By DUANE W. GANG
The Inland building industry is using the downturn in the housing market and economy to push and win major changes in how local government handles new construction.
For more than a year, the Building Industry Association of Riverside County has met with county officials to find ways to make it easier to move through the often complicated and bureaucratic process to gain approval for a new home or development.
The changes already under way range from reduced and delayed fees and fewer plan checks to a policy requiring phone calls be returned within 24 hours.
The two sides will meet again next week to continue hammering out details, officials said.
"Unfortunately, this is an opportune time," said Mark Knorringa, executive director of Riverside's BIA. "Because the industry is in such bad shape, the county has an opportunity to focus on management issues."
How the Fees Work
Local governments charge development fees to pay for transportation, recreation, utility and other public improvements. The fees typically are collected before construction begins.
Homebuilders pass those costs on to buyers and argue the fees are adding costs to homes at a time when prices are dropping.
"The fee level is an area we are focusing on now," Knorringa said. "It is important that fees come down. Fees, in almost every jurisdiction, are at all-time highs."
Fees should be reduced or delayed until a home is occupied, he said. Local governments should even consider a new formula, such as tying fees to the region's median home price, he said.
Inland economist John Husing, in an October report about Riverside County, said the reduction of fees should be considered to help boost the slumping homebuilding industry. But he stressed local governments view any reduction as temporary.
Meanwhile, industry officials in San Bernardino County are pushing similar changes.
San Bernardino, Ontario, Colton and Chino Hills are among the cities that are now allowing developers to pay fees when certificates of occupancy are issued, rather than at the start of construction, said Jeff Simonetti, vice president of government affairs for the Baldy View chapter of the BIA.
Rancho Cucamonga takes up a similar proposal next week, and the city of Victorville has temporarily lowered fees as a way to jump-start new construction, Simonetti said.
On the state level, a law took effect in July granting builders a one-year extension on project maps on developments that are not under construction. Builders won't have to begin the approval process all over again when they decide to restart building.
"Limiting development impact fees helps to keep home prices affordable and will ultimately help to prevent further erosion of the local housing market," he said by e-mail.
San Bernardino County officials also are discussing ways to streamline the development process but aren't as far along as their counterparts in Riverside, said Supervisor Gary Ovitt, who backs possible changes. Nothing has come before the board yet for consideration, he said.
Developers in the Inland area long have been powerful and influential, major campaign contributors to local elected officials. The building industry, when booming, helps drive the local economy.
Now, permits are down, as is fee revenue, and industry officials say a more efficient approval process and lower fees could help jump-start building.
"Housing unfortunately is one of the roots of our current economic downturn, but a healthy housing market will ultimately help to stabilize our local economy," said Simonetti, who also is the Baldy View BIA's chief economist.
But county officials insist the moves are not a giveaway to developers.
Efficiency Saves Money
"I like to think we are constantly re-evaluating ourselves and finding better ways to do business," said George Johnson, director of the Riverside County Transportation and Land Management Agency.
Developers, if working in an unincorporated part of the county, have no choice but to go through county government to get permission to build. The county sees itself as a partner with the industry, Johnson said.
The county has an obligation to be as efficient as possible, he said.
"I don't see it as giving away the store," Johnson said.
Anytime the county can simplify the approval process, both the county and private sector will save money, Johnson said.
He said he understands concerns about the deferral of fees, particularly those such as local Quimby fees that pay for parks and recreation space. The deferral of Quimby fees until the time a building permit is issued was put in place in June.
A deferral on a development, for instance, means the fee revenue comes in scattered and not all at once.
The county tries to have amenities built as close as possible to when people move in to new homes, Johnson said.
"That's a constant challenge," he said.
But with tough economic times, he said, the county was willing to defer the payment of those fees. "It is a constant balance," Johnson said.
Talks between the building industry and county officials began in November 2007, with direction from supervisors Marion Ashley and John Tavaglione, Johnson said.
Meetings took place regularly, with recommendations put in place throughout the summer and into the fall. Officials are working out details of others.
Published: Monday, November 17, 2008