Fast Focus: 'Should schools collect impact fees on new housing?' Fees unfair, ineffective

April 27, 2014 

The short answer to requiring new homeowners to pay impact fees is no. The assumption is that developers or builders absorb the fee. That is not correct nor can it even work. Builders will be lucky to make 10 percent on a home after taking out their cost of doing business, closing fees, excise tax, overhead, commission, etc. The current Pasco impact fee of $4,700 means a 23 percent decrease in their profit on a $200,000 home. Since no right-minded business person would or could take a 23 percent decrease in their profit the only answer is to pass it on so then the person paying the impact fee is the home buyer.

One might assume that is a small amount to pay for such a large purchase but consider this. The total price of the house has an excise tax and real estate commission. That can add $370 to the impact fee. Then if it goes on a 30-year mortgage it may add an additional $4,190 dollars for a total of $4,560. So the homeowner is paying in additional costs almost as much as the impact fee itself. That does not seem like a sensible way to collect money for schools nor does it lend to helping families who are working hard to make ends meet.

Pasco would say it is inherently fair to charge new home owners this impact fee because with new homes come more children. While no doubt that is true, a few things to consider are: 1) not all new homeowners have children, 2) there are many, many owners of existing homes who have children that don't pay an impact fee, and 3) many families with children buy already-existing homes that don't pay an impact fee.

I am all for the community helping with the schools but I am strongly opposed to a small segment such as new-home buyers being compelled to pay -- not to mention a drain on an industry that brings many jobs and pays lots of taxes already.

Now it seems that Pasco would encourage Franklin county to also require an impact fee so there won't be a big divide between homes being sold in the county and in the city. Not really a great reason to employ impact fees in my opinion. They may say they need the money, but in 2013 there were only 23 new homes built in Franklin county so it's not like the impact fee money from these 23 homes will make a significant difference.

There were 203 single-family permits issued in 2013 in the city of Pasco for a total impact fee dollar amount of $954,000. Last year voters approved a $46,000,000 bond that is spread between all the homeowners in Pasco. I would think that squeezing a million bucks -- or two tenths of a percent compared of the recent bond -- out of new homeowners is not the answer.

-- BRETT LOTT, Burbank

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