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Archive for Tuesday, December 12, 2006

Not smart

New development fees being considered by the Lawrence City Commission will have an impact on more than developers and new home buyers.

December 12, 2006

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Lawrence residents who think the "impact" fees being discussed by the Lawrence City Commission are only an issue for local developers need to think again.

Commissioners in favor of placing additional fees on new construction to pay for new parks and streets are portraying those fees simply as a cost of doing business for developers. Because they profit from their residential developments, they ought to pay some of the city's cost for providing the services to those developments.

That logic seems plausible at first glance, but it doesn't stand up on closer examination.

First, it's wrong to assume that local developers, who already pay impact fees to hook onto the city's sewer and water systems, are reaping such a huge profit margin from their projects that they can afford to pay additional fees without passing them on to the people who buy homes they build. Those fees will be added onto the cost of the home, raising not only the price of the home they are selling, but inflating the real estate market across the city.

Commissioners may try to sell the idea that they could mitigate that effect by waiving the fees for "affordable" housing, but even if additional impact fees are applied only to new high-end construction, the cost of those houses will have a trickle-down effect on the cost of both new and existing housing in lower prices ranges.

It's also faulty reasoning to contend, as Commissioner David Schauner did recently, that impact fees are the same as a "use tax." He opined, "If I drive on the turnpike, I pay the fee; if I don't drive on the turnpike, I don't pay the fee."

Following that logic, only the people on whose property the impact fees were collected would be allowed to use the streets and parks those fees financed.

Providing and maintaining the city's infrastructure is a communitywide responsibility. The people in new homes in Lawrence pay taxes to rebuild Kasold Drive, replace downtown sewer lines and finance other projects outside of their new neighborhoods. Many of the people who move into new homes have lived in Lawrence and paid property taxes to support city services and infrastructure for many years.

They also, as one local developer pointed out, have been paying a 1-cent local sales tax that was sold to the community in 1994 on the basis that it would fund recreation services and parks for the city. Unfortunately, it seems revenue from that tax isn't keeping up with the community's appetite for those facilities. Rather than trying to match the city's wish list with the resources available, commissioners now are seeking to tap another revenue source.

The strategy of the commissioners who favor these new impact fees seems to be to sell them as something that will only affect developers and the supposedly well-to-do people who can afford the new houses they are building. On the contrary, these fees will unfairly tax buyers of new homes, perhaps even those in established neighborhoods, and drive up the cost of housing across Lawrence.

The commissioners who support this idea may be advocates of Smart Growth, but new impact fees don't sound like a smart move.

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