Fee reform crucial to making California affordable

As Californians know all too well, we are in the depths of a housing crisis decades in the making.
There are no easy answers, but we know affordability solutions are going to involve increasing production to dramatically higher levels. This is true in Concord, where the Metropolitan Transportation Commission has determined that it would take until the year 2984 for the city to reach its 2040 housing goals if the current level of construction is maintained.

According to the Public Policy Institute of California, new housing permits statewide decreased by 16 percent in the last year – when construction was needed the most. With such high demand and need, how is it possible that more units aren’t being built in our state?

One answer is that it is still prohibitively expensive to build housing in California, especially housing that is affordable. High development costs and local municipal fees can dissuade developers from investing in new projects and exacerbate existing problems of rising rents and home prices.

In a March 2018 report, UC Berkeley’s Terner Center for Housing Innovation found that local fees on multi-family developments can be as high as $75,000 for each new unit constructed and can reach up to $157,000 for a single-family home.

When half of our renters are spending more than 30 percent of their income on housing and young families struggle to become first-time home owners, it is critical that we address unreasonable fees. This is why in 2017, I authored legislation to direct the Department of Housing and Community Development to conduct an in-depth study looking at the different components of the high cost of development and the impact that fees charged by local agencies have on our ability to build.

The study, which was released this summer, concluded that as housing costs continue to rise, a comprehensive approach to fee reform is appropriate and necessary. This month, I am hosting roundtable discussions across the state with cities, counties, special districts and developers in order to understand how these reforms could be implemented in a way that will help communities build the housing they need while not sacrificing the vital services that reasonable fees help fund.

We have only just begun these discussions, but already a few points have been brought to the forefront: All regions of our state are not the same and a one-size-fits-all policy will not help us achieve our goals; greater transparency in the ways that locals develop, justify and assess fees can be helpful for developers; and there is a role for the state in helping local governments provide critical infrastructure while reducing the financial burden on housing.

If California is going to build its way out of this housing crisis, it is critical that we remove unreasonable barriers to construction. By moving forward conversations on how to ensure that fees are structured and justified in a way that helps – not hinders – development, we are taking steps toward accomplishing that goal.

If you would like to learn more about the fee study or legislation I’ll be authoring to help make housing more affordable, contact my Concord office at 925-521-1511.