Study shows effect of impact fees on affordable housing in North Lake Tahoe, Truckee
KINGS BEACH, Calif. — While impact fees imposed on new construction in the North Lake Tahoe region are lower than those in the Bay Area, they could be creating barriers to affordable housing, according to a new report from the Mountain Housing Council of Tahoe Truckee.
“What we heard over and over again from the developer community and from our partners was the question ‘are our fees higher in this region than in other areas?’” said Seana Doherty, Mountain Housing Council project director.
The council hired Hansford Economic Consulting to conduct a study of impact fees in the region and how they affect affordable housing projects.
“It broke down some myths that people had about Truckee, that our fees were astronomically higher than the region and the Bay Area and it turns out that’s not actually the case,” said Town Manager Jeff Loux.
However, the report determined the cost of fees were still a barrier for development projects.
“What we found was yes, building any type of housing for locals is challenging,” said Doherty. “Every dollar matters when you’re close to making a project pencil or not.”
According to the report development fees are between 4 to 5 percent of the total cost of building a single-family home, and 6 percent for a multi-family home, while construction costs comprise 76 percent of the overall cost of development in the region.
“Fees are high because cost of building is high,” said Doherty. She also said the Mountain Housing Council believes the cost of building housing can be lowered incrementally to reduce perceived barriers through policy changes and how the fees are charged.
The report also highlighted the complex nature of paying fees in North Lake Tahoe, as the region has 18 fee-charging government entities or special districts all with unique development requirements which could make it difficult for developers to navigate.
There are also significant differences in total fees depending on the area, with the highest fees in Kings Beach and lowest on Donner Summit, according to the report.
The Housing Council has already made suggestions on policy changes that the town has implemented in the past year.
Among those are charging impact fees based on a scalable methodology, such as square footage or per bedroom, to encourage the construction of smaller units, and to offer impact and capacity fee deferrals until the building is occupied.
“At the end of the day,” Doherty said, “we are trying to create culture in this region that says ‘We would like your private investment dollars to come and help us move the needle forward on housing.’”