BILL ANALYSIS Ó
SENATE COMMITTEE ON TRANSPORTATION AND HOUSING
Senator Jim Beall, Chair
2015 - 2016 Regular
Bill No: SB 341 Hearing Date: 4/28/2015
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|Author: |Nguyen |
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|Version: |3/26/2015 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant|Alison Dinmore |
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SUBJECT: Department of Housing and Community Development:
local fees survey
DIGEST: This bill requires the California Department of Housing
and Community Development, by January 1, 2017, and every five
years thereafter, to conduct a statewide survey of cities and
counties to determine the total amount of fees and charges
imposed on new home construction by local jurisdictions.
ANALYSIS:
Existing law states that the California Department of Housing
and Community Development (HCD) may do the following:
1)Make investigations of housing and community development in
California
2)Call conferences with local, industry, and private housing
stakeholders to discuss housing and community development
problems in California
3)Investigate and report on substandard housing and the problems
resulting therefrom and the work to remedy those conditions
4)Study the operation and enforcement of housing, building,
zoning, and subdivision laws and regulations, of housing
finance, taxes, redevelopment programs, and public housing
projects, as related to housing and community development
5)Examine the records of housing authorities and redevelopment
agencies, including reports and copies of records at any time
6)Promote the formation of organizations intended to increase
the supply of adequate housing and the proper living
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environment
7)Investigate and report, with the California Department of
Transportation, the consistency between state, federal, and
local housing and transportation plans and programs
This bill would require HCD to take the above actions. This
bill would also require HCD to conduct a statewide survey of
cities and counties to determine the total amount of fees and
charges imposed on new home construction by local jurisdictions.
HCD shall complete the survey and submit the findings to the
Senate Transportation and Housing Committee and the Assembly
Housing and Community Development Committee by January 1, 2017,
and every five years thereafter.
The survey shall include the fees and charges imposed by at
least 150 cities, at least one city within each county, and all
58 counties. The fees and charges shall include, but not be
limited to, all of the following:
1)Planning and zoning fees
2)Environmental documentation fees
3)Building permit fees
4)Plan check fees
5)School fees
6)School mitigation fees
7)Highway, road, traffic, and transit fees
8)Water, wastewater, sewer, and drainage fees
9)Utility or water connection fees
10) Public safety fees
11) Capital facilities fees
12) Affordable housing fees and assessments
COMMENTS:
1)Purpose of the bill. According to the author, California
residents face extremely high housing costs, with the median
value of a home costing 144.3% more than the national median
home value, while the median California household income is
only 15.7% higher than the national average. One reason for
the high prices is residential development fees associated
with new housing developments. These high costs significantly
inflate housing costs and may account for why only 56% of
Californians own a home, far behind the national average of
65.5%.
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A report released by HCD 15 years ago revealed that these
costs were approximately 10-15% of a new home cost. Recent
data from the California Building Industry Association,
however, estimates that local fees now comprise up to 30% of
the value of a newly built home. For example, the city and
county fees associated with a single-family home in Rancho
Cordova in 2011 were approximately $80,000, while the lot and
construction costs of $162,500 accounted for 61% of the costs.
Recently adopted building standards have increased the
average home prices by thousands of dollars. Elevated local
fees discourage new construction due to the margin between the
cost of production compared to market value, which in turn
limits the housing supply and job creation. Additionally, this
makes it more difficult for Californians to purchase a home.
All Californians should be concerned about the high cost of
housing and an audit of local fees assists in creating housing
that is truly affordable.
2)Update similar 1999 study. Existing law authorizes HCD to
make investigations of housing and community development in
the state. In 1999, pursuant to this authority, HCD conducted
a survey and released a report, Pay to Play: Residential
Development Fees in California Cities and Counties, 1999,
that, based upon the responses to the survey, analyzed
California's residential development fees statewide. The
report identified typical fee amounts for homes in a 25-unit
subdivision, individual "infill" houses, and for a 45-unt
apartment building. It identified the types of fees surveyed
and evaluated overall how much these fees contributed to new
home prices. The report also provided examples of how local
governments could improve administration of permit fees and
set forth policy issues and options related to broader local
development of long-term capital improvement plans and
programs and improving financial mechanisms.
This bill would require HCD to conduct a similar statewide
study and submit its findings to the legislature by January 1,
2017 and every five years thereafter.
3) Unintended consequences. The bill would require, instead of
authorize, HCD to: make investigations and call stakeholder
meetings to discuss housing and community development problems
in California; investigate and report on substandard housing;
study the operation and enforcement of housing, building,
zoning, and subdivision laws and regulations, and of housing
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finance, taxes, redevelopment programs, and public housing
projects; examine the records of housing authorities and
redevelopment agencies; promote the formation of organizations
intended to increase the supply of adequate housing and the
proper living environment; and investigate and report, with
the California Department of Transportation, the consistency
between state, federal, and local housing and transportation
plans and programs.
The general practice in the Senate Rules Committee is not to
release bills that merely require studies. For this reason,
the author accepted an amendment in the Senate Rules Committee
that changed the existing departmental discretionary authority
to a mandate in this bill. HCD is a department that receives
funding from the general fund. It is not clear to what extent
the impacts of these changes will have on the HCD and their
existing practices, but these changes will most certainly have
a fiscal impact to the state.
4) Locals are not required to respond to the survey. While
this bill requires HCD to conduct a statewide survey, there is
no requirement for locals to respond. The author points out
that the cities who responded to the 1999 survey were
similarly not required to respond; of the 145 cities that
received the survey, 89 responded.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes
Local: No
POSITIONS: (Communicated to the committee before noon on
Wednesday,
April 22, 2015.)
SUPPORT:
California Building Industry Association
OPPOSITION:
None received
-- END --
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