Impact Fee Confusion
In Saturday morning’s Grapevine section of the “Tilghman Times” editorial page one reader wrote:
Some builders in this community say they want to
do their fair share to help, and then every project they are asking for
an exemption from the impact fees for 55-and-older housing. When we
implemented the impact fees to go to our schools, we did it because our
children are in desperate need of more schools and school upgrades.
Unfortunately a few have found the little loophole and are running with
it. Is there a way to make the impact fees collected from a
55-and-older home go toward something else like roads?
There seems to be some confusion over what an impact fee does. Impact fees are charged for the expected impact of a project. Unless I am mistaken, it is illegal to charge a schools impact fee to a commercial project or to housing that is restricted to seniors. The logic behind this is simple. Offices do not have children to educate; nor do factories. People in their late fifties or older usually don’t have children in the public schools. If they do, they should probably get a special “frisky” credit on the fee anyway.
There are impact fees that can be levied against commercial projects or senior-only housing. The county could levy an impact fee for libraries or one for transportation (roads). They could enact an impact fee for “green space”. They should most certainly levy a fee for public safety (sheriff, fire and EMS). These aren’t bad ideas.
As for schools, the county could also lobby the legislature for the authority to enact an excise tax for schools. Such a tax on new construction would enable the county to charge seniors only housing. If they chose, they could also charge commercial projects.
Many people in Wicomico County including a couple of council members I have spoken with on this issue have not be adequately educated on what the impact fee actually accomplishes and who it can be levied against. This is quite important. A couple of days ago I posted on the recent court decision in Ann Arundel county where the county will have to refund millions of dollars in improperly used impact fees. It would be a huge waste of tax dollars to improperly charge an impact fee or use the money improperly only to be forced to refund the money at a later date with interest.
Another point that should be considered if the county ever plans to enact an excise tax for schools is whether or not to tax commercial projects. If it were up to me, all non-retail commercial projects should be exempt. The reasoning behind this is simple. Non-retail commercial projects use far less in services than they pay in taxes and they provide permanent and hopefully high paying jobs. My prejudice against retail projects is only that they do not usually provide permanent or high paying jobs. The also have a disproportionate impact on traffic congestion. However, retail projects do use far less in services than they pay in taxes.
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Comments
Senior housing needs more fire rescue and ambulance service than neighborhoods with younger people. It’s so easy for older people to fall and break bones. So they may claim they won’t put a strain on schools, but they will have an increase in ambulance calls and emergency services. All communties use public services, and should pay impact fees equally across the board to prevent abuse.
Excellent idea Nosweat. In all honesty I had never given it much thought. If the county (cities could also adopt Police, Fire and EMS Impact Fees) were to adopt such an impact fee then they could set the Fire and/or EMS impact fee at a higher level for seniors only housing.
As far as I know this would not be illegal because, as you stated, seniors use these services at a higher level. However, it would be politically difficult because seniors vote at a much higher percentage than younger people. If they were properly educated it should not make a difference because, as we wrote here during the debate over school impact fees, an impact fee does not directly affect the cost of housing. A developer will charge every nickel that the market will bear for his property no matter what his costs.
Thanks again, great comment!
An impact fee must bear a reasonable relationship to the burden that results from the particular development on which it is imposed — that’s why true (”deed restricted”) senior housing in which school aged children are prohibited can’t be hit with a school impact fee. Probably any impact fee for roads would have to be reduced for such senior housing, and imposed at a greater rate on other housing, because the burden that results from the latter type is much greater than in senior housing.