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Is the debate over impact fees interrupting housing development?

On Behalf of | Aug 22, 2019 | Development |

California is one of the states that has a shortage of affordable housing. Accommodating all of the residents who need a place to live could be hindered by the debate over impact fees. Typically these are fees imposed by a local government on a proposed or new development and are meant to cover the cost of all of the public services to be provided to the new development. A development could be delayed or even scrapped because of these fees.

Even though this is not the only reason for the current lack of housing here in California, some are calling for reform to the impact fee system. They say that lower fees, more transparency and consistency in the amount of fees would make a difference for developers. Part of the problem is that cities in the state rely on impact fees to finance needed upgrades and services for utilities and roads. It only makes sense that in some locales, that need would be greater. Some substantiate the impact fees as making developers take ownership in the growth of the communities in which they build, and the fees are also seen as a way for them to pay for disrupting communities.

The problem is that these fees tend to drive up the cost of housing. As just about everyone who lives here knows, that costs are already some of the most expensive in the country. Making the situation worse is the fact that the state needs approximately 3.5 million more apartments and houses to make up for the shortage.

Most developers may understand that impact fees are the cost of doing business when starting a development. However, they need those fees to be reasonable enough to lower housing costs across the state. Right now, the impact fees charged by some cities raise the cost of housing by as much as 18%, which is significant and makes it difficult for people to find a place to live.