Construction stimulus yields modest results
Mono County’s construction stimulus plan, first put forth by District 1 Supervisor Larry Johnston during his campaign for the seat, was implemented this past May. After six months in effect, Planning Analyst Brent Calloway briefed Mono County’s Board of Supervisors on the results so far at their regular Board meeting Tuesday in Bridgeport.
While the pilot program might not have set the area’s building industry on fire, Calloway could point to at least a modest amount of success.
The program was set up into 2 funds: a $50,000 permit fund for quick stimulus to permit projects that had been previously submitted, and a $50,000 plan check fund, for encouraging new project submissions in order to help accelerate them to construction phase. All permits were eligible for fee waivers for the first $200,000 of permit valuation. Applicants were required to begin construction within 90 days or face permit cancellation and repayment of the stimulus fees.
A total of 114 permit fee waivers and 46 received plan check fee waivers were received and the permit fee waiver hit the $50,000 cap on Sept. 30. The 114 waivers issued ranging from $20 to the maximum allowable of $1,880.
As of Oct. 12, the plan check waiver program had waived approximately $23,000 in fees.
Many permits received multiple plan check waivers, as both the building plan check and the planning plan check fees were eligible to be waived. Of those, 2 permits, both large additions, received the maximum permit fee waiver, realizing a savings of more than $3,300.
Survey says …
Applicants were surveyed as to the program’s effectiveness, and while 37.5% of those who answered said that they were unaware of the program at the time of application, many of those same applicants also responded that the stimulus “greatly impacted” their project timeline. In addition, 55.2% reported the program was a meaningful savings, 19% reported the program was an important part of their project budget and without it, their project would have been delayed and 3.4% reported the program was a true stimulus and without it, their project would not have been possible.
Comparing 2010 data to 2011 data, at the time of implementation in midMay, approximately 10 fewer permits had been issued in 2011 than in 2010. However, permits issued in 2011 surpassed the amount issued in 2010 by mid-August, and rose dramatically in September, though Calloway said a significant amount of that number could be attributed to one project that consisted of 36 individual permits.
The stimulus was targeted to small projects, and a 2010-2011 comparison for small permit types shows an overall increase. Over the Counter permits during the months of May-September increased 27.3% , permits valued under $50,000 increased 21.2% and permits valued over $50,000 but not creating a new residential unit increased 66.7%.
One disturbing trend, Calloway noted, was that submittals for new single-family home construction were almost zero. Since July, only two requests have been turned in. Pending valuation of S$4.4 million in 2010 is down to $2.3 million this year. “We would like to get that number up so we can look forward to a healthy summer next year,” he told the Board.
Calloway said he thinks that the $50,000 permit fund was depleted on schedule, and added that extending or renewing that part isn’t pressing, since little or no construction can be realized during the winter months.
The plan check stimulus might not have skyrocketed, but Calloway recommended extending it, since those waivers can effectively remain in play until the entire $50,000 is exhausted. “It could go relatively fast, if people submit projects over the winter,” Calloway said. At least a few architects, he said, have houses sitting on the fence, and discounted plan check fees could make moving forward more attractive.
Calloway also suggested developing a “prescriptive library of solutions.” Small projects of say $500 or less, such as deck improvements or changing out a water heater, could be streamlined to save thousands of dollars in fees, as opposed to a couple of hundred bucks.
Board Chair Hap Hazard asked Calloway to look into whether any prospective permit seekers might have missed out on getting a share of the pool.
Johnston joined other Board members in supporting the prescriptive solutions, but added he doesn’t want to see the stimulus going to outside contractors and wants it focused solely on local contractors. “If we can get a few homes built to help tide [our local workers] over, that’s where I’m at on this,” he stated.
Johnston acknowledged that the county does give up a certain amount of revenue up front, but makes the stimulus back in property taxes and so on, and indicated he wanted to add more money into the exhausted permitting fee pool to extend that program further in the short term. “I eventually see us phasing this out, but I don’t think [pulling back] now is … the appropriate thing to do. It’s a great program, it shows a lot of interest in our locals and we need to keep it going,” Johnston opined.
The entire program was to expire Nov. 10, but the Board voted 3-1 (Hansen was absent) to extend the plan check portion another six months. Look for the permit stimulus to return at mid year budget review. “I’m in favor of continuing it, but don’t think it’s enough, so I’m voting against it on that basis,” Johnston said before casting the lone dissenting vote. A resolution to solidify the plan check extension will be on the Consent Agenda during the Board’s Nov. 8 meeting.
A Mammoth DIF-ference
Locally in Mammoth Lakes, Contractors Association President Tim Flynn briefed Town Council Wednesday night with news of increased permit activity. Council recently opted to substantially reduced Development Impact Fees, and Flynn related that since Jan. 1 hundreds of permits for projects of various sizes have been pulled, including 21 projects currently in the plan check process. He added that total valuation is up $1.5 million, or about 27%, over last year.
The Town and Contractors Association, he said, are mulling an outreach campaign to target potential contractors and “those on the fence” and spur more applications. Those who do pull now, Flynn said, can apply for extensions on building start deadlines.
Flynn told Council he thinks a significant portion of the building uptick is directly attributable to DIF reductions, and thanked Council for its action on the matter.