Fee hike could halt affordable housing

Bryce Alderton

Affordable housing in Huntington Beach may be a thing of the past if

the City Council approves a proposed fee increase to new residential

developments in the city.

Developers and residents are irate at the skyrocketing costs proposed

by city staff.

“Where I do business it will stop [affordable housing],” said Randy

Allison, a Downtown Realtor and builder. “The sales price [of a home]

will increase.”

The heated debate centers on a fee increase developers would have to

pay for new residential housing units built or rehabilitated in the city.

Staff intends to change the fee the developer pays, which is called a

“park in-lieu” fee. These fees pay for developing new parks or

refurbishing existing neighborhood or community parks and recreational

facilities. They do not pay for park maintenance.

Currently, developers can either pay a fee, which is 60% of the

average land value for residential property in the city, or set aside

land to be used for a park or recreational facility.

City staff has now proposed a new fee that would be based on 100% of

the appraised acre value of a property.

The new fees would be site specific instead of being based on a

citywide average land value.

City officials have expressed concern concern with existing fee

because land values in the city can vary from $700,000 to $4 million per

acre.

A subcommittee made up of planning commissioners, builders, city

staff, a member of Huntington Beach Tomorrow and one realtor will study

this proposed fee plan and will return to the planning commission with

its findings on April 9. The planning commission would then send the plan

to City Council for approval at a later date.

Huntington Beach first adopted the fee in 1982 and was based on

residential land value for a single-family home being $182,000. The fee was revised in July 2000 to the current fee of $519,976 per acre, said

Ron Hagan, the city’s director of community services.

The proposed fee increase would hurt business for Downtown developers

who are tearing down old homes and building new ones, Hagan said.

Along with the increased fee developers would also be required to pay

an additional 20% for any off-site improvements such as curbs, gutters,

sidewalks and traffic signals.

Allison, the Downtown realtor and developer, contends that the

proposed fee increase would tack on an additional $65,000 to $75,000 to a

home’s price.

“It would stop building for a few years until the new prices are

absorbed into the market,” he said. “City and school [districts] would

have less revenue for a couple of years with the decrease in building

permit revenue.”

But Hagan insisted that the new fees are necessary to maintain the

city’s existing current ratio of providing five acres of parkland for

every 1,000 residents.

* BRYCE ALDERTON is the news assistant. He can be reached at (714)

965-7173 or by e-mail at [email protected]