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  Chair: Mike Recupero (Recupero & Associates)
Meets 3rd Wednesday of each month BIA fights hard for economic stimulus. Click here to learn about the latest efforts. The BIA/OC Government Affairs Committee is actively working with local jurisdictions to adopt local economic stimulus packages. The stimulus packages are different for each jurisdiction, but all with a common thread; relief for the distressed housing industry. The various stimulus packages include deferral of development impact fee collection from permit to certificate of occupancy issuance, refund of development impact fees paid by projects currently under construction for the purpose of improvements or infrastructure, permit and plan check inspections, allowance of alternative building materials, fee increase moratoriums, and much more. BIA/OC will also be working with local school districts and special district to defer fees to certificate of occupancy. This action will allow for greater cash flow flexibility for our builder members. Stimulus is not limited to local efforts. Both the California Building Industry Association (CBIA) and National Association of Home Builders (NAHB) are actively pursuing state and national solutions to the housing market crisis. CBIA is working on statewide fee deferral legislation and has introduced a bill to extend sub-division maps for an additional 3 years. NAHB has introduced a permanent increase to the conforming loan limits and FHA reform. One very recent piece of good news for the industry was the approval by the FHA of the conforming loan limit increase for high-cost housing markets to $729,750. This mechanism, that carries with it a federal guarantee on the payment of principal and interest of the underlying loans, helps lenders obtain the capital they need to keep mortgage markets flush with money to lend to homebuyers – something the nation’s current “credit crunch” has stymied. In addition, the implicit federal guarantee on these loans means lower interest rates for borrowers. Please click the following link to see the new mortgage limits for all housing markets on the HUD website: These are difficult times for our industry, but the BIA staff, Board of Directors, and dedicated members volunteers are working hard on your behalf. For more detailed information on the stimulus efforts please contact Bryan Starr at bstarr@biaoc.com Senate Approves Economic Stimulus Package The Senate has voted 81 to 16 in favor of a $161 billion stimulus package which is now headed back to the House of Representatives where it is expected to be quickly approved. Two key components for the housing industry are as follow: A $16.5 billion tax break (paid out over the next two years) that allows businesses suffering losses now to reclaim taxes previously paid. An increase in the limit of “conforming” loans that Fannie Mae and Freddie Mac can buy to $729,750,(Orange County’s limit would be $706,250 based on the median home price formula in the bill). Click here to read online news story Builder / Economic Relief Package * Automatic 360 day extensions of permits and plan checks beyond the normal 180 days that can be already granted by building officials to carry current projects over through the code change year. We are very optimistic that the BIA/OC will be able to compel government agencies to grant our requests on behalf of the industry. The government agencies will also feel the pinch of a slowing housing market. The overall health of the economy depends upon government and industry’s willingness to work together. Because the entire industry is dependent upon the economic health of our homebuilder companies, the BIA/OC will continue to find proactive solutions to help solve issues that impact our entire membership. Residential Development Impact Fees Continue to Negatively Impact the Housing Industry 35 jurisdictions each with their own individual schedule of fees, Transportation Corridor Agencies fees, school impact fees, water, sanitation district fees…the list goes on and on. Residential home builders are no stranger to the endless fees that are charged to residential projects. The problem is, that while the market makes corrections and unit pricing is periodically adjusted, government regulations and fees keep on going up. Nearly all of the jurisdictions in Orange County undertake annual adjustments (increases) to their individual fee schedules. During the recent housing boom, residential builders were not terribly concerned with fee increases because home pricing was increasing sharp and housing demand was great. But this boom has come to an end and pricing has been corrected to reflect the market. The problem now is that government agencies with land use authority are not accounting for the depreciation in housing when adjusting their development impact fees. The end result is, lower unit pricing + higher fees = significant revenue loss. We have come to the point now that members of our industry are actually forced to shy away from building projects in certain jurisdictions due to the fact that projects simply will not pencil due to over regulation and unreasonable fees. A recent example of the kinds of fees we are seeing is the recent increase to the park dedication in-lieu fee in the city of Newport Beach. At the beginning of this year the fee was approximately $6k per unit. The staff came up with a methodology based on assumptions about the appraised value of park land in the city and came up with a recommendation to increase the fee to an astonishing figure of $36k per unit. This figure accounted for a nearly 475% increase. The BIA immediately reacted to the initial staff recommendation and assembled a task force to address this dramatic proposal. Over the course of the next few months, the BIA team was able to get the fee adjusted downward, but the end result was still an exorbitant fee that will end up costing residential builders a lot of money. While Newport Beach seems to be on the extreme side of the fee spectrum, this is just one example of the financial challenges our industry is facing throughout the county. The BIA/OC Government Affairs Committee is committed to defending our members from this constant barrage of attacks on the prosperity of our industry. The BIA/OC tracks and documents each fee in every jurisdiction on an annual basis through our Land Development Fee Survey. This survey allows our members to fully understand the cost implications of building residential projects in any given jurisdiction here in Orange County. As a part of our annual fee tracking, the BIA/OC asks each jurisdiction to provide at least a 60 day notification on regular fee adjustments, per our BIA/OC Fair Share Principles. We also ask that the jurisdictions work with the BIA/OC on major fee studies and significant increases. The advanced notification allows us to fully understand the methodology and needs assessment surrounding a particular fee. In many cases the jurisdictions methodology is found to be flawed or the needs assessment fails to meet the appropriate nexus requirements. In those cases, we are able to effectively advocate for a lower fee or no fee at all. It is these kinds of tangible cost savings that stand to be a true benefit to our members and the industry at large. For more information about the efforts of the BIA/OC Government Affairs Committee or the 2006/2007 Land Development Fees Survey please contact Bryan Starr. BIA/OC’s Fair Share Principles. BIA Monitors Fire Map Revisions Current Issues in the County of Orange: City of Newport Beach County Storm Water Run‐off Permitting (MS‐4) UPDATE South County’s draft permit has been released for public comment and review and there are several provisions in the draft permit that are troubling to the building industry and our coalition partners including LID and Hydro‐modification. The SDRWQCB held a public hearing on the tentative order of the South County Permit on April 11. At this hearing, the BIA task force was able to organize a significant turnout representing both private and public stakeholder interests. As a result, we were successful in extending the public comment period into the early summer. During this time, BIA/OC and our coalition partners will continue to expand our grassroots and grasstops outreach effort in order to broaden our coalition dealing with water quality issues. For more information on how to get involved or to receive regular updates on this issue, please contact Bryan Starr: bstarr@biaoc.com San Juan Capistrano County of Orange SB 670 Dies in Committee Local Governmental Issues: Code Liaison: Environmental Issues Liaison: State and Federal Liaison: School Facilities Fee Liaison: Dept. of Real Estate Liaison: Orange County’s Representative districts are: Senate Assembly Want to make a difference in your community? Contact Jill Cagle to join the BIA Voice Task Force |
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