Development Doesn't Have to be a Zero Sum Game, Says Local Architect

Impact fees fund community centers, public art, new school construction and public safety and are paid for by developers as a cost of doing business in a city. But critics of Petaluma’s fees say they are among the and are keeping developers from coming to town.

At Monday’s council meeting, numerous residents, including realtors and others those whose livelihoods depend on new construction, spoke about the need to lower the fees in an effort to attract new business to town.

“If you want to stop growth, leave your fee structure in place,” said Larry Jonas, who owns several parcels of land around Petaluma. “If you want the city to grow, if you want to fill up all the little parcels that are now empty, lower fees. When you are a developer looking at fees that equal 50 percent of the construction costs, it’s not worth it.”

Petaluma charges $59,800 in fees for a single family home, compared to Windsor's $46,900, Santa Rosa and Rohnert Park's $38,300, according to Petaluma planners. That's considerably higher than the $12,000 per single-family-home fee nationwide and $29,000 in California.

Petaluma increased fees in 2008, just months before the housing crash. But Mayor Dave Glass reminded the council and the public that fees were utilized to pay for vital city services such as road work.

"How do we keep the promises that have been made to the community (like the Rainier undercrossing or East Washington freeway intercharge, which rely on developer fees), especially when some of those promises have been made by people who are advocating a reduction in the fees?" Glass said. 

But Petaluma architect Steve Von Raesfeld, whose firm specializes in infill and redevelopment projects, said the real issue was not whether to lower or keep the current impact fees, but changing the entire formula to encourage multiple family unit construction, as called for under the Petaluma General Plan, the guiding document for city development through 2025.

“The city’s current fee structure was formatted for single family large format subdivisions and large developments like Target…and is based on units," Von Raesfeld said.

"If you want to incentivize someone to build four or five one-bedroom apartments on a lot, why are they going to do that if they can build a five- bedroom house and pay 70 percent less in fees?”

Von Raesfeld said that downtown had a significant number of “undeveloped and partially utilized parcels” that already have sewer, water and gas set up, yet are not generating any revenue because they are vacant.

“We’re thinking about it in a ‘Do you want to sell a lot of shoes for a little money or no shoes for a lot of money?’ kind of way,” he said. “Now we’re selling no shoes for a lot of money…so we’re not getting employment downtown, we’re not getting jobs and we’re not increasing our tax base.” 

Mayor Glass said he would consider Von Raesfeld’s comments and instructed city staff to study which fees could be eliminated first and which ones required more analysis.

What do you think? Should the city alter its impact fee structure to incentivize multiple-unit housing? Should fees stay high or be lowered?