County takes a swing at construction stimulus
Mono County has plenty of hammers. The problem, as District 1 Supervisor Larry Johnston sees it, is that too many of them are idle. During the Board of Supervisors’ March 15 meeting, Johnston proposed a “Construction Stimulus” plan designed to help jumpstart housing
His plan, one of the planks of his campaign for the seat during last year’s election, was made up of three parts: (1) elimination of Development Impact Fees (DIF); (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 homes (SFH) completed within an 18-month period.
The item was sent back to staff for review and development of alternatives. County Planning Analyst Brent Calloway returned on May 10 with staff’s recommendations.
Staff’s program called for temporarily limiting or nearly eliminating permit fees for projects that commit to begin construction this building season. Plan Check and Permit Fees may be waived or reduced, for potential savings of up to $3,328.68. Most permits will see building division fees reduced by up to 90%. The “first come, first served” program will end in six months, or when $100,000 in fees have been waived, or $50,000 in each of two pools covering plan check charges and various types of permitting fees.
The program essentially covers the first $200,000 of valuation, which staff set as a cap. Fees on valuations above that amount will cover costs on large homes, plans which typically need to be reviewed by a consultant.
Under the plan, an applicant would apply for the stimulus, which would include a survey to evaluate effectiveness. Applicants would have three months to start construction, but could reapply or have the permit reinstated with payment of waived fees. The County is expected to lose roughly $100,000 in revenue, but much of that would be offset by fees coming in from projects valued above the cap. “That’s not expected to be a problem,” Calloway told the Board.
Staff’s proposal deviates significantly from Sup. Johnston’s proposal in at least one major area: it covers all construction projects, large and small, not just single-family homes, and the savings are taken up front, as opposed to refunds issued after the fact.
According to Calloway, however, the new concept allows staff to offer bigger savings on smaller projects, such as deck installations and so on. For example: a new garage valued at $48,000 would have fees of about $1,384 without the stimulus, but those drop to $738 under staff’s plan, a savings of about 60%.
Calloway suggested that flexibility was needed to target what staff considers the bread and butter of the industry during recessionary periods. “Small non-SFH jobs have historically kept the industry afloat during hard times,” he pointed out. Researc revealed that most homes currently pulling permits are not “traditional” SFH builds.
“Right now, large construction loans are harder to obtain, and contractors contacted by the County indicated that current building costs are ending up greater than the home’s final valuation,” Calloway observed.
Johnston appreciated staff’s taking the concept and thinking outside the box and conceptualizing it for use at the counter level. “It shows that government can actually do something, at a minimum on a symbolic level. It gets people back to work sooner rather than later,” Johnston commented. “I know there was a reluctance, because staff was unwilling to give up fees, but it will make a difference.”
The County “needs something to spur construction,” Supervisor Byng Hunt said. “It’s a good start.”Supervisor Vikki Bauer agreed, saying it’s “worth a try.”
Board Chair Hap Hazard called the program “very positive” and extended kudos to Johnston for broaching the topic. Hazard suggested extending the program’s timeline out to one year, though holding the pools of money to $50,000 for each category, suggesting there’s little expectation that the economy will rebound significantly in next year.
“The only real reason for the six months was as a trial period, which is probably going to close anyone around October, and drop off during the winter season,” Calloway said. “I’m certain we’ll be out of waiver money and back for an extension within four months.”
The Board reached consensus on approval of the six-month timeframe.