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Rogersville reduces builder impact fees

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The Rogersville Board of Aldermen on Feb. 6 approved an ordinance to reduce construction impact fees by 75 percent through Aug. 31.

The move, aimed at spurring new development, does not reduce administrative, inspection or meter fees, according to a city news release. Officials estimate the move would reduce the cost of a new house in Rogersville by $1,125 to $2,225.

“Rogersville is officially open for business,” Mayor Jack Cole said in the release. “Even with greater than 100 percent growth in the last 10 years, the board’s foresight and planning has situated the city in an enviable position to be able to provide affordable services to our current and new residents.”

Local governments typically assess impact fees for builders to connect new residences to municipal water and sewer lines to cover the infrastructure improvement costs. Those fees are often built into a homebuyer’s cost.

Officials at the Home Builders Association of Greater Springfield said the move signals the city’s desire for home-building business.

“As home building emerges from unprecedented economic hardship, cities will have to compete fiercely for thousands of jobs and economic benefits that will come from future home building,” HBA of Greater Springfield CEO Matt Morrow said in a post at SpringfieldHBA.com. “To win that competition, cities must demonstrate they are committed to minimizing costs to build, and to treating builders fairly.”

According to the HBA, which has worked with Rogersville officials on the proposal for the past year, water and sewer impact fees assessed to builders in Rogersville range from $1,500 to $2,600 per house.
HBA policy opposes the use of impact fees, saying they:
  • are based on a false premise that residential construction represents a net cost to a city’s economy;
  • artificially inflate the price of new homes, and, ultimately, all housing;
  • represent a fundamentally flawed financing scheme that, by raising the price of new homes, reduces the very activity (home building) the community depends upon for impact fee revenues; and
  • cripple housing affordability, especially for the poorest members of a community.
HBA efforts in Republic convinced city officials last month to reconsider an increase to residential impact fees, and yesterday 54 percent of voters approved a new fee schedule that results in lower overall fees.

According to HBA, Republic is expected to remove a 3.5 percent annual escalator and a $250 per house sewer connection fee, and raise water and sewer impact fees by $10 and $50, respectively. The moves are expected to reduce impact fees by a net $190 per house, and Republic City Council now has authority to establish or adopt new rates “based upon economic conditions related to the cost of providing for expansion of the sewer and/or water system,” according to the primary election bill language.[[In-content Ad]]

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