Builders Brace as Impact Fees Rise
Builders constructing homes in Manatee County this April will soon have to pay more in impact fees, not just thanks to a school impact fee restored by county commissioners last week but also thanks to an increase in other fees that have been charged at reduced levels for years.
John Mast, CEO for the Manatee Sarasota Building Industry Association, said once the fees go into effect, a new 2,201-square-foot home will have just under $28,000 worth of fees of some sort charged “before you even pay for the first load of dirt.” The most recent addition to that will be the school impact fee, set at $3,327.50 for a single-family home starting on April 18. The fee will go up over the next two years, rising to $6,475 come April 18, 2018, but would stay at the same rate if Manatee County voters renew a school sales tax. Fees vary for other types of residential construction. An impact fee is a one-time charge assessed when a building permit is pulled on a home.
The condition proved the most contentious issue when Manatee County commissioners debated the issue on Thursday. County Commissioner Charles Smith openly worried that the sales tax might be endangered if opponents criticize the associated cut in the school fee as a giveaway to developers. “I really want the School Board to get as much money as possible,” he said. “But this is troubling to me.” He and County Commissioner Robin DiSabatino ultimately voted against the fee, citing the possibility of keeping the fee at a 50-percent level as the chief reason.
But the fee was passed 5-2. Some commissioners who voted with the majority said they shared some of the same concerns Smith voiced, but felt ultimately that it was a matter best left to the School Board, which recommended the fee, the phasing schedule and the plan to tie levels with the sales tax. “Do I like having the sales tax mentioned? No, I’m not crazy about it,” said County Commissioner Vanessa Baugh. “But it’s not up to me to second-guess.”
As for builders, as a group most were opposed to having a fee at all. Mast said many developers are also encouraging people to buy new homes before fees kick in this April when the cost of new homes leaps up by around $20,000. The schools fee, going into effect for the first time since 2009, goes online at the same time as steep spikes in road impact fees, Mast noted. “It could in effect create a minor moratorium until the dust settles,” he said. “I’m sure the no-growthers are happy about that, but as the stock market tanks this week and we have more taxes on top of new construction, we could have another recession. Nobody knows.”
Based on history around the state, many building permits will likely be pulled right before the fees go into effect. The revenues collected through school impact fees are earmarked for constructing new schools to accommodate growth associated with new construction. But Mast noted that money raised through the sales tax would be available for a wider variety of uses. “It’s just reinstating a tax that sunsets in 2017, but if the sales tax referendum doesn’t pass and the tax sunsets the School Board will lose a lot of money.”