Santa Clarita / Antelope Valley : Fee Hike Rescinded to Aid Building Industry

In a mostly symbolic gesture aimed at helping revive the local home-building business and save construction jobs, a divided City Council voted to rescind a 3.2% increase in city engineering and building and safety fees that took effect in July.

The increase was mandated by a 1991 ordinance passed by the council that provided for automatic cost-of-living adjustments to city fees each July. But last month, citing the lingering recession, Mayor Arnie Rodio proposed that the new engineering and building increases be revoked.

The council approved the change by a 3-2 vote Monday night, with council members George Root and George Runner dissenting. City officials, privately calling the change mostly symbolic, estimated that the rollback might reduce a builder’s cost for a typical house by $50 to $100.

City officials estimated that the rollback could cut city fee revenues this year by $105,000. Rodio said the potential loss could be offset if more development occurs because of the city’s rollback, since Lancaster’s engineering and building fees now will be slightly less than those charged in neighboring Palmdale and unincorporated county areas.

The move by the city is just the latest in a series by Southern California cities striving to attract the economic benefits of development, often competing against each other for projects, in a period when government revenues have been dwindling.

However, Lancaster officials noted that the council’s action does not revoke the even larger 5% increases effective in July for other city fees such as those that fund construction of parks and traffic improvements. Nor does the action roll back a 3.2% increase in the city’s planning fees.

Rodio said the city’s action will send a signal to the development industry that Lancaster is serious about trying to promote construction and the jobs that come with it. Since 1990, the recession has wrecked the Antelope Valley’s once-thriving home construction industry.

But some of Rodio’s own council colleagues questioned the effectiveness of his proposal and his motivation. Several asked whether Rodio, a former contractor who faces reelection in April, was trying to court developers who traditionally have been large campaign contributors.

The Antelope Valley Building Industry Assn., representing developers and contractors, waged a widespread petition and letter campaign in support of the rollback, and was joined by several other business organizations in the valley in supporting the one-year freeze.

Root questioned whether the city ought to roll back its fees. Runner unsuccessfully suggested that the rollback apply only to residential projects, not commercial buildings such as shopping centers.

A recent industry report found new house permits in Lancaster totaled only 281 in the first six months of this year, down nearly 39% from the 460 permits for the same period a year ago. Palmdale issued 452 permits, down 28% from the 631 issued for the first half of last year.