Southern California City Raises Development Fees on Housing

In the midst of a historic housing crisis, the city of Santa Ana is raising fees on housing construction, which housing advocates fear will drive developers from the city.

May 13, 2022, 8:00 AM PDT

By Diana Ionescu @aworkoffiction

Highway sign for Santa Ana, California

Albert Campbell / Santa Ana, California

In response to Senate Bill 9, which requires California cities to build more housing and loosen density restrictions in single-family neighborhoods, some cities have employed creative methods of skirting the state law. “Some, unfortunately, have tried to game the system by designating obviously unusable land for housing, such as heavy industrial sites.” One proposal to designate an entire city as mountain lion habitat garnered significant attention, including here. According to Dan Walters writing for CalMatters, “Of all the responses, however, the oddest may be what happened in Santa Ana, the Orange County seat. Its city council decided to make new housing virtually impossible by imposing hefty new fees on developments.”

Walters writes that “The minimum increase would be $5 per square foot of construction and up to $15 per square foot. Developers would be allowed to pay the smaller amount only if they use 90% unionized labor for construction when the law is completely operational in 2026.” According to the article, the city’s Mayor Pro Tem, Phil Bacerra, expressed less optimism. “Imposing such heavy fees that could be mitigated only by using relatively expensive union construction labor is likely, Bacerra said, to encourage developers to ignore Santa Ana and take their projects to neighboring cities which don’t impose expensive barriers.”

Wednesday, May 11, 2022 in CALmatters

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