Archive for January 21st, 2010


Impact Fees Part Two, A Better Way

January 21, 2010

Yesterday’s blog pointed to some of the bigger issues surrounding impact fees and their use.  Rather than simply complain, it is better to present a solution and return them to their original purpose.  The fees need to be a force to improve a community rather than  funding irresponsible practices.

Impact fees are one example of government taking the path of least resistance rather than a longer view of what is best for the future.  Unfortunately, it is too common an occurrence.  Local ordinances are often hard to comply with or are punitive in nature.  In the case of impact fees, rather than encourage responsible construction, they only extract money from process, in effect, a fine for building in the community.

What impact fees fail to take into account is the true impact of new construction.  In most cases, state legislation dictates the areas fees apply but local communities, with state approval, determine the formula for collection.  This prevents local communities the ability to address local issues.  A better method is for the state to list the areas where fees cannot be applied, and then approve the local plan.

In doing this, the process is under local control.  Of course, this assumes the process is open and only in the hands of officials voters elect.  To address specific issues (trash collection, waste treatment, etc.) the process needs to remain flexible.  For example, a community wants environmentally friendly new construction.  To do this, understanding the true cost of the building, from construction until the day it is demolished and disposed of, is calculated.  Questions like, how much of the building material can be recycled are taken into account.  The initial fee assumes none of the structure is recycled, it is reduced by the percentage that is.  If the cost of the whole building going to a landfill is $20,000, that is the impact fee.  If ninety-nine percent of the material is recyclable, the fee is reduced ninety-nine percent to $200.  This idea imposes the fee on irresponsible construction, from a community standpoint, and rewards construction that complies with the wishes of the community to recycle.

It is a complex way to impose fees, to say the least.  The current draconian method is much easier to administrate, but does little to serve the greater good.  After all, serving the greater good is the reason we accept government in the first place.  New construction should bear the cost of its impact on the community, but only its true cost.  Impact fees used to subsidize budgets or cover shortfalls only push problems down the road.  We need ordinances that encourage the type of building we want rather than one, across the board, fee that only siphons money from the public.  The budget simply cannot be balanced on the back of new construction, at some point, the use of the impact fee band-aid will fail.

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