The Hernando Commission does not like to detour from a losing policy. Commissioners again are seeking to stimulate the local economy via reduced impact fees for home builders even though the strategy has been a miserable failure the past two years. Over the past nine months, the county issued 89 building permits for single-family homes, down from 134 over the same time period in 2010. Home-building peaked in 2005 when the county issued nearly 4,200 permits.
The stagnation mirrors the state and national economy squeezed by tight credit, high unemployment, falling property values, investors looking elsewhere and continued foreclosures that have flooded the market with relatively new homes at bargain prices.
Cutting impact fees is not going to magically turn into an effective remedy now. Regardless, on Tuesday, commissioners are scheduled to talk about continuing their temporary rollback for another year. The 2009 ordinance, which cut the fee nearly 50 percent to just less than $4,900 per single-family home, expires Nov. 30.
Unfortunately, some commissioners last week indicated a preference for lowering the fees even further. Granting a bigger benefit to those building new homes is misguided. It simply pushes a greater share of building roads, schools and other public infrastructure onto the rest of the taxpayers including homeowners who paid the full rate of $9,155 charged between 2005-09.
Instead of focusing again on the short-sighted tactic of home-building as an economic stimulus, commissioners would be wise to consider a broader discussion on targeting impact fee cuts. Specifically, the commission should be encouraging construction of industrial and office space — the types of buildings that will house permanent jobs, not temporary construction work.
State and county programs already provide financial incentives for jobs created within high-paying, targeted industries. But, the commission could still consider temporarily eliminating impact fees for medical and professional offices. Or, waiving impact fees for construction in areas worthy of redevelopment like South Brooksville. The commission, however, should not be doing likewise for all commercial construction. Pushing more low-wage jobs in the retailing or hospitality industry will not satisfactorily diversify Hernando's economy.
Nationally, new home sales improved slightly in September, but analysts said the market won't see major gains until there is significant job growth.
Commissioners should take note and act accordingly. Hernando County needs an economic strategy beyond swinging hammers into nails.