Tool 11: Reducing Public Administration Fees and Process Costs This tool presents several different actions that governments can take to
reduce public administration fees and process costs. This, in turn, will reduce
developers’ overall building costs (which are often transferred to homebuyers or
renters) and facilitate the creation of more affordable units. Steps: - Read through the outlined actions that governments can take to lower
public administration fees and process costs associated with affordable
housing projects.
- Consider which actions may be feasible in your community. Feasibility
may depend on such factors as the existence and level of fees in your
community, the nature of fee schedules, permitting practices etc.
- Select one or more actions to implement.
Revise development charges and impost fees
Municipalities levy development charges and impost fees on new developments to
fund municipal infrastructure. In general, developers pass on these levies and
fees to buyers through higher purchase prices or rents. From an affordability
perspective, the main issue is that development charges and fees are often
levied on a flat-rate basis, regardless of the type of unit. There are various ways to reduce the impact of development charges and fees
on affordable housing. One way is to modify fees to make them more progressive.
For instance, one mid-sized Canadian city uses the following “type-based” fee
schedule, which varies according to the type of unit. - Single-family and semi-detached homes—$5,909
- Two-bedroom apartments—$3,780
- Bachelor and one-bedroom apartments—$2,544
A second method is to vary fees based on the square footage of living space.
A third option for municipalities is to institute reduced fees for infill
development. Finally, municipalities may lower fees for certain types of
development, such as affordable densification. Expedited permitting
Municipalities adopt a variety of building-permitting policies for health and
safety reasons. These policies cover such things as building permits and
environmental assessments. Although these policies are well intentioned and
necessary, the permitting process can be convoluted and lengthy, resulting in
higher development costs and less affordable housing. Some municipalities have adopted expedited permitting for affordable housing
to reduce the administrative burden on the developers of these projects.
Expedited permitting usually involves making a series of process improvements.
These improvements can include eliminating processes that do not contribute to
public safety and environmental requirements and speeding up approvals of
elements deemed necessary. Using Kaizen planning processes (see Tool 10) is one
way to approach this challenge. The objective is to improve efficiency and
predictability, thereby reducing costs to developers. The resulting savings can
then be passed along to homebuyers and renters Adopt rehabilitation codes
The rehabilitation of older buildings can be a key way to add to the affordable
housing stock. However, many municipalities insist that rehabilitated buildings
be brought up to current building standards. This can be especially problematic
for older buildings, which are more expensive to “bring to code” than are new
buildings. Rehabilitation codes seek to balance the need for public safety with the
desire to renew the housing stock. Such codes cover repairs, renovations,
alterations, reconstruction, change of use, and additions. Rehab codes are based
on the principle that rehabilitating a building need not involve bringing the
entire building up to code. They allow for incremental improvements to buildings
and, thus, foster the creation of affordable housing. A good example is North Carolina’s rehab code. This type of code allows
building owners and developers
to choose the extent of renovations required and to gradually upgrade buildings
to current standards. (For more details, see www.ncrehabcode.com/pdf/PP_REHABBRO.pdf.
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