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Reducing Pasco's impact fees is misguided, useless

Pasco commissioners should resist the temptation to start chipping away at impact fees as their own economic stimulus plan. Tuesday, Commissioner Ted Schrader suggested waiving impact fees for fire, parks and library for the next year, dropping the county's cumulative impact fees by $1,400 per single-family home. The more expensive fees for transportation, education and utilities would remain.

Schrader offered a legitimate point worthy of public debate. If the county's limited resources prohibit hiring personnel to staff new libraries and fire stations, why collect the impact fees if new capital construction isn't in the county's short-term future?

It's a fair question, but one that merits a thoughtful response that should include an inventory of the county's existing public safety, parks and recreation facilities in relation to past growth and future projections.

It also raises other questions about fairness. How do you waive the fees now after assessing them on every other newly built home for eight years? And, why waive the parks fee when the commission plans to use impact fees to help build a tournament-caliber softball complex plus additional land for field space for local residents?

While the commission ponders those questions, it should also wonder about the motivation. Knocking down impact fees provides a tidy answer to politically influential home builders seeking a break to help jump-start sales, but is an inconsequential strategy.

For instance, seven months ago, Hernando County halved its impact fees to roughly $4,500 per single-family home, the rate assessed in 2001. Through the first six months of this year, it issued just 107 permits for new homes, according to the U.S. Census Bureau data. Pasco, by comparison, now charges impact fees more than four times higher than Hernando and still issued 581 permits for new homes in the first six months of the year, or more than five times the building activity in Hernando.

Impact fees are one-time charges on new construction to help pay for the demand on services. The fees became popular in the late 1980s as a way to meet state growth management requirements. Pasco adopted road fees 24 years ago, but didn't fully embrace the fees for schools, parks, libraries and public safety until after 2000.

Lowering impact fees doesn't address the real issues that crippled the home building industry. Reckless lending practices, fraud and a real estate bubble built on speculation instead of true demand from growth triggered the industry's three-year free fall. Now, a market saturated with reduced-price foreclosure homes and short sales will not require new construction until a greater share of the existing inventory is liquidated.

Reducing impact fees is just a misguided, feel-good ploy. The commission would be better served to continue its quest to diversify the job market instead of trying to prop up a single segment of the local economy.

Reducing Pasco's impact fees is misguided, useless 08/11/10 [Last modified: Wednesday, August 11, 2010 8:42pm]
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