| California City Reduces Affordable Housing Fees|
|Most cities and counties in the United States have affordable housing fees. These fees allow developers to choose between including a predetermined percentage of affordable housing units into their projects or paying a fee to the local housing authority. Recently, the city of Concord, California reduced its per-unit fee.|
In 2004, the City Council voted to impose a fee of $17,660 per unit for residential developments that didn't include any affordable housing. Collected fees go into a fund that's then used by the city to develop affordable housing on its own. Because housing prices have dropped so sharply in the last few years, the city proposed dropping its fee to $7,032 per unit.
Though the reduction was significant, some local builders protested that it was still too high. Citing the low cost of existing and foreclosed properties, they argued that a $7,000 fee would still hinder their ability to develop projects that were competitively priced. One developer suggested the fee should be dropped to $3,055 per unit. The City Council eventually decided that the easiest thing to do was split the difference. As a result, the new fee is now $5,043 per unit - not as low as some developers and builders wanted, but still a significant reduction from the original $17,000 per-unit fee.
Concord isn't the only city or county re-evaluating its affordable housing fees. Contra Costa County - also in California - recently reduced its single-family house fee from $25,000 to just $3,000 per house. Government officials hope the lower fees will spur development in these areas.