For the first time ever the Manteca City Council almost rejected a request by a developer to start grading and construction of improvements prior to filing a final map.
The council split 3-2 Tuesday with Richard Silverman and Gary Singh dissenting to approve a request from DR Horton — America’s largest home builder — to start work on DeJong Unit 4 south of Woodward Avenue bordered to the east by the future extension of Atherton Drive. Similar requests in the past have produced unanimous votes approving them.
Silverman before casting his vote against what in the past has been a routine request said DR Horton wasn’t the type of quality builder that Manteca deserves or expects.
After the meeting Silverman held up Atherton Homes and Raymus Homes — two local builders — as examples of developers that want to build a community and simply not sell homes.
The rare dissention comes on the heels last month of the Manteca Unified School District vowing to oppose another proposed DR Horton project to build 158 homes on North Main Street based on the firm’s refusal to even return calls requesting them to consider help building new schools to accommodate growth.
Since the Aug. 7 council meeting when DR Horton representatives made it clear that they had no intention of encumbering future home buyers with a Mello-Roos tax, representatives of the home builder that had $14.5 billion in sales in 2017 have contacted the school district and are discussing — but have yet to commit — to helping build schools.
The school district projects the 158-home North Commons neighborhood DR Horton is pursuing will generate 77 more kindergarten through eighth grade students and 37 high school students.
The nearest elementary school to the North Commons project is Neil Hafley School. The elementary campus consists of all portable classrooms that are more than 30 years old. The project is located in the current New Haven School attendance boundary that would require busing to the rural campus more than three miles away.
The 3-2 council vote Tuesday could signal problems with DR Horton’s ability to get approval for the North Commons project.
Unlike DeJong Estates that is already zoned for residential use, the 23.7 acres for the North Commons project located across the street from Casino Real requires the council to agree to a general plan amendment to accommodate the building of single family homes. It is currently zoned commercial.
It has been pointed out by a council member that it would be tough to support a zoning change to create more lots to build homes that are not committed to help solve the school’s housing problem especially when there are already upwards of 9,000 homes in various stages of approval.
The city has no legal authority to impose a Mello-Roos district as a condition on a new subdivision. That said it can make a variety of legal findings that would allow then to vote against the general plan amendment.
After the Aug. 8 meeting a DR Horton representative said the firm — which doesn’t build apartments — could legally build apartments under the existing zoning to cover the entire parcel that would generate even more students that would impact Manteca schools.
Singh, after hearing comments made by the DR Horton representative at the Aug. 8 meeting, said “They (D.R. Horton) have got to do what it takes to be a part of this community,”
Mayor Steve DeBrum at the time also indicated he was less than enthusiastic with DR Horton’s positon. DeBrum said it would prompt him to “give pause” regarding the general plan amendment request if D.R. Horton was not participating in a Mello-Roos district.
Historically when all builders in Manteca were 100 percent local — with firms with deep roots in the community or based in nearby Stockton and Modesto — they viewed it as a necessity to make sure their future residents as well as the rest of the community would have needed school facilities.
Developers like D.R. Horton essentially buy subdivisions that are entitled to be developed instead of working on them from inception. That means whatever the local land developer is able to get city approval for is what the national builder is buying. D.R. Horton’s representative said since their deal only covers development fees for schools that is all they plan on paying.
Not having Mello-Roos would give
D.R. Horton advantage over
That said the builder doesn’t really pay for the Mello-Roos taxes. The buyers of new homes and subsequent buyers do for 30 years.
Builders like D.R. Horton like not having Mello-Roos attached to their neighborhoods as it gives them a leg up on competition such as Raymus Homes and Atherton Homes.
It’s because a $450,000 home sold a Mello-Roos tax requirement is not equal to a $450,000 home sold without such a requirement. Fewer buyers can qualify for a home with Mello-Roos obligations as mortgage writers undertake all of the monthly housing costs into account included pro-rated Mello-Roos taxes.
Just like the housing boom from 1999 to 2006, Mello-Roos taxes aren’t slowing down the sales of new homes in Manteca. That’s because almost 8 out of 10 buyers are from the Bay Area with significantly higher paychecks than can be typically earned in the Northern San Joaquin Valley.
Mello Roos is considered vital for school facilities given development fees aren’t enough to cover the impact of additional space needs even when coupled with state money if it is available.
The fact a general plan amendment is needed to allow more homes in addition to roughly 9,000 proposed homes in Manteca that have secured entitlements or in the process of doing so, means questions could be raised about how the zoning change would benefit the community especially since it would create homes that could be built without paying Mello-Roos taxes.
That could create significant political issues in the middle of the council campaign.
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