Development fee could impact real estate in Chico

Engineering says they need to increase the development fee as much as 30% for multi-family complexes.

Posted: Dec 19, 2017 4:18 PM

Chico just keeps growing, which has it's upsides.

"We will benefit by having more people come to Chico and bring more businesses and jobs, we just need to have a place to house them," said Darlene Giampaoli, Executive Director for the Chico Builder's Association.

But with the low cost of building in the city, new homes aren't carrying their own weight.

"The current program in place is based on an old and outdated general plan, it's not reflective of what this community's intentions of growth are, and desires are," said Brendan Ottoboni, Chico City Engineer.

So what will Chico look like by 2040? What the needs will be for sewer, police and fire, parks and roads?

"The biggest one is the street facility, the cost to add roads, widen roads, are expensive!" said Ottoboni.

Engineering says they need to increase the development fee as much as 30% for multi-family complexes.

Right now, developers pay about $13,000 for a single-family home, and the proposal will add another $5,000 to the fee total.

So we know what the money will be used for, the question now is who will bare the cost, the new home buyers? Or the developers themselves.

"The builders these days simply cannot absorb a cost increase of $5,000 per unit, their profit margins are not that high, so it passes on the cost to consumers, so fewer people are qualifying for home, it means to price of homes goes up for everyone," said Giampaoli.

The director of the Chico Builder's Association says developers are willing to pay their fair share, but they don't see eye to eye with the city on what exactly is "fair".

"The urbanization fee is focus on repairing below standard level road- when you think of new people to move to chico, they haven't driven on the roads, but we're asking them to par for those repairs," said Giampaoli.

"This is absolutely to make the community better, we collect fees from developers so we can maintain levels of service so existing residents are not negatively impacted," said Ottoboni.

City Council will have a final vote on the matter Tuesday, December 19th. 

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