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Manteca bucks trend again

71% of SJ housing starts in Manteca

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Manteca bucks trend again

Manteca continues to lead the region in new housing starts.

HIME ROMERO/The Bulletin


POSTED April 4, 2010 1:56 a.m.
January and February made the Northern San Joaquin Valley seem more like Death Valley in terms of housing starts.

Lathrop started 16 new housing units in the first two months  of 2010 followed by the unincorporated areas of San Joaquin County with 14, Stockton with 13, and Tracy with two. Ripon, Lodi, and Escalon did not issue a single housing permit in January or February.

Manteca’s fortunes were not as bleak. There were 111 housing units started in Manteca during January and February including the 52-unit affordable seniors’ apartment complex being built on North Main Street behind Dribble’s Car Wash and Burger King.
Manteca’s relatively robust housing sector was led by Del Webb at Woodbridge. The age-restricted community by Pulte Homes started just under 20 homes.

The data, gleaned by the Construction Industry Research Board, indicates 71 percent of all housing starts within San Joaquin County were in Manteca. If you take out the 52-unit seniors’ apartment complex, then 60 percent of all new single family homes countywide were started in Manteca during January and February.

The pace virtually mirrors the housing numbers for the fiscal year that ended June 30, 2009 when 65 percent for all new homes started in the county were within Manteca’s city limits. Manteca had 237 housing starts, Stockton 120, San Joaquin County 30, Lathrop 25, Lodi and Escalon one apiece while Ripon and Tracy had none. Overall, there were 414 new housing starts countywide. The data is contained in SJCOG’s Regional Transportation Improvement Fee report.

Manteca‘s housing sector is expected to pick up even more once March figures are compiled.

The city council’s decision March 3 to suspend bonus bucks for sewer allocation certainty and defer collection of fees for growth-related municipal expenses until homes close escrow allowed builders to sell 29 new homes in 18 days.

The City Council lifted the bonus bucks - a shorthand for sewer allocation certainty payments - until June of 2015 in a bid to stimulate the new housing market in the hopes of putting more trades people back to work. Home construction has been one of Manteca’s biggest sources of well paying jobs after health care and education.

At the same time the council deferred collecting growth fees they have control over - upwards of $40,000 for a typical 2,000-square-foot new house - until such time as a house closes escrow. That frees up working capital for developers. The city doesn’t need the money for amenities and infrastructure until such time people occupy the houses. The suspension of the bonus bucks could either spur more housing sales by lowering the price or enable a developer to improve their financial well being at a time when they are simply building in a bid to recover their investment out of the ground on finished lots.

There were 957 finished residential lots as of Feb. 1 ready for homes to be built that could generate $633,000 annually to reduce municipal budget gaps.

How those lots could work to Manteca’s advantage when combined with other moves to prevent further erosion in municipal services paid for with general fund receipts depends on several things occurring.

•An average of 300 homes would need to be built in 2010, 2011, and 2012.

•Manteca would not add additional staffing to serve those additional residents.

And such a move could also take pressure off short-term sewer and water costs to put off the need for additional rate hikes in each of those enterprise accounts.

Manteca currently is wrestling with a projected $3.8 million deficit for the fiscal year starting June 1. Building 300 homes a year would reduce the deficit by $437,100 providing no additional municipal personnel are hired.

The city foresaw a drop-off in building and projected no growth when budgeting for the sewer operation and maintenance costs and just a one percent gain in growth or 210 homes when setting up the water operations budget.

The possible scenarios to ease Manteca budget woes triggered by The Great Recession and the foreclosure meltdown were examined during a council subcommittee meeting with developers to determine if there is a way to get housing starts to pick up in a bid to put more people back to work.

Manteca now has a 16.1 percent unemployment rate with San Joaquin County’s jobless rate at 18.4 percent.

Calculations show that it costs the city $1,457.37 in general fund dollars to provide municipal services to existing property that is within a subdivision that have infrastructure in place but are not built out. The typical household generates $209.01 in property tax, $226.50 in vehicle license in lieu taxes, and $98.83 in sales tax revenue for total revenue of $534.34.

That would represent a net deficit per house of $923.03 based on how the city was operated before budget cuts where instituted.

Unlike new subdivisions that are on the perimeters of existing development and are being processed but haven’t broken ground, the 957 finished lots for all practical purposes are being served now as the streets and parks are already in place that has to be maintained. Police and fire coverage is also partially based on geographic concerns involving response times. Both departments are already responding to the seven neighborhoods where the finished lots are located.

The scenario assumes no increase to city costs which may not be 100 percent practical. At some point it may trigger a need for an additional police officer or parks/street worker as they lots – once all are completed – have the potential of adding 2,880 residents. Under the city’s projection, they would generate $46,893 in additional Measure M sales tax that could go toward covering almost half the salary of a second police officer.
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