Homebuilding Fees Are a Huge Part of the Cost of New Houses

New Homebuilding Fell 24 Percent In 2007, Largest Decline In 17 Years

Thinking about buying a new house? Turns out, nearly a fifth of the price of the house goes to government fees. A new study out of UC Berkeley looked at how much homebuyers were paying in ten different cities across the state.

KFBK spoke toDavid Garcia with the Terner Center for Housing Innovation at UC Berkeley, who says the cost can vary widely from city to city...for instance, in Fremont in the East Bay, from 22 thousand dollars to as high as 35 thousand dollars per unit.

Sacramento's fees generally range from 85 hundred dollars to 13 thousand dollars per unit. Garcia says the high fees are inhibiting new housing growth in California.

He also says while cities use the fees to pay for services, the costs are being passed on to the consumer and it's making it hard for the state to overcome the housing crisis.

So what's being done about this? The study was actually commissioned by the state Assembly in 2017 to figure out how lawmakers can reduce development fees.

Garcia says they identify a couple of potential solutions in the report, but the problem remains: cities have to find a way to fund their infrastructure. He says cities have their hands tied because of limited revenue from Proposition 13.

If you want to hear more, you can listen to our whole conversation with David Garcia from the Terner Center for Housing Innovation at UC Berkeley below.

Sam Shane

Sam Shane

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