Proposed "Affordable" Housing Fee is Worst Idea Yet

Affordable housing is a laudable public policy goal, of benefit to the whole community. But, who pays for it?

Santa Cruz County, California is considering a major building permit fee increase in order to fund its Affordable/Inclusionary Housing Program. The current shortfall is due to the loss of redevelopment funds since 2011. The county hired Keyser Marston Associates to provide an Affordable Housing Program Analysis. This report includes recommendations on how to raise funds to implement the program.

Their main proposal is a new $15-per-square-foot fee on all new home construction and remodel addition projects. This proposed fee is to be added to current building permit fees, which are already sky high.

If approved, the cost to permit a modest new home of 2,000 square feet increases by $30,000. A simple 500 square foot addition will cost an additional $7,500. With fee increases like these, many homeowners may simply choose not to build.

This fee may also lead to an increase in nonpermitted and undocumented work, which often results in poor construction and hazardous buildings. Unpermitted work reduces legitimate building permit income to the county while increasing the cost of code enforcement.

The proposed fee will place the burden of cost for the countywide affordable housing solution squarely on the shoulders of those residents who wish to add needed space to their home, build an accessory dwelling or build a new home.