New housing construction in Hollister.

Hollister and San Benito County must consistently and effectively use development agreements to protect the public interest.

A development agreement is a voluntary negotiated contract between a public agency and a developer regarding the land use process applying to a specific project. Although many things can be negotiated, the land use must still comply with the general plan and be consistent with any applicable specific plan.

There are advantages and disadvantages to development agreements, when properly used the advantages can be maximized. To do that it is essential that the public agencies have staff that is well trained and experienced in all aspects of these contracts and who understand the value of the development authority asset as well as development finances.

City and county residents, through their government representatives and police powers, own an extraordinarily valuable asset in areas where development is in demand. That asset is the exclusive authority to control what property owners can do with their property; the control mechanism is the permitting process.

No private developer does a project just to benefit the residents or community; that may happen if it fulfills a need, as incentive or by happenstance; but their primary consideration is financial for themselves and/or their investors and there is absolutely nothing wrong with that.

A good development agreement makes sure that the public agency gets a fair return (public incentives) for the value of the right to develop (profit) in exchange for certainty in the development process. It has to leave enough profit potential to entice the developer to enter into the agreement and, at the same time accomplish the agency’s objectives.

Impact fees are legally justifiable; therefore, they are the “get even payment” for the impacts of new development. There is no “get ahead” in impact fees and too few of the public understand that.  Development agreements provide a way to get ahead by obtaining more and/or better public extracts for right to develop.

Many documents have summed up some of the advantages and disadvantages of development agreements, here are a few:

Advantages –

– Greater latitude to advance local land use policies in new or creative ways (affordable housing, mixed use, etc.).

– Permits greater flexibility in imposing conditions or requirements on development including greater exactions (payments and/or infrastructure).

– Affords developers and the agency greater assurance project can be built.

Disadvantages –

– Time and cost to process (contract negotiation).

– Difficulty to amend once adopted (major amendments must be agreed by both parties; minor amendment process can be built in).

– Over-reaching can make the project unfeasible

Overall, development agreements require a lot more care and work form the planning point of view, but when properly done they can do a much better job of mitigating the impacts of new developments.

(See the attached file for recommended reading on development agreements.)