State elected leaders in California are considering legislation that would grant automatic extensions of one, perhaps two years, on tentative subdivision maps, giving builders a chance to wait out the downturn without losing hard-won entitlement progress on potential communities.
"Extending the maps is a critical entitlement vehicle," says Tim Coyle, senior vice president for government affairs at the California Building Industry Association (CBIA). "They take five or more years to complete, so we lose a lot if they expire and the sponsor has to go to the back of the line."
Ironically, given the time required to get a tentative map, these essential documents do not last long; they expire within two to three years if they are not finalized and must be resubmitted to officials.
Why don't builders just pay to finalize the tentative map, which outlines the plans for a prospective development? The expense involved, which is substantial even in boom times.
"In order to complete a map, a builder may need to pay the impact fees, which in California can be $30,000 to $100,000 per lot," explains Ray Becker, a vice president with DMB Associates and chairman of the California Building Industry Association. A builder may also need to post bonds or begin improvements on the site. It adds up to a "significant upfront investment" that many builders can ill afford in today's market, Becker says.
Currently, the bill is with the California Senate, but Coyle hopes to get it passed by both houses "as soon as humanly possible." There is precedent for such a legislative action; CBIA leaders say the state enacted similar extensions in the 1990s.
Alison Rice is senior editor, online, for Builder magazine.
Learn more about markets featured in this article: Los Angeles, CA.