The last dairy within the city limits is being converted into a subdivision that will boast of some of the city’s smallest lots — 3,255 square feet — in what the developers say is an attempt to provide Manteca with more affordable homes.
The 99-home project known as Yosemite Greens is envisioned for 11.7 acres between the Manteca Golf Course and Airport Way and borders Crom Street on the north. The subdivision will feature typical lots of 43 by 75 feet compared to “standard lots” that tend to be 60 by 100 feet in areas of Manteca that do not have so-called McMansions built on lots ranging from 8,000 to 12,000 square feet.
Unlike local developers such as Atherton Homes, Raymus Homes and firms from the Central Valley that build housing in Manteca, the Bay Area-based CastleRock Partners have refused to allow their future home owners to be encumbered with a community facilities district to help pay for school facilities to educate school-age children that will live in the houses.
Instead they will create a CFD to make homeowners pay for basic improvements such as streets as well as sewer, water, and storm lines with a 30-year tax on top of their mortgage. In a letter to the city, Spencer Snyder representing CastleRock Partners, indicated they are pursuing a CFD because as developers they can’t afford to put such improvements in place. That is a major departure for how local developers such as Raymus and Atherton have developed in Manteca for years. They foot 100 percent of the bill for such improvements and then recapture the investment when they sell homes.
What this means is they also eat the interest on construction loans needed for the work in advance to build the infrastructure. What CastleRock is doing is making the homebuyers not just pay for the infrastructure but the interest required to pay back the bonds over 30 years. And while the cost of interest on a standard infrastructure loan that puts the developer on the hook is passed on as part of the selling price of a home, it is only what is accumulated over the course of several years while the CFD approach significantly increases the interest paid given the 30-year payoff.
The recession showed how CFDs used to get the developer off the hook for fronting infrastructure costs for a subdivision can make homes extremely unaffordable in economic downturns.
Unlike Manteca Unified CFDs that have a ceiling on what can be charged, those tied to infrastructure do not. What happened in several neighborhoods in Lathrop as homes went into foreclosure, the remaining homeowners saw their CFD taxes increase — substantially in some cases — to cover the shortfall of CFD payments due that owners of homes in foreclosure could not afford to pay. The infrastructure CFD which was much higher than the Manteca Unified CFD for a five-year period after housing prices collapsed forced owners that sold who weren’t under duress to sell for less than they would have gotten due to the CFD.
The Yosemite Greens developers will pay school fees to Manteca Unified based on a square footage charge as does every other developer who also puts in place a CFD that encumbers the buyers and not them. CastleRook appears to have opted to use the CFD to avoid their putting in upfront costs for the project.
If they had agreed to encumber future owners for a CFD tax for schools along with a CFD tax for infrastructure so they could avoid securing a loan for such improvements, prospective buyers would have been considering homes that come with two CFD taxes.
The project as presented will also include:
*extending sidewalk along the south side of Crom Street to Zurich Drive to provide a safe crossing to Stella Brockman School.
*installing a 55-foot high and 1,000 plus long netting in a bid to protect future homes from errant golf balls.
*putting in place two new northbound lanes on Airport Way and a 36-inch median along the subdivision’s frontage.
The Manteca City Council will consider approving the project when they meet Tuesday at 7 p.m. at the Civic Center, 1001 W. Center St.
To contact Dennis Wyatt, email firstname.lastname@example.org