Too High or Too Low?

From the Santa Barbara Coastline


I was very surprised to open the News-Press Monday and find a letter from developer Michael Towbes tweaking me about development fees.

If Towbes had called me directly, I could have shared some astounding information.

Towbes, a longtime, highly respected builder, came up with the conclusion that fees charged by the county and other agencies are a “windfall for those who already own their homes.”

Actually, it appears that fees are so low that present property owners are really subsidizing the developers, who can thereby keep home prices lower than they would be with realistic fees. Builders, Towbes points out, pass the costs on to homebuyers.

Take Hope School District.

Two years ago voters celebrated after approving a $6 million bond measure officials figured would tide the district over for future growth, well into the 21st century.

But now a large housing project has been proposed on the St. Vincent’s property. It will create the need for the equivalent of four more classrooms.

Yet the state-mandated school fee will produce only about $90,000, and you can’t build four classrooms for that, according to Hope Superintendent Les ImeL.A.nd another large Hope district development is being proposed north of Foothill east of Highway 154.

In fact, according to one study, fees charged by Santa Barbara County, schools, water and sewer agencies and the like may be a third or more too low to cover the costs of new classrooms, road improvements, water and sewer capacity, law enforcement, fire protection and other infrastructure to accommodate growth.

Present fees range from $11,014 for a new 1,865 square-foot home in Santa Maria, $19,746 in Goleta and $20,500 in Orcutt.

County supervisors first decided to set Orcutt fees at $8,246, but then cut them to $7,800, while admitting that the fee won’t cover costs. Add school and other fees and the total is $20,500.

Three supervisors – Jeanne Graffy, Tom Urbanske and Tim Staffel – approved zoning last year for6,000 new housing units in Orcutt. The town is clearly on the brink of a major spurt of development.

According to a study by Energy and Environmental Planning Associates of Eugene, Ore., the infrastructure cost of a new home in Oregon was $24,500.

Assuming a typical family size of 3.1 persons, that meant it costs about $9,000 to add each new person to the Portland area, based on housing costs there, according to Focus, a newsletter put outby Carrying Capacity Network, a Washington, D.C., group interested in growth issues.

Then, using Santa Barbara-Lompoc-Santa Maria average home price figures, CCN came up with a cost of $11,200 for each person added to the area.

Assuming an average of three persons per home, that means that fees here should be more like$33,600, to cover costs without passing them on to present residents.

Of course, making such extrapolations can be pretty risky. If anything, the figures are probably low, considering our high state water costs.

As an example of how state water costs are affecting us, Marshallia Ranch Golf Course gets its water from Vandenberg Air Force Base, which ordered a large amount of costly state water.

As a result, the 1998 golf course bill for the same amount of water as in the past would be $444,000 instead of $40,400. So the course slapped on a $4 per player fee and is cutting use until a base pipeline is built to allow the links to tap into a wel L.A.s towns across the U.S. have learned, “Growth doesn’t pay for itself,” in the words of Florida columnist Charley Reese reprinted by CCN. Winners are builders, bankers and others who profit, he said.“The losers arethe rest of the existing residents who have to pay for growth. They lose not only money in the form of higher and higher taxes but quality of life.“They get more crowded roads and schools,more crime, more pollution, more inflated property values, more loss of farmland and more loss of wildlife habitat.”

Gee, Mike, we could have had a nice talk.

This story was provided by the Santa Barbara Coastline Online with permission of Mr. Brantingham