Builders fight fee hike for schools
Rapidly growing districts demand developers pay for campus construction
As the real estate markets for Fremont and Dublin soar with new home sales, the schools that house all those new students are bursting at the seams and looking to developers for help building classrooms.
The state agreed. In a precedent-setting act — after repeated pleas by the Dublin and Fremont school districts — a state board overseeing school construction declared in May that state funds for new school construction are not available, triggering the highest-level fees on homebuilders that the law allows. But those builders are fighting back, in a battle that could have implications for school funding around the state.
Last month, the California Building Industry Association slapped the State Allocation Board with a lawsuit the same day the panel voted. A Sacramento judge issued a tentative
ruling this week favoring the districts and the state, but did not make a final decision during a court hearing Friday. The association declined to comment for this story.
The board’s decision to raise fees that overcrowded school districts can charge housing developers for building new schools was seen as a long-awaited victory.
According to SB 50, passed in 1998, the state and local communities are supposed to share costs of new school construction, with developers also kicking in their share, but the state hasn’t passed a school construction bond since 2006. Those bond funds dried up last September. More than $1.3 billion in new school construction projects dating to 2012 are stuck in the pipeline.
At the same time, several new developments in Dublin and Fremont — with sales pitches touting the area’s good schools — have added more students than the campuses can handle.
The law has a provision that addresses when state bonds are unavailable for new school construction: The additional burden of the state’s portion of funding would fall on developers, by triggering higher “Level 3” fees. That would allow the most overcrowded districts that meet certain strict criteria to double the amount they request from developers to support new schools.
In Dublin Unified, the district could bump its fees from $10.66 to $21.32 per square foot of residential construction. And in Fremont Unified, fees could go up from $8.19 to $16.38 per square foot.
“I need more classrooms. With all the development in Fremont, it’s really gotten to a critical level,” said Fremont schools Superintendent Jim Morris. “And without a Level 3 fee, we don’t have the leverage to get developers to understand how real and desperate the need is for classrooms.”
According to court documents, the association argues that the additional fees “would immediately and unlawfully expose homebuilders and homebuyers throughout the state to the unjustified and unnecessary burden” of doubled fees, leading to immediate increases of $15,000 to $30,000 per home. The lawsuit states that the increased fees would cause “between 216,345 and 435,690 families seeking to purchase a home in California” to be “priced out of the market.”
The association argues that the state has more than $85 million left in a school bond fund dedicated to seismic improvements that could be used for new school construction. It also points out that a $9 billion state school bond measure on November’s ballot is polling favorably and “will likely pass, making additional funds available shortly for new school construction.”
Paying a fair share
But in the eyes of many Fremont and Dublin residents, developers are just trying to dodge paying their fair share. Scores of community members have staged a series of protests throughout Fremont and in Sacramento over the past few months, decrying the building lobby’s power in the state.
“It’s all big money, so in the end, it’s the local school districts that are suffering,” said Amanda Anguelouch, a Fremont parent with three daughters attending different schools because of district overcrowding. “But we, the taxpayers, are subsidizing the builders ... and they are making these millions in Fremont. It’s just incredible — the housing prices.”
In Fremont, overcrowded classrooms, jampacked bathrooms, cafeterias and gymnasiums, with about 350 portable buildings wedged onto campuses throughout the city, are becoming the order of the day, Morris said.
In the next five years, 6,705 homes are expected to be built in the city, according to the district’s demographic analysis. The district, which had 32,000 students enrolled in 2010, grew to 35,000 students this past year. By 2022, it’s anticipated the district will have 45,000 students, Morris said.
More than 2,000 students, many of them kindergartners, had to be moved from their neighborhood schools to schools farther away this year. Patterson Ranch developers agreed last week to pay $7.5 million in extra funds to the district to make sure the children living in those new homes aren’t sent to Newark schools.
Terri Morales said her two daughters at American High School were often afraid to drink or eat too much around lunchtime.
“The lines for the restrooms are so long, there’s just not enough time to get to your class in time before the bell rings,” she said.
Dublin Unified also is feeling the squeeze. It wants the state to reimburse it $28.8 million for building Amador Elementary, money that might never come. Nearly 4,700 new homes are expected to be built in the fast-growing city over the next seven years, adding about 5,500 more students, according to the school district. School enrollment has already doubled in the past 10 years to more than 10,000 students, but the district only has the facilities to provide about 9,100 seats, according to court documents.
Who’s to blame?
“We’ve passed three school bonds so far, so we’ve doing our part as a community,” said Dublin Unified spokeswoman Michelle McDonald. “Our residents have been stepping up. But developers need to do their share, too.” Dublin voters have approved $566 million in school bonds since 2004, and Fremont voters have passed $887 million in school bond measures since 2000.
Since 1998, developer fees collected statewide have amounted to $9.4 billion — or roughly 9 percent of total K-12 construction in the state, compared with local school districts’ contribution of $75.2 billion. Funding from state bonds accounted for $35.4 billion, according to the State Allocation Board.
Some residents are pointing fingers at developers in two communities, while others blame Dublin city officials for not tamping down unbridled growth. Dublin Councilman Abe Gupta says a lot of the city’s recent development required zoning changes that the council could have rejected.
“If you drive around the city at 7 a.m. on Friday, you’ll see so much bulldozers and heavy earth-moving equipment,” Gupta said. “We have literally thousands of homes going up in the city. And residents are saying, ‘How can we approve all this?’ ”
More people are packing what used to be empty chairs at City Council meetings to protest, he said, and there’s been a backlash against developers.
“People will want to move in here and want to take their kids to our schools of distinction,” he said. “But if this keeps up, the roads, the capacity and infrastructure they’ll need to do that just won’t be there.”