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Impact fees postponed for 12 months
Tuesday, March 4, 2014 - 7:45pm
El Paso (KDBC) — Homeowners and ratepayers won't have to worry about seeing a hike in impact fees just yet.
El Paso City Council voted 7-0 on Tuesday to postpone raising impact fees on new developments for another year.
There is a catch.
Developers would need to build more homes within the city limits.
There is no doubt El Paso is growing.
The evidence lies in all the new rooftops popping up across town.
El Paso now needs to extend water and sewer services to those new subdivisions, which will cost tax payers money.
But El Paso City Council has a plan to fix that: Build more homes within El Paso limits.
"When you can build more homes, and of course increase what the amount of people pay taxes, then you are able to collect more," said El Paso Mayor Oscar Leeser.
Right now many developers choose to build homes outside the city, to avoid being charged impact fees.
But the Public Service Board and the city are sweetening incentives to build within El Paso limits.
The PSB will sell smaller and cheaper lots, and the city promises to delay any impact fee hikes for at least another 12 months.
"I think we need to spend this next year going over all the options,” said City Representative for District 5 Dr. Michael Noe.
“We will be working with school districts, working with developers, home builders, working with the PSB, and try to find a reasonable solution to development to the fringes of our city.”
It's ultimately new homeowners who will win. Developers usually pass those impact fees down to home buyers.
"With an impact fee you can't do without it,” said Executive Vice President for El Paso Builders Association. “So then you have to calculate your pricing as to what you’re going to build, how you’re going to build that house, and how much is it going to cost."
City council hopes a year from now, more homes will mean lower costs, eliminating the need for higher impact fees.
It's a compromise Ray Adauto said he couldn't be more pleased with.
"The more houses we are able to build the more rooftops, then that brings commercial which brings retail, retail creates jobs, jobs add to the economy, and again it's a revolving door," he said.
Under the proposal before council Tuesday, impact fees would have risen anywhere from two to four thousand dollars depending on the exact location of the subdivision.
City Council will revisit the issue in 2015.