Some more facts about Impact Fees

This Sunday the Hernando Times publish two letters favoring an Impact Fee reduction.

We must compliment the Times Editor for his non bias presentation of the issue.

First let’s not confuse the readers this is a politically divided issue. So my associations are as obvious as the two letter writers associations to the other party. Putting political affiliations aside lets look at the facts concerning Impact Fees.

It is implied that costs for infrastructure have declined, this is not true. The cost to build a road, or install electrical and water service has not declined since 2001. The frequency has because of the downturn in the construction industry. The statement by the builders association that impact fees are charged to the buyer is true, but lowering them reduces the price of a home for the benefit of the builder (more sales and more profits) and the new homebuyer, but neglects to mention that the reduced tax revenue will not be enough to pay for the cost of infrastructure required for the new home therefore passing on the burden to the rest of the county taxpayers. Just as a reminder the builders and developers shared in the real estate bust don’t pass it on to banking alone.

My opposition to impact fee reduction goes way back to prior county commission boards.    

In response to my other opposing letter writer concerning the $20 million down payment assistance for first time buyers is as follows.

The 20 Million was available to all 67 counties in Florida; if equally divided by 67 that would make available to Hernando $298,507.00 for First Time Buyers of Low income Housing. Most Fist Time Buyers are Lower to Lower Middle income household. Their credit ratings are sometimes lower than the average buyer rating of 700. In the 2008 credit crunch, lenders were looking towards higher end credit ratings over 700.  If we estimated the value of these lower priced homes at 100,000 and if lenders require a 10 to 15 percent down and closing costs of 2,500 on average, the average applicant will get 12,500 to 17,500 from this fund. This equates to 24 to 17 homes sold respectively. This is not what I would call a stimulus.

My political party affiliation has nothing to do with my opposition to lowering impact fees, just logic. The other party calls themselves capitalist when the profit margins are high and supply and demand work in their favor. When the times get tough they blame Government for high taxes and not stimulating the economy. You must share the burden like everyone else in this economic downturn and not pass the burden onto the Hernando County Taxpayers.

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2 Comments to “Some more facts about Impact Fees”

  1. Vito,

    While you and I frequently disagree, I’m right with you on this. In fact, I would like to see the impact fee raised as a way to curtail residential development in the county. With the existing housing inventory, more development is the last thing Hernando County needs.

    New houses will be sold at market for less than current housing prices thus depressing the market for existing houses. That, in turn, will make the recovery within the housing market take even longer.

    Ken

  2. You can’t argue with logic. Thanks Ken.

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