UNEXPECTEDLY: California has the highest impact fees for homebuilding in the country.
When property owners apply to the government for building permits, they’re often required to pay impact fees: fees meant to cover the strain additional buildings have on public resources like roads, sewers, schools, and parks.
There’s nothing wrong with properly set impact fees. But some local governments set impact fees that are excessively high or that aren’t related to the actual impact of construction projects. In addition to violating property rights, these improperly set exactions increase the cost of construction during today’s housing crisis, as a new Pacific Legal Foundation report reveals.
While this is a problem across the United States, California’s impact fees are much higher than anywhere else. Our report found that the average total impact fees for a typical U.S. home grew from almost $5,000 in 2004 to more than $9,000 in 2019. However, California’s average impact fee in 2019 was more than triple the national average, at almost $30,000. And it was much higher than the next-two-highest states: Maryland and Oregon charged the third- and second-highest exactions on average in 2019—nearly $13,000 and $17,000, respectively.
When breaking this down by locality, the situation paints an even starker picture of how much higher impact fees were in California. The five cities with the largest average total impact fees in 2019 were all in California, and all exceeded $50,000. Ironically, the smallest exactions were found in California’s next-door neighbor, Nevada. Las Vegas and Mesquite had average total impact fees of $165 and $43, respectively.
Somewhat relatedly, Thomas Sowell has written about “The Housing Price of Liberalism.”
In this part of California, liberalism reigns supreme and “open space” is virtually a religion. What that lovely phrase means is that there are vast amounts of empty land where the law forbids anybody from building anything.
Anyone who has taken Economics 101 knows that preventing the supply from rising to meet the demand means that prices are going to rise. Housing is no exception.
Yet when my wife wrote in a local Palo Alto newspaper, many years ago, that preventing the building of housing would cause existing housing to become far too expensive for most people to afford it, she was deluged with more outraged letters than I get from readers of a nationally syndicated column.
What she said was treated as blasphemy against the religion of “open space” — and open space is just one of the wonderful things about the world envisioned by liberals that is ruinously expensive in the mundane world where the rest of us live.
As Sowell writes, “Much as many liberals like to put guilt trips on other people, they seldom seek out, much less acknowledge and take responsibility for, the bad consequences of their own actions.” San Francisco is a crumbling, endlessly multifaceted example of precisely that.
And as we linked to earlier today, Adam Carolla knows who California’s local governments will invariably roll first: