For the record, I am pro-growth, but not blindly, all developments are not created equal. In my opinion, all residents should be pro-growth because old growth becomes more of a financial burden on the city as time goes by.
Hollister needs the new growth to revitalize its economy, its population, improve its infrastructure, raise its median education level and income demographics and to pay for services. Everything gets old and wears out sooner or later; properly managed growth is essential to renew any city.
Old, non-transacted, housing units (with old property tax values, used up impact fees, no homeowners’ associations and a small proportion or no service taxes) cost the city a lot more per unit than new housing with their community facility districts, homeowners’ associations, heavy impact fees and whopping property tax bills.
New designs and specifications such as fire sprinklers, energy and water efficiency and pollution prevention puts less stress on the environment per unit than most older homes.
Capital costs are “fixed, one-time expenses incurred on the purchase of land, buildings, construction, and equipment.” By law, impact fees cover a fair share of the capital costs. Added up and leaving out the county’s litigated demand for a fiscal neutrally fee of more than $10,500, Hollister and approved county impact fees typically come to $54,360 per single-family residence of approximately 2,033 square feet of living space; almost $65,000 if the county prevails in court.
Who gets approximately what of these one-time fees without the county charge? Jail and Juvenile Hall gets $367, Police Impact Fee $420, Library $544, Fire Impact Fee $570, Park Acquisition $2,567, Park Construction $2,704. Sewer Collection $2,830, Water $3,243, Storm Drain $3,300, Schools $10,000, Traffic $13,816 and Sewer Treatment $13,998.
Additionally, most new developments are required to have a homeowners’ association to maintain their roads and streets at no cost to the city.
For continual operational funding, new residential developments are enrolled in Community Facilities Districts (CFD) that have a current annual police and fire service charge of $436 and an annual lighting and landscaping charge of $350 unless they pay for their own lighting and landscaping. The CFDs have annual adjustments for inflation, so they keep up with costs.
Finally, there is the property tax issue. A home purchased 20 years ago, in 1996, for $220,000 and not sold or significantly renovated is likely paying about $3,500 a year in property taxes used to support the county, the city, and other taxing entities, but mostly (68 percent) schools. A new home of the same size is likely paying $5,800 in annual property taxes for the same purpose. New homes also absorb applicable property-related bond taxes, eventually reducing the costs for everyone else.
Therefore, new development is paying its own way if the fees are properly applied; those payments also tend to offset the increased burden of older growth and reduce overhead costs.
So, what’s the problem? Well, for one thing you may get someone to buy you a delicious cake, or even two cakes, but you usually can’t eat them in one sitting. For the critical impact fees, traffic and schools, there can be a significant lag between accumulating the fees and putting in the improvements depending on the project’s details. A project that includes the road enhancements or completions directly improving traffic flow is more digestible than one whose improvements come long after the traffic impact hits.
Likewise, schools have to plan ahead and this brings up the other risk, what I call “the avalanche effect.” Like putting boulders in a hillside, every approved project that sits and waits for the best market opportunity adds to the potential for an avalanche where everyone decides to build at once because the market is good. New housing is market sensitive more than most other businesses; the developer, typically, sells each new home only once. The avalanche effect is one of the causes of extreme peaks and valleys in development execution.
Going back to the cake analogy, we get no cake or very little cake for years and then the entire table is filled with cake and you have to eat it all; the question then is, why aren’t you eating it, don’t you like cake? The best growth pattern is a steady rate, but practically it’s not possible; however, we can find chunks we can digest if we are smart enough to look ahead and keep watching the rate of development and size of the potential avalanche, and control both.
To do this requires a codified strategy and frequently updated planning documents and schedules. We also have to change the General Plan to better identify our priorities and to ensure that county development plans in the Hollister area are fully coordinated and do not adversely impact our own.