How Cost of Housing Inches Up : * Survey: Fees levied by government agencies against home builders for roads, schools, parks, sewers, water systems and other items range from $8,500 to about $23,000.
Land still accounts for more than 30% of the cost of a new home in Orange County, but the fees that government agencies charge developers have steadily grown over the years and now can add $20,000 or more to the price of a single-family residence, according to a new survey by an industry trade group.
While the fees in this year’s survey run from about $8,500 per home in Buena Park to nearly $23,000 per home in San Juan Capistrano, most cities and the county levy charges in the $15,000 to $19,000 range, according to a report released Thursday by the Orange County Building Industry Assn.
The survey also found that most cities’ fees rose faster than the nearly 5% rate of inflation in the past year.
Because the annual study is prepared with the cooperation of officials in the various agencies, the report does not single out agencies with excessive charges or congratulate those with very low fees.
But while government officials typically maintain that the fees are directly linked to actual costs, builders often privately criticize them as excessive.
The charges are levied to help pay for the roads, schools, parks, sewers, water systems and other capital improvements required by new development, as well as to compensate government agencies for the costs of processing, checking and inspecting developers’ plans.
The BIA survey is based on the fees that a city, school district, water agency or other special agency would assess the developer of a 10-acre tract of 50 single-family homes of 2,500 square feet each. The BIA’s numbers, which are approximate, cite the highest fees applicable in cities where such fees can vary from location to location and they do not include many of the hourly fees charged for inspections and plan-checking.
BIA president Philip Bettencourt said the association has been preparing similar fee reports for internal use since 1979--the first public report was issued in 1988. In the 12 years, he said, fees have gone up every year, usually exceeding the rate of inflation.
“That is our big concern,” he said Thursday. “The costs seem to bear no particular relationship to the cost of living. Fees are going up by 8%and 10%a year, while increases in the the cost-of-living index in the past two years have stayed pretty flat” at about 5%.
Typically, the BIA report shows, government fees are lower in Orange County’s older cities and higher in newer cities and unincorporated county areas.
Park fees and school fees tend to be the most expensive levies in most jurisdictions, with school fees in most cities topping $3,800 per home and park fees ranging from nothing in Buena Park to more than $7,000 per home in Irvine, Bettencourt said.
San Juan Capistrano, where most new construction is being done in hilly terrain where a substantial amount of grading and earth moving is required, generally has one of the highest fee totals in the county, largely because of its water and sewer connection charges.
THE HIGH COST OF HOME-BUILDING
Land, labor, materials and the builder’s profit margin have a lot to do with the cost of a home. But all of those things being equal, the fees required by government agencies add a lot to housing prices. A new study by the Orange County Building Industry Assn. details how those fees vary from city to city and have increased in the past year for a 2,500-square-foot detached home. The chart provides examples of low-fee, moderate-fee and high-fee cities.
COMPARISON OF CONSTRUCTION FEES
Total amount of fees for 1991 and percentage increase from 1990: Buena Park: $8,509 / +7.7 Costa Mesa: $22,650 / +30.4 San Juan Capistrano: $22,967 / +9.0
Fees* Buena Park Costa Mesa San Juan Cap. In dollars: 1991 1990 1991 1990 1991 1990 Environmental 0 12 1 1 45 45 Planning 69 49 60 60 1,816 1,816 Building 1,835 1,337 1,644 1,659 1,701 1,637 Engineering 236 208 214 204 1,803 1,147 Capital facilities 2,430 2,360 16,981 11,699 11,690 10,873 School fees 3,900 3,900 3,750 3,750 3,950 3,950 Other 39 34 0 0 1,962 1,595
* Does not include various hourly fees for city planning and inspection services. Source: O. C. Building Industry Assn.
