Rules Committee to Discuss Permit Price Reduction, Potential Tax Measure

Since most of San Jose’s housing stock is a half-century or older, maybe the city should cut the cost of remodel and renovation permits. The move would encourage more people to improve their homes, raise property values and discourage folks from skirting existing permitting laws by making them more affordable to comply with.

District 10 Councilman Johnny Khamis proposed the idea, and he’s bringing it to the Rules and Open Government Committee when it meets Wednesday.

The city should look at ways to cut the cost of single-family home renovations by reducing overhead rates on small projects, Khamis says. Or, he counters, by putting in place a second-tier fee schedule that leaves amortization out of costs that have nothing to do with remodeling, like traffic impacts.

A bunch of homeowners want to renovate their place with remodeling and additions, the councilman says in his memo, but right now the cost of permitting those projects can make up 20 percent of the total cost of work. In a 200-square-foot project Khamis’ office researched, permitting would rack up $5,000 in fees for a $30,000 project.

“For many homeowners, these high costs of permitting can mean the difference between moving ahead with a project and foregoing the project altogether,” he writes.

It’s a win-win for residents and the city, he continues. Homeowners make their property safer and code-compliant, while the city gets more property taxes from the uptick in property values. People will be more likely to complete a project, possibly bringing in enough revenue to make up for the reduced-rate fees, and the city will spend less on code enforcement, Khamis states.

The city’s already slashing construction fees for downtown developers. And not long ago, the City Council extended a business tax amnesty for small business owners who fell behind.

More from the San Jose Rules and Open Government Committee agenda for August 14, 2013:

• The council plans to meet 1:30-5pm Aug. 29 in the council chambers to talk about ways to restore city services by putting a revenue measure on the 2014 ballot. Possibilities include a June 2014 library parcel tax or a November 2014 half-percent sales tax increase.

• Councilman Ash Kalra suggests updating the city’s no-smoking rules to specify a reasonable distance from an entrance or service line for someone to light up. Right now, city code restricts smoking around outdoor dining areas, service lines like those at an ATM or the movies and unenclosed common areas like parks, apartments and the like. Kalra asks the city to simply list what it considers a “reasonable smoking distance” instead of leaving that open to interpretation.

• David Wall, local government’s dogged pundit, spent some time last week penning several letters to the Rules committee. One demands that City Manager Debra Figone host a “public apology workshop” for all staffers involved with selecting the financially embattled Applegate Johnston, Inc., contracting company to build the Environmental Innovation Center and a couple fire stations.

“One thing is for sure, I am not responsible for the litany of failures that has caused the Environmental Innovation Center to go belly-up,” Wall writes. “I tried to stop this boondoggle, but, no, my warnings were not heeded. Therefore, who is going to step up to the plate and accept responsibility?”

He asks who was responsible for snagging $4.5 million from lenders and $2.35 million in federal funding to offset funding for the center by using a contractor now tied up in bankruptcy court. (For more on that snafu, read this 2011 memo about the city’s settlement over the deal).

“The city manager could get everyone in her conference room and each one of them would practice saying, ‘I’m sorry Mayor Reed for my screw-ups, please don’t fire my worthless rump,’” Wall suggests. “Or better yet, ‘It wasn’t my fault, Mayor Reed, [Applegate] hoodwinked me with their voodoo.’”

WHAT: Rules and Open Government Committee meets
WHEN: 2pm Wednesday
WHERE: City Hall, 200 E. Santa Clara St., San Jose
INFO: City Clerk, 408.535.1260

Jennifer Wadsworth is the news editor for San Jose Inside and Metro Silicon Valley. Email tips to [email protected]. Follow her on Twitter at @jennwadsworth.

4 Comments

  1. We really don’t need to be burdened with additional taxes right now. This post explains why high permit fees are a bad thing for homeowners and holds out a glimmer of hope the council gets that. But then we get the bad news that City Hall’s money grubbers want to boost our already high taxes even more. Wonderful, death by a thousand cuts.

  2. Im Not usually in agreement with Khamis , BUT on this one topic , I am in agreement. It makes total sense for homeowners to be able to renovate their homes with out the added expenses. It benefits the homeowner and it benefits the city by raising property Values. AND it just might help people begin to care about this “God forsaken ” City again.

  3. The change in permitting described is directly tied to the discussion on how to raise revenue that psa188 wrote about above.  If I had my druthers I would rather continue the current fee structure, and not have to pay more in sales taxes or infrastructure bonds.

    Remember too that because of Prop. 13, there is a real disincentive to selling a home too.  I’m sure that allowing a buyer to keep the seller’s property tax rate would result in more real estate sales.  I’m sure that would be a win-win for everyone too, but those lost revenues would have to come from somewhere.

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