Leader Blues

Thursday, January 24, 2008

TOP STORY >> Did fees put hurt on home building?

By JOAN McCOY
Leader staff writer

The Cabot City Council appointed a committee Monday night to determine whether the impact fee on new construction, which last year added $1,272 to the cost of a 3,000-3,900 square-foot house, has contributed to the slowdown in the residential building industry.

Alderman Terri Miessner, who was against the moratorium on the impact fee that was imposed during the November 2007 council meeting because she said the city needed the money and no one would actually study the issue, was named chairman of the committee.

One thing is clear from the information readily available at public works: residential construction is down, but it started going down before the impact fee went into effect in November 2006. Two years earlier, 2004, was the lazy boom year for home construction in Cabot. Building permits for 500 houses were issued that year, compared to 288 in 2002, 374 in 2003, 419 in 2005, 400 in 2006 and 183 in 2007, which was after the impact fee was passed.

But the numbers for 2007 are deceptive because of the 400 permits issued in 2006, 122 were in November, just before collection of the impact fee was started, for houses that would be built in 2007. If 100 of those permits had been purchased instead in the year the houses were built, then the numbers would show 283 houses for 2007 and 300 for 2006.

But while residential construction has slowed, commercial is on the rise. Nine commercial permits were issued in 2002, 25 in 2003, 20 in 2004 (the boom year for residential), 60 in 2005, 58 in 2006 and 67 in 2007.

The city council passed the resolution appointing the committee to study the impact fee with six votes. Alderman Ken Williams, a developer, abstained from voting and Miesser was absent.

In addition to Miessner, the members of the committee are Alderman Eddie Cook, Mayor Eddie Joe Williams, Bill O’Brien, Cary Hobbs, Dewey Coy, Clint Skiver, Mike Bernardo, Kim Boudry, Larry Biernackie and Ricky Hill.

The committee has until May to determine whether the impact fee is responsible for the decline in residential construction or if other factors such as the economy are to blame.

The moratorium on collecting the fee that the council approved in November 2007 was for six months only.

If the council hadn’t imposed the moratorium, the impact fee would have doubled from $1,272 to $2,196 on a 3,000 – 3,900 square-foot house. The fee is also scheduled to increase in 2008 and 2009. By the third increase, the impact fee on a 3,000 – 3,900 square-foot house would be $4,037.

Council members discussed the impact fee at length before the moratorium was approved two months ago. Alderman Tom Armstrong, who was on the council when the impact fee was passed and voted against it, said the fee is reason builders have left Cabot for Austin and Ward.

Alderman Ed Long, who called for the moratorium, said if the impact fee was responsible for Cabot’s decline in residential construction, a moratorium on the impact fee might slow the boom in Austin and Ward.

Alderman Cook said builders told him they left Cabot because there was no land to build on. But Alderman Becky Lemaster said builders told her they left because of the impact fee.

Norma Naquin, planning coordinator and office manager at the public works department which houses much of the information the committee will likely need such as building and occupancy permits, said Tuesday that no one from the new committee has contacted her yet but the staff at public works is ready to help in anyway they can.

“Whatever they need, we’ll get for them,” Naquin said.