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Dropping Impact Fees Not In Plans

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By KEVIN WIATROWSKI

kwiatrowski@tampatrib.com

Published: March 22, 2009

A proposal to stimulate construction by dropping county-levied impact fees for the rest of the year has found little traction in the halls of Pasco County government.

County officials say they've dropped further consideration of the proposal, which was backed by the county's beleaguered home builders. County Commissioner Pat Mulieri asked the county to study the proposal this year.

Dropping the fees would cost the county about $20,000 per single-family home, putting a large dent in developer-generated funds used to improve roads, build fire stations and pay for parks.

County officials surveyed their colleagues in other Florida counties and found that some had dropped fees with no visible improvement in the housing market.

There was no way to prove the benefit went to the homebuyer and not simply to builders' bottom lines, said Michele Baker, chief assistant to County Administrator John Gallagher.

"We asked developers to show accountability," Baker said. "If they could do that, we might be more willing to consider it."

Pasco's reluctance to part with impact fees could be rendered moot by the Legislature. State Rep. Denise Grimsley, R-Lake Placid, has introduced a bill that would put a three-year halt to all county impact fees, starting July 1.

That bill and a companion in the state Senate are now being discussed at the committee level.

The request from builders to drop Pasco's impact fees came amid deepening declines in new-home construction.

In the first 10 weeks of this year, Pasco County issued a little more than 130 permits for new homes. That was down more than 40 percent from the same time last year and about one-ninth the number for the same period at the market's 2006 peak.

Already saddled with competition from foreclosures and short sales - homes sold by banks for less than the mortgage - builders in Pasco have the added burden of fees that can be double those of neighboring counties, said Stew Gibbons, the developer of Connerton in central Pasco.

Pasco's current fees were set just before the housing market began its tumble. As prices fall, those fees become a larger part of the price tag of every house, said Gibbons, who was part of the group of builders asking for the fee reprieve.

In some cases, county fees can add as much as 10 percent to the cost of a new house, Gibbons said.

"I'm hoping there can be some other ways to relieve the cost of building in Pasco County," he said.

One of those solutions may be having homebuyers pay impact fees over time - an idea builders have floated by the county, also with limited success.

At the moment, builders pay impact fees to Pasco when a house is ready to occupy. Those fees get passed along to buyers when the house is sold.

National studies by builders suggest every $10,000 rise in impact fees costs a builder 1,000 potential buyers, said Jennifer Doerfel, executive vice president of the Tampa Bay Builders Association.

"If Pasco County had the desire to reduce impact fees, I am confident that could be worked out," Doerfel said. "Simply put, if you give a builder a tool to be more competitive in today's market, they will absolutely take that tool. That just makes good business sense."

Reporter Kevin Wiatrowski can be reached at (813) 948-4201.

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