Innovative Approach to Property Tax Impact Fees Should be Studied by Lake County

Thanks go to Marilyn Bainter who sent me the link to this article, and the new impact fee method described sounds creative and very logical!

Apparently in Hernando County (FL), real estate developers have loaded the County Commission with supporters who then cut impact fees in half, without any real discussion on where funds for schools, roads, etc, would come from in the future.

But,. the Columnist also discusses another County, Charlotte County, where they came up with a creative approach by setting sliding impact fees based upon the DISTANCE from existing facilities.  They had already tried drastic reductions of impact fees and "it didn't work" (no reason supplied).  Thus the impact fee might be half off if a new house was built within 2 miles (no bus requred by the State) of an existing school.  But, if a new housing tract was built far away from existing schools AND roads, then fees were much higher to reflect the cost of building infrastructure and schools to support the new tract.

I think that is very innovative, and also supports the Lake County type of development plan where land zoning is being setup in clusters so that we don't have sprawl.  Thus a real estate developer could choose to build near new, existing services which reduces need for new infrastructure, vs paying more impact fees if the houses are located 15 miles from the nearest school.

Sounds fair to me, and this method should be evaluated by Lake County officials.

vj

Charge Hernando County developers the 'real' cost of growth

By Dan DeWitt,  St. Petersberg, FL Times Columnist  - link is HERE
In Print: Friday, November 13, 2009

County Commissioner Rose Rocco asked the crucial question about impact fees: "What's the real level?"

In other words: How much money is really needed to provide each new house with schools, roads, libraries, parks and fire- and crime-fighting equipment?

Of course, Rocco and the rest of the Hernando County commissioners didn't wait for the answer on Tuesday before handing over a 48 percent impact fee cut to builders, many of whom had lined up along the back wall of the commission chamber.

Considering the development industry last year basically ousted the one commissioner willing to stand up to it, Diane Rowden, this is not a bunch the board wants to tick off. Which may explain why Commissioner Jeff Stabins, previously the voice of reason on this issue, didn't just fold. He crumpled.

But here's the unfortunate thing: There's another way the commission could have lowered impact fees, at least in some parts of the county.

Rather than abandoning the core principle of our impact fee ordinance — charging the "real level'' for new homes — this method would advance it.

Putting it in place would rely not on ignorance, but on a more refined knowledge of the costs of growth. And, as a final bonus, it would allow impact fees to encourage efficient growth.

The model here is Charlotte County, which is about a year ahead of Hernando on this issue — if we have the sense to follow its example.

In early 2008, Charlotte experimented with a drastic rollback. As we've heard about in other places that tried this, "It didn't work,'' said Jim Fendrick, Charlotte's concurrency manager.

So, in September, Charlotte created a sliding scale.

If you build houses close to schools, jobs and shopping, you pay less than those building far from these services, where longer trips put more traffic on roads.

The fee Charlotte set in 2006, which does not include school-building costs, was $9,015 per house.

The new "tiered impact fees'' bumped that amount up 45 percent for new houses in the most rural, eastern parts of the county, but cut the fee nearly 56 percent, or $5,013, in the built-up west.

All that reduction came from transportation fees, because it's relatively easy for planners to measure how the cost of road-building increases as development sprawls over a wider area.

But the same principle should apply across the board, Fendrick said. For example, fire impact fees could probably be lowered for houses built just around the corner from an existing station. So, Fendrick said, more cuts in urban areas may be coming.

In Hernando, impact fees not earmarked for schools amount to just under $5,000. If we cut the same percentage as Charlotte, the cost for a home built, say, just off County Line Road, might be less than $2,500.

In Royal Highlands, where the commutes and shopping trips are longer, fees would be higher. In the far hinterlands — say, the site of planned Quarry Preserve subdivision — builders would justifiably pay through the nose.

Such a graduated fee structure would require study, time and money, though only about $25,000 in Charlotte so far.

The builders and developers are happy, Fendrick said. Even better, the county is charging the "real level.''

[Last modified: Nov 12, 2009 07:47 PM]