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Manteca should limit new homes to 500 a year

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POSTED March 8, 2010 1:27 a.m.

It is time to revisit the 3.9 percent growth cap.

The City Council decision last week to drop the bonus bucks for five years makes it clear that Manteca is wrong to tie its economic fate to the housing market.

The bonus bucks are essentially a surcharge of $8,000 to $17,000 per new home for sewer allocation certainty  that has saved Manteca from financial disaster by covering $12 million in general fund shortfalls since 2002 plus has helped make up for woefully inadequate growth fees.

It is noble that the council seemed to think it was the right thing to create construction jobs for non-Manteca residents who happen to build homes in Manteca. One must assume that is the case as the only attempt to verify who would be working was a quick survey by the Community Development Department of those who were at home construction sites in Manteca. It was quickly dismissed by builders. That survey showed the vast majority of those people who built the 304 new single family homes in Manteca last year were not Manteca residents
So much for jump starting housing to create jobs for Manteca residents but then again how can anyone use the words “jump starting” with a straight face when Manteca’s new home construction is quite strong compared to virtually any other place in the Central Valley.

If Manteca developers simply built another 100 homes this year that hadn’t already paid their agreed upon bonus bucks that would have brought in $1.2 million. That would have gone a long way toward wiping out the $3.8 million deficit projected for the fiscal year starting July 1, Of course, if Manteca simply repeated its “dismal” home start performance of 2009, it would wipe out the deficit and assure there would be no police or fire layoffs.

It is not wise to use bonus bucks to balance the budget. And yes, the city in past years was a bit “fat” as shown by how the city has trimmed $11.4 million in the current fiscal year to stay in the black.

No one – expect of course home builders – are now arguing that Manteca is still fat. So you need to ask yourself why we still have a deficit.

Yes, the state and the economy are a factor but in reality growth – specifically new homes – haven’t been paying their way.

It didn’t help that a previous council got rid of the utility tax on garbage servcie or that they were reluctant to charge what many services cost. A prime example was a repeated refusal of previous councils to increase golf rates for years because they didn’t want to lose votes at election time.

Growth fees – at least a number of them – are arguably inadequate. That means the city can’t build the facilities needed to accommodate growth.

Can the fees and the implementation of such amenities be done more efficiently? Without a doubt that is the case. The builders’ solution though is to drive Manteca to discount the building fees across the road. They have made it clear they won’t stop at the bonus bucks. They want bargain basement growth fees as well.

And to make everything even more ironic, the builders are showing resistance to any attempt at full cost recovery for city-related expenses to process subdivision maps and such. That reflects roughly $1.7 million of the $3.8 million deficit.  Of course, some builders will say the city’s figures are inflated.

It’s about time someone questioned whether the builders are simply crying wolf.

It should be clear by now that Manteca doesn’t benefit from having its financial fate tied to home builders. It is also clear that Manteca is emerging as a regional retail and jobs center.

We also know that we need to build 300 homes a year to retire the fire fee loans and somewhere around 400 a year to cover sewer and water bond costs.

With that in mind, Manteca needs to go cold turkey.

Chuck the 3.9 percent growth cap tied to sewer allocations. Instead, allow only a maximum of 500 single family homes a year to be built in Manteca period. No carry over, just a maximum of 500 homes a year. All other housing whether it is age-restricted, apartments, duplexes or non-traditional single family homes can secure 200 units a year with carryover allowed.

This will actually improve Manteca’s financial status.

The city is down to muscle now and probably once the economy bounces back will be able to stay at the current staffing level.

But when the economy bounces back developers will want to build even more homes. They can either be first come first served on the first of each year for those 500 housing permits or else they can ask the city to guarantee them sewer allocations over multiple years in exchange for paying something extra.

Since developers hate the bonus bucks so much let’s call that “something extra” a license to build houses since essentially the city is giving them a license to make money as all 67,000 residents – and not developers – have  gone out on a financial limb to bond for sewer and water.

It’s time to wean off the housing market for a financial fix and for Manteca to stand on its own.


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