School Impact Fees – A Tradition of Inaccurate Assessments

The State of California allows public school districts to impose impact fees (also called developer fees) on new residential and commercial construction, based on the idea that new homes and workplaces will translate into additional students—and thus, new demands on local schools.

In December, the Ukiah Unified School District (UUSD) Board of Trustees approved developer fees. The last two times this happened, UUSD had to rescind the fees after losing lawsuits that pointed out the faulty nature of the underlying assessments that were intended to justify the fees. When this happens, the district must not only return the impact fees collected, but also pay the attorneys’ fees on both sides. I expect this time will be no different given that a lawsuit has already been filed to challenge the fees.

In the last several years, UUSD has closed two elementary schools, mostly because of declining student enrollment. Now, they say they need money for new schools and to upgrade existing schools. I can see how current schools could use some rehabilitation, but to suggest we need new schools is far-fetched.

The population in Ukiah (and statewide) is shrinking. However, the school district is using the state’s requirement that K-12 schools add preschools (transitional kindergarten) to suggest that enrollment is on the rise. For the next few years, schools will get a small increase in enrollment because they’ll begin including four-year-olds, but after that one-time bump, it’s unlikely we’ll see increasing student populations—certainly not enough to justify building a new school.

As of now, the number of children per household in California is about 1.7, and it’s lower in Mendocino County. Last time the district tried to justify the need for developer fees, they estimated 2.8 children per household and used the Ukiah Valley Area Plan to suggest Ukiah schools needed to prepare for thousands of new households. They didn’t bother to ask about how the UVAP had been developed—the estimated households represented the number that would fit in the valley, not how many were likely to be added.

UUSD also estimated that the cost of a new 15-acre school site would be $15 million. As a real estate broker, I am familiar with the cost of things around here and I knew that wasn’t right. When I asked how they calculated the cost, they said they extrapolated from the district’s most recent real estate purchase. Basically, they compared apples and oranges. They took the cost of the third-acre parcel for the district office on Orchard Avenue (a busy downtown location) and multiplied that by 50 to get to 15 acres. Never mind that the rural land for a new school site wouldn’t cost nearly that much.

Why does all this matter to you? Well, the district has implemented the maximum developer fee the state allows for residential property: $4.79 per square foot. Guillen Construction is planning to build desperately needed entry-level, three-bedroom, two-bath homes that average 1650 square feet. With the UUSD fee, the cost per house goes up by $7,900. That will add about $53.90 to the monthly mortgage payment. Over the life of a 30-year mortgage, that’s an additional $19,400.

Raising the cost of new construction makes it harder for people to buy homes because either the cost of new homes will be higher or there simply won’t be as many homes available (because the increased costs will curtail construction). On the bright side, if you already own a home, it’s value will probably increase over time. But if you want your kids to be able to grow up and buy a home here, good luck. Perhaps most significantly, our housing shortage is affecting our ability to attract the employees needed to support our community.

Mendocino County cannot hire out-of-area expertise because people cannot find adequate housing. The hospital can’t hire doctors and technicians. Mendocino College cannot hire new faculty. And ironically, UUSD also complains that they cannot hire new teachers because housing is so expensive in this valley.

To be fair, it is not only school impact fees that drive up the cost of housing. It is also fire impact fees and the myriad unnecessary building requirements such as tempered glass windows, solar panels, and sprinklers in single story homes. Individually, these requirements are not too burdensome, but taken together, they are debilitating. It appears that the school district, like all other bureaucracies, cannot pass up the opportunity to grab more money. The district has been unsuccessful during the last two attempts, and I anticipate they will be unsuccessful this time as well.

If you have questions about property management or real estate, please contact me at or call (707) 462-4000. If you have an idea for a future column, share it with me and if I use it, I’ll send you a $25 gift certificate to Schat’s Bakery.

Dick Selzer is a real estate broker who has been in the business for more than 45 years.

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