State law designed to reduce the miles people travel can unintentionally raise the prices of new homes. And, according to the California Building Association, the law – commonly known as Vehicle Miles Traveled – places “a big pause button” for residential home construction.
In response, Clovis City Council unanimously approved spending just over $ 91,000 to change that Monday night.
With the action, Clovis will go ahead with an overall environmental impact report to remove some legal uncertainties for builders. In short, the city does not want each new project to be submitted to an individual EIR coming forward as a consequence of the VMT law.
“VMT has really slowed down the amount of residential development that has come along. “– Ricky Caperton, Town of Clovis Senior Planner
“VMT has really slowed down the amount of residential developments that have come along,” Ricky Caperton, senior town planner for the Town of Clovis, said at the council meeting. “VMT has played a role in slowing down some residential projects, especially the larger ones. “
According to California Association of Realtors, the median price of a home in the Fresno area is $ 350,000. The minimum household income eligible to purchase this home is over $ 60,000. In April of last year, the median price of a home in Fresno County was $ 290,000.
VMT is applied to new developments. For example, if a person goes to several places per day – work, store, soccer practice, etc. – all these kilometers are counted and charges are calculated. The higher the VMT, the higher the costs added to the price of a new house or even to the rent of a newly built apartment.
Means to mitigate VMT
The Fresno Council of Governments has calculated an average of 16 kilometers of vehicles driven per day for the development of Clovis. Going forward, the VMT target for Clovis will be 14. It may seem easily achievable, but it’s expensive, according to Mike Prandini, President and CEO, Building Industry of Fresno-Madera Counties.
In theory, Prandini said, a developer could be asked to subsidize carpooling for residents of a new housing estate or apartment complex. The cost to do this for a 20-unit project, according to Prandini’s calculations, would be $ 460,000 over 30 years, or $ 23,000 per unit.
While the developer bears the initial costs, they are passed on to buyers and tenants.
Umbrella EIR Development Costs Fund
The question was raised by the mayor of Clovis, Jose Flores, whether the city is helping developers make a profit by paying an umbrella EIR.
“So there’s going to be a cost, and it’s going to come from the city, and it’s going to really help the developers,” Flores said.
Caperton allayed the mayor’s concern.
“The fees themselves come from the developers anyway. While we collect permits, we take a small percentage of the consulting fees from this fund. So really, this money, this money is coming from the developer community anyway, so it’s already their money, ”Caperton replied.
Flores asked no more questions.
Central valley problem
Prandini told the board that the biggest challenge for developers right now is the unforeseen costs associated with VMT.
“IIt’s basically a Central Valley problem, ”said Prandini, referring to the densely populated parts of the Bay Area and Los Angeles where bike paths and vans already make up for miles driven.
State Senator Anna Caballero D-Salinas says state shouldn’t scare away from home builders, but she’s worried VMT is doing just that.
“The last thing we need right now is to reduce the number of communities we are building. We have 2.5 million homes overdue, ”Caballero said recently. “If you built 2.5 million units, you would have families tomorrow.
(Disclosure: Darius Assemi is President and CEO of Granville Homes and Publisher of GV Wire)