Now the city of Davis is offering its own economic stimulus.
The Davis City Council last week passed a package of three measures designed to help local businesses and development projects survive the current economic downturn.
The most controversial part of the package was an ordinance to give a break on fees to developers of new homes in town. The ordinance allows developers to pay water and sewer connection fees at the time that people move into the home. They are normally required to pay the fees much earlier in the process.
City Councilmember Sue Greenwald objected to the provision, saying that if the market cannot support more new homes, the city should not subsidize them.
“Why would we be giving Davis taxpayer money toward subsidizing the building of more houses in this climate, when you acknowledge that the economy does not support their being built?” she said. “I say absolutely no.“
Greenwald also argued that people who are trying to sell new homes already have an advantage over those who are trying to sell existing homes.
“I think that we shouldn’t be bending our rules to new homebuilders when they already have an unfair advantage over the sale of existing homes as a result of the state tax credit,” she said.
The California Legislature passed the tax credit Greenwald was referring to two weeks ago. It is a $10,000 tax credit spread out over three years, but it is only available to buyers of new homes that have never been occupied. The credit applies to homes purchased between Mar. 1 of this year and Mar. 1, 2010.
City staff said the new city ordinance was designed to make it easier for developers to get financing for their projects. The extension only lasts through Dec. 31 of this year.
Dan Fouts, developer of the planned Chiles Ranch neighborhood, said the extension should last longer than 9 months.
“Most projects won’t get out of the ground in that short period of time,” he said.
The ordinance passed with three votes, with Greenwald voting no and councilmember Lamar Heystek abstaining.
A similar ordinance that was aimed at non-residential developments also passed.
The third part of the package extended approval for a number of projects that have not yet been built.
The Planning Commission and City Council have approved approximately 150 dwelling units and over 200,000 square feet of non-residential development within the city that have not yet been built, according to a staff report. Some of these include an expansion of the Pole Line Road Baptist Church, construction of a car wash near Covell Boulevard and Highway 113, and approval of a Trader Joe’s store at 885 Russell Blvd.
That measure passed unanimously.
JEREMY OGUL can be reached at city@theaggie.org.
