City Hall is poised to add another $1,000 to the cost of building a new house in Lawrence.

City commissioners have given preliminary approval to an increase in “system development charges” for extending water and sewer service to new homes and businesses.

Proponents of the plan say it is a fairer way of making sure growth pays for itself in Lawrence. Detractors counter that it just makes housing more expensive.

“While the increase looks like a large one, we’ve failed to collect the costs (of growth) for quite some time,” Mayor Mike Rundle said. “That means the regular ratepayers have been paying the costs.”

Bobbie Flory, director of the Lawrence Home Builders Assn., was skeptical of the plan, which would become effective in 2005.

“We believe that new homes pay more than their way through a whole number of fees and costs when a home comes into the city,” she said.

Property owners now pay the city $420 for new water service and $550 for sewer service, a combined one-time $970 fee.

Under the proposal from consultant Black & Veatch engineers, new water service would cost $1,250; sewer service would cost $680, for a total of $1,930. And the combined costs would rise to $2,510 in 2009.

But officials say the price increase wouldn’t seem so dramatic if the Lawrence City Commission had accepted Black & Veatch’s recommendation from a 1999 rate study.

Developments cater to simpler life (6-27-04) Rural areas seeing population skyrocket (4-24-04)

Then, the consultant proposed combined water and sewer fees of $1,180 for new homes in 2004. Commissioners in 1999 rejected that proposal after hearing testimony the charges would damage prospects for affordable housing.

“If we had approved them, the charges in 2004 would have been higher — and there would have been less of a jump,” Assistant City Manager Debbie Van Saun said.

At the heart of the rate increases is a change of philosophy. The current rates are based on the idea — known as the “buy-in” system — that new homes and businesses are helping pay for the city water and sewer systems that are already in place.

The proposed rates are based on the philosophy that new developments will force the water and sewer systems eventually to expand, and that the new developments should also help pay that expansion cost.

“It really doesn’t help you to build expanded facilities,” Keith Barber, a Black & Veatch consultant, said this week of the current rate system.

“We prefer the buy-in method,” Flory said. “We feel that is a fair way for a new home to purchase their capacity.”