Abstract
In 2004, the Sacramento Area Council of Governments (SACOG) adopted a “Preferred Growth Scenario” to guide land use decisions and shape the region’s growth in a manner consistent with seven key principles. One of the principles was housing choice and diversity, which focused on providing an assortment of housing types, such as multi-family rental homes, attached condominiums and townhouses, and small single-family detached homes for a variety of household types, income levels, and ages. Using a residual land value calculation, my research tested whether development impact fees and other infrastructure charges imposed on new development discourage the construction of multi-family condominiums (for sale) and apartments (for rent) in El Dorado Hills, Rancho Cordova, and Roseville, California. When landowners bear the incidence of the development impact fees and infrastructure charges, both multi-family scenarios produced non-positive or inadequate land values in my three study jurisdictions. Shifting the incidence of the development impact fees and infrastructure charges forward to the consumer in the form of higher housing prices and rental rates produced positive and acceptable land values under the condominium scenario, but the apartment scenario remained non-positive in each of my study areas. My research has revealed that jurisdictions charging impact fees on a flat fee basis by housing category may discourage the production of multi-family housing. To expand the supply of multi-family dwellings and other types of affordable housing, proportional-share or variable impact fees eliminate the regressive nature of a one-size-fits-all-approach by accounting for variations in product type, unit size, density, and number of bedrooms.