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Fees to build ‘typical’ home: $40K

Paying for growth’s impacts clashes with affordability

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Fees to build ‘typical’ home: $40K

It costs $40,000 in fees for a typical new tract home in Manteca before construction can start.

HIME ROMERO/The Bulletin


POSTED January 7, 2010 2:48 a.m.
What does it cost to build a typical tract home south of the Highway 120 Bypass in Manteca?

It is a question that builders are likely to supply the council subcommittee addressing ways to jumpstart the Manteca new home construction that was appointed by Mayor Willie Weatherford. Council members Debby Moorhead and Vince Hernandez are serving on the committee.

The council’s goal is to get more people back to work by finding ways to encourage more home construction.

Developers for years contend everything comes down to cost that ranges from construction and development costs to growth fees.

A permit issued for a 2,608-square-foot home in Woodside – the neighborhood in the triangle bounded by Atherton Drive, Woodward Avenue and Van Ryn Avenue in southeast Manteca – in November reflects the actual construction cost of $199,091.

Toss in permit review fees for the specific home plans that average $906 and the cost is $199,997.

The other upfront costs that are passed on to the buyers are numerous fees the city as well as Manteca Unified School District level to make growth pay for its share of community facilities and infrastructure. That adds $40,617.57 to the basic cost of constructing the home. Now the tab is up to $240,714.47 for a five bedroom, three bathroom home. That does not include the cost of the land plus the home’s prorated cost of subdivision infrastructure that includes streets, sewer and water lines, underground power lines, street lights, sidewalks, curbs, storm drains, and such that the developer has to pay for including postal cluster boxes and things such as sound walls and common landscaping.

The buyer of that home also has to pay for neighborhood park upkeep and other common landscape maintenance along sound walls and entry points plus Mello-Roos school taxes for new construction on top of the school mitigation fee collected with the permit. The two could easily add $500 annually more to the cost of buying that new home compared to buying an older home in central Manteca.

Things won’t be getting cheaper for those who may end up buying one of the 4,198 homes proposed as part of the Austin Road Business Park project. Manteca is pondering how to pay for $235 million in needed interchange improvements at Austin Road on Highway 99 as well as along the Highway 120 Bypass. Depending upon how the improvements are made, the cost could run as high as $10,000 per home.

Breakdown of basic fees for homes
Manteca’s elected leaders are considering the possibility of delaying the payment of some of the growth fees until such time as a home closes escrow. Currently, the fees are collected before a building permit can be issued. It can take three months or more to build a house.

By allowing the developer/builder to defer the payment they won’t have to borrow the money to do it freeing up resources to build spec homes. The city would still be made whole.

The money collected can only be spent for what it is collected for. The city would simply be delaying receipt of the money for three months.

The growth fees applying to the Woodside example is as follows:

First there is a fee for paying the major collection lines for the wastewater treatment plant. The fee is based on location of the new neighborhood in Manteca.

The highest fee is $1,782.
Then there is the fee to pay for the wastewater treatment plant expansion.  Add $314.86.

The cost is now $2,096.86.

This pays for the trunk line put in place to serve the area south of the Highway 120 Bypass. Add $576.56.

The cost is now $2,328.11
Add to that the interim sewer facility – basically to pay for a lift station. Add $231.25

The cost is now $2,904.67.
There is a sewer connection fee of $3,301 as well as a phase 3 completion charge of $1,802. All of the sewer charges, by the way, are assessed separately under law so it is clear what each fee covers.

The cost is now $8,007.67.
Storm drains to serve new development with fees based on the infrastructure needed to serve a particular area. The highest fee is $1,269.

The cost is now $9.276.67.
The transportation fee for major roads also has to be paid. The highest fee among the five residential zones is $1,996.

The cost is now $11,272.67.

Water fees are next. There is a surface water treatment plant debt fee of $3,219, a meter installation fee of $246, and a surface water capital fee of $98.

The cost is now $14,835.67.

There is also a government facilities fee to cover things such as additional space for the library, city hall, police headquarters, animal shelter, performing arts center and other uses. The cost is $2,852.

The cost is now $17,687.67.

Larger subdivisions are subject to an agricultural conversion fee of $14,104 or $2,820.80 per home. The money goes toward preserving agriculture land elsewhere within San Joaquin County or in and around Manteca.

The cost is now $20,508.47.

There is also a San Joaquin County Regional Transportation fee that is assessed to pay for non-local transportation needs troiggered by growth that is regional in nature for the county. The fee is $1,509.

The cost is now $22,017.47.

San Joaquin County is also assessing a facilities fee that cities had to agree to before any more land would be allowed to annex. The fee covers everything from jail and court needs to administrative centers such as the one proposed for Manteca on Daniels Street across from the Stadium Retail Center. The fee is $1,678.

The cost is now $23,695.47.

Fire facilities and major equipment purchases have a fee based on square footage of a home. A 2,500-square-foot home would have a $750 fee.

The cost is now $25,445.47.

Then there are other fees such as for parks and schools that are based on the typical home’s footprint will add at least $7,000.

The cost is now at $32,445.47.

Bonus bucks are biggest fee
Then there is the big fee – bonus bucks. The sewer allocation certainty fee for residential construction was proposed by builders to avoid lawsuits over the city’s first come, first-served approach that was in existence in the late 1990s. Now almost all development of consequences is in a development agreement that guarantees allocations for sewer servcie in exchange for a fee. The fee is on a sliding scale with $7,350 per home for one to 50 housing units a year, $8,172 per home for 51 to 99 housing units per year, and $13,340 per home for 100 or more housing units.

For the example, Woodside Homes is being charged $8,172.

The cost is now $40,617.57.

Without growth fees, Manteca would have no way to pay for infrastructure needed to handle additional residents and traffic except for borrowing and spreading 100 percent of the cost to all residents existing and new.

With growth fees, state law allows new construction to pay for the impacts they create. That means other costs – such as the existing residents’ share of a new city hall – are funded from other sources.
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