Impact Fees
On August 28, after some fifteen months of study, the City Council voted in a new and badly needed impact fee structure.
Impact fees are the necessary evil which enables cities to extend essential services to new development in a timely manner. Assessed as a one-time fee on new construction and authorized by section 11:36 of the Utah code, impact fees accelerate the expansion of such essential services as water, sewer, roads, parks, police and fire protection. Without impact fees, existing City resources are spread too thin to provide effectively for growth.
Residents of the Hillcrest neighborhood understand the ills of not collecting adequate impact fees: They waited years for the construction of Hunter Park.
Businesses in the Meadows understand the danger of spreading resources too thin: They'll be in much better shape when the City finally saves enough money to enlarge the water line that services their district. (This will happen when 1120 North is completed.)
Without impact fees, AF is hard-pressed to provide new services in a timely manner.
With impact fees, AF can not only provide for present growth; it can also plan and provide for future growth by bonding against future impact fee revenues. An essential component of the City's long-term financial plan, impact fees are a key strategy for keeping property taxes as low as possible.
Homebuilders are quick to remind us that impact fees are a tax--a nasty tax, they say, that drives up the cost of housing and, in turn, the cost of living.
They have a certain point. Impact fees are added into the price of the house and they are indeed a tax. All government revenues are taxes, including those which provide City services. Certainly, government has a responsibility to restrain its costs, keeping taxes as low as possible.
But to say that impact fees add to the cost of living is a piece of reverse logic. That cost of living, or in this case, the cost of providing essential services, already exists. It will be recovered through one tax or another. Impact fees merely enable the City to recover its costs up front. If the City does not charge the home buyer up front for services, it will have to charge him some other way.
The City is no different from the dairy farmer who must determine how much to charge for his gallon of milk. The price tag he puts on the jug has to include a number of fixed costs including the cows' feed, the farmer's labor, the cost of the jug, the price of shipping, the insurance on his farm, and so on. If he doesn't recoup his costs from selling his milk, he produces at a deficit and goes out of business. No matter how badly he wants to please his customers, the dairy farmer cannot drop his price below his costs.
The City is the same. In a sense, charging an impact fee is like truth in advertising. Home buyers are enabled, through impact fees, to comparison shop. Those wanting a cheaper product may go elsewhere. Those wanting to enjoy American Fork parks, police, water, etc., will be willing to help shoulder the cost.
As of August 28, American Fork now charges impact fees for transportation, water, fire, police, parks, and sewer. Of these, the transportation, fire, and police fees are new. The City Council has high hopes for the transportation fee, given our many road needs. The water and park fees already existed but were raised. Park fees went up significantly to reflect the skyrocketing costs of land.
All fees taken together total $12,833.29 for a single-family dwelling. Multi-family dwellings are assessed $10,794.15 per unit.
It sounds like a lot of money, and indeed it is. But if it means families can rely on adequate public safety and infrastructure, and if it means that young families can take their children to the park while they're still children, then I say it's good planning, and a bargain at the price.
Impact fees are the necessary evil which enables cities to extend essential services to new development in a timely manner. Assessed as a one-time fee on new construction and authorized by section 11:36 of the Utah code, impact fees accelerate the expansion of such essential services as water, sewer, roads, parks, police and fire protection. Without impact fees, existing City resources are spread too thin to provide effectively for growth.
Residents of the Hillcrest neighborhood understand the ills of not collecting adequate impact fees: They waited years for the construction of Hunter Park.
Businesses in the Meadows understand the danger of spreading resources too thin: They'll be in much better shape when the City finally saves enough money to enlarge the water line that services their district. (This will happen when 1120 North is completed.)
Without impact fees, AF is hard-pressed to provide new services in a timely manner.
With impact fees, AF can not only provide for present growth; it can also plan and provide for future growth by bonding against future impact fee revenues. An essential component of the City's long-term financial plan, impact fees are a key strategy for keeping property taxes as low as possible.
Homebuilders are quick to remind us that impact fees are a tax--a nasty tax, they say, that drives up the cost of housing and, in turn, the cost of living.
They have a certain point. Impact fees are added into the price of the house and they are indeed a tax. All government revenues are taxes, including those which provide City services. Certainly, government has a responsibility to restrain its costs, keeping taxes as low as possible.
But to say that impact fees add to the cost of living is a piece of reverse logic. That cost of living, or in this case, the cost of providing essential services, already exists. It will be recovered through one tax or another. Impact fees merely enable the City to recover its costs up front. If the City does not charge the home buyer up front for services, it will have to charge him some other way.
The City is no different from the dairy farmer who must determine how much to charge for his gallon of milk. The price tag he puts on the jug has to include a number of fixed costs including the cows' feed, the farmer's labor, the cost of the jug, the price of shipping, the insurance on his farm, and so on. If he doesn't recoup his costs from selling his milk, he produces at a deficit and goes out of business. No matter how badly he wants to please his customers, the dairy farmer cannot drop his price below his costs.
The City is the same. In a sense, charging an impact fee is like truth in advertising. Home buyers are enabled, through impact fees, to comparison shop. Those wanting a cheaper product may go elsewhere. Those wanting to enjoy American Fork parks, police, water, etc., will be willing to help shoulder the cost.
As of August 28, American Fork now charges impact fees for transportation, water, fire, police, parks, and sewer. Of these, the transportation, fire, and police fees are new. The City Council has high hopes for the transportation fee, given our many road needs. The water and park fees already existed but were raised. Park fees went up significantly to reflect the skyrocketing costs of land.
All fees taken together total $12,833.29 for a single-family dwelling. Multi-family dwellings are assessed $10,794.15 per unit.
It sounds like a lot of money, and indeed it is. But if it means families can rely on adequate public safety and infrastructure, and if it means that young families can take their children to the park while they're still children, then I say it's good planning, and a bargain at the price.
posted by Heidi Rodeback at 6:06 PM
0 Comments:
Post a Comment
<< Home