How should we pay for growth?

[ChiefJoJo]

***We'll use this existing topic to discuss how to finance the region's growth.***

It is very important that you attend this meeting so you can let the politicians know that our rediculously low fees must be raised.

From the city's website:

Facility Fee Public Hearing April 4

Hearing to Be Held In City Council Chamber

The Raleigh City Council will hold a public hearing April 4, 6:30 p.m. to discuss a proposed 72 % increase in facility fees. Duncan&Associates evaluated the current state of the impact fees the City is currently authorized to impose on new development. The report stated that facility fees have not stayed current with the increases in the cost of land and construction. Average new home prices have almost doubled since 1988, the City

[ChiefJoJo]

This is an important meeting. I hope many of you attend and express your opinion.

[Tayfromcarolina]

Yeah my townhome is underconstruction shortly and this will definetly affect things in the future. An impact tax in conjuction with a slight property tax increase hopefully will alleviate some of the counties burden expecially with the school issues.

[sax184]

Anybody go? What happened?

I can't believe there was nothing in the N&O. Or do I have the date of the meeting wrong?

[plus2]

http://www.newsobserver.com/102/story/425285.html

There was no vote taken, it was just a public hearing. It appears as if most in attendance supported much higher fees.

[MR-2]

Good. They should be higher. If anything can be used to promote smarter growth, this would be a good step.

It probably won't increase revenues much for the city directly, but the cost we'll save in the long run for providing utilities to all these 'McMansions' will definitely help.

[ChiefJoJo]

I was there late. I caught the last several speakers including Sandreuter, who developed 510 Glenwood. It was about 2/3 for higher fees and 1/3 against the fee increase. There were a lot of passionate arguments on both sides. Lots of mentions of Cary, and how when they raised there fees, the development dried up... Also developers said as much as 60% of new homes are bought be existing residents, so 'we are taxing are own residents.' I got the feeling that a lot of long-time and even recent residents feel (as I do) that they pay too much in property taxes for new roads and parks they never use, and that developers should have to pay more.

The proposal is to raise the fees to about $1170/home, from 680. I would bet that the final fee increase will be somewhere above $1170 and below the maximum of $3450... maybe $2k?

[Transplant]

I was there late. I caught the last several speakers including Sandreuter, who developed 510 Glenwood. It was about 2/3 for higher fees and 1/3 against the fee increase. There were a lot of passionate arguments on both sides. Lots of mentions of Cary, and how when they raised there fees, the development dried up... Also developers said as much as 60 of new homes are bought be existing residents, so 'we are taxing are own residents.' I got the feeling that a lot of long-time and even recent residents feel (as I do) that they pay too much in property taxes for new roads and parks they never use, and that developers should have to pay more.

The proposal is to raise the fees to about $1170/home, from 680. I would bet that the final fee increase will be somewhere above $1170 and below the maximum of $3450... maybe $2k?

Why are we tied to a fixed number system? Would a 1% new home fee be too much? I would assume this would help push some high end homes out of Raleigh. But really adding $3k additional to a $300k home is nothing.

[Tayfromcarolina]

X-actly it should be percent based. Not all homes are created equal. Therefore the tax should vary upon the price of the home and equated to a percent value.

[avery]

Would this same flat fee apply to condo developments?

[plus2]

Would this same flat fee apply to condo developments?

I believe there is a flat fee for condos and apartments but it is smaller than that for single family homes.

[sax184]

Okay, I think this puts the nail in the coffin of the impact fee discussion.

Toll Brothers Clears $92,000 PROFIT Per HOME in 2005

Raleigh should raise the fee to the roof of what was proposed. Toll Brothers et al will have to settle for a mere $85,000-$87,000 profit per home.

[ChiefJoJo]

Reading that article made me . It's not so much over the tremendous profits they made (I have no problem with successful businesses per se), but that they acquire green space and build on it at what must be an alarming rate. No condos for Toll Bros... McMansions are the way to go. These guys will come in, make their millions, and then leave to find the next hot real estate market.

Check out BTB for much more on impact fees.

[ChiefJoJo]

WRAL update on council discussion over TIFs. Of course Kane wants $75M in TIFs to build massive parking decks to support North Hills East.

Isley says the TIF issue should be on a case by case basis instead of with a policy and Meeker disagrees. To me, we'd be setting ourselves up for lots of mistakes if we let the council decide on a whim every time this comes up. Developers would be lining up left and right wanting public subsidies for their developments. There ought to be a strict policy developers must adhere to in order to qualify for TIF funding... things like:

• submitting a financing plan that meets minimum criteria

• providing affordable housing (say 5-10% of total residential units)

• providing a significant amount (15-20% land area) of open space

• meets criteria for LEED (green building) certification

• meets a high standard of excellence in architectural style and urban form

• is mixed use in nature

• receives overwhelming neighborhood support

[carynative]

Chief..

Great reccomendations. Now, if only the council would hear those.

[Jones_]

WRAL update on council discussion over TIFs. Of course Kane wants $75M in TIFs to build massive parking decks to support North Hills East.

Isley says the TIF issue should be on a case by case basis instead of with a policy and Meeker disagrees. To me, we'd be setting ourselves up for lots of mistakes if we let the council decide on a whim every time this comes up. Developers would be lining up left and right wanting public subsidies for their developments. There ought to be a strict policy developers must adhere to in order to qualify for TIF funding... things like:

• submitting a financing plan that meets minimum criteria

• providing affordable housing (say 5-10% of total residential units)

• providing a significant amount (15-20% land area) of open space

• meets criteria for LEED (green building) certification

• meets a high standard of excellence in architectural style and urban form

• is mixed use in nature

• receives overwhelming neighborhood support

[urbanesq]

^^ Plus, you've gotta have a plan because there is an absolute statutory limit to the number of TIF districts a municipality can establish, so unless you're desperate for development, why give them out only on a first-come basis. Makes no sense to do it that way. Establish some criteria (althoguh the statute sets the base line criteria anyway) and then evaluate each project that comes along on that basis.

[ncwebguy]

I like adding a points system to Chief's checklist/application. The list could be a series of minimus, with points assigned to exceeding the baseline. The "bonus points" earned by more affordable housing, more open space, etc. would be used to bid for the limited number of TIF projects every few years.

Community support is hard to gague, but going through the CACs is a good place to start.

[ChiefJoJo]

This is sort of another pet issue for me (and WakeUp!)... how to pay for growth in the region. Right now, regardless of what the real estate/homebuilder talking heads say, growth doesn't come close to paying for itself. Right now, counties have no authority (unless granted to them by the state GA) to levy taxes except for property taxes. Any poublic policy expert/economist will tell you having a single revenue stream for public financing is a terrible policy. As we've seen with the school bonds, people will support tax increases to a point, but most people are fed up with mega bonds--they want alternatives...

What s on the table in the General Assembly this session is most likely one or more of three options:

(1) Impact fees (ex: $3k fee ea. new home--I would exempt certain infill projects)

(2) Real estate transfer fees (ex: fee/tax by seller of county property based on assessed tax value--or sale price?)

(3) County sales taxes (ex: additional 1/2 to 1 cent administered by the county)

Here's an NBC-17 article from a week or so ago about the subject:

Some county leaders say developments like these aren't paying their fair share for the costs of building schools.

"Right now all the pressure is on the property tax, and we're going to reach a point where the taxpayers say no more," said Wake commissioner Tony Gurley.

Gurley wants the state to allow the county to consider impact fees on developers and real estate transfer taxes, which is essentially a fee anytime a home is sold.

"Property tax is one way the county commissioners have of raising money but that's about the only revenue source and there's very limited funds," Gurley said.

That group [state Homebuilders Association] and Realtors are some of the biggest contributors to state lawmakers. Still, they argue their opposition to the fees is about homeowners, not themselves. Still, when it comes to growth, there's no consensus on whether it's benefiting or costing us. "Both act as a tax on housing. They disproportionately affect low to moderate home buyers," Martin said. "Every single study that we have done shows that growth does in fact pay for itself."

The question before state lawmakers is which influential group will win out in the end, local counties or homebuilders and Realtors, groups with differing views on the same issue.

"Growth does pay for itself statewide, but it is not paying for itself in Wake County," Gurley said.

This is a big issue, and could help urban areas pay for much-needed transportation and schools. It's good to see Gurley (Wake Co Chair) support it.

[DwnTwnRaleighGuy]

What s on the table in the General Assembly this session is most likely one or more of three options:

(1) Impact fees (ex: $3k fee ea. new home--I would exempt certain infill projects)

(2) Real estate transfer fees (ex: fee/tax by seller of county property based on assessed tax value--or sale price?)

(3) County sales taxes (ex: additional 1/2 to 1 cent administered by the county)

[ChiefJoJo]

I copied the North Hills TIF article here because I feel that it's much more about setting a wide-ranging policy that affects the entire city, rather than North Hills in particular.

Kane says he'll move forward with a $120 million to $140 million project, instead of an $800 million project, if he doesn't get the help. The bigger project would generate $500 million in taxes over 50 years, he said.

"How could you afford to turn that down?" Kane asked.

Meeker and others, including City Manager Russell Allen, have worried that funding Kane's projects and others like it will flood the city with similar requests.

Last month, developers of the Soleil Center, the 42-story tower planned near Crabtree Valley Mall, said the tool should be available to their project if North Hills gets it. To do otherwise, their letter says, would put the Soleil Center at an economic disadvantage. [ uh oh]

Meeker said taxpayers will lose if these projects receive public financing. If tax revenue is set aside to pay for a project, the city and county might not be getting the money needed to provide services, such as police and fire coverage, to the new development.

And, Meeker notes, projects such as North Hills East are moving forward without public aid.

[ChiefJoJo]

nm

[ChiefJoJo]

Wake Up! presents plan for financing growth; WTVD story here...

WakeUp Wake County's proposal calls for impact fees on new construction projects and a 1 percent real-estate transfer tax on all homes on the market.

"Because the school crisis is connected to growth and the population and school body, we've got to connect our funding to that growth as well,” said WakeUp Wake County Chairwoman Karen Rindge.

WakeUp leaders believe another multimillion-dollar school bond is more likely to pass if voters' property taxes do not increase. Under their plan, the two fees would potentially raise nearly $200 million [per year].

Wake County supports a menu of options for all 100 counties. Those options include impact fees and real-estate transfer taxes. County commissioners, however, believe a better option in Wake, is a 1 cent sales tax to split between schools and transportation.

Of course the homebuilders stroll out their "good familes won't be able to afford the American dream" garbage. Not surprisingly alot of the commissioners themselves are funded by the homebuilders and realestate lobby. So a 1% sales tax makes more sense than a fee that is exactly tied to growth? oh, right... it doesn't, this is just politics as usual.

[wfdude]

Wake Up! presents plan for financing growth...

WakeUp Wake County's proposal calls for impact fees on new construction projects and a 1 percent real-estate transfer tax on all homes on the market.

"Because the school crisis is connected to growth and the population and school body, we've got to connect our funding to that growth as well,

[ChiefJoJo]

WRAL story on a possible sales tax for transportation in the Triangle.

A 1/2 cent tax in Raleigh only would generate $45M/year--I'm sure Wake Co would be closer to $60M. The story also mentions a Triangle tax district for transportation.

I favor impact fees and land transfer fees as WakeUp! does, since they target growth directly. Sales taxes are somewhat more regressive, but as a positive, they would also tax visitors to the area as well as residents. It's clear we do need another source of revenue very badly. The easiest way to do a sales tax would be to hold a referendum in Orange, Durham and Wake...

get a list of projects on the ballot (incl transit funding for the new transit plan) and hold the vote.