Tierra West Appraisal Blog

Regarding the 02/19/2010 Valley Chronicle Editorial: “Cut in fees help builders, not residents”: From the editorial, it would appear that those evil and greedy developers are at it again; trying to make a profit. Yes the real estate market is in a severe slump and home equity has virtually evaporated with most home transactions in our Valley now tied to short sales, lender REO’s, foreclosures and bankruptcies. With falling home prices, development and home construction has come to a virtual halt since the market price of a new home is now less than what it costs to build – let alone make any profit. Also, when development, impact and mitigation fees run $35,000 or more per home even before a shovel hits the dirt, it is no wonder new home construction does not pencil. Who do you think really pays these fees (err, taxes) in the end? Yes that is right, the homeowner - you and me! What makes more “economic sense” – stimulating hundreds of jobs that come with new home construction or watching the unemployment and welfare lines extend around the block? A temporary or even permanent reduction in the $9,812 per home County Transportation Uniform Mitigation Fee (TUMF) and other development fees will not lead to a breakdown in society or other inferred maladies noted within the editorial that states development fees “pay for such things as the street lights and sewer service that new building requires”. Actually, this infrastructure in paid for and installed by the developer when the tract is developed and homes are built; or possibly deferred in part to the homeowners through increased property taxes if a CFD is formed. The statement made in the editorial that: “If they (developers) cannot afford to build and pay the cost of their impact, then they should not build” is extremely myopic – it is not the developer who lives in those new homes! It appears that the NIMBY syndrome is back in town. California also has one the highest “development and impact fee” schedules in the country and the TUMF fees are dispersed throughout the County to improve regional transportation corridors and will not likely end up being spent in your neighborhood (see County Ordinance 824 and Amendments). Developers are not the bad guys – they are just attempting to provide we the people with a safe, attractive and affordable place to live; maybe even make a profit along the way and create a few jobs in the process. What’s wrong with that? With our County unemployment rate now exceeding 14%, we need to encourage our legislators and representative to get California back to work and stop spending money we don’t have. It seems all my friends and family have been cutting back recently because of the economy, why not government spending? It is truly amazing how creative and efficient government can become when the money/tax spigot is turned down a notch or two.