
Affluent homebuyers can afford the fees, and people with low incomes are eligible for subsidized housing, he said.
"When you address fees like this, look at the big picture, at how this prices out the middle class," Alarcon told the board.
Supervisor Ron Briggs said he voted for Measure Y, the 1998 ballot measure that required new development in the county to pay for traffic improvements needed to serve growth.
"I would do it again," he said.
But Briggs said he was concerned about the cumulative effect of county fees and the accuracy of figures used in calculating the traffic-impact fee increase.
He recommended postponing action on the fee increase and suggested one or two board members meet with Measure Y proponents and building industry representatives "so we can make Measure Y work."
But board Chairwoman Helen Baumann argued that the board was obligated under the general plan to adjust the fees to keep pace with inflation.
"It would be irresponsible of this board not to approve the fee structure before us," she said.
The board approved the increase on a 4-1 vote, with Briggs dissenting.
The supervisors were unanimous, however, in approving a motion by Supervisor Jack Sweeney directing Transportation Department staff members to assemble an advisory group to review the fees and methodology before coming to the board in January with an updated capital improvement program.
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by: Paul Raveling
This analysis is incomplete, to distinguish between market factors and County-specific factors such as TIM fees you need to do additional comparisons, especially between El Dorado County and other counties in the same region. Another comparison of interest is for home values (not just volume). One set of such comparisons for home prices , a couple notes follow below) is at http://sacrealstats.blogspot.com/2007/03/sacramento-regional-real-estate-trends_18.html
Other statistics in January showed El Dorado County as the only county in the Sacramento region with a year-to-year increase in monthly sales volume. For the year ended March 17, 2007 all areas declined but El Dorado County fared well in comparison with the others. The first set of graphs for median asking price shows:
El Dorado County: Down 7.9% (from $510K to $470K)
Placer County: Down 7.1% (from $495K to $460K)
Sacramento County: Down 9.2% (from $380K to $345K)
Yolo County: Down 12.4% (from $485K to $425K)
El Dorado Hills median prices are more like what this set of stats showed as El Dorado County average prices:
El Dorado County: Down 6.4% (from $700K to $655K)
Placer County: Down 1.6% (from $620K to $610K)
Sacramento County: Down 5.9% (from $420K to $400K)
Yolo County: Down 6.5% (from $535K to $500K)
Market factors and County land use planning continue to drive housing growth in El Dorado Hills while leaving the rest of the county much more stagnant. For example, despite the real estate slowdown my own neighborhood recently had its first sale of a home for more than $1 million, more than double its original cost when built in 1994. Its appreciation period actually was only about 6 to 7 years, during that house's early period the marked had dropped into the pits and stayed stagnant for a few years.
In the last decade or so the lesson has been that the stock market is a leading indicator for the future of the mediue-to-high end of the real estate market. The market's doing fine now, I'll forecast that housing growth in El Dorado Hills will accelerate a lot again in 2008. If past is prolog then results in the rest of El Dorado County will show moderately higher growth but will continue to be much weaker than the El Dorado Hills market. The new trent for rural living seems to be scattered McMansions cropping up in cow pastures.
With TIM fees generally around 5% of new home cost in El Dorado Hills they're less than what most owners add on for landscaping or for a swimming pool. Market factors dominate setting of sales prices, development fees (TIM and others as well) are more evident to builders' profit margins, especially in areas where the market is cheaper than EDH.
by: John Lockwood
Oh, hey Chris, thanks for stopping by. Nan Raley had once reported that one of her El Dorado County clients was up to about $100,000 -- I'm not sure where or what else that may have included besides Tim Fees, but to be even up to $60,000 before you put a shovel in the ground is enough to discourage anyone.
by: Chris McCullough
Did you realize that the TIM fees for a sinlge family residence in zone 2 are now up to $37K per dwelling. Add the $14K for water and sewer, the $5-8K for school fees and the $2500-3500 for building permits, plus the thousands of mandated costs for canopy, soil and energy, and you have a typical permit package for a residential home in Cameron Park approaching or exceeding $60K. What the hell are the idiots at the county thinking, John? Then take into account that El Dorado Hills, Zone 8, was exempted from county wide responsibility, and saved about $10K off the the costs of zone 2, and you wonder who was paying who to get their own way with the county commissioners.
Good post, John!
Chris
by: Edde Anderson
Not that I think you have all the time in the world to do that...
by: Edde Anderson
That is pretty good John... I think your figures are accurate in the general context, but would be far more interesting to look at it area by area. For instance, have the TIM fees impacted Pollock to the same extent as El Dorado Hills, or the town of El Dorado as opposed to Cameron Park?
