FEES 14% OF HOME COST; SOUTHLAND BUILDERS, CITIES IN PRICING VISE.

Byline: Angela M. Lemire Staff Writer

It takes more than two-by-fours, nails and sidewalk appeal to drive up the cost of new homes these days, as about 14 percent cost of an average home in Santa Clarita goes to fees to support expanding public services.

Industry and city officials agree that, in Santa Clarita, nearly $40,000 of the $297,000 price for the average 2,000-square-foot home can be attributed to hidden costs, including fees for the building permit, water and sewer hookups and contributions toward libraries, schools, parks, firefighting services and roads, all affected when more people move in.

Those ancillary costs create constant balancing acts between builders, who aim to turn profits in a market pleading for affordable housing, and city officials who struggle to hold the line on municipal spending and taxes, while meeting the needs of booming populations.

``We don't take any development impact fees in stride,'' said Ray Pearle spokesman for the Southern California Building Industry Association.

He said the BIA closely watches rate structures in Ventura and Los Angeles counties and lobbies to try to keep developer fees manageable for builders - and, in effect, for the buyers who ultimately pay.

The BIA periodically surveys government fees to assess their overall impacts on developers. The next survey probably will take place in 2000, he said, because new fees are imposed more often when the residential development market remains strong.

Developers must balance rising costs of land, materials, administration, insurance, labor and possible litigation with profit margins lingering between 3 percent and 10 percent, he said.

``We have to look at the cumulative effect, which can be staggering. Developer impact fees aren't the only factor, but they help drive up the costs of homes,'' Pearle said.

Meanwhile, there's a need to meet demands for affordable housing in Southern California, where housing prices are among the country's highest, almost as high as those in Hawaii. Pearle said that 12 of the 25 least affordable communities in the nation are in Southern California, and the rate of home ownership in Los Angeles County falls below the national average by 19 percent.

City of Santa Clarita Planning Manager Vince Bertoni agrees that the balancing act is a tough one.

``We don't want to price people out of the market,'' Bertoni said. ``We need to make it affordable for young families starting out with children to live here . . . and we have to think of the elderly, who rely on affordable housing and good public transportation.''

But along with affordable housing, he pointed out, the community wants good public services, such as schools, public transit and streets, and public officials must figure out how to fund growing needs for such public services as the population swells, Bertoni said.

The city of Santa Clarita Transit Division is reviewing its interim fee set in 1991 - $2,000 per new home - toward funding public transit.

City administrators have worked with Los Angeles County planners to develop rate proposals that would apply to new residential development not just inside the city but throughout the Santa Clarita Valley, including Castaic, Val Verde and Stevenson Ranch. Developers could build transit improvements for credit toward fees, city officials said.

The proposed fees, based on updated projections of needs and growth, would be $1,400 per new-single family home, $1,120 per condominium home, townhouse or mobile home, and $980 per apartment unit.

Santa Clarita Transit, the city's municipal bus service provider, has experienced a 287 percent increase in ridership since 1992.

Public transportation closely ties in with the city's efforts to keep its rising population from congesting roadways. It helps protect the environment and reduces the need to construct more roadways, but Bertoni pointed out that it comes with a price tag.

``If we're successful in getting people out of the cars, we have to have the infrastructure to support it,'' including expanded bus fleets and routes, new stops, benches and shelters, Bertoni said.

Developer impact fees that offset costs for new road construction, parks and open space are not assessed per residential unit, but are factored by the total size of a development, said city senior building engineer Jan Bear.

Those hidden costs are more difficult to factor into the final asking price for a new home, as they are paid by residential home builders who, in turn, pass the expense along to home buyers, he said.

Developer fees per new dwelling unit - single-family homes, townhouses, condominiums, apartments and mobile homes - are adjusted periodically according to updated growth rates or new needs resulting directly from new residential growth, Bear said.

Pearle credits Santa Clarita with providing strong data to justify its developer fee increases, but said builders must actively negotiate with the county and all communities to keep increases minimal.

As an example, he cited last year's increase from $336 to $580 in county library-impact fees to pay for construction and facility expansions to serve new residents in a particular area. The city last month adopted the same fee, because the county cannot charge new developments within city borders.

BIA representatives negotiated with Los Angeles County officials and eventually were given proof that the $580 is fair, Pearle said.

ADDED COSTS:

Here's a breakdown of the fees for expanded public services that developers pay per house in the Santa Clarita Valley, based on costs charged per average 2,000-square-foot single-family home.

Schools: $1.93 per square foot, or $3,860 for 2,000 square feet.

Los Angeles County Fire District Fees: 19 cents per square foot, or $380.

City permits for electrical, plumbing and building: $4,000.

Roads and bridges: $6,000

Sanitation connection fees: $1,780 to $2,330.

Water connection fee: $6,400 to $8,000.

Library mitigation fees: $580 per unit

Public transportation: Presently, $200; Proposed increase: $980 to $1,400.

Note: Developers also pay fees or donate land to create parks and open space, figures are based on total subdivision sizes, not individual residential units.

Sources: City of Santa Clarita, Los Angeles County, Castaic Lake Water Agency.

Staff Graphic

CAPTION(S):

Box

Box: Added Costs (see text)