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Building Industry Association calling city’s proposed fee hike ‘unjustified’

ENCINITAS — The Encinitas City Council is considering a significant increase to the fee it charges developers to mitigate the traffic that new homes, apartments and other development create.

The proposal has struck a nerve with the regional Building Industry Association, whose representatives called the increase unjustified and will attend Wednesday’s council meeting to question the fee hike.

The city’s development staff is proposing raising its traffic mitigation fees by more than 60 percent for single-family homes, from $2,225 per unit to $3,552 per unit, and 30 percent for other developments.

The council is considering raising the fee after its fee fell below the county’s minimum requirement of $2,254 per unit.

The county requires that cities charge developers at least that amount for single-family homes (and other amounts for other types of development) to receive their share of funds from TransNet, the voter approved half-cents sales tax that is earmarked for regional transportation projects. Encinitas is annually entitled to $1.5 million in TransNet funds.

Originally, staff proposed a lower increase, but the City Council directed engineering officials to return with a higher increase.

As justification for the increase, the city points to a 2007 study done by the San Diego Association of Governments that established the nexus between the fees charged for certain types of development and the impact that development has on the region’s transportation network.

That study, staff wrote in its report, justified $3,552 and $2,842 as maximum fees for single-family homes and other residential development, respectively.

Borre Winckel, the president and CEO of San Diego’s Building Industry Association chapter, criticized the city for basing the proposal on the 7-year-old study rather conducting its own study to justify its fee hike.

Encinitas, Winckel said, would be hard pressed to justify the maximum increase because the city’s slow-growth stance means fewer homes, and subsequently, less new traffic created than in other cities.

“If they want to do the maximum, they should do their own analysis that would justify the fee increase,” Winckel said. “What they are saying is that ‘we are going to raise the rate based on a 2007 study that was done from a regional basis and apply that to our city,’ and we (the BIA) aren’t buying that from a legal or a practical perspective.”

The BIA sent the city a letter this week outlining the association’s opposition to the fee increase. City Engineering Director Glenn Pruim said city officials disagree with the association’s primary argument that the city needs to perform its own study.

“We believe SANDAG gave local agencies the right to use the regional nexus study to support its local impact fee increases,” Pruim said. “The ordinance says that yes, there needs to be a nexus study done, but it doesn’t specify which agency, and we believe the legal basis exists for using the regional study.”

The council meets at 6 p.m. at the Encinitas council chambers at 505 South Vulcan Ave.

1 comment

hayd May 21, 2014 at 3:53 pm

Well OF COURSE the regional Building Industry Association doesn’t like it. The whole purpose of their existence is to make more money for the builders, *not* for citizens who have to deal with the new homes and subdivisions. And their rationale isn’t even logical… yes, Encinitas citizens want a slow growth, so YES a higher fee will cause slower growth. Which is what the town and its citizens want.

And honestly, when the average price of a new home here is over a million dollars, and the usual profit in new homes is anywhere form 40-50%, complaining about a 0.15% increase to the price of a house is really, really slimy.

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