As demand for housing soars locally, Fresno Mayor Jerry Dyer is exploring ways of expediting the building process in the city via his 2022 proposed budget, including improving existing systems, hiring more staff and adding fire inspectors.
A proposal to fund an express development team (EDT) within the Planning and Development Department, however, is raising concerns about whether the city is adopting a “pay-to-play” model that will benefit few.
The proposed expedited process would offer quick service to developers willing to pay an extra fee to get their projects off the ground. Developers could see a three-day turnaround decision on their applications or even over-the-counter and on-call services from the proposed new team instead of the current timeline of seven to 14 days.
“One of the concerns that I’ve heard for a long time is that sometimes, to get a plan check approved, it can take months or longer,” Dyer said. “Meanwhile in the housing arena, we are suffering from a shortage of housing which is driving up housing costs and rent.”
Jennifer Clark, director of Planning and Development, made the proposal for the express service at the June 16 budget hearing, in the context of her department’s nearly $1.5 million budget proposal for the 2022 fiscal year.
Here’s a quick breakdown of what the money would be used for:
$985,500 for 13 additional employees and to convert one part-time position to full-time. Seven of the 13 proposed new positions would make up the EDT.
$198,100 for new information technology and communications support.
$200,000 for on-call express development team consultation services.
$53,600 for staff equipment.
Clark said about $1.2 billion in construction-related investments were made in Fresno in the 2021 fiscal year, and her department cannot keep up with demand.
Several city council members said they understood the need for more employees in the planning department, but Councilmembers Tyler Maxwell and Miguel Arias made a motion to kill the creation of the EDT saying it is not equitable.
“To me, the equivalent of that would be, you haven’t had a pothole filled in front of your house in six months; you pay additional money to Public Works, you get it expedited,” Maxwell said June 16. “We don’t do that. You don’t pay additional money to a dispatch center to get 911 calls directed to your house faster.”
Clark said that the expedited services fee would be determined after the plan has been approved. The Fresno City Council is slated to finalize the budget June 24, which will determine if the EDT is created or scrapped.
Demand to build housing in Fresno is extremely high
The Planning and Development department has 66 staff members who process the highest volume of applications the city has seen in more than a decade.
Within the past year, building permit activity skyrocketed to an average of nearly 900 permits per month, Clark said.
Over the past decade, Planning and Development staff processed an average of 118 entitlement applications per year, Clark said. In the 2021 calendar year, each employee will process more than 300 entitlement applications, she said.
“While entitlements permits and inspections have increased to over the peaks of 2006 and ’07, staffing has not recovered to the 2008 level and has not kept up with demand,” Clark said.
Residential homes, particularly single-family homes, have been a significant chunk of the applications that are coming through the queue.
By the end of the calendar year, the city is on track to approve 2,000 single-family home permits — 50% more than the 20-year average in Fresno, Clark said.
As a result, Planning and Development staff are processing high levels of applications, working overtime and outsourcing to third parties to help improve wait times for processing permits.
Creating the EDT would result in keeping more jobs locally, Clark said. The promise of completing the department’s work locally earned the support of Councilmember Mike Karbassi, who voiced his support of the EDT.
“These people have said we’re willing to pay more, and what I’m worried about is that they are going to say, ‘We’ll go hire a firm to do your job,’” Karbassi said. “And that’s going to hurt all the employees that work (at the Planning and Development Department).”
However, Maxwell, Arias and Councilmember Esmerelda Soria said they would rather see the money go toward additional employees that would benefit all.
“I’m interested in expediting across the board because I get the calls from the big developers, I get the call from the little supermarket or little business that wants to open in my district,” Soria said. “And because the small business can’t have the ability to pay upfront, they’re going to be stuck.”
Councilmember says EDT is ‘created to reward wealthy developers,’ others disagree
The goal of the EDT is to alleviate the number of high-volume projects that could undergo quicker review processes so that more complex projects in the non-express line can be reviewed in a more timely manner, Clark said.
“What we don’t want is for that to take away from any other plan checks,” Dyer told The Bee. “What we want to do is provide a system that allows for all of our projects to be expedited, whether it’s residential, business or industrial.”
The expedited service would only be available to projects that do not require reviews from other agencies or departments.
“Typically when we get solar panel applications from an installation company, we’ll get 50 in a day, so that creates a lump in the system which impacts everything behind it,” Clark said, illustrating the types of projects that could be reviewed through the EDT service.
City Manager Thomas Esqueda compared the EDT to the TSA precheck, which grants access to a quicker line for those willing to pay more.
“We are responding to a market demand,” Esqueda said. “Everybody wants to jump the line; we don’t have a way to jump the line.”
Clark said the EDT would instead create a whole new line and has been done in some California cities, including Visalia.
“There are some in government who believe you have to sacrifice equity for expediency,” Maxwell said. “What I’ve seen from our city’s planning department, going back many years, is that they’ve always made the sacrifice in favor of expediency.”
A criticism of EDT is that while it would expedite the process for some developers, it ends up creating an inequality in the building process by allowing those who can pay more to get better services.
Maxwell told The Bee the EDT is a “system created to reward wealthy developers while leaving local mom and pop businesses to settle for government as usual.” He also referred to it as a “pay to play” model.
He likened it to a FastPass at Disneyland which is great for those who can afford it, but which penalizes those who can’t pay for it with lengthy waiting lines, even if some people have been removed from the original line.
“We all want to see quicker development,” Maxwell said at the June 16 hearing, adding that he will not stand for policies that allow “wealthy citizens of the city to have better services than the rest of the folks who can’t afford it.”
“I can appreciate the segregation that it creates, but we are responding to the market demand that is there,” Esqueda said in defense of the EDT on June 16.
Karbassi, the only council member to speak favorably of the EDT, made a motion to keep the proposal on the docket. The proposal was seconded by City Council President Luis Chavez.
“If we do nothing, those small-business owners, that I am one of, will get stuck further and further back because it is first come first serve,” Karbassi said. “There are people that take up more resources that reinvest their dollars in this community and build homes in districts that need new homes.”
Arias countered that all businesses and developers, even those who can’t afford additional fees, are aiming to invest in Fresno and should receive equal resources.
Councilmembers Garry Bredefeld and Vice President Nelson Esparza did not comment directly on the EDT at the hearing June 16.
The EDT will not directly affect affordable housing
The city of Fresno’s need for affordable housing increased even before the coronavirus pandemic, and saw some of the largest rent increases in the nation this past year. With the statewide eviction moratorium potentially ending in about a week, the city’s need for affordable housing is urgent.
“We have a responsibility to the city to make sure we are meeting the housing demands,” Dyer said on June 16. “Right now, the demands far outweigh the supply, and when that happens, it drives up the cost of housing, the cost of rent, all of those things.”
The solution, he said, is to “build, build, build.”
David Garcia, policy director of UC Berkeley’s Terner Center for Housing Innovation, said that building more housing is crucial to alleviate housing shortages, however, the type of housing that is built plays a role in how affordable the market will become.
“There’s really good research showing that more housing supply in a region overall can lower or stabilize housing costs,” Garcia said. “That being said, it is important to understand the dynamic between what is being built and affordability.”
Garcia explained that an increase in single-family homes will not necessarily relieve rent burdens for those most affected by a need for affordable housing.
“While there is a significant demand for for-sale single-family homes throughout the state, there is also a significant demand for affordable and rental housing which the construction of new single-family homes does not necessarily address directly,” he said.
Clark said the EDT will likely see a high number of applications for houses on single-family home tracts or applications for residential solar panels.
“Those are two really, really high-volume projects that if we could pull them out of the queue we would have the ability to process our larger, more complex applications,” she said.
Clark reiterated that the EDT would not directly address the need for affordable housing.
“We have a huge demand and not enough supply to meet that demand which obviously drives prices up,” Clark said. “If we can get more supply in the ground, prices will start to regulate; that doesn’t necessarily mean that they are restricted as affordable housing.”
The local bump in single-family homes comes at a time when other California cities, including Sacramento, are moving toward alternate options.
“It’s true there is a need for more single-family for-sale housing,” Garcia said. “But several cities are considering changes to offer more housing types in single-family neighborhoods as a means to address the housing shortage.”