I made a statement up above that I need to correct. There is no state law that caps the impact fees at 0% of the cost. i read that online weeks ago, but when I looked at the actual law today I couldn't find it. And I've now confirmed that 100% can be recovered with people who should know. So don't repeat the 50% rumor. Some people already have and I apologize for the bad information.
But it doesn't change my support for some increase in impact fees. My concern with 100% recovery is that our residents can create some additional value to the city over time. that they should get credit for. But I've been told the Council has always considered this in their discussions of impact fees, though its hard to really know what the net value of a resident is to a city. We have a city committee for impact fees and I assume their job is to make some judgement on what the unrecovered burden is for our taxpayers. So I don't know if it's 50% or some other value, but I'm confident the unrecovered burden is more than $ 2k per house.
The total is probably greater than even $15k. The fee is calculated with a process established in state law. The $15,000 is consistent with that process and was confirmed by the city. It does not include any expenditures by the developer. By law, some of the largest ticket items cannot be included, such as fire stations, fire trucks, and building space for police. We are already using about 40% of all property taxes to service our debt, and there are even more future commitments in the new neighborhoods that contribute to the $300M in additional unfunded liabilities we're told are in the pipeline.
If I didn't believe new growth should pay for itself, then what should I believe? If I bought a house I would expect to pay for it and I think there is some conservative upbringing in that. The subsidy does not go to the homeowner, it goes to the developer. If a developer cannot build a neighborhood economically without a government subsidy of $15k per house, I would expect that neighborhood to simply not to be built. That's the way it works for all of the rest of us. Government subsidies always distort markets. In this case, it hurts the owner that is trying to sell their older home. Assuming the developers actually do pass their subsidy on to the buyers, is this fair to the rest of the housing market?
There are a number of posts that express concern for new home buyers. Whenever impact fees come up in conversation we all naturally imagine the the young family trying to get started. But every house gets this subsidy, including million dollar homes. If we did want to subsidize low income housing, we would index the fee so it increases with home value. Somewhere around 250-300k and above I would expect a developer to pay the full fee set by the city. I would prefer to let the free market work, but if you do have progressive ideas about subsidings millennials who are having a hard time getting started, design a system that does that. Maybe we could be generous and just let developers of $350k houses be subsidized as well, but it's a little hard to justify when we seem to have a runaway debt problem to start with, and new state laws that will make it hard to ever catch the curve.
You can be dogmatic and vote for budgets while voting against the taxes to pay for it, or you can get real. We will never get control of our taxes until we get control of our growth in debt.
I agree with a previous poster that we have a lot of inefficiency, overspending on projects and other opportunities to do better. But the growth problem is so big it has to be a major part of the formula for a balanced budget. It's not just the situation we're already in, but the certainty that it will get much worse. We already know the numbers. We need leadership to address it head on. We have a math problem and to get anywhere close to addressing it we need to make more reasonable decisions on a lot of fronts.