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Woodland council likes idea of deferring fees for downtown developers – Daily Democrat

The framing is being put in place which will make it a little bit easier for Woodland builders to erect more housing within the city’s downtown.

If the City Council decides to give its final approval in a few weeks, a development impact fee deferral ordinance in could allow  more affordable housing on now-unused property and ease — if only a little — the lack of affordable places to live.

The crisis is paramount statewide as well as across Yolo County and in Woodland. In September, there were 120 homes sold countywide at a median price of $445,000, which was 9.1 percent higher than a year earlier. Another 19 new home sales took place countywide with their median prices at $584,000.

Developers are happy with the direction the city is taking, which is part of a series of measures that have been enacted over the past year to provide financial incentives for builders, who until recently haven’t provided any apartments or other “missing middle” housing. In fact, no new apartments have been constructed since the 1990s.

Under the plan talked about by Community Development Director Ken Hiatt and Economic Development Manager Wendy Ross, the city would basically switch its schedule of being paid development impact fees. Instead of being paid upfront, before a project gets off the drawing board, the city would be paid when work is completed.

That allows builders to have more money upfront so they could apply it to the project and then pay the city when the work is done.

Talks about deferring fees first came up last June and city staff have been looking exactly which fees could be deferred and for how long.

According to Hiatt, it’s believed the short-term financial effect “is more than off-set by the program’s benefit of stimulating new
projects that would not otherwise be feasible. Therefore, the deferral program is projected to have a net positive fiscal impact to the city.”

Developer Ron Caceres spoke for many other builders when he said there was a “housing crisis in Woodland.”

“Housing is too expensive and there’s a severe shortage of it,” he said, “particularly in rental housing, but also in affordably priced for-sale housing as well. While the economy is doing well now, the rising cost of construction and rising interest rates further impair our ability to create more housing in the future. We need more housing now.”

Caceres, backed by builders Doug Busy, Mark Mezger, Dave and Tim Snow, all agreed deferring fees would “bring down the costs and make projects more affordable.

Dave Snow is in the process of building the Woodland Downtown Suites at Third Street and Lincoln Avenue. When completed next year, the three-story tall, 14-unit condominium-style homes are expected to sold at market rates.

Mezger, who owns property at Ashley Avenue and West Main Street, went so far as to say the fees, when applied, actually increased the cost of rentals by around $220 a month (depending on the price of the structure).

“We’re not asking for something for nothing,” Caceres said to the council. “In return for lowering development fees we will start building housing now; more housing in the core urban infill areas. Many of you know the struggles we’ve had in trying to build downtown. It’s not easy and we want to keep the momentum going. We can with your help. Areas like Spring Lake do not need developer incentives because they can pay their fair share. However, not everybody wants a single-family, suburban home. Some of us want to live in or close to our downtown.”

At it’s heart, the city’s current building ordinance calls for the payment of facilities fees when a building permit is issued. But now, according to Hiatt and Ross, cities are revising their fee deferral program to allow developers to pay their fees “at final inspection,” or when a certificate of occupancy is issued or escrow closes.

The council itself has elected to defer fees for specific projects in the past —  notably the new Yolo Food Band building now under construction, the fees of which were deferred less than a month ago. Specifically, 39 projects have received fee deferrals.

But according to city code, only the council can defer fees, not city staff.

The current ordinance is also scheduled to sunset in 2022, but by changing the ordinance now, it’s hoped more building will occur sooner.

The modifications to the ordinance basically expand or further define those fees and conditions allowed for deferral, along with the removal of specific money amounts, or “thresholds,” and permit the city manager or his representative make the final decision. As in the case of all ordinances, in the event of a dispute the council would still remain the final arbiter.

“The Greater Sacramento Economic Council, of which the city of Woodland actively participates, continues to identify development impact fees as one of the primary challenges to stimulating new job generating development activity in the region,” according to a report prepared by Hiatt. “The industrial vacancy rate is less than 3 percent and large industrial space is needed for projects currently looking for existing inventory or speculating for future development. The temporary reduction in fees is critical to the feasibility of future development projects, particularly during this time of high construction costs. Most cities in the region have and will continue to provide fee deferral programs and participate in other infrastructure financing mechanism … support private developer’s need to defray the initial cost of construction.

In response to questions from the council, Hiatt said the alterations in the fee payments won’t increase the city’s population and wouldn’t apply to Spring Lake, but rather “eliminate some finance and procedural hurdles.”

Councilman Angel Barajas also wanted to know what was trying to be achieved? He wondered if the changes would provide more “missing middle” housing or low-income housing. Hiatt said the fees themselves “are agnostic. It’s up to the market to determin which projects move forward. the hope is we’ll front load some of the market rate infill and then more over time.

Presently, he said, the general plan allows for 1,000 apartment or other types of housing within the downtown core area and that over the lifetime of the general plan, which continues until 2030, there could be as many as 1,600 housing units built.

Overall, the council was in favor of the idea with Councilman Tom Stallard saying the community is in desperate need of housing. He suggested, however, that the city contact both the Woodland Joint Unified School District and Yolo County officials, to see if those agencies could defer their fees as well.

Stallard and Mayor Enrique Fernandez also urged both city staff and developers to look at “creative ways” to finance infill development such as density bonuses, meaning the greater the density of housing, the more fees would be reduced.

“This is just the beginning of the process,” Fernandez said to developers. “I appreciate your patience. (I want you) to know that we are thinking on the same wavelength and know that we are protecting the interests of the community as a whole and and those of developers.”

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