One of the less heroic chores during my days as a land use attorney was making sure that before we submitted a land use application with a municipality, the application fees and escrow amounts to serve as retainers for board professional reviews were computed properly. Some were straightforward affairs, requiring flat fees for projects. However, other localities’ formulas required the combined mathematical powers of our office to arrive at the correct figures. Sometimes it would take careful conversations with the town to ensure accuracy, and perhaps haggle for a better price. Constructing overly complex computations based on a variety of factors – square footage of construction, lot areas, etc. – town officials would take great glee at spotting our “errors” to extract additional funds from the applicant. Those situations would lead to the query often lamented by lawyers: “Is this why I went to law school?”
Clear for a time from those moments of frustration, I recently read an article from the Los Angeles Times about the cry from builders over an increase in “impact fees,” or payments required by municipalities and other governmental units to finance new services and infrastructure required by new development. As one builder from the piece notes, “[t]he added costs have made many new homes unaffordable.” At best, this statement is pure hyperbole. Although different from land use application fees and escrows, impact fees derive from the land use process, and often are tied to approvals as conditions that must be met to permit the drawing of building permits. If builders could not sell their products, they would simply stop producing them.
The push and pull over impact fees boils down the issue of who should pay for the needs created by new development within a community. Municipalities argue that existing residents and businesses already pay taxes. To require additional payments from these constituencies would not only threaten local politicians at the ballot box, it would be inherently unfair, imposing a double taxation on the community. On the other end of the debate, new residents (and the builders who pass along the costs to them) argue that they are being discriminated against, and that the old residents benefit from new roads, more firemen and increased funding for schools just as much as the new inhabitants.
In the end, as is the case with any change, all parties have to pay. New residents pay, as part of their purchase price into the community, for the infrastructure and services the town will provide. The town pays by having to grow its bureaucracy to accommodate the needs of the newcomers. The existing residents pay by losing some of the qualities that attracted them to their homes or places of business in the first place. To require monetary payment from the consumers of new development may be the most affordable cost amongst the respective groups “impacted” by the new construction.
Clear for a time from those moments of frustration, I recently read an article from the Los Angeles Times about the cry from builders over an increase in “impact fees,” or payments required by municipalities and other governmental units to finance new services and infrastructure required by new development. As one builder from the piece notes, “[t]he added costs have made many new homes unaffordable.” At best, this statement is pure hyperbole. Although different from land use application fees and escrows, impact fees derive from the land use process, and often are tied to approvals as conditions that must be met to permit the drawing of building permits. If builders could not sell their products, they would simply stop producing them.
The push and pull over impact fees boils down the issue of who should pay for the needs created by new development within a community. Municipalities argue that existing residents and businesses already pay taxes. To require additional payments from these constituencies would not only threaten local politicians at the ballot box, it would be inherently unfair, imposing a double taxation on the community. On the other end of the debate, new residents (and the builders who pass along the costs to them) argue that they are being discriminated against, and that the old residents benefit from new roads, more firemen and increased funding for schools just as much as the new inhabitants.
In the end, as is the case with any change, all parties have to pay. New residents pay, as part of their purchase price into the community, for the infrastructure and services the town will provide. The town pays by having to grow its bureaucracy to accommodate the needs of the newcomers. The existing residents pay by losing some of the qualities that attracted them to their homes or places of business in the first place. To require monetary payment from the consumers of new development may be the most affordable cost amongst the respective groups “impacted” by the new construction.
But all of the affected parties also receive a benefit for the changes that come from new development. Obviously, the new residents have paid to enter because they receive the benefits that the town has to offer. The town itself will increase its tax base, and no doubt the prestige of being the home for new businesses and homes. Finally, the existing residents will be enriched by the influx of new personalities and ideas into the community. There is a reason for the fees. In the end, they are more often than not well worth every penny.
Next time, I'll delve into the journey my fiance and I just completed -- a two-week odyssey on the road from Los Angeles to New York -- and the facinating ways in which we use and occupy the North American continent.
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