Lancaster’s Building Stimulus Program is a success

One of the most notable participants in Lancaster’s Building Incentive Stimulus Program has been KB Home. (Image courtesy KB Home).

LANCASTER – A Building Incentive Stimulus Program launched in 2010 has met and surpassed goals to generate home and commercial growth in Lancaster, according to city officials.

The following is the press release from the City of Lancaster.

The Building Industry Association of Southern California Inc. (BIASC) applauds Lancaster’s foresight and wisdom in launching a program that has not only generated jobs and business growth, but increased fee revenues to the city.  At the core of the program has been Lancaster’s decision to reduce and defer development impact fees up to 30 percent in select parts of the city.

“The decision by Lancaster’s elected leaders to revisit fee structures as part of a homebuilding stimulus program should serve as a model for cities throughout Southern California,” said Holly Schroeder, CEO of the Los Angeles/Ventura County Chapter of the BIASC. “If more communities work with the industry to set fees that reflect the realities of today’s housing market, more homes would be built, more people will be put to work, and more revenues could be collected by local government.”

At a time when new home construction has remained stubbornly low throughout most of the region, Lancaster has seen 559 new single-family homes permitted, along with 33 new commercial/industrial buildings since launching the program in February 2010.

The city is experiencing job creation and increased business activity, along with generating $6.8 million in fee revenues.

“The Building Incentive Stimulus Program has been exceedingly effective,” said Lancaster Mayor R. Rex Parris. “In the short term, we are encouraging development, creating jobs and stimulating our local economy. In the longer term, we are bringing in new residents and investing money back into our community.”

A total of nine homebuilders have taken advantage of Lancaster’s incentive program, which provided 20 percent discounts on development impact fees throughout the city, and 30 percent reductions within the downtown corridor within the first year.

When the program was extended in 2011, a 25 percent discount was offered on development impact fees for new homes within existing tracts which had been abandoned by the original developers before construction was completed; as well as a deferral on impact fees related to commercial projects. The City of Lancaster recently extended the program for an additional year.

One of the most notable participants has been KB Home, which has seen many projects launch in part because the fee reductions made the developments feasible.

“Without question, the city’s decision to reduce development impact fees has allowed us to move forward in building communities  that otherwise might not have made sense financially,” said Tom DiPrima, Executive Vice President of KB Home’s Southern California division. “Essentially, this program has provided KB Home and other homebuilders an incentive to move more aggressively into developing sustainable communities throughout Lancaster. Other cities are now finally realizing that this is a very smart business model, and are now considering adopting similar programs.”

In many cases homebuilders have purchased finished lots in subdivisions that were once abandoned. This has allowed builders like KB Home to complete these communities and create new jobs for area residents. According to the BIA of Southern California, the average fees charged on a new single-family house are about $60,000, between local and county fees, with some communities still demanding upwards of $100,000 or more per home.

“In this market where homes must be priced right to sell, reducing development fees by 25 or 30 percent can make a project financially feasible,” said Schroeder from BIA. “We really hope that other Southern California cities follow Lancaster’s lead and revisit their fee structure. Historically, in Southern California, it has been homebuilding that has led economic recoveries out of prior recessions.”

Nationwide, it is estimated that each new home built results in three new construction jobs and one new long-term job.

  11 comments for “Lancaster’s Building Stimulus Program is a success

  1. ryenisha jackson
    July 22, 2012 at 5:33 pm

    Why even build more house so the scum can break in to more homes …BIG waste of money who wants to buy a house and live where crime is high.. I know the scum who rob who rob the house before may have enought stolen property might buy one. but then again section 8 will get there hands on it and it will go down the tube like all the other houses here in lanptom hahah

  2. T. Morales
    July 20, 2012 at 5:40 pm

    Instead of building new homes here they should have put a moratorium on home building to let the current values of homes go up. What the hell are they thinking? dumbasses!

    • Adam Chant
      July 20, 2012 at 6:36 pm

      Don’t worry the banks are already doing that by holding back foreclosures from going on the market. Real Estate sales numbers are currently showing that we do not have a glut of properties in the A.V. and because of that prices are going up and multiple bids are being taken on available homes.

      • sacryinshame
        July 21, 2012 at 12:24 am

        Adam that means that the empty homes are being ignored by the banks. Vandelized by kids, air conditioners stolen, yards brown and overgrown, sometimes abandoned cars in the driveway, all because they don’t want to take them into their inventory because it will through off their balance capital. Anyone can drive around and see all the empty houses and commercial buildings. It’s a shame that they keep building. Most of the buyers I have seen are investores and they rent them out.

    • sacryinshame
      July 21, 2012 at 12:31 am

      There is reason to worry inspite of what Adam says…There are too many empty houses here. Empty houses begging for a family, instead they get ignored by the bank(held back), get vandelized, yard dies and why should someone by a used house when they can get the brand new 5 bedroom with solor for the same price or less. Think about it.
      There should have been a moratorium, like you said. Problem was our beloved city officials gave their friends building permits and let them build. They say it was for the jobs…I don’t know a single person who got a job in construction from here in Lancaster.

  3. William
    July 20, 2012 at 4:36 pm

    I must have looked at a 100 homes when looking to buy in the Antelope Valley in 1990 and I thought KB made the worst homes. Some had living rooms so small that I wasn’t sure what they were for. Were they alcoves?

    They had just a few inches of roof overhangs or eaves which made them look like low-cost housing or barracks. One model actually had wood-grain contact paper covering the end of a kitchen cabinet.

    I wish there was a way to prevent KB from building in the Antelope Valley period as their homes cheapen the area.

    Back in the 1990s, there was a lawsuit against KB somewhere(?) in the San Gabiel Valley: bathtubs slanted the wrong way and wouldn’t drain, floors were slanted, the rooms were so small that whoever did the actual construction would add a couple of feet to make them livable but weren’t in the blueprints, and so on. This was from an article in the LA Times at the time.

    If Lancaster wants to reduce fees and build more cheap and cheaply built homes that will become blocks of deteriorating neighborhoods in the future, good for Lancaster.

    How will Lancaster make up for the money lost from reduced fees? Who will Parris have to sue to make up the difference.

  4. Nancy P
    July 20, 2012 at 10:45 am

    I am so confused as to why..let’s make that WHY?????, builders are building houses when there are so many vacant neighborhoods now. Builders, investors, and whoever it is allowing the builders to get permits is turning this place into a ghetto.

    • sacryinshame
      July 20, 2012 at 2:41 pm

      Houses and commercial buildings are sitting empty all over this city. A number of them have broken or boarded up windows and some are covered in graffiti. They couldn’t have created all that many jobs, since our unemployment rate is still so high. Who really benefited from this and who is going to have to pay for it in the long run.

      • Adam Chant
        July 20, 2012 at 6:40 pm

        These fees are almost always extended to the buyer. So the only one that loses out is the buyer if this program is not available.
        Actually during the Lancaster Council meeting when this was presented the council actually asked the same question and given a very detailed explanation as to how this program benefits the buyer the most. They even mentioned that Palmdale was discussing implementing a similar plan.

        • sacryinshame
          July 21, 2012 at 12:36 am

          so what you are saying is the buyer has to pay to get the graffiti cleaned up from the house they want to buy, replant the dead yard, and change out the carpet because the vandels were pooping and peeing on the carpet because they broke all the bathroom fixtures? The new buyer has to pay for that? Really?

    • William
      July 22, 2012 at 4:27 pm

      I agree except how many people want to buy a foreclosed home in a neighborhood full of foreclosed and deteriorating homes.

      Perhaps a good deal can be had on a foreclosure in a nice neighborhood with few if any other foreclosed properties.

      A very low-income home buyer who manages to buy a cheap foreclosed home will likely be unable to make any visible improvements for years if they stay that long.

      The money the builders save from reduced fees should be put into the highest upgrades for energy efficiency and not just the minimum standards and at least build some extra value and quality in them. But, I wonder if that will happen or the builders will just take a larger profit.

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