It’s All About Fairness National Impact Fee Roundtable Denver – October 2005 Dr. Arthur C. Nelson, FAICP Professor & Director Urban Affairs & Planning Virginia Tech – Alexandria Center

One Fee Does Not Fit All Florida County “A” School impact fee per unit = $5,443 School impact fee per unit = $5,443 Assumes 0.31 students per unit Assumes 0.31 students per unit Actual apartment rate is 0.12 per unit Actual apartment rate is 0.12 per unit Proportionate share should be = $2,057 Proportionate share should be = $2,057 Apartments charged in excess of their Apartments charged in excess of their proportionate share Public safety & parks  same problem Public safety & parks  same problem fees based on 2.38 persons per unit but apartments average 1.81

Proportionate Share Equal protection Similarly situated people must be considered similarly Similarly situated people must be considered similarly Some argue that each residential unit is similar to the other, hence equal impact fees acceptable Some argue that each residential unit is similar to the other, hence equal impact fees acceptable Constitution addresses people not residential units Constitution addresses people not residential units If the average person is charged 3 times their school impact, equal protection may be violated If the average person is charged 3 times their school impact, equal protection may be violated

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Density Matters Impacts fall when density rises for: Impacts fall when density rises for: Public safety Public safety Utilities Utilities Transportation Transportation

Persons Per Unit

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Location Matters Distance to public transit Distance to public transit Distance to schools Distance to schools Location in “fully served” versus “partially served” areas Location in “fully served” versus “partially served” areas Atlanta reduces road fees by 25% if within 1,000 feet of rail station Atlanta reduces road fees by 25% if within 1,000 feet of rail station DeKalb County, GA to reduce road fees based on rail and bus access DeKalb County, GA to reduce road fees based on rail and bus access

Configuration Matters Integrated office, retail and residential reduces road impacts by 30%+ Integrated office, retail and residential reduces road impacts by 30%+ Connected to multi-modal can reduce road impacts by 50%+ Connected to multi-modal can reduce road impacts by 50%+ Few impact fee programs recognize these reductions on fee schedules Few impact fee programs recognize these reductions on fee schedules

Assessment Base Matters Fees usually assessed on only residential: Fees usually assessed on only residential: Parks & recreation Parks & recreation Libraries Libraries schools schools What is the source of impact? What is the source of impact? New jobs = new households New jobs = new households Jobs = impact Jobs = impact Fairness Fairness Broaden the base to include all development Broaden the base to include all development

Credits Matter External revenue credits External revenue credits Account for non-local government revenues Account for non-local government revenues “Double-Tax” revenue credits “Double-Tax” revenue credits Several Florida counties give dedicated school construction property tax credits based only on residential share, not all development Several Florida counties give dedicated school construction property tax credits based only on residential share, not all development At least two counties give no such credit At least two counties give no such credit Residential pays once for impact fees and again for paying off bonds for schools used by existing residents Residential pays once for impact fees and again for paying off bonds for schools used by existing residents

Parks and Recreation Questionable Practices Questionable Practices 2 Georgia counties assess the same fee on all residential units. 2 Georgia counties assess the same fee on all residential units. Fees on apartments 36% to 51% higher than proportionate-share Fees on apartments 36% to 51% higher than proportionate-share Best Practices Best Practices Manatee County, FL Manatee County, FL Fees vary by type of unit and by size of unit based on bedrooms Fees vary by type of unit and by size of unit based on bedrooms

Fire & EMS Questionable Practices Questionable Practices 1 California city and 1 Georgia county assesses the same fee on all residential units. 1 California city and 1 Georgia county assesses the same fee on all residential units. Fees on apartments 33% to 45% higher than proportionate-share Fees on apartments 33% to 45% higher than proportionate-share Best Practices Best Practices West Valley City, UT uses Functional Population West Valley City, UT uses Functional Population Fees based on four residential categories Fees based on four residential categories Almost  Missoula, MT has density-distance-based fees that vary from $91 to $1,354 per unit

Roads Questionable Practices Questionable Practices 2 California cities use same trip rate and length to charge fees in all residential units. 2 California cities use same trip rate and length to charge fees in all residential units. 1 California city gives no credit. 1 California city gives no credit. Best Practices Best Practices Manatee County, FL Manatee County, FL 4 residential categories with 3 sizes in each, and different impact figures for each 4 residential categories with 3 sizes in each, and different impact figures for each Albuquerque, NM Albuquerque, NM Fees based on 7 service areas, type and size of unit and is $0 in several service areas Fees based on 7 service areas, type and size of unit and is $0 in several service areas

Water & Wastewater Questionable Practices Questionable Practices Common to assess based on meter size and equivalent units. Common to assess based on meter size and equivalent units. Emerging evidence suggests apartments overcharge by 2 to 5 times Emerging evidence suggests apartments overcharge by 2 to 5 times Best Practices Best Practices Scottsdale, AZ Scottsdale, AZ 1 du/2.5 ac = $5,492 1 du/ac =$3, uncluster = $2, cluster = $1, du/ac = $1, du/ac$1,337

Next Steps Need to vary impact fees by type and size of residential unit Need to vary impact fees by type and size of residential unit Refine definitions of “proportionate share”, Refine definitions of “proportionate share”, “pro rata” and “reasonable relationship” Base size on bedrooms (census) or square feet Base size on bedrooms (census) or square feet Encourage fee schedules to use automatic impact reductions for location, configuration benefits Encourage fee schedules to use automatic impact reductions for location, configuration benefits Adopt legislative finding that all development creates impacts on and benefits from facilities  all development needs to be assessed. Adopt legislative finding that all development creates impacts on and benefits from facilities  all development needs to be assessed.