Home Front: Impact fees may be the next battlefield for area builders - Sacramento Business, Housing Market News | Sacramento Bee: "When the housing market soared in Sacramento a few years ago, many cities, counties and school districts hiked fees for a new house, with some soaring into the $80,000s and $90,000s. Builders complained, but moved on. Times were so flush they just paid some and passed the rest to buyers. What did $90,000 matter if a house sold for $470,000 or more to a buyer using exotic financing?

It's sure different today. There are no exotic loans. And much of the new home market is back in the $200,000s. At those prices, builders say, the fees make it hard to break even.

So they're again pushing City Hall to rethink impact fees in light of a devalued housing market."
----------------------
When cities were in the driver's seat the developers had to pay the fees, and then they passed them on to the home buyers in the form of higher home prices. So this practice fueled housing price inflation, which in turn contributed, along with other problems, to the whole debacle we are enjoying. Now a developer with money is able to strike a harder bargain. How will this play out? Cities have been minimizing property tax increases on residents by practices like impact fees, mandatory CIDs, TIFs, and other similar cost-shifting mechanisms. How will development be accomplished in this new financial environment, where nobody has any money?

Maybe new housing will be, shall we say, a bit humbler than in the past.

Thanks to Fred Pilot for the link.