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Slicing impact fees didn't stimulate Hernando County's real estate industry

Remember when the County Commission cut impact fees nearly in half last year?

Realtor Gary Schraut said it was all about "jobs, jobs, jobs.'' But with Hernando's September unemployment rate at 14.8 percent, it doesn't seem to have put too many hammers in the hands of too many laidoff construction workers.

Builder Dudley Hampton described the cut with a phrase that some now consider a dirty word. A "Hernando County stimulus," he called it. But total building starts are down, commercial construction has collapsed, and, generally, the local economy needs more than stimulus; it needs defibrillation.

The builders said the cut could help make their new houses competitive with the existing homes. But over the past year, the median sales price of houses in Hernando has dropped about as fast as impact fees — between $4,000 and $5,000 — to $105,000, according to the Hernando County Association of Realtors. I can't see any builder competing with that.

Oh, yeah, one other thing about the fee cut, which went into place Dec. 1 of last year. It was supposed to be temporary. Now, all of the commissioners have voted to extend it another year.

First of all, that wasn't the deal. Second of all, if this one-year run really was a trial, as builders say now, it failed.

Commissioner David Russell disagrees, pointing to the slight upward creep in the number of new home permits the county issued in the 10 months since the cut went into effect — 134 — compared to the 10 months before it did: 105. That increase of 29 permits is less than a 10th of the number issued by the county in a good month during the boom. But to Russell it was proof, he said, that, "to some degree, it has had an impact on residential construction."

And if the cut hasn't made new homes competitive, it at least helped a few buyers get loans. Appraisals tend to find new homes are way overpriced, Russell said. Add the cost of going back to the old impact fees — $4,400 — and the price would be unacceptable for most lenders.

Maybe so, and I confess that at times I've wondered if this is all really such a big deal. So far, the county has missed out on less than $600,000 on fees for single-family homes. Not a huge amount if you remember this money goes for big-ticket items such as roads and schools.

But as far as I'm concerned, the arguments that were valid last year, still are. The falling home prices show the vastness of the housing glut. Incentives to builders — or, if you prefer, handouts — will make it bigger.

And here's the main issue, one that came up over and over when I interviewed people moving out of Florida in 2007 — a time when, suddenly, more people were leaving the state than arriving.

Yes, they complained about high taxes (though I don't think there would be now). But mainly, people told me they were sick of the clogged roads. Our schools couldn't compete with those in new destination states like North Carolina. Florida seemed like a collection of subdivisions, not a community with parks and other public facilities, the stuff built with impact fees.

It was a referendum by moving van and Florida was losing.

To win, we need public investment. Besides tax and fee cuts to businesses, this is the other kind of stimulus. And, no, it isn't a dirty word.

Slicing impact fees didn't stimulate Hernando County's real estate industry 10/26/10 [Last modified: Tuesday, October 26, 2010 8:19pm]
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