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Who should pay for development?

City, county justified in raising developer fees to pay for extension of roads and infrastructure.

The Bakersfield Californian | Wednesday, Jul 2 2008 5:07 PM

Last Updated: Thursday, Jul 3 2008 10:12 AM

Kern County builders may be unhappy about the prospect of paying an estimated $5,400-per-home increase in development fees. They correctly point out that those fees will, to a great extent, be passed on to homebuyers.

But who, if not homebuilders and their customers, should be bearing the cost of roads, traffic signals and other infrastructure improvements necessitated by growth?

Bakersfield and Kern County have for too long allowed development to outpace local and state government's ability to properly prepare for it. Development fees, intended to help pay for the streets and sewers essential for growth, have historically been low in this county.

There's a new urgency behind the proposed increase. Local government needs the money to pay for highway projects — or run the risk of seeing $630 million in federal transportation funding evaporate.

Developers warn that the fragile local economy will be further weakened by the increase in fees and the inevitable increase in the price of housing and commercial development.

But Bakersfield City Manager Alan Tandy points out that tens of thousands of lots have already been vested. Builders can construct new homes on those lots without paying the new fees, which won't kick in for at least a year.

And new retailers will come to Bakersfield when they sense that demand justifies the investment, as they do in the many cities where fees are higher still.

Bakersfield and Kern County must raise about $1.8 billion over the next 27 years to pay for road projects. Much of that money would pay the city's portion of the federal Thomas Roads Improvement Program, obtained in the 2006 highway bill.

Because the proposed half-cent sales tax increase failed to get the required two-thirds on the November 2006 ballot, the only immediate options for raising that money are gasoline taxes and the proposed development fee increase — revenues that will help banks justify the value of bonds the city must secure to pay for those freeway projects.

The proposed increase in development fees could have a side benefit. Builders concerned about the cost of turning agricultural land into housing tracts might start looking toward the city's center. Infill redevelopment opportunities abound in Bakersfield, but builders have looked to the city's outer perimeter because it's cheaper to build there. Meanwhile, the older parts of the city become blighted.

High gas prices, which increasingly look like a permanent fixture in American life, mean that smaller lots, mixed-use development and a more urban lifestyle are becoming more attractive options. Higher development fees could hasten those changes even more. The net effect could be more walkable communities, better public transportation and improved air.

Given the direct and indirect benefits, the fee increase is a no-brainer.