Sacramento Slashes Fees on Housing Development

Last month, before the misguided Proposition 10 rent control measure failed, the Sacramento City Council voted unanimously to cut many city development fees for qualified affordable housing units. The sewer development fee, the water system development fee and the park development impact fee will all be reduced to zero dollars and this will trim costs from $10,000 to $13,000 per housing unit. The fee reductions are part of a quest to spur more development of affordable units at a faster pace. On that theme, a local example may prove instructive.

Back in 2007, a fire consumed 1,400 feet of a 2,200-foot wooden Union Pacific trestle bridge on a heavily used rail line for consumer goods and passengers alike. The city of Sacramento promptly waved regulations for reconstruction of the trestle in steel and concrete. The fire started on March 15 and Union Pacific crews had the new trestle in place by March 28, so within two weeks people and goods were rolling again. Similarly, if officials want more affordable housing at a faster rate, they must start slashing or eliminating the fees and regulations that bulk up costs, with zoning restrictions as a priority. As Emily Hamilton of the Mercatus Center notes, “when supply constraints prevent new construction in the places where people want to live, only zoning reform can increase access to housing.”