City Council to Consider Eliminating Impact Fees

Santa Fe officials are taking another stab at reviving the city’s flagging construction industry with a new ordinance that proposes to temporarily eliminate impact fees for residential developments.

“This is a continuation of proposals that we’ve put forward to try to help the construction industry start up again and that’s what it’s all about,” City Councilor Rebecca Wurzburger, a sponsor of the measure, said.

Builders pay impact fees when they acquire a building permit from the city. The fees cover roads, parks, fire and police services, and the amount varies depending on the size and type of project. For a residence, fees range from $3,130 to $4,147.

The city already waives impact fees for homes priced under affordable housing guidelines.

Land Use Director Matt O’Reilly couldn’t immediately say how much the city is currently collecting in impact fees, noting his department is in the process of calculating that information. But residential construction has been “way down” in Santa Fe, he said.

Wurzburger’s proposal would eliminate residential impact fees for two years.

Other cities have considered similar measures. Albuquerque reduced impact fees, residential and commercial, by fifty percent over two years ago.

Builders say the move spurred construction in that city. But there hasn’t been enough activity to offset the fee reduction for city government’s coffers, according to a March municipal report.