TAMPA — In their ongoing quest to spur the local economy, Hillsborough County commissioners are considering an old favorite: cutting impact fees paid by developers.
Commission Chairman Ken Hagan proposed suspending transportation impact fees charged to new construction projects for up to a year.
The measure would be added to a slate of tax and fee cuts or waivers commissioners have implemented in the past few years to spark building, including cutting permit fees 50 percent and waiving property taxes for up to 10 years for certain types of new or expanding businesses.
The step is largely symbolic, Hagan acknowledged, since new construction has slowed so much that impact fees are bringing in relatively little money. The fees are charged to construction projects to help pay for road work caused by new development.
Transportation impact fees brought in just under $2 million last year, according to county records, down from $7.8 million in 2007.
"We're trying to show Hillsborough County is open for business," Hagan said. "It's just another example to show it."
The proposal drew strong opposition from Commissioner Mark Sharpe when Hagan first pitched the idea Feb. 22.
Sharpe said impact fees cover the cost of road work that new construction necessitates, and this proposal will make the situation worse. Hagan's idea will increase the burden on taxpayers to cover the cost of new development, he added.
Furthermore, Sharpe said, the runaway home construction that occurred while impact fees were in place is a big part of why Hillsborough County's economy is worse off than in other parts of the country.
"I'm worried that our emphasis is on the wrong thing," he said. "If we're trying to grow business, we should be focusing on what generates business activity, and the type of business activity we need is not what got us into this mess."
Hagan's proposal asks a soon-to-be formed committee, called the Economic Prosperity Stakeholders Task Force, to analyze the proposal. He said he hopes that committee will come back with a recommendation by early June.
Sharpe was the lone opposing vote, though the board's two Democrats, Kevin Beckner and Les Miller, expressed skepticism about the plan.
County administrators are not making a recommendation on whether they think the idea is a good one or not.
The Tampa Bay Builders Association, which represents home builders, welcomed the commission taking a look at the issue.
Contrary to perception, there is still demand for some new housing, said Jennifer Doerfel, the group's executive vice president. And keeping what can amount to thousands of dollars per home in impact fees prices some people out of the market, she added.
Commissioners have turned to impact fee waivers in the past to encourage new construction. They waived fees in the early 2000s in areas characterized as poor and missing out on the then-burgeoning housing boom.
It was later shown that waivers were put in place where in fact large residential construction projects were taking off, particularly Gibsonton and Riverview. The program was later suspended in those areas.
Hagan's proposal, if ultimately approved, would apply to all unincorporated areas of the county. It would not affect impact fees charged on new construction that help pay for schools, parks and fire stations.
The fees for a single-family home range from $998 to $1,950. Commercial and office impact fees vary widely. On the high end, a new bank is assessed anywhere from $6,813 for each 1,000 square feet and up to $15,683.
Hagan initially said he might be willing to exclude homebuilding from the fee waiver but backed away from that last week.
He noted that other surrounding counties have already taken steps to reduce impact fees. And what the county would give up now in collections would likely not cover the cost of adding a lane to a single road.
"We're the only ones who have not altered our impact fee structure," Hagan said. "I am concerned that we're already at a competitive disadvantage."
Bill Varian can be reached at firstname.lastname@example.org or (813) 226-3387.