As of January 1 of next year, the City of Napa User Fees – which apply to a wide range of services such as building permits, sports field rentals, and benches and trees commemorative – should increase so that the city can eventually recover 100% of the cost of providing most of these services.
But because increasing fees on affordable housing permits could discourage affordable housing development, Napa city council voted last week to reduce affordable building permit fees by 50%. This will allow fees to stay roughly where they are now, according to a staff presentation.
Specifically, the council voted 3-2 to approve the reduction in building permit fees related to affordable and labor-intensive housing projects – housing for those earning a median income of 120% and below – and accessory housing units of 500 square feet or less. The reduction also applies to the associated plan review and inspection fees.
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This action follows council approval of the new rate structure in October and a request that city staff come back with a reduction program for affordable housing.
The city currently subsidizes paid services using the city’s general fund, meaning full cost recovery would allow those dollars to be spent elsewhere.
Fee increases for user fees that require an increase of more than 25% to be fully recovered, like most construction-related costs, will be rolled out in 25% increments over the next three years. Otherwise, the fees will be applied to their total assessed amount from January 1, 2022.
This means that the construction fee receiving the 50% discount will increase further over the next few years, but will retain the discount.
The two council members who voted against the fee cut, Liz Alessio and Mary Luros, said – as they already did at the October meeting – that they would like the subsidy to apply to housing. at all levels.
Luros pointed out that even with the grant, the city continues to charge fees for affordable housing. She said she would like to see the city encourage more developers to come and create homes in Napa.
“In my opinion, halving it for some is not enough,” Luros said.
Alessio said she believes the city should do all it can, on many levels, to encourage housing development in the city. She also said she would like the council to look at fees for people who own a second or third home in Napa but don’t live in the city full time.
“Either way, if we can support and incentivize more housing to live here and work here, the better for all of us,” said Alessio.
Additionally, Alessio said she was concerned about the 500 square foot limit for applying the fee reduction to ADUs and said she wanted to extend the fee reduction to ADUs 1,000 square feet and below. .
City attorney Michael Barrett said the limitation is due to ADUs 500 square feet or less not being charged an affordable housing impact fee – a fee charged to most projects projects that go into the city’s affordable housing fund.
Community Development Director Vin Smith added that ADUs within this size limit are considered by the California Department of Housing and Community Development to be moderate-income housing. Any larger ADU, he said, is not considered moderate income housing. The maximum size of an ADU in Napa is 1,200 square feet, Smith said.
Board member Beth Painter said she believes most construction costs should go primarily to cost recovery, as those costs help streamline the approval process.
Painter added that the city may look at other fees impacting housing development in the coming months, which it believes could do more to change the way market-priced housing is built.
“I think we might, at a future date, start looking at some of the other charges that could impact housing,” Painter said. “It could be in our February workshop to really talk about how we are helping to encourage housing. “
Council member Bernie Narvaez said affordable housing and workforce housing is exactly where the city needs to focus its subsidy efforts. He added that the city may consider increasing subsidies for market-priced housing in the future, but it has already effectively subsidized all kinds of real estate developments for too long by not updating its fees.
“If we extend some of the market-priced housing subsidies, market-priced housing is going to take priority over affordable housing and workforce housing,” Narvaez said. “That’s why I think our goal should be, as is the case here, the workforce and affordable housing.”
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You can reach Edward Booth at (707) 256-2213.