July 30, 2014

Development

Sudden Impact

Home builders and local governments are clashing over escalating impact fees.

Ken Ibold | 5/1/2005
Rapid growth has prompted a number of central Florida governments to impose huge jumps in fees levied against new homes to help pay for road improvements, schools and other infrastructure made necessary by the growth.

The hikes often pit home builders against governments in a high-stakes game that influences where residential growth is likely to occur. Governments use them to plan for and accommodate growth, while builders lobby to keep their home prices as competitive as possible.

In Orange County, county commissioners hiked the school impact fee from $2,828 per single-family home to $7,000, effective May 1. Smaller increases apply to multifamily units, where the fee doubled from $1,907 to $3,807 per unit, and mobile homes, with the fee jumping from $2,329 to $4,104.

But even Orange County's increases pale compared to the hike that Volusia County enacted. Beginning June 6, buyers of new single-family homes will pay $5,284 instead of $1,139. Volusia originally planned to raise impact fees to about $3,000, but protests by home builders led the county to hire consultants to assess the need. Their findings caused the county to raise the fee even higher than originally planned.

In addition, several cities in Volusia County have added city "road fees" on top of road fees already put into place by the county.

Edgewater adopted a road impact fee of $1,370, and similar fees are being considered by New Smyrna Beach, Port Orange and Daytona Beach. Although the fees are intended to apply only to residences on city streets, they have been applied to property on county roads as well, says Dave Castagnacci, executive director of the Volusia County Association for Responsible Development.

Osceola County's 2004 school impact fee hike from $2,828 to $9,708 prompted a lawsuit from the Home Builders Association of Metro Orlando, which says the amount is unwarranted. Since then, the funds collected have been held in escrow and cannot be spent on improving schools.

The home builders say the hike was based on flawed data from a consultant the county hired.

The dispute has forced the Osceola County School Board to put some $8 million into a reserve account pending the outcome of the lawsuit -- with little chance it can be used for school construction until at least the middle of 2006, according to school board lawyers.

"It is unfortunate that the money that could help provide needed relief from overcrowded classrooms is being tied up because of a lawsuit instead of being spent to build new schools for our students," Superintendent Blaine Muse said in a statement. "Raising the impact fee was a huge step for new growth to pay for itself. By 2006, the district will be even farther behind in building needed classrooms."

Tags: Politics & Law, Central, Education, Government/Politics & Law, Housing/Construction

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