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Construction Gets More Expensive

I'm not sure how I feel about this move by the Council to impose "developer fees".  It's one thing to collect fees and another to decide how to spend them.  The Daily Journal gives us the basics here.

Builders looking to construct new retail spaces, offices or hotels in Burlingame will be required to pay a new schedule of fees intended to help officials fight the local affordability crisis.

The Burlingame City Council unanimously approved Monday, June 19, establishing linkage fees charged to developers to generate revenue for a new fund designated for subsidizing affordable housing opportunities.

Fees will rise as high as $22 per square foot for office spaces, $12 per square foot for hotels and $7 per square foot for retail projects but there would be discounts for developers willing to pay prevailing wages to construction workers.

Assuming councilmembers confirm their vote at a second meeting, the rates will go into effect Thursday, Aug. 3, and projects currently in the development pipeline would be required to pay, raising officials’ concerns over springing new fees on unprepared builders.

The real problem is not to fund more so-called "affordable housing" since that is just a myth perpetuated by local socialists who never passed Econ 101 and don't really care about middle income people trying to make a home in B'game.  The new tax revenue should go to help infrastructure to support the increased load, the heightened police and fire needs and perhaps relieve the burden on the school system that comes with more kids.  And while we are at it–this should be sufficient to replace the .25% sales tax increase on the November ballot (see the next post down).  Here is the scary part:  the fees "could bump up to as much as $25 million in a more aggressive development environment, according to a city report."  I really don't want the City to have $25 mil (per year??) to distort the housing or office/commercial market in town.  But the old saying that if you want less of something tax it, means this might not be all bad.  Like I said at the top, not sure about this one.  What say you Voice bloggers?

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3 responses to “Construction Gets More Expensive”

  1. professorawesome

    25 million estimate by 2040. NOT every year. And that is assuming an aggressive amount of development, NOT an increase in fees.

  2. Bruce Dickinson

    So, as they say in the music biz, for recording, production, distribution, and royalty contracts, the devil is in the details. While Bruce Dickinson believes this is one of the more interesting things coming out of council chambers lately (I know, very low bar) there a a few things that strike me as questions that need to be answered before, or, concurrently with this proposal.
    What does this subsidizing fund look like? How will it give out money?
    Is the money available for both renters and home buyers?
    What are the qualifications to receive the money?
    How much would it reduce the typical family’s rent (or home purchase price)?
    Just levying money with no clear plan on re-distributing it allows for the potential of mis-allocation or abuse further on down the road. As can be seen by a rec center now costing $45 million (at well over $1,000 per square feet, unheard of for this type of facility), there is already plenty of evidence that stewardship of your hard-earned dollars is not the city’s forté, to put it mildly.
    Between this and the increased sales tax rate proposal, Burlingame seems to be dead set on increasing revenues via seemingly more desperate measures. Translation: expect more of the build. build, build mentality as the city seems to love protecting their incumbency, their job security, salary/benefits, and community business, real estate and development interests.
    The steam-roller is coming head-on and either get out of the way, or be run over and flattened!

  3. Joe

    From yesterday’s Daily Journal:
    Supporters of more rent control in California say they have gathered enough signatures to put an initiative on the November ballot and held a Monday rally to generate support for the measure.
    If the secretary of state certifies that the campaign collected enough signatures, voters will weigh in on repealing a 1995 law that restricts rent control.
    The law, known as the Costa-Hawkins Rental Housing Act, bars cities from capping rent on buildings constructed after the law took effect and puts other limits on rent control policies.
    Opponents say the measure will exacerbate the state’s affordable housing shortage by discouraging developers from building. Developers’ profits — and their incentive to build — will drop if communities cap rents, they say.
    “This ballot measure will pour gasoline on the fire of California’s affordable housing crisis,” California Apartment Association CEO Tom Bannon said in a statement. “It will result in an affordable housing freeze.”
    If the rent control proposition makes the ballot, it will join a $4 billion bond measure to fund housing for low-income people and veterans.
    https://www.smdailyjournal.com/news/state/rent-control-backers-say-they-expect-to-qualify-for-ballota/article_8fa7b536-4765-11e8-9b67-df9855da0a1f

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