Council shelves fee reduction for single-family homes

Those calling for caution in regards to Stockton’s growth and future finances won a measured but meaningful victory Tuesday, Aug. 18, at City Hall. The City Council decided to conduct further study regarding the “Stockton Economic Stimulus Plan” proposed by Mayor Anthony Silva after hearing from several individuals and organizations. (Full disclosure: I was one of the speakers urging the council to amend the stimulus.)

The plan, which Silva crafted with community organizations as well as the Building Industry Association, would have cut $17,000 off the per-home Public Facilities Fee for 1,300 single-family homes to be built in Stockton.  That raised eyebrows, as the proposal would mean a $22.1 million cut to the fund that pays for future infrastructure such as roads, utilities, parks, libraries, community centers, etc.

Silva and BIA Chief Executive Officer John Beckman said the reduction in fees would bring Stockton’s fee structure closer in line with those of surrounding Central Valley cities, making Stockton more attractive for investors. They also argued that the stimulus would jump-start economic growth, citing research from the University of Pacific’s Business Forecasting Center that shows residential development can be a prime driver of commerce. They estimated the construction of 50 homes in each of the six council districts, plus the construction of 1,000 homes in the city at large, would create 3,700 temporary jobs and have a positive ripple effect in the region. The stimulus also stipulates that 60 percent of people hired for those jobs must live within a 50-mile radius of downtown Stockton.

Tuesday night, the Stockton City Council decided to schedule a study session to delve into the topic of reducing Public Facility Fees for single-family home development

Tuesday night, the Stockton City Council decided to schedule a study session to delve into the topic of reducing Public Facility Fees for single-family home development

Although the plan is a plain gift to the development community, credit should be given for looking at ways to reinvigorate Stockton’s sluggish economy. However, there are major shortcomings with the proposal.

The study serving as the proposal’s foundation admitted that its conclusions regarding the economic benefit of residential home building “does not estimate … the cost of providing government services to the households.” Those costs can be considerable, because while developer fees cover one-time infrastructure costs in new neighborhoods, the city is left to pay for maintenance of those structures in perpetuity. Such unfunded mandates are one of the reasons that the city recently danced with the bankruptcy reaper. If this plan is to move forward, the City Council must have a firm grasp on what a $22 million hit to the Public Facilities Fund would mean for the city down the road.

And that’s not the only concern. As the proposal is written, city staff would use “their discretion and best judgment to determine which Public Facility Fee is to be reduced and by how much.” While such a plan might provide expediency and flexibility, the decision regarding what to fund and what to cut should be a council-level decision and not hidden from the public.

The thing that most drew my attention, however, was the lack of any explicit mention of affordable housing. The stimulus policy is clearly intended to boost the construction of single-family homes. But the reality is that even if a $17,000 per-home discount is passed on to consumers — far from a guarantee— relatively few residents in Stockton can afford to purchase a detached house, let alone one that is newly built. As originally proposed, the stimulus would leave out those with very low- and extremely low-incomes — those most in need of help finding safe, affordable housing.

I’d suggest that any targeted reduction of fees should be for developments for multiple families that are easily connected to existing amenities and infrastructure, or for developments that offer reduced costs for those on the low end of the income ladder. Those, after all, are the types of projects that most challenge builders financially.

These concerns and others were enough to convince the council to unanimously (with Councilman Michael Tubbs absent) schedule a study session regarding the proposal before moving on to approve or reject it. This deliberate approach means there is a real opportunity to address the questions surrounding a decision that would take away a large chunk of future infrastructure spending.

But it’s not enough to find fault or to say no. There must be answers and positive movement, because the needs pointed out by Mayor Silva are real. The city needs economic development. The city needs a new fee structure that makes us competitive for builders. The city needs to encourage growth in all its geographic areas. It’s possible, with patience, some of the answers can come out of a process that’s already begun — the 2007 General Plan update.

Though the city has so far failed to live up to a legal settlement to update the broken and outdated 2007 General Plan, that process is invaluable to moving the city forward. Amending the city’s blueprint for growth should include a comprehensive review of developer fees and an estimate regarding the level of funding needed for future roads, utilities, parks, libraries, community centers, etc. It will contain a better gauge of our community’s needs, which can be balanced against the desire for a stimulus. And it can provide a path forward regarding growth in all-too-overlooked areas of Stockton.

This is yet another reason why the 2007 General Plan update needs to be a top priority — it will put us in a position to make more educated choices, rather than taking hopeful shots in the dark.

The desire to act now is understandable. There is a restlessness and sense of urgency to shake Stockton from its moribund status — to show that the city is on the rise after its precipitous fall. But acting too quickly hasn’t panned out well for Stockton in the past. Which is why it’s good to see the mayor and council take the cautious route when playing the stimulus game with money borrowed from future needs.

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Categories: Development News

Author:Jon Mendelson

Jon was born and raised in Stockton. He returned to the city following four years of college at Loyola Marymount University, in Los Angeles. He is an award-winning columnist and the former editor of the Tracy Press newspaper in Tracy. He currently is associate director of Central Valley Low Income Housing Crop., which assists homeless families and individuals. He lives in Stockton's Miracle Mile district.

3 Comments on “Council shelves fee reduction for single-family homes”

  1. cecorrales
    August 19, 2015 at 11:33 am #

    Hi Jon! I’m born and raised in Stockton too. I just finished my urban planning degree in Portland and wrapping up an internship at 1000 Friends of Oregon. Not sure if you’ve seen this already, but this is one of their reports making the financial and environmental case for smarter growth management: http://www.friends.org/infrastructure.

  2. Tim Dearborn
    August 19, 2015 at 1:12 pm #

    I don’t know if this was covered in the fee reduction proposal or not, but I think it is prudent for fees to be set to direct housing where it is most needed. If we want to encourage infill development, then fees can be set to push development in that direction. If someone wants to build in green field areas, the fees should be higher. I also have concerns about the fact that these fees cover infrastructure costs but not the cost to maintain or operate them. I know that is what property taxes are supposed to cover but as we all know, they don’t.

Trackbacks/Pingbacks

  1. “Stockton Economic Stimulus” for homebuilders gaining steam | Stockton City Limits - October 20, 2015

    […] Silva has been the most vocal champion of the legislation, dubbed the Stockton Economic Stimulus Plan. Its supporters contend the proposal would stimulate local job growth by making it less costly for […]

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