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Riverside County Considers Raising Building Impact Fees That Were Lowered in Recession

In 2009, when the Great Recession precipitated a crash in regional construction activity, the board slashed development impact fees by 50 percent in the hope of enticing developers to come back.

The Board of Supervisors this week scheduled an April 22 public hearing to consider implementing an ordinance that would require developers to begin paying higher fees to build or expand residential and commercial structures in Riverside County.

In a 5-0 vote, the board put developers on notice that the current reduced rates charged for construction of homes, office buildings, apartment complexes and other projects could go up beginning in July.

In 2009, when the Great Recession precipitated a crash in regional construction activity, the board slashed development impact fees by 50 percent in the hope of enticing developers to come back. The fee reductions were touted as temporary but were renewed for 12-month cycles every year, including last summer.

Critics complained that the board was giving financial interests too big a break while gaining little in return. Development impact fees are justified as being necessary to offset the environmental and other impacts of projects.

County officials argued that without the reductions, the area stood to lose out on potential revenue altogether.

According to the Executive Office, over the last decade, the development impact fees program generated $132 million that was allocated to infrastructure projects in unincorporated areas countywide.

Future impact fee revenue will go toward jail expansions, roadway grade separations, interchange improvement projects and the Interstate 10 "Life- Line" Bypass that entails building frontage roads paralleling the east-west artery between Banning and Palm Springs so motorists aren't stranded in the event of a massive traffic jam, the Executive Office said.

Under the proposed revised development impact fees program ordinance, reduced impact fees would be phased out over a year's time, between July 1, 2014 and July 1, 2015. In about half the unincorporated communities governed by the board, rates would increase over and above the rates that existed prior to 2009. In the other communities, rates would be lower than when the reductions went into effect five years ago.

Using a phased-in approach, for the first six months, rates would start out at 40 percent below their proposed base level. Then, in January 2015, rates would climb to within 20 percent of the proposed base, and in July 2015, rates would normalize, according to county documents.

A spreadsheet provided by the Executive Office showed that, in the San Gorgonio Pass, the development impact fees assessment for construction of a single-family dwelling would be $2,631 in July and would rise to $3,508 in early 2015 and reach its proposed base level of $4,385 by July 1, 2015.

The pre-2009 fee was $4,956 per dwelling.

Development impact fee charges will vary according to the size of a project, with some fees applied per acre, or per housing unit or per certain number of square feet.


– City News Service.

Carole Masson February 13, 2014 at 10:09 AM
The cost will just be passed on to the buyer. This also may slow building down, further reducing jobs which will be harmful to our area, especially at this time.

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