A long-awaited study detailing how much cities and counties charge developers to build housing in California found that such costs are often hidden, vary widely across the state and have slowed growth.
The report, released this week by the state Department of Housing and Community Development, comes as Gov. Gavin Newsom and state lawmakers continue to search for ways to lower construction costs to help remedy a shortage of available homes. The study recommends that legislators push cities and counties to make public their fees, set standards for services so that costs will be more predictable and take into account how they affect housing production.
“While fees offer a flexible way to finance necessary infrastructure, overly burdensome fee programs can limit growth by impeding or disincentivizing new residential development, facilitate exclusion and increase housing costs across the state,” said the report by researchers at UC Berkeley’s Terner Center for Housing Innovation.
In California, local government fees on housing construction, which can be used on parks, traffic control, water and sewer connections and other services, were nearly three times the national average in 2015, according to a 2018 Terner Center report. In some cities, researchers found, fees can amount to 18% of median home prices.
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