Cutting the price of a new home less than $2,300 is not going to jump-start the stagnant home-building industry in Hernando County. A new home buyer could save just as much by laying Bahia instead of Floratam grass on the finished yard.
But this is the logic being shoveled on county commissioners who on Tuesday will be asked to cut by 25 percent the $9,100-per-single-family-home impact fee charged for roads, schools, libraries and other public services.
Impact fees, long the bane of the building industry, are one-time assessments to help ensure growth pays for a share of the new demand on public infrastructure. Costs are passed through to new home buyers. Last month, the building association, real estate agents and chamber of commerce representatives asked the county to consider the reduction as an economic stimulus in order to qualify for $20-million available statewide to help income-eligible, first-time buyers acquire a home.
We're not sure how this modest cut is supposed to spark the local economy since just south of County Line Road, Pasco County's government charges impact fees of more than $20,000 per single-family home. Hernando County already is well-positioned to offer bargain houses.
And, here's an irony. Pasco retained the same economist as Hernando, Hank Fishkind, to study its transportation impact fee proposal in 2007. Pasco's commission approved a $9,500 road impact fee a year ago after Fishkind's report said the housing market could weather the hike because the good infrastructure helps sell new homes.
In Hernando, the affordable housing element of the proposed fee cut is being obscured by a smokescreen as builders simply seek a break during tough times. It is understood that the housing industry drives the Hernando County economy, but this cut, supposedly only temporary, would require all property taxpayers to make up the difference in lost revenue for public services. How is asking the rest of the county to potentially pitch in $3.6-million making things more affordable?
County staff said that if the proposed affordable housing program had been in place last year, only eight people would have received the loans, and those people were buying existing homes, not building new ones.
Better options exist, including an idea floated by Commissioner Jeff Stabins and one of his election opponents, Michael Burmann, to use state funding to rehabilitate low-income, owner-occupied homes. There is $1.8-million available for zero percent loans for qualifying homeowners in the county. The remodeling jobs would help put construction crews back to work and the long-term benefits would include improved property, increased home values and perhaps a stimulus to other low- and moderate-income homeowners to follow suit.
The ills of the residential real estate industry can be traced to prices inflated by investors, loose lending practices, homeowner insurance costs and other factors beyond the commission's control. But what the commission can control is a responsible growth management tool intended to let infrastructure keep pace with growth.
It would be a mistake to bow to pressure from special interest groups and adopt this short-sighted measure. Hernando commissioners should not retreat from the county's reasonable impact fee schedule.