Leader Blues

Friday, February 08, 2008

TOP STORY > >Impact fee still being examined by council

By JOAN MCCOY
Leader staff writer

The committee appointed to investigate whether or not the impact fee on building in Cabot is making builders leave the city met for the first time Thursday evening. After two hours of mostly venting about the need for money for infrastructure versus imposing a tax on the biggest industry in the city, the group decided to meet again in two weeks after it has collected the data it needs to analyze the situation.

The committee is charged with making a recommendation to the council to either keep or repeal the fee that could add almost $5,000 to the price of a large home when the fourth incremental increase is in place in three years.

Alderman Terri Miessner, the committee chairman, told the committee that if the recommendation is to repeal, the committee needs to also offer an alternative to the impact fee to help pay for the streets and other infrastructure needed because of growth. Building permits for the past year that show a decline in residential construction were available, but the committee wanted to look at other factors that could have contributed to the decline, such as the price and availability of land for building subdivisions.

Kip Boudry, an ap-praiser, said the impact fee priced builders of starter homes out of the market. Mayor Eddie Joe Williams said the biggest deterrent to building houses 1,200 square feet or less is the price developers must pay for land. Unless they can build larger houses with bigger profit margins, they can’t afford to build, Williams said.

Cabot’s biggest draw is the school district, which has helped the city double in size in the past 20 years to its current population of about 22,000.

In 2007, residential construction in Cabot was at the lowest point it has been in five years while in Ward and Austin, which also are in the Cabot School District, building is booming.

Information available at Cabot Public Works shows that 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 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.

However, 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.

Although residential construction has slowed, commercial, which increases the city’s tax base, 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.

In Ward, seven of the newest housing developments have provided homes for the estimated 1,000 new residents who have moved in since the 2000 census. In 2000, Ward’s population was 2,582. Now it is estimated at 3,500.
Austin Mayor Bernie Chamber-lain estimates her city’s population at 1,800, triple the number of the 2000 census.
“Austin is growing,” Chamber-lain said. “People don’t want to live in town, but they want the Cabot School District. Besides, Cabot is running out of room.”

Williams doesn’t completely disagree with that statement, but he says the available land is not as convenient and it costs twice as much as the land in Austin.

In theory, the committee members will know exactly how much land costs in both cities when they meet again Feb. 21.
Williams pointed out during the meeting that home insurance in Austin costs more than in Cabot because of Austin’s higher

ISO rating and that is a recurring cost, not a one-time cost like the impact fee.

He also said water was higher in Austin and that the city doesn’t have enough police protection.

The committee said it would look into the cost of insurance inside Cabot and in the neighboring cities.

Former Cabot Alderman James Moore, one of the biggest builders of starter homes in the city, who now lives and builds in Austin, told the committee that developers control the market and if they have to pay more for land in Cabot and still more for an impact fee, the houses will cost so much more that the military families who buy the starter homes can no longer afford them.

Moore said after the meeting that he believes at least 250 large houses that appeal to the affluent will be built annually in Cabot despite the impact fee.

Eventually, he said, the price of land will go up in Austin and Ward because of the demand.
“I’ll end up in Beebe,” he told the committee.

In addition to Miessner, the mayor and Boudry, the members of the committee are Alderman Eddie Cook, Bill O’Brien, Cary Hobbs, Dewey Coy, Clint Skiver, Mike Bernardo, Larry Biernackie and Ricky Hill.
Skiver and Biernackie did not attend the meeting.