Before a homebuilder puts a backhoe to work, he or she has permit fees to pay, and other costs that can amount to more than $100,000 per house, not including land cost. Housing won’t be affordable in California until legislators address the permit and fee structure and the high cost of land.
By Robert Taylor, Modesto
Robert Taylor is a commercial insurance broker who serves on the board of directors of the California Building Industry Association of the Greater Valley.
Re “Reduce builders’ fees to make housing more affordable”; Commentary, Aug. 9, 2021
You cannot have affordably priced housing in California without government subsidy. Until we address the permit and fee structure and the high cost of land, affordable housing in California is a myth.
Before a homebuilder puts a backhoe to work, he or she has permit fees to pay, and other costs that can amount to more than $100,000 per house, not including land cost. These fees are not uniform across the state (i.e., fees and permits are more costly in Modesto than in Merced).
According to UC Berkeley’s Terner Center for Housing Innovation studies, the cost of building a 100-unit affordable project in California was $425,000 per unit in 2016 (“affordable” in this instance means the monthly housing cost would not exceed 30% of a household’s income).
You hear about county housing agencies and nonprofits building affordable housing for low-income owners or renters. However, they receive government and/or private foundation subsidies.
It will take political will to create subsidies to build more affordable houses, and that doesn’t seem to be here.