Calexico has added many homes in recent years, which increases the need for school classrooms. To pay for them the Calexico Unified School District charges fees to housing developers—recently increased—that are typically added to the price of new homes. | Corissa Ibarra photo
CALEXICO — Building homes in California is a costly proposition, affected by a great many factors, including median incomes of an area, market rates, property values, materials and labor costs, and development fees — especially development fees, and particularly school development fees.
The median home value in California in 2019 reached $550,000, with the cost of building new, “affordable,” or entry-level housing in the state at $600,000 or more per single-family unit. This is according to the Terner Center for Housing Innovation at University of California, Berkeley, which released the comprehensive report “Residential Impact Fees in California” in August 2019.
fees, or “impact” fees, are imposed separately by local governments and school
districts. The fees go into funding construction of everything from parks and recreation
facilities, to underground and above-ground infrastructure for undeveloped
properties for critical needs. This includes streets, curbs and gutters,
lighting and other electrical- and communications-based hook-ups, and essential
services for water and sewer works that include distribution lines and
They also fund the
construction of new schools in districts with current and projected enrollment
increases due to families drawn to new housing developments.
Recently, the issue of
school development fees and how they can affect the development of new homes,
came into focus locally. Recently, there were ongoing talks between the
Calexico Unified School District, the city of Calexico and a developer of
entry-level single-family homes and apartments that wants to build hundreds of
units in the northeast part of town.
The developer, Imperial
Valley Builders Construction Co., wants to build about 870 dwellings on
undeveloped land along East Cole Boulevard in a development known as the El
At the heart of the issue
is school developer fees, which the Calexico Unified district board raised
substantially in October to a level that caused the builder, a representative
of the company said, to pull out of talks the next day and put the brakes on
Although all sides agreed
to meet again in February, the builder said the fee increase approved by the
board is such that unchanged it will raise the
price on the proposed single-family units by $15,000 each. That would make the
project no longer affordable for entry-level buyers.
What is ‘Affordable?’
What is considered
affordable in California is highly subjective, though, as the Terner Center
study points out. Among the 10 localities studied was Imperial County whose
fees and figures, when put side by side with some other locations in the study,
was worlds apart.
For instance, impact fees
per single-family unit in California during the study cycle (2018-19) ranged
from $5,700 in Imperial County to $35,300 in Fremont in the Bay Area that the
study identified with the top fees overall. In the Terner Center study,
“impact” fees are the total of school district, city and county development
The median home price for
new single-family construction in Fremont, which is in Alameda County, is
around $1.02 million a home as of January. With no real estate trade
publications or websites currently tracking prices in Imperial County in real
time due to the low number of construction starts, it’s difficult to get a
However, new homes in the
cities of Imperial, El Centro and Brawley are listed between $255,000 and
$340,000 for three to four bedrooms, according to Realtor.com; no new homes are
listed for Calexico.
The median household
income in Imperial County was $44,779 in 2017 ($38,015 in Calexico), compared
to $75,277 in California for that same time period. In Fremont, the median
income was $122,191 (2017) and $102,125 for Alameda County in general.
Costs to Build Schools
The average cost to build
schools in California is fairly evened out, yet still runs in the tens of
millions. Except for property values and the cost of acquiring land fluctuating
between regions, generally it costs around $30-$50 million to build an
elementary school, $50-$70 million to build a junior high school and $100-$250
million to build a high school, depending on location and information source.
Imperial County’s newest
school, Cross Elementary in the Imperial Unified School District, which opened
in August 2019, cost about $34 million to build, district Superintendent Bryan
Thomason said during a recent interview.
Cross was built in the
Paseo Del Sol subdivision at 2462 Cross Road, north of Aten Road near the U.S.
Border Patrol El Centro Sector headquarters. With a current enrollment of 510
students, the school can comfortably accommodate 900 students, Thomason said.
Even that price tag has
some caveats. The campus is only designed for kindergarten through fifth grade
and does not have some of the amenities, such as a gymnasium.
Although Imperial Unified
had higher residential developer fees in place than many of the districts in
the Valley at $4.93 a square foot, Thomason said it didn’t come near to being
enough to fund new school construction. Most of the school was funded through a
general obligation bond, he explained, being paid back through school district
residents’ property tax assessments at a rate of $60 a year for every $100,000
of assessed valuation on the home.
In Calexico, the fees
that caused such sticker shock to El Portal developers went from $4.79 per
square foot to $7.41. The school district board took the action unanimously on Oct. 24 after approving a
comprehensive School Fee Needs Analysis that included three new levels of fee increases.
In raising its fees, Calexico
officials cited the high cost of building schools to meet its needs, student
enrollment projections for the next five years and other local cost factors. The
estimated cost for constructing a new school was
placed at $40 million for an elementary school, $65 million for a middle school
and $150 million for a high school, according to Cesar L. Vega, district
assistant superintendent of business services.
seemingly needs new schools at all levels, according to the district’s
“Based on information
from the planning departments of the city of Calexico and the county of
Imperial, new residential housing units projected to be built within the
district’s boundaries over the next five years is 621 single-family and 504
multi-family units,” Vega reported in a written statement from Jan. 31.
“By using student
generation rates calculated from past developer fee payments and the district’s
student enrollment data, the future development units are projected to yield
406 K-6 students, 167 7-8 grade students, and 261 high school students to
enroll into the district’s schools,” Vega continued.
“This means 156 K-6
students, 167 7-8 grade students and 261 high school students (total of 584
students) will be unhoused (in schools) from the proposed future development.
The district has no local funds available to dedicate to rehabilitate or
construct school facilities impacted by future residential development,” Vega
enrollment is such (9,246 in 2018-19) among its 11 schools that it only takes
grades 10 through 12 at its high schools and has grades 7 through 9 at its two
junior high schools. All other high schools in the Imperial County are ninth
through 12th and middle schools and junior highs are commonly grades 6, 7 and 8.
Makeup of School Fees
developer fees is a touchy subject and also depends on myriad factors. There
are “statutory” Level 1 fees set by the state Office of Public School
Construction’s State Allocation Board and more recent Level 2 and 3
“alternative” fees, also tied to the state board, said Tom Duffy. He is a
former school superintendent and current lobbyist and legislative director for
Coalition for Adequate School Housing.
In 1987, Assembly Bill
2926 authorized Level 1 fees, the “basic mitigation fee” for school
construction, through the State Allocation Board. Individual school boards can
change the fees every two years based on inflation, Duffy said, but they can
only be set (even after inflation adjustments) at the school board level after
a justification study has been completed.
That basic mitigation fee
applies for both residential and commercial development, which was just raised
by the state board on Jan. 22, to $4.08 per square foot and $0.66 per square
(It’s important to note
that no school district in the state has had a chance to raise the fees to this
new level considering it must be done by a board action and a justification
study. The current basic fee, or Level 1 fee, maximum being assessed is $3.79 a
square foot and $0.61 a square foot, based on January 2018 numbers.)
In 1998, through Senate
Bill 50, Levels 2 and 3 “alternative” fees were authorized but only for
residential developer fees; commercial rates only have the one basic level.
Level 1 fees are fixed and set, while Levels 2 and 3 are not set costs.
Although Levels 2 and 3
have fixed elements that factor into how they are set (their formula), they
often vary greatly from district to district based on local factors and the
difficulty in qualifying to assess them and maintain them.
Levels 2 and 3 are tied
to a district’s approved State Allocation Board Level 1 residential amount plus
a formula that includes what is called the “Per Pupil Grant” amount and other
local factors. The Per Pupil amount is a fixed cost tied to what is known as
the state Construction Cost Index. When the Index changes, the Per Pupil
What makes the Level 2
and 3 fees vary so greatly, Duffy said, can be the “local” factors that are
based on land price, costs to prepare that land for building (grading,
surveying, etc.), property taxes, even the cost to bring infrastructure (electric,
water and sewer) to a prospective school site.
For Calexico, “‘local’
factors considered and applied toward the calculations include projected
development, average housing square footage, the school district’s current facilities
capacity and projected enrollment; and availability of local funds,” Vega explained.
In maintaining and
assessing the alternative fees, SB-50 states a school district has to meet two
of four levels of criteria in its needs analysis to set the fees. These include
whether a school district is year-round, its level of debt and bonding
capacity, its number of students in portable classrooms, and whether it had a
successful bond election within the last four years.
In Calexico’s case, as with
the Fremont district, it meets two of the four — bonding capacity/debt and
students in portable classrooms.
Vega said according to
the district’s needs analysis, “it has issued debt for capital outlay in excess
of 30 percent of bonding capacity” and “at least 20 percent of the district’s
classrooms are relocatable,” that is, trailers.
Additionally, to continue
assessing Levels 2 and 3, the needs analysis must be updated every 12 months.
Also of note, while Levels 2 and 3 can be on the books, the State Board of Allocation
only allows Level 2 to be levied against a developer unless the state board
certifies and declares that no school building fees are available from the
state. The state has done that just once, in 2016.
can be difficult. Imperial Unified’s Thomason said recently that Imperial will
return to only assessing Level 1 fees next year when its eligibility runs out. He
did not elaborate any further.
fees can be erratic. Fremont Unified has been charging Level 2 fees of $4.91 a
square foot since April 2019.
According to news reports
in the East Bay Times, Fremont Unified has seen its fees yo-yo in recent years.
In 2016 and 2017, the district had rates of $5.70 and $8.19 for level 2 fees
and $16.38 and $26.11 for Level 3 fees, respectively. In 2016, the State Allocation
Board declared there was no money left for building new schools available to
During that time, the
Fremont school board was under constant scrutiny, too, with the East Bay Times
reporting online petitions and legal challenges.
It’s difficult to
immediately find current fees that are comparable to what Calexico has set. There
is no database or storage house online that collects that information, not
through the state Department of Education nor locally through the Imperial
County Office of Education.
Even UC Berkeley’s Terner Center had difficulty tracking
the fees because of what the think tank described as a lack of transparency and
cases, that was very difficult information to obtain,” said David Garcia, the
center’s policy director, in an Aug. 12, report on Capital Public Radio’s
Imperial County, with its 16 separate school districts, any other school
district assessing Level 2 fees besides Calexico Unified and Imperial Unified
could not be located.
Magnolia Union School District official initially stated the district was using
the new rates set by the State Allocation Board as of Jan. 22. Upon further
questioning, the person who answered the call misunderstood that those new
rates must be set by a study and board action.
almost all cases, local school districts are assessing the Level 1 maximum for
residential based on the 2018 numbers. Some even have those rates below the
allowable state maximum because they have not done new justification studies,
including Holtville Unified School District and Calipatria Unified School
District (both are using $2.97 residential/$0.47 commercial).
about 13, 14 years behind,” said John-Paul Wells, Holtville Unified’s assistant
superintendent/chief business officer. “Each school district does a School
Facilities Needs Analysis. I’m working on ours now with a consultant. … We’re
said he hopes to have a new fee schedule in place in March.
other local school districts are charging the allowable Level 1 maximum,
although the elementary districts must divide their rates with the high school
El Centro Elementary School District and McCabe Union School District both are
capped at $2.62/$2.63 a square foot for residential and $0.42 a square foot for
commercial because they are K-8 districts. Central Union High School District,
on the other hand, is charging $1.17/$0.19 because it is a 9-12 district. It’s
the same for Brawley’s districts.
officials in Calexico, both administration and elected officials, believe the Calexico
school board’s fees could stifle future housing development in the city, just
like it has threatened the El Portal development. City management and Calexico
City Council members spoke out against the increases during public comments at
an August school board meeting several weeks before the board passed its
revised fee schedule.
asked whether the criticisms are off base considering the severity of the
district’s needs for new facilities. Similar questions have been asked of
several school board members and school Superintendent Carlos Gonzales, but all
have deferred to Vega and all answers have been in the form of written
“The district’s board is
simply trying to plan for future impact that will occur upon the district’s
resources from new construction by following the statutory requirements that
are in place to mitigate student growth from new development. The district does
not care to speculate what motivations other parties might have with regard to
criticizing the district’s actions in this regard,” Vega responded Jan. 31.