Developers: Regulations, price of land add to cost of building

CNJ staff photo: Kevin Wilson Houses on Carmel Lane near the Clovis Civic Center are in various stages, from empty lots to homes in progress to moved-in residences. Developer John Bourne said it's hard to find a balance between building a home that's affordable to residents and making enough money on a project to justify the time and effort.

When the city did a survey for its affordable housing plan, 40 percent surveyed said the biggest obstacle to getting a home was that prices were too high.

In the same survey, 59 percent said it’s difficult to buy a home in Clovis, with reasons like limited financing, high costs and cumbersome regulations and permitting processes.

The two beliefs work hand in hand. Housing must be affordable to own. But to set that in motion, housing must be affordable to build.

John and Marilyn Bourne have been building for years, including the Raintree subdivision, Jonquil Park and an ongoing project near the Clovis Civic Center. They aren’t in the poorhouse, with their hands in home development, rentals and other interests. But they dispute any notion they are price-gouging developers making money hand over fist.

Bourne is currently working on homes on Carmel Lane and Almond Tree Lane, and he said he does the best he can to make a quality home and keep it affordable for those serving at Cannon Air Force Base.

“These houses we’re doing by the Civic Center, we are making $2,000 to $3,000 a house,” Bourne said. “We’re trying to do that to provide housing for military people.”

A profit of $2,000 to $3,000 sounds good, but if it takes three months or more to develop the lot, the Bournes say, you’re better off at a 9-to-5 job.

Bourne, who got his contractor’s license in 1972, said many financial hits occur because the state and the city put requirements on Clovis homes that homes in other cities just don’t have.

“The main things that go into the price of a home are standard,” Bourne said, “but there are many little hidden costs we have to do in Clovis.”

Some requirements were left by long-gone city staff, and some are new with every year.

New homes require a circulating pump for hot water, which runs about $1,500. Add in another couple thousand for mandated pedestals instead of power meters on each house. That’s on top of a requirement that developers pave new roads, pave alleys and set up all of the utility connections.

Bourne indicated he wanted to choose his words carefully because he doesn’t want to hurt long-standing relationships with other businesses. But the bottom line is that building a home requires financial incentives for pavers, plumbers, electricians, construction crews, Realtors and many others, and nobody thinks they should forgo such incentives.

Andy Cordova of ADC Construction said another factor is the cost of land. The nature of the market dictates that “you don’t sell when the market is low.” With incoming military personnel creating a demand, the market is high.

The city’s affordable housing plan, which will be discussed at a 3 p.m. Wednesday zoning and planning meeting, is geared towards lower-cost measures like infill, which saves on some of those development costs. But even that has a downside, Bourne said.

“You’re not going to get a good appraisal, for one thing,” Bourne said. “You’re going to make even less money” because home values are tied to neighboring houses of various age and quality.

“I realize that needs to be done,” Bourne said, “but somebody’s got to pay the price.”