Should Manatee County's transportation impact fees be cut in half?
Impact fees are usually assessed to the cost of a new home. In Manatee County, the fees total $17,000 for a three-bedroom home, from which the school district gets $6,200. In a typical year, the school district would receive $5 million from impact fees.
A proposed two-year moratorium on impact fees the county charges on new construction will cost the county $14.7 million in lost revenue, but the question is: Will it create jobs?
And what builder would favor adding $17,000 to the price of each home he builds to pay for roads, schools and parks?
"I am the only developer that I know of to testify in favor of impact fees," said Rex Jensen, president and CEO of Schroeder-Manatee Ranch. "Impact fees do have a purpose in the funding equation, but they cannot be the entire equation. For instance, commercial construction such as building medical offices are taxed $20-plus per square foot. That literally kills construction of new medical centers in places that need them, but at present are absent because of exorbitant impact fees. It gets crazier. Can you believe that a bowling center should pay impact fees of $850,000?"
For more than 20 years Jensen has worked to build Lakewood Ranch into a modern model community in east Manatee County. What was once only pastures and oak forests are now homes, schools and parks. But like the rest of the nation, Lakewood Ranch has been hurt by the economic meltdown.
But unlike many developers, Jensen supports impact fees.
"The proposed moratorium or 'temporary reduction' sounds nice to some and threatening to others, but I'm not impressed either way," Jensen said. "First, the temporary reduction is just that and it isn't enough. We have a broken system and I won't rest until it gets fixed. Sales are flat in Lakewood Ranch, but once this crisis passes, we will be right back to the same old foolishness. We treat job creation like a war crime and I'm fed up with it."
But in spite of the Great Recession, soaring foreclosure rates and 300,000 vacant homes in Florida, commercial construction is rising in Manatee County.
In March, the county building department issued 39 permits for new business buildings, compared with 22 in March 2008 and 31 in March 2007. However, the building department issued only 41 permits for new homes in March, compared 74 in March 2008 and 31 in March 2007.
So how can a suspension of impact fees in Manatee County stimulate jobs?
"It's difficult to calculate what the suspension of transportation impact fees will have on our economy," said Jim Seufert, the director of Manatee County's Financial Management Department. "With building construction falling, we have had to lower our expectations for new road construction."
Seufert has been the county's number-cruncher for 25 years, and he has never seen a bleaker period. "This is the most difficult time. I have never seen it as bad."
Because of these difficult times, the County Commission voted to have County Administrator Ed Hunzeker draft a proposed ordinance cutting in half the transportation impact fees for two years, starting Jan. 1, 2009, costing the county $14.7 million in lost fees.
"Due to the sagging economy and decreasing demand, we don't need to build as many lane miles, based on the data, pre-economic meltdown," Hunzeker said. "We don't have to build as many roads, as well as contractors are cutting cost-per mile estimations."
In spite of the anemic economy and rise in the foreclosure rate, Florida has a record number of requests to build new homes and develop commercial properties. The Florida Department of Community Affairs reports that since 2007 it has received 410,126 acres of proposed new projects with a potential for 630,965 new homes and 479.5 million square feet of non-residential space.
However in the Tampa Bay area, new home construction plunged 90 percent from three years ago. For the first three months of this year construction of new homes fell to its lowest level ever, 1,239 homes from January to March 2008, to 697, a 44 percent decline, this year.
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