Cost of Cali homebuilding is too damn high: City fees push up home prices, report finds

Construction fees imposed on developers can translate to up to 18% of median home prices, the study found

Los Angeles /
Aug.August 07, 2019 08:00 AM
Gavin Newsom (Credit: Facebook and iStock)
Gavin Newsom (Credit: Facebook and iStock)

The cost of homebuilding in California is too damn high, specifically, what city and counties charge developers. That was the conclusion of a new study released by state officials, confirming what developers have long known to be true.

The report, released by the Department of Housing and Community Development, also reveals that local construction fees fluctuate drastically statewide, according to the Los Angeles Times.

In Sacramento, those city and county-imposed fees on a home are less than $9,000. In Fremont, a suburb in the Bay Area, fees can reach up to $35,000.

In some cities, they can translate to 18 percent of median home prices. The high costs of building have contributed to slowing home growth in the state, exacerbating the region’s affordability crisis, the report found.

The study was ordered as part of Assembly Bill 1484. The 2017 measure aimed to identify how to limit the fees imposed on homebuilding.

Municipalities often use revenue from developers’ fees to fund parks, infrastructure projects and traffic control. The study warns that limiting fees could drastically impact that funding, and recommends the state finds ways to adjust property tax laws to account for the difference.

In May, the California Housing Partnership estimated that L.A. County needs to build around 517,000 more homes priced at very low-income levels. [LAT]Natalie Hoberman


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