SANTA FE – The Santa Fe Planning Commission would like to see an end to the city’s temporary elimination of residential impact fees.
The all-citizen commission voted 5-2 earlier this month to recommend that the City Council, which has final authority, deny a proposed ordinance to continue having no impact fees for residential developments for one more year and then reduce fees by 50 percent for another year beyond that.
Some commissioners said they were troubled that homes worth several hundred thousand dollars or more aren’t being subjected to impact fees and that, in any case, the developers of those homes may pay only nominally more in impact fees than builders of homes worth significantly less.
City Land Use Director Matt O’Reilly said the fees are based on impact to the city’s infrastructure. He added that the city will be reviewing its current impact fees in four to six months.
Commissioner Signe Lindell said she doubts that the elimination of impact fees has had much of an effect on whether those more expensive dwellings, as well as multi-home subdivisions, get built. Lindell also said she isn’t certain that the ordinance has fulfilled the purpose of kick-starting construction projects delayed by financing issues.
“I would like to see us do a little more analyzing, and I would like to see us reduce this to 50 percent sooner rather than later and take a look at commercial construction,” Lindell said. Commercial impact fees in Santa Fe have not been affected by the ordinance.
Commissioner John Padilla argued that the ordinance speaks to the city’s concern for local contractors and developers.
“I would venture to say that in the next 12-month period because of the extension, if it does go through, I think it will motivate a number of developers to move forward,” he said.
Builders pay impact fees when they acquire a building permit from the city. The fees help fund roads, parks, fire and police services. The amount of the fee varies depending on the size and type of project. For a single house, fees can range from about $3,130 to $4,147. The city waives fees for dwellings priced under affordable housing guidelines.
The Santa Fe City Council voted in January 2012 to temporarily eliminate impact fees for residential developments for two years. The move joined with other measures and was designed to bolster the city’s faltering construction industry. The ordinance expires in late January.
When the ordinance was initially passed, city staff estimated that the cost to the city in lost impact fees would be around $700,000 to $800,000. O’Reilly said the loss will actually be around $1.5 million.
However, residential building permits have increased by 35 percent during that time, O’Reilly said.