Divided Napa County Supervisors raise new construction fees; affordable housing to benefit
Builders and others will soon pay higher impact fees on new construction in unincorporated Napa County to fund affordable housing.
The Napa County Board of Supervisors last week voted to raise the affordable housing impact fees on new construction in unincorporated areas, effective Jan. 16.
They did so after a contentious 4 ½ hour meeting during which Realtors and general contractors railed against the residential fees’ hike, which they consider “massive.” The new fee hikes are to be implemented over three years.
The impact fees on residential projects have not changed since 2010; the impact fees on commercial developments such as warehouses and hotels were set in 2014.
The vote on Oct. 21 was 3-2, with supervisors Belia Ramos, Amber Manfree and Joelle Gallagher voting “yes.” Supervisor Anne Cottrell and Liz Alessio voted against the hike.
“We are 26 years behind on building sufficient housing stock to support the workers within our economy,” Ramos said before the vote.
Manfree said the county is not saying “no” to development. “We’re saying we’re trying to structure development in a way that really serves the whole of the community more effectively.”
Alessio and Cottrell said they needed more time to evaluate the proposal.
“I still feel that people are learning about this,” Cottrell said after nearly 40 speakers gave their take on the proposed residential fee hike.
Alessio, whose husband is a general contractor, said the new fees are “too much too soon.” She asked for more analysis, including on today’s building costs and economic impacts. Construction is the top employer, according to the city of Napa.
Gallagher said the new fees have been vetted, including by consultants, in-house and outside counsel. “This has taken a lot of time,” she said. “I don’t want to be in a ‘kick the can down the road’ situation.”
Gallagher noted that Napa County is obligated to meet the state-mandated Regional Housing Needs Allocation (RHNA) requirements. Housing is also the second most important issue to the community behind roads, Gallagher said.
A $20 billion Bay Area affordable housing bond measure was removed from the November 2024 ballot after polls indicated it would not pass.
Jennifer Palmer, Napa County director of Housing and Community Services, presented the nexus study, which included the new fees.
The new residential fees were designed to incentivize the construction of smaller houses, with bigger houses paying proportionally higher fees. The median house size is Napa County is now 2,028 square feet.
The fees for new residential construction taking effect in January are as follow:
• Developer fees for houses 0 to 2,500 square feet: $0
• Developer fees for houses 2,501-3,500 square feet: $43 per square foot
• Developer fees for houses 3,501 and above: $86 per square foot
• Accessory Dwelling Unit: $10.
The current fees residential fees are:
• Developer fees for houses 0-1,1199 square feet: $0
• Developer fees for houses 1,200-2000 square feet: $9
• Developer fees for houses 2,001-3,000 square feet: $10.75
• Developer fees for houses 3,001 square feet and up: $12.25
• Accessory Dwelling Unit: $5.50
Most building permits for commercial construction in unincorporated areas are for warehouses. Commercial impact fees on warehouse/storage are set to increase from $3.60 per square foot to $7.75 per square foot.
Ramos suggested changing the proposed fee structure to impose impact fees on houses 2,501 square feet or bigger instead of 2,001 square feet and up. In addition, she recommended the fees be implemented over three years.
More than three dozen speakers weighed in, including Realtors and contractors selling and building houses.
Hilary Ryan, a Realtor in Napa, said there is “alarm” about the “massive hike.”
“I think there are going to be a lot of unintended consequences,” Ryan said.
Paul Holland, a contractor who works on high-end residential houses, said the fees are “going to kill construction.”
“People are not going to build here,” Holland said.
Stephanie Gibson, a Realtor, agrees there is a need for more money for affordable housing, but she questioned “gouging” people who can afford to build luxury houses. They do provide employment, Gibson said, including landscaping, painting and contractor jobs.
Realtor Chris Wunderlich spoke against the fee hike. Napa needs more affordable housing, he said, but the path needs to “fair, sustainable and effective.”
“Penalizing new homeowners and small builders won’t solve the housing crisis,” Wunderlich said. He urged a partnership across all industries.
Property owners already contribute “heavily” by paying property taxes, transfer taxes and impact fees, he said.
But Mary Stephenson, a longtime affordable housing advocate in St. Helena, said everyone needs to do “much more” to support affordable housing. “We need the wine industry to do more; we need the hospitality industry to do more,” Stephenson said. The county, state and federal governments need to do more, she added.
“So, you’re not penalizing this particular group of people,” Stephenson told the supervisors, referring to those who could pay higher affordable housing fees. They are among the many “who have to do much more than we’re doing right now.”
Judy Myers, a member of Progressive Women of Napa Valley who is also a member of Napa Housing Coalition and Napa Housing Commission, urged the board of supervisors to approve the nexus study.
So did Jenny Ocón, executive director of UpValley Family Centers.
UpValley Family Centers serve more than 3,500 people each year, including students, parents and older adults. All their clients last year earned below Napa County’s median income, she said. The region’s high cost of living and a “serious” lack of affordable housing are among the biggest and most pervasive challenges, she said.
“That’s why we strongly support an increase in affordable housing impact fees. The fees secured will help to address the need for affordable housing that is in such short supply.”
Howard Siegel, a member of Napa Housing Coalition, said that agriculture and hospitality do face challenges; however, “one of those challenges – and equally important to the economy is the ability to house that workforce.”
A good proportion of that workforce receive wages that are not sufficient to support housing prices, either rental or ownership, Siegel said.
Siegel spoke on the challenge of funding affordable housing. State funding sources are very competitive while federal funding are “really challenging,” he said. There is no housing bond in place. “You aren’t left with many other options to address this pressing issue,” Siegel told the supervisors.
The new fee structure is supposed to return every year before the Board of Supervisors for review.
