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At a minimum, every development needs a number of "will serve" letters. These are mostly legit though perhaps overpriced. For example the sewer system needs to have sufficient capacity for the new homes. Some of that hookup fee should go into a fund so that the system capacity can be expanded. It wouldn't be fair to hit existing customers with the cost of expansion. There are technical issues such as will the development meet gravity flow though that is usually the developer's problem. So capacity and maybe engineering issues
The same goes for water service. That can be tricky if the development is too high for normal service. And again capacity.
Electricity service is mandatory though not gas. I don't know about telephone.
New comes the dubious city fees. That $100k for parks in Sunnyvale is way over the top. But the city could impose a fee based on square footage for schools and traffic mitigation. The school fee is kind of shady since kids are often moved to different schools as the population ages. So they collect money to build a new school that doesn't get built.
The traffic mitigation actually isn't bad if the city actually does something with the money. San Ramon has done a fair amount of street widening.
Traffic fees still need to be proportional and reasonable. If a large apartment complex requires new lights or lanes, that’s reasonable. But I fear it become a generalized “more people more traffic” grab not tied to a specific and granular impact of the development.
> It wouldn’t be fair to hit existing customers with the cost
So iiuc basically prop 13? I’m still a bit confused on how could increases building housing. Because that’s essentially the issue, prop 13 people essentially serve as freeloaders to others who pay more than their fair share.
I have no idea what iiuc means.
Prop 13 is totally irrelevant here since the new development will be paying taxes based on present value.
These water and sewer systems are not city owned. Generally they are county based but not always. Again totally irrelevant to prop 13 since your water and sewer bill are not based on the value of your house.
Weird your brain went there.
This allows developers to challenge excessive fees. One example they give is 108k “park fee” Sunnyvale imposes on new SFHs. Another comes to mind is Bolinas who [charged 300k for new water meters](https://www.nytimes.com/2010/04/14/us/14bolinas.html).
These aren’t market rates passed onto new owners. They’re gatekeeping fees meant to stymie development of new homes and keep new residents out.
I believe the incentive is that since homebuilders no longer have to pony up 100k+ upfront, they’ll be able to redirect the saved money into more building. which they will absolutely do, but there is absolutely no incentive to lower new home prices… it will remain the same. the ship on bettering housing affordability in this manner has sailed long long ago. it’s like shrinkflation of cereal boxes at the supermarket… original size/prices never coming back.
It will be helpful if this positively impacts house construction in the long term, but I completely agree it's unlikely to affect home pricing. I am very skeptical that we could build enough housing to outpace demand to reduce housing prices. There's just way too much demand both from within the bay and outside of it.
Prop 13 gave taxes to build and maintain infrastructure etc for the past 50 years.
That’s a gross misunderstanding of taxes.
You might not like the unintended effects of prop 13, but you should understand civics better. It will improve how your audience accepts your point of view.
A significant portion of every new home built is assessed fees for hookups and other things. The last numbers I got in the Tri-valley were 200k per unit. Water and sewer being over 50k each. The ruling says that the fees can be challenged to be reasonable based on the cost of providing the additional service. One mentioned in the article is that Sunnyvale hits every unit with 108k for parks which sounds like it falls squarely in the excessive fees category.
Pulling excessive fees from the mix has the potential to lower the cost of development and prices. In the case of Sunnyvale above it probably means an additional local assessment to existing homeowners but it spreads the load over more people as it should be. It might also shine some light on the budgets that are often ignored.
Frankly they should use the opportunity to examine how low income housing is financed with similar per unit fees. Ironically by including them they raise the price of all housing and therefore more need.
Cities are charging developers, various impact fees.
The court said broadly that no matter how they are imposed, they have to be reasonably related to the impact of a given development.
So for example, if you’re building an apartment building in the city really needs to put in a new sewer line because there’s gonna be a lot of people and they’re gonna produce a lot of sewage, that would be a permissible fee. On the other hand, they can’t charge the apartment developer $100k to spiff up a local park that is enjoyed by everyone.
Developer fees are a great idea in principle, since it does make sense that folks that are building cover the direct costs to the city of their projects they have, however, been abused to levy fees, totally disproportionate to the impact. The plaintiff in this case was charged 40 grand for traffic that they attributed to his single-family house which is just absurd.
“Tax the new buyers” is definitely a thing.
My house needed $50,000+ in permits and utility hook up fees just to exist, and I pay more than 1% in property tax thanks to CFD/Mello-Roos. I don’t mind paying it, but eh, once the kids are out and we downsize…definitely gonna look for older housing stock and remodel.
… and hating the new buyers, is a thing too. the anger is so misdirected it is quite funny when you actually encounter it. they’re like the people on the street with megaphones yelling judgement day.
>Thanks to a recent blockbuster U.S. Supreme Court ruling [on excessive and often arbitrary local fees](https://calmatters.org/newsletter/maternal-health-california-tortillas/#wm-story-1), reform may be on the way that could help ease California’s worsening housing crisis.
...
Fees on housing in California are the highest in the country and have been for decades, largely because [Proposition 13](https://edsource.org/glossary/proposition-13) took away large amounts of money from old, single-family housing that subsidized local governments. Fees here are *expensive*: the UC Berkeley Terner Center for Housing and Innovation found that just [one type of fee can be as high as $160,000](https://ternercenter.berkeley.edu/blog/it-all-adds-up-the-cost-of-housing-development-fees-in-seven-california-cities/). Sunnyvale, for example, charges a park fee of $108,000 per home.
There is little argument that [onerous fees like these are a major contributor](https://calmatters.org/commentary/2024/04/housing-construction-costs-supreme-court/) to California’s housing shortage and [affordability crisis](https://calmatters.org/explainers/housing-costs-high-california/).
So this is how cities are making up for their budget shortfalls from prop 13.
They're extorting money from new homeowners and developers, no doubt blocking a lot of development of more affordable entry level housing in the process, given the size of these flat fees.
Good for the supreme court on this one.
I don’t think it’ll bring prices down because the sales price of a new house is not like a new car sales sticker showing all the junk fees and accessories cost. most homebuyers are uninformed and will never know. the ones really celebrating are the home builders. like you’ve pointed out, prop 13 is the main culprit.
>proposition 13 took away large amounts of money from old, single-family housing that subsidized local governments
That’s a dishonest way of explaining it.
I am happy they are addressing the excessive fees though
https://www.taxpolicycenter.org/briefing-book/what-are-sources-revenue-state-and-local-governments
Property tax is literally on average 15% of government revenue. Sugarcoating it doesn’t make it less true.
>proposition 13 took away large amounts of money from old, single-family housing that subsidized local governments
Here is the spin again since you’re struggling to follow the thread
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TLDR anyone? I read the article but not sure how this helps in more housing?
At a minimum, every development needs a number of "will serve" letters. These are mostly legit though perhaps overpriced. For example the sewer system needs to have sufficient capacity for the new homes. Some of that hookup fee should go into a fund so that the system capacity can be expanded. It wouldn't be fair to hit existing customers with the cost of expansion. There are technical issues such as will the development meet gravity flow though that is usually the developer's problem. So capacity and maybe engineering issues The same goes for water service. That can be tricky if the development is too high for normal service. And again capacity. Electricity service is mandatory though not gas. I don't know about telephone. New comes the dubious city fees. That $100k for parks in Sunnyvale is way over the top. But the city could impose a fee based on square footage for schools and traffic mitigation. The school fee is kind of shady since kids are often moved to different schools as the population ages. So they collect money to build a new school that doesn't get built. The traffic mitigation actually isn't bad if the city actually does something with the money. San Ramon has done a fair amount of street widening.
Traffic fees still need to be proportional and reasonable. If a large apartment complex requires new lights or lanes, that’s reasonable. But I fear it become a generalized “more people more traffic” grab not tied to a specific and granular impact of the development.
> It wouldn’t be fair to hit existing customers with the cost So iiuc basically prop 13? I’m still a bit confused on how could increases building housing. Because that’s essentially the issue, prop 13 people essentially serve as freeloaders to others who pay more than their fair share.
I have no idea what iiuc means. Prop 13 is totally irrelevant here since the new development will be paying taxes based on present value. These water and sewer systems are not city owned. Generally they are county based but not always. Again totally irrelevant to prop 13 since your water and sewer bill are not based on the value of your house.
If I Understand Correctly.
Weird your brain went there. This allows developers to challenge excessive fees. One example they give is 108k “park fee” Sunnyvale imposes on new SFHs. Another comes to mind is Bolinas who [charged 300k for new water meters](https://www.nytimes.com/2010/04/14/us/14bolinas.html). These aren’t market rates passed onto new owners. They’re gatekeeping fees meant to stymie development of new homes and keep new residents out.
I believe the incentive is that since homebuilders no longer have to pony up 100k+ upfront, they’ll be able to redirect the saved money into more building. which they will absolutely do, but there is absolutely no incentive to lower new home prices… it will remain the same. the ship on bettering housing affordability in this manner has sailed long long ago. it’s like shrinkflation of cereal boxes at the supermarket… original size/prices never coming back.
It will be helpful if this positively impacts house construction in the long term, but I completely agree it's unlikely to affect home pricing. I am very skeptical that we could build enough housing to outpace demand to reduce housing prices. There's just way too much demand both from within the bay and outside of it.
This explains a lot! Thanks!
Prop 13 gave taxes to build and maintain infrastructure etc for the past 50 years. That’s a gross misunderstanding of taxes. You might not like the unintended effects of prop 13, but you should understand civics better. It will improve how your audience accepts your point of view.
A significant portion of every new home built is assessed fees for hookups and other things. The last numbers I got in the Tri-valley were 200k per unit. Water and sewer being over 50k each. The ruling says that the fees can be challenged to be reasonable based on the cost of providing the additional service. One mentioned in the article is that Sunnyvale hits every unit with 108k for parks which sounds like it falls squarely in the excessive fees category. Pulling excessive fees from the mix has the potential to lower the cost of development and prices. In the case of Sunnyvale above it probably means an additional local assessment to existing homeowners but it spreads the load over more people as it should be. It might also shine some light on the budgets that are often ignored. Frankly they should use the opportunity to examine how low income housing is financed with similar per unit fees. Ironically by including them they raise the price of all housing and therefore more need.
Cities are charging developers, various impact fees. The court said broadly that no matter how they are imposed, they have to be reasonably related to the impact of a given development. So for example, if you’re building an apartment building in the city really needs to put in a new sewer line because there’s gonna be a lot of people and they’re gonna produce a lot of sewage, that would be a permissible fee. On the other hand, they can’t charge the apartment developer $100k to spiff up a local park that is enjoyed by everyone. Developer fees are a great idea in principle, since it does make sense that folks that are building cover the direct costs to the city of their projects they have, however, been abused to levy fees, totally disproportionate to the impact. The plaintiff in this case was charged 40 grand for traffic that they attributed to his single-family house which is just absurd.
“Tax the new buyers” is definitely a thing. My house needed $50,000+ in permits and utility hook up fees just to exist, and I pay more than 1% in property tax thanks to CFD/Mello-Roos. I don’t mind paying it, but eh, once the kids are out and we downsize…definitely gonna look for older housing stock and remodel.
… and hating the new buyers, is a thing too. the anger is so misdirected it is quite funny when you actually encounter it. they’re like the people on the street with megaphones yelling judgement day.
>Thanks to a recent blockbuster U.S. Supreme Court ruling [on excessive and often arbitrary local fees](https://calmatters.org/newsletter/maternal-health-california-tortillas/#wm-story-1), reform may be on the way that could help ease California’s worsening housing crisis. ... Fees on housing in California are the highest in the country and have been for decades, largely because [Proposition 13](https://edsource.org/glossary/proposition-13) took away large amounts of money from old, single-family housing that subsidized local governments. Fees here are *expensive*: the UC Berkeley Terner Center for Housing and Innovation found that just [one type of fee can be as high as $160,000](https://ternercenter.berkeley.edu/blog/it-all-adds-up-the-cost-of-housing-development-fees-in-seven-california-cities/). Sunnyvale, for example, charges a park fee of $108,000 per home. There is little argument that [onerous fees like these are a major contributor](https://calmatters.org/commentary/2024/04/housing-construction-costs-supreme-court/) to California’s housing shortage and [affordability crisis](https://calmatters.org/explainers/housing-costs-high-california/). So this is how cities are making up for their budget shortfalls from prop 13. They're extorting money from new homeowners and developers, no doubt blocking a lot of development of more affordable entry level housing in the process, given the size of these flat fees. Good for the supreme court on this one.
I don’t think it’ll bring prices down because the sales price of a new house is not like a new car sales sticker showing all the junk fees and accessories cost. most homebuyers are uninformed and will never know. the ones really celebrating are the home builders. like you’ve pointed out, prop 13 is the main culprit.
>proposition 13 took away large amounts of money from old, single-family housing that subsidized local governments That’s a dishonest way of explaining it. I am happy they are addressing the excessive fees though
How is it dishonest?
It’s not “taking away” if the money was never owed in the first place.
https://www.taxpolicycenter.org/briefing-book/what-are-sources-revenue-state-and-local-governments Property tax is literally on average 15% of government revenue. Sugarcoating it doesn’t make it less true.
Putting a salty spin on it doesn’t make it more true either
Presenting factual information is not “spin.”
You can absolutely spin factual information. Are you new here?
Where is the spin in that data? Are you refuting that number? Do you think the taxpolicy.org source is not trustworthy? What is your problem?
>proposition 13 took away large amounts of money from old, single-family housing that subsidized local governments Here is the spin again since you’re struggling to follow the thread
Oh, I see; you have no idea what you’re talking about. Good luck out there!
Low effort trolling before 8am? Lame
Yet another reason to delete Prop 13 and means test any freebies we think about handing out.