Rehab program shows results

To encourage home renovations, Costa Mesa waives permit fees; officials say the plan is working. A program designed to encourage Costa Mesa homeowners to spruce up their residences appears to be working.

During the first month of the program -- in which permit fees for building, plumbing, mechanical and electrical projects are waived -- city staffers processed more than twice as many permits as they did a year ago.

Statistics provided by Costa Mesa building official Khanh Nguyen show that 381 permits were processed in September. In September 2004, 146 permits were processed.

The program will be in effect through Dec. 31.

A large number of the permits are for roofing projects.

“If you drive around town now, you’ll probably see a lot of guys walking on the roof,” Nguyen said.

Terry De La Cruz, a partner in Performance Roofing Co. in Costa Mesa, said his company’s business is up by about 30% from last year, though he does not know if the fee waivers or some other cause has spurred the increase.

The uptick in contracting work is somewhat surprising, De La Cruz said, since the cost of building materials has escalated.

“I would think that [the higher cost] would deter people, but it’s not,” he said.

The waivers meant that Costa Mesa homeowners saved almost $76,000 in fees in September. Last year, the city collected about $19,000 in permit fees in September.

Building permits were processed in September for projects with a total assessed value of $3.2 million. In September 2004, that figure was $824,000.

Since the end of September, permit activity has slowed down, Nguyen said. He said he expected that the rush at the beginning of the program would level off, based on observations of a similar program that was used in Anaheim in 2004.

The remodeling incentive program was proposed in the City Council by Councilman Eric Bever. Bever said he was pleased to see that more people have sought home improvement permits under the program, which was designed to encourage homeowners to invest in their properties.

“It’s showing that it will only take a little push for getting the residents off the fence,” Bever said.

Improvements that enhance a home’s value can be taxed, but homeowners can save a lot of money on their property tax bills by building add-ons rather than purchasing larger homes.

Buying a new house often “doubles the property taxes, where a remodel would not do that as a general rule of thumb,” said Valerie Torelli of Torelli Realty.

On the low end, homeowners taking advantage of the program for a roofing project can save about $100, Nguyen said. People pursuing costlier projects, like a 500- to 1,000-square-foot addition, can save about $1,500.

Because the savings available through the program are small compared to the price of a new home, two real estate professionals said they doubt the program will effect Costa Mesa’s real estate market.

“The fees are not really big enough,” said Gary Legrand, who manages Coldwell Banker’s office near Fashion Island.

First Team Real Estate agent Lori Robnett said she has not observed any impact on the home market because of the program.

She said some homeowners are opting for remodels instead of moving, but that is a trend she has seen in play for about a year.

* ANDREW EDWARDS covers business and the environment. He can be reached at (714) 966-4624 or by e-mail at andrew.edwards@latimes.com.