Should DIF = Ditch impact fees?
Johnston says slash fees, spur development
Stimulus packages aren’t just for big government, and during Tuesday’s regular Board meeting in Mammoth, District 1 Mono County Supervisor Larry Johnston rolled out a Construction Stimulus Proposal to spur local building and development.
Johnston’s plan was made up of three parts: (1) elimination of Development Impact Fees (DIF), which was a plank in his platform while running for office; (2) elimination of building permit fees for energy-related improvements, such as solar panels, energy-efficient water heaters, window replacements, insulation, etc.; and (3) for a limited time period, such as 12 months, waive building permit fees for single family (stick-built) homes completed within an 18-month period.
“There’s a great sense of despair in the construction sector of the economy, which is probably the lowest it’s been in 20 years or more. People have had to leave town, it’s been very destructive,” Johnston said in his presentation remarks. “I believe this is something government can do and with minimal cost. If we can get some projects on the tax rolls, that would employ people, including some who would otherwise leave the area.”
New construction is to some degree based on national as opposed to local trends, but Johnston is convinced that some changes in the building code would help get shovels into Mono County ground. “Lack of development has as much impact on the [economy] as overdevelopment.”
Supervisor Byng Hunt was wary of scrapping DIF. “If we eliminate it, we have to refund the money already collected,” Hunt said. “If done properly, DIF has proven to be a benefit to many communities around California. There is definite value in having fees in place to offset the costs of development.” Hunt charged that Mammoth Lakes has dramatically dropped its DIF fees, and seen little or no effect on housing starts.
None of the capital projects which were slated to have been paid for in part by DIF revenues are going forward, Johnston said. At the rate things are going, he theorized it could take literally hundreds of years to collect enough fees to fund waiting projects.
He also railed at a later agenda item regarding updating the fee schedule. “Why should we spend $20,000 to update it? Is the fee going down with a new Capital Improvement Program? It’s only going to go up,” he said. Taking issue with Hunt’s note about refunding money, Johnston pointed out, “It’s not our money; it never was.”
“The reason for the slowdown is the economy,” Supervisor Tim Hansen opined. “We could be shooting ourselves in the foot and lose what little building fees we are getting. Maybe we have to define ‘impact.’ Subdivisions generate impact. I just think we can’t dump the whole thing.”
Supervisor Vikki Bauer restated her long-running stand against DIF fees, and reminded Hansen that the community of Lee Vining recently fought tooth and nail to be exempted from DIF. “And I don’t support spending money to revise [the fee schedule],” Bauer stated. “It’s going to be a money pit and a bureaucratic quagmire. We have, what … enough money to put in half a curb down about half of one side of a street?”
Chair Hap Hazard, however, has a different perspective. His district has roughly 250 lots approved for building, and with that in mind posited that the County’s approach to DIF is not ill-conceived, though he acknowledged it hasn’t been done appropriately. “I’ve got lots approved for building. Those homes are going to put a demand on the County for services,” Hazard said. “I’m not supportive of moving away from DIF as a whole. I think we need to look at what we need countywide.”
Tim Flynn, new Mammoth Contractors Association President, said the key word is stimulus. “You have to have a project to apply the fees to,” Flynn said. “The current fees aren’t doing anything anyway. From the private sector, I’d rather work than not. [The fees] are affecting whether people are building; numerous costs are going up.” In Mammoth, Flynn pointed to a preponderance of remodel projects, though he said there are some new homes pending, estimating that about 5 single-family permits have been pulled.
A $20,000 update of the DIF schedule met with some pushback, at least in terms of where the money’s spent. The majority of the Board seems to be banking on building and development coming back, splitting 3-2 on whether the schedule should be revised, with Bauer and Johnston dissenting. Having directed staff to proceed with the revision, that move was tempered by the consensus that the money would be better spent in-house, as opposed to hiring a consultant.
County Counsel Marshall Rudolph advised that the County also is prohibited from using any of the already-banked $296,000 in DIF to fund the revision, last updated in 2005. If the County is going to file a revised schedule, it has until the end of this fiscal year, since the 5-year legal window is getting ready to close.
Given the new CalGreen Title 24 standards that went into effect Jan. 1, the Board directed staff to proceed with developing language for Johnston’s green building proposals in items 2 & 3.
Chair Hazard also asked to add housing mitigation for removal consideration, which according to Rudolph technically qualifies as a form of DIF. “Let’s put a freeze on housing mitigation costs and process,” Hazard suggested. Bauer scoffed at the idea, saying that affordable housing fees amount to $300, a pittance compared to DIF, which can run $5,000. Affordable housing fees, she cited, only make a difference when building homes with a square footage of 2,500 or more. Housing mitigation is set for an April 19 Board review.
As for refunds, staff is also working on digging through building permit records to figure out who paid what; however, per the Board, it appears that no refunds will be issued until the fee schedule revision is completed.
