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Manteca may delay payment of fees until new homes close escrow

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POSTED March 1, 2010 1:47 a.m.

Banks could be the big losers if the Manteca City Council Tuesday opts to allow home builders to hold off paying growth-related fees until the close of escrow.

It is one of four proposals the City Council subcommittee of council members Vince Hernandez and Debby Moorhead are advancing to the full council in a bid to help jump start Manteca housing construction. The council meets at 7p.m. Tuesday at the Civic Center, 1001 W. Center St.

The other proposals are:
•to request the Manteca Unified School District, San Joaquin County Board of Supervisors, and the San Joaquin County Council of Governments defer the collection of their respective fees as well until the close of escrow.
•not to collect any unpaid bonus bucks paid for sewer allocation certainty through June 30, 2015.
•to have staff continue to work with the building community to finalize a new set of cost recovery fees that will be submitted to the City Council by June 15.

A typical 2,000-square-foot home being built in Manteca today has $48,464 in development related fees collected at the time a building permit is requested.

It takes between two and six months to build a home. Just $1,696 of the fees reimburses the city for actual work done to process the permit. That covers the building permit, plan check, and plumbing, mechanical and electrical checks.

There are $9,564 in fees regarding sewer and water use that pay for services that aren’t used until someone is living in the home.

The balance is for fees to pay for future projects ranging from parks and government facilities to habitat mitigation and school construction.

The only thing the city would be “giving up” is interest earned on the fees over about a three-month period.

How it helps builders is by reducing $48,464 of a new home’s construction cost that they have to carry or finance.

Since the growth fees are collapsed into the price of the home, the city would be dispersed the money it is due– as well as the county, school district and council of governments - when the homebuyer’s loan is funded.

The measures are being advanced out of concerns that a slower pace of housing isn’t helping the unemployment situation in Manteca. The city currently has a 15 percent jobless rate.

During the past nine years an average of 517 new homes have been built annually in Manteca. In 2009, there were 304 new home starts or almost 60 percent of all new housing starts in all of San Joaquin County.


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