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Clovis Considers Bumping Builders' Fees 100%. Will Housing Prices Follow?
gvw_edward_smith
By Edward Smith
Published 2 days ago on
June 10, 2024

Clovis City Council will consider increasing fees homebuilders pay for water infrastructure by more than 104%, which likely will result in higher new home prices. (GV Wire Composite/Paul Marshall)

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After putting off fee increases, the city of Clovis wants to more than double what homebuilders pay for water infrastructure.

To pay for plant expansions, water tanks, and pipes, the city charges builders anywhere from $3,500 a door to $8,500 a door, according to a staff report. Because of rising water infrastructure construction costs, those fees need to climb by 104%, said Sean Smith, supervising civil engineer with the city.

Absent the fee hikes, Smith says preparing land for future housing will be difficult. The city is already forced to finance water projects, which can be double the price versus paying cash.

Any fee increase will result in higher prices for new homes, said Darren Rose, president of the Building Industry Association of Fresno Madera Counties.

“We can anticipate that an increase in impact fees will cause housing prices to increase as builders operate on tight margins and can’t simply absorb the fees,” Rose said.

The developer fee hike is on the agenda for Monday night’s Clovis City Council meeting.

Clovis Been Hesitant to Increase Water Fees

Clovis did a market study on the cost of material earlier this year, Smith said. The market study showed that water construction costs have out-paced the implemented fee hikes 2017.

The city council has considered proposals to increase fees for water facilities for the past three years. In 2022, city staff recommended a 59% fee hike, according to the staff report. The council countered by approving a 15% climb. When staff recommended a 62% increase the next year, the council decided not to raise fees.

The city bakes into the construction costs a contingency of 48% in case a project runs into unforeseen complications, Smith said.

NewHomeSource reports that the average price of a new home in Clovis is $624,281 compared to $607,454 in Fresno.

Fee Hike a ‘Reality,’ Other Options May Come in the Future: Clovis Mayor

Clovis Mayor Lynne Ashbeck said fee hikes are a reality considering the rising cost of construction.

“We’ve delayed the increases over the last two years, we’re trying to make up lost ground as staff and the building industry work through methodologies,” Ashbeck said.

She said raising fees is not a strategy that can be continued indefinitely. Other options include bonding out projects or creating Mello-Roos districts where projects are paid for additional property taxes.

“I still think there’s ways that cities, and Clovis in particular, can generate revenue in the future that we still need to do a lot more work on,” Ashbeck said.

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Edward Smith,
Multimedia Journalist
Edward Smith began reporting for GV Wire in May 2023. His reporting career began at Fresno City College, graduating with an associate degree in journalism. After leaving school he spent the next six years with The Business Journal, doing research for the publication as well as covering the restaurant industry. Soon after, he took on real estate and agriculture beats, winning multiple awards at the local, state and national level. You can contact Edward at 559-440-8372 or at Edward.Smith@gvwire.com.

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