We all need to help California build more housing
At the end of last year, I embarked on a statewide listening tour on housing affordability.
I brought together city and county officials, developers, affordable housing advocates and special districts representatives to share the challenges and opportunities they faced trying to get housing built across the state.
From Oakland to Fresno, to Los Angeles and San Diego, I heard from both affordable and market rate builders that development impact fees were a major cost driver. In some cases, they added so much to the cost of construction that a project had to be scrapped entirely.
We have data to back up the numerous stories I have heard on the tour: UC Berkeley’s Terner Center found that development fees can comprise up to 18 percent of the cost of a new home. In some jurisdictions, developers pay $157,000 in fees on each single-family home constructed.
Are fees being passed onto the public?
There is strong evidence that fees are ultimately passed along to the public in the form of higher rents, inflated home prices and stalled projects that intensify our chronic housing shortage. For our affordable housing partners like Habitat for Humanity, whose financing is already stretched to the limit, out of control fees can push homeownership out of reach for a family in need.
Fees can also be both regressive and exclusionary, driving up the cost of construction to the point that low- or middle-income projects simply do not get built. This disproportionately impacts first-time homebuyers, communities of color and the working class. It has effectively barred a generation of Californians from one of the most reliable forms of wealth generation available: owning a home.
It has become clear to me that we cannot achieve our goal of building housing for all Californians – at all income levels – if some local jurisdictions continue to place a disproportionate financial burden on the backs of new homebuyers. With that in mind, last month I introduced a package of bills with some of my fellow Assembly colleagues to reform the way that development fees are determined, assessed, justified and financed in California.
Comprehensive reform needed
I’m going to keep working on a bill I authored last year, AB1484, which provides a comprehensive reform of the nexus standards that cities and counties use to determine fees. I’m also proud to be introducing three new bills this year: AB1924, which requires jurisdictions to assess fees on a per-square-foot basis, giving developers the option to build smaller, more affordable units without being penalized with multiple fees; AB3144, which will provide state funding to reimburse local governments who waive impact fees on affordable projects; and AB3145, which will establish a ceiling for development fees based on the median home price in a jurisdiction. Cities and counties that exceed this ceiling will be required to seek approval from the Department of Housing and Community Development.
Together with the legislation introduced by my colleagues, these bills will set California on a path to dramatically increase our housing supply, build sorely needed affordable housing and produce housing that is attainable to working families at all income levels.
If you’d like to learn more about my work on housing issues, or any other matter of importance to you, please reach out to my Concord office.
Reach Assemblyman Tim Grayson at (925) 521-1511. Visit or write the district office 2151 Salvio Street, Suite P, Concord, CA 94520