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The Coachella Valley Conservation Commission is in Trouble
But should the new home and commercial/industrial construction industry pay for their mistakes? The LDMF is a fee on new construction. It was supposed to only be charged on new construction disturbing “undisturbed” lands of the valley. Which would be part of the direct nexus, disturbing pristine lands purchasing desirable habitat lands identified by CVCC. However, that was not the case. The industry was taken aback 17 years ago as the CVCC proclaimed that even infill lots and previously cleared lands were subject to this fee.
The idea of the LDMF was a “rough proportionality.” An acre of disturbed land would be replaced with the purchase an acre of habitat. Simple enough. That can meet the requirements of the Mitigation Fee Act for which the CVCC and its consultants were hanging onto in order to avoid the fee being defined as a tax. Well, the imposition of a management and monitoring costs onto this fee, did make it a tax. My understanding is that this portion of the fee is hidden within the creation of the “endowment” which is to fund the management and monitoring into perpetuity. Still, the intent of this ‘one-time’ fee is management and monitoring, which does not benefit the builders, developers, nor specifically the home buyers. It benefits the general public. Once habitat is purchased it becomes a public responsibility. Proposition 26 now defines what is and what is not a tax.
Prior to the CVMSHCP and LDMF new construction had to seek environmental permits from the state and federal wildlife agencies. This caused years of delays and inconsistent regulatory costs. The CVCC’s Plans worked well as a one-stop fee payment shop. Consistent costs and the CVCC was responsible for meeting the habitat conservation requirements of the wildlife services.
The 2011 amendments were supposed to clean up some of the processes of the CVMSHCP and LDMF as by this time $247 million would not be coming from the Eagle Mountain Landfill tipping fees. The industry fell in line with the plan.
The 2026 Plan acknowledges that the construction industry is not building new home or businesses at the rate initially designed in the 2009 Plan. Instead of constructing on over 1,500 acres per year the industry is only disturbing 500 acres annually. One might think this is a good thing, even admirable. But, not to the wildlife services who have a plan in their hands stating so many acres per year will be purchased for habitat. They have a timeline and it is not being met. There are other factors as well.
The MSHCP has funds. They have a reserve. They just are not purchasing land at the rate of 1,300 – 1,500 acres per year. Under the plan the CVCC has no authority to force anyone to sell their properties in the desirable habitat conservation areas. The CVCC may only purchase habitat lands from ‘willing sellers.” How they go about trying to find willing sellers is unknown to me. But that leaves CVCC to purchase a substantial number of county tax default properties. These properties may not be the most desirable prime lands, but it is forward movement. The CVCC has an annual unspent balance of $4 million. This seems to be that pattern over the past 5 years. But, if property should come up in significant quantities would the CVCC use its $20 million land reserve fund?
The CVCC has avoided the difficult processes necessary to make their violations of the Mitigation Fee Act and Proposition 26 history. Management and Monitoring are an obvious violation of the Mitigation Fee Act. This is a public benefit. The easiest rule of the Mitigation Fee Act in defining a “nexus,” If we do not build there is no ‘nexus,’ no need to purchase habitat lands. But, per the plan additional purchase of habitat is required, and management and monitoring are required. New construction is not the force creating the ‘need.’ This is a public obligation. However, the industry will gladly pay its fair share for its actions in disturbing lands of the Coachella Valley.
In the New 2026 Plan it is understood that only 30% of the expected funding is being captured. This Plan more than doubles the current per acre fee of $7,930 to $16,084. This fee is a penalty to new construction for trying to work through the rest of California’s regulatory demands, increased material costs, and high interest rates. The CVCC and its consultants again call it “rough proportionality” to meet the standard language of the Mitigation Fee Act. Instead of an approximate one for one proportion, we are seeing something closer to three acres habitat for one acre of disturbance. Logically that would mean habitat could be completely funded prior to Coachella Valley’s construction buildout. CVCC has a plan that new construction would later pay a lower fee for management and monitoring. All this because the “rough proportionality” of the previous “nexus” studies no longer fit the CVCC’s need for more money. What happens when this new fee slows new construction further? What happens to proportionality and “nexus” should the industry again rebound?
The construction industry is in a difficult reality right now. Our builders are not looking at new projects. Home sales are near recession levels. Our builders are laying off loyal staff members. To some this fee increase is nominal. However, per NAHB the addition of a $1,000 to the purchase price of a home eliminates 132,000 families from purchasing a home. In California this is significantly different. For every $1,000 added to the purchase price, approximately 15,000 families are priced out. The cost at the beginning of new construction is significantly higher at time of purchase, as it is pushed along through months of construction, financing, and handling.
Should the building industry, again, acquiesce to pay an unlawful tax as a Mitigation Fee Act charge? The alternative, unlike what is suggested in the CVCC Staff report is a tax on all of us for the benefit we all receive. The Staff reports suggest different taxes that would only affect new construction properties. Infrastructure Funding Districts might be a better alternative.
We have a considerable number of smart and educated professionals in this community why should we continue to violate the law to charge the few to meet the needs of the many?
A Message from NAHB Chairman Bill Owens
https://www.nahb.org/blog/2026/09/september-is-associate-member-appreciation-month
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