Development Impact Fees | April 9, 2015

Mayor Steven W. Martin

Mayor Steven W. Martin

Everyone who likes to pay fees raise your hand.

Everyone who likes to pay someone else’s fees raise your hand.

On Tuesday, April 21, the Paso Robles City Council will receive a report from the Paso Robles Planning Commission recommending, among other things, that fees charged to developers to build new homes be reduced. The argument goes something like this:

  1. We need affordable housing.
  2. Development impact fees add to the cost of housing.
  3. Therefore, development impact fees are bad.

Seems simple enough, but let’s think about this for just a minute. What are Development Impact Fees? How are they set? And, most importantly, who pays them?

What are Development Impact Fees?

Development Impact Fees are charged to the developers of new residences to help pay for the cost of new roads and other infrastructure necessary to service the increased population. These fees are determined in three steps (all carried out in public, not behind closed doors).

Needs List

A list of amenities required by new development necessary to sustain our quality of life has been established as part of the public process. This needs list details roads and other infrastructure need that would not be needed if the new construction did not occur.

Estimated Costs

Estimates are made of the cost of each of these amenities.

Subsidization Policy

The City Council, as part of the public process, determines how much of the cost of new infrastructure should be paid by new development and how much should be subsidized by the existing citizenry.

To logically and fairly lower Development Impact Fees at least one of the following must be accomplished:

  1. Remove items from the Needs List
  2. Revise the cost of one or items on the Needs List
  3. Move a greater share of the cost of these items from developers to the existing citizenry.

Some argue the benefit of new construction outweighs the cost to existing citizens because of the new jobs created, sales tax generated, etc. According to a study undertaken by the City before establishing the existing Development Impact Fees, however, these benefits do not offset the costs of new development. In fact, the City may not require developers to hire local labor or purchase construction materials from local suppliers.

Presently, the City of Paso Robles has many infrastructure needs without revenues to fill them. This is, in large part, the result of lowering Development Impact Fees in the past, thus shifting the burden of these costs onto the general public.

Development Impact Fees are set based on the infrastructure needed to maintain our quality of life as new homes are constructed and new people move into town. Cost estimates have been made for these infrastructure needs and current policy calls for new development to pay for roughly a third of the cost of paying for the items on out Needs List.

We must be watchful so that our Development Impact Fees are not artificially high nor sacrificially low. They need to be just right to assure our quality of life is protected and that those who generate the need for new infrastructure pay their fair share.

I urge you to check www.prcity.com for information about the Needs List, Engineers’ Estimates and policy establishing the responsibility of new development for new infrastructure as well as the Planning Commission’s report. I invite you to email your thoughts to me, other Council members and the Paso Robles Planning Commission. I strongly suggest you attend the AprilĀ 21st City Council meeting, 7:30 p.m. to hear and be a part of this debate which could affect your quality of life, not to mention your pocketbook, for decades to come.

Until next we blog, here’s to you Paso Robles!

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