Monday, May 21, 2007

Housing Bust, Budget Crunch

From the Sacramento Business Journal:

The North State Building Industry Association typically frowns on escalating building fees, but the organization didn't object to a 30 percent fee increase in Sacramento County.

Those one-time increases to building permit and plan check fees are estimated to add about $875 to the cost of building a 2,200-square-foot home. Supervisors on Tuesday approved the fee increase, effective July 1, to replace reduced fee revenue stemming from the decline in new-home construction.
Similar fee increases of 35 percent have been proposed in El Dorado County to deal with falling revenue from the housing bust.

Unlike cities, many county building departments are self-sustaining, meaning they don't draw general fund revenue, said Harold Bixler, Sacramento County building chief. This fiscal year, the county expects building-permit revenue to decline 15 percent to less than $2 million, which is significantly less than during the boom years. "We're in quite a bit of a budget crunch," Bixler said. "What I take in fees is what I have to run this office."
Is the use of the phrase "housing bust" a first for this publication?


smf said...

Bunch of SHIT is what these building departments are saying. A small increase is indicated on 1 part of the fee process, but I KNOW from developers and builders in our office, and personal experience, that TOTAL 'fees' for construction are simply an outrage. By the time you are thru building a simple house you may have paid over $50K in 'fees' alone.

Plus, if these departments were self-sustaining, what happened to their surplus during the boom? What about the extra (totally inept, I add) workers they added, that are no longer needed?

What did all these municipalities do with the $$$ they received during the boom? (Wasted it, I guess)

Gwynster said...

I agree SMF. We did predict they's try this just about a week ago.

So instead of letting new development prices drop with the reduced land, labor, and materials prices, they'll keep the prices jacked up with "fees".

Totally ridiculous. Raising fees which increase the prices will just encourage more people to leave the area.

smf said...

"Raising fees which increase the prices will just encourage more people to leave the area."

And as most people I talk to agree, there was one overriding reason to live in the Central Valley, the low prices as compared to the rest of the State.

Once you eliminate that, what do you get?