I CAN MAKE HOUSING MORE AFFORDABLE
GIVEN THE AUTHORITY I COULD REDUCE THE COST OF NEW HOUSING
BEING BUILT IN CALIFORNIA BY $60,000 OR MORE IN LESS THAN A MONTH
By way of historical context I spent several years “back in” the 1970’s as a carpenter and builder of housing, mostly in El Dorado County, California but also in Sacramento County. I was also one of the project Foremen on the Grizzly Flats Mountain Retreat Project from start to finish in El Dorado County. I loved my work. In those days when we went in to get a building permit for a new home the cost of the permit was a couple to a few hundred dollars. My memory is not perfect but I remember one permit on a custom home we were building was $292 (don’t know why that number has stuck in my head all these years). Times have changed.
FIRST – THE GOOD NEWS
Give me the authority to control the cost of a building permit for new homes within the State of California and I will mandate that Cities, Counties and all other agencies that issue building permits may not charge more than $1,000 for giving builders permission to build a new home. At the time of this writing many/most government agencies in California are charging $60,000 or more to give you a paper to let you build a house on property that you already own. And I have heard unverified horror stories of permits running as high as $150,000 in some locales before you can drive the first nail in that new home.
A bit of history. Some number of years back California voters passed Proposition 13 which says Taxing authorities within California cannot raise taxable property values by more than 1% a year unless the property is “improved” (such as adding a pool or an additional room etc. that lets them re-evaluate the property to “current market value” for taxing.
Since government at all levels has an unquenchable thirst for more tax dollars the above “Prop 13” rule frustrates their desire to find ways to tax you more and more.
But then… almost by accident government discovered a way to raise property taxes exponentially. They discovered that if they raised the cost of a building permit, which you must my law have to build a home, the cost of the building permit would be added to the cost of the home being built and of course to the price of the home. The added benefit to the Taxasauras’ is that the Building Pcrmit fee increases the price of the home and its tax base and Harry Homeowner will now pay taxes on the cost of the home AND also pay taxes on the added permit cost, indefinitely. What started out as a $340,000 new home has been converted into a $400,000 (or more) Tax Cow that your Neighborhood Tax Authority can “Milk” forever. A 20% increase in property tax revenue for issuing a piece of paper allowing you to build a house. Talk about creative accounting.
Give me the authority to remove their ability to “fleece” you with this clever little “Permit Scam” and the cost of a new home can be reduced by $60,000 (or more). As an added bonus the Property taxes would be based on $340,000, the actual cost of building the home, not on $400,000, which is the inflated value from the greatly inflated Permit cost, a savings of 20% in taxes to the homeowner.
NOW – THE BAD NEWS
Since the above little government scheme has inflated the market cost (and tax base) of housing in California by $60,000 (or more), if we remove their ability to charge those fees, the cost of a new home can be reduced by the amount of those fees, in this example $60,000, which is good news to those looking to buy a new home. But there is a downside. This reduction would put downward price pressure on existing homes…. Good news for those looking to buy and, in many cases, bad news for those who would now find themselves “upside down” in homes purchased under the existing Government “Flim-Flam” Tax Scheme where they are forever stuck with paying “Property Taxes” on governments little Permit Fee to “work around” the “Prop 13” “hurdle”.
Editors Note: If property values decline you can have your Property Tax Authority revalue your property for Property Tax purposes and a reduction in Property Taxes on your home. Don’t expect speedy smiling service. Tax Authorities do not like losing Property Tax revenue because of declining property values.
In the “Good News” case citizens would likely make me out a hero because new housing would be more affordable.
In the “Bad News” case citizens stuck with the phony, paper value inflated tax scheme and facing market value devaluation of their homes would most likely not form a “Fan Club” for me.
What would you say the odds are of government letting this little “Tax Bonanza” “ripoff” slip out of their control?
Don’t you just love the way government can find new ways to tax you?
Bob Bandy – September 2025
