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To: Moominoid who wrote (62766)	4/25/2005 4:57:35 PM
From: Elroy Jetson	Read Replies (1) \| Respond to of 74559

When I worked for Pardee Homes, there were many additions to the Development Fees charged in various areas. These fees were imposed to pay for additions to the sewerage system, the cost of freeways and related streets, parks, schools, fire stations, and many other things. If the new Development Fee for a parcel of land added $1 million to our costs, we offered the land owner $1 million less for their land. When you determine the price you are able to pay the land owner, you start with the sales value of the homes and commercial buildings, subtract your cost and desired profit and the result is the price you can pay the land owner. This is why the process is called "Residual Land Value Analysis". Some unfamiliar with the development business, claim we should not have paid the land owner less but we should have marked up the price of the homes by a pro-rated amount. But the home price is determined by what people in that area are willing and able to pay - not by our costs. Development Fees and zoning requirements do not increase the sales price of a home. Zoning can preclude you from buying a small condo in a single family subdivision, but it doesn't make the home or the condo more expensive. .