View Mobile Site

New homes may slightly help ease city budget crunch

Text Size: Small Large Medium
POSTED February 27, 2010 3:21 a.m.
Manteca has a big financial stake in trying to encourage at least 300 new homes to be built annually over the next several years.

Finance Director Suzanne Mallory has devised conservative projections showing that every 300 homes built in Manteca would send $133,433 in property tax, sales tax, and vehicle license in lieu fees into general fund coffers.

To equate that to municipal services, it is the equivalent of the salary and benefits for one Manteca Police officer. In reality, though the money would go toward reducing a $3.8 million deficit projected for the fiscal year starting July 1, 2010.

Developers – who are lobbying the city to hold bonus bucks in abeyance as well as to chip away at growth fees in a bid to encourage housing – argue that the city will actually realize more than $444.78 per single family home that is built.

The developers may be right. The city is assuming a 2,000 square foot home yet monthly tracking shows the typical home now being built is 2,400 square feet. As far as the median sales price is concerned, instead of being $240,000 as the city projects it is closer to $300,000. The city assumes the buyers of the new homes will have a median income of $56,474 which reflects the current Manetas median household income. The city assumes a disposable income of 35 percent.

While the prices median income is hard to pin down, the buyers of Del Webb homes - the top builder in Manteca in terms of overall homes built during the past three years - typically own their home outright, which means they have more disposable income.

Obviously, anything more than the city’s projections benefits the bottom line of the general fund.

There are 957 finished lots in Manteca that are ready to build homes on.

City Manager Steve Pinkerton has indicated because those are essentially fill in lots plus streets are new, the impact on the city’s general fund would be absolutely minimal. The general belief is the city can absorb those homes without a need to add general fund staff.

Pinkerton has also made it clear that ultimately there is a point – whether it is 500 more homes or 1,000 more homes – where too much building would trigger the need for more city staff.

The other major municipal services – garbage, water, and sewer – are ratepayer driven which means as demand and revenue justifies it, the city can hire additional workers without impacting the general fund.

The City Council will consider acting on several proposals being advanced by the housing subcommittee of Councilwoman Debby Moorhead and Councilman Vince Hernandez.

Dropping the bonus bucks that can run as high as $17,000 per single family home for five years is one proposal.

Bonus bucks are paid to secure sewer allocation certainty. They are not designated for any particular purpose and can be spent as the council sees fits. That contrasts with growth fees that are imposed to mitigate specific impacts created by growth.

Developers though are expected to make a pitch to drop the bonus bucks entirely.
Manteca built 304 single family homes last year – the most of any jurisdiction in the Northern San Joaquin Valley. Modesto, by contrast, built only eight new homes in 2009.

The city’s goal is to not only keep housing at least at the 300 housing units per year level but to see if it can be kicked up higher to help put people back to work.

The council meets at 7 p.m. at the Civic Center, 1001 W. Center St.
Commenting is not available.

Commenting not available.

Please wait ...