15 replies to this topic

[ghughes]

Transportation Impact Fees are under consideration in Fort Worth. The information below was lifted from a city document, and a community forum is scheduled to provide more details. All are encouraged to attend.

Fort Worth Transportation Development personnel are currently managing the development of a transportation impact fee policy, scheduled for City Council consideration in mid- or late-2007. Transportation impact fees are charges assessed by local governments on new development projects. These charges are intended to recover the cost incurred by the government for the expansion of the transportation network necessary to serve demands generated by new development. Impact fees may not be used to remedy existing transportation deficiencies.

Impact Fee Basics:
Chapter 395 of the Texas Local Government Code requires transportation impact fees to be collected in and expended for improvements within a discrete geographical “service area.” Service areas are limited to six miles .
A transportation impact fee assessment would be based on the amount of traffic generated by a development. Impact fee studies and fees are required to be updated at least every five years.

Project Purpose:
The transportation impact fee policy is being developed to provide a mechanism through with “growth pays for growth” and thus ultimately the City’s transportation needs can be met. Transportation impact fees will help fund transportation improvements that will be needed as development occurs in Fort Worth.

One advantage of a transportation impact fee policy is flexibility to prioritize improvements. The impact fee policy will allow the City to schedule capacity improvements and to construct continuous segments designed to be immediately operational.

Project Status:
The Fort Worth City Council authorized a contract for professional services to perform a Transportation Impact Fee study in November of 2005.

Service area boundaries have been finalized and one service area among twenty-six was chosen to be completed as a pilot of the larger study. The pilot study was completed for the purpose of soliciting public input, open review of the study methodology, and discussion of policy options.

TRANSPORTATION IMPACT FEE COMMUNITY FORUM
DATE: Thursday, August 23, 2007
TIME: 7PM
PLACE: Heritage Church of Christ, 4201 Heritage Trace Parkway
Primary Sponsor: North Fort Worth Alliance

[safly]

If this is the same deal they do in London, then BAD DEAL.

[Fort Worthology]

If this is the same deal they do in London, then BAD DEAL.

Are you thinking of the "congestion charge" payed by people driving through downtown London? Because I don't think this is the same deal. This seems to be payed by developers depending on how much their development impacts the transportation system. So, building a sprawling suburban subdivision that generates a zillion car trips would pay money to the city to build/improve roads. If I understand it correctly.

[ghughes]

You are correct, Mr. Glee.

London's (and Singapore's) congestion charges are not without merit, but that's a completely different topic if anyone wants to launch it.

[safly]

I was totally thinking this was for the "congestion charge". So would developers pay this impact fee prior to developing or after. I take it that this impact fee is lessening the burden of taxpayers.

If after the develpment project is finished and apparent that it did have an impact on the growth and transportation, what if the company decides not to pay this? What then?

Retroactive?

[360texas]

We moved from Texas to Eastern Oregon 12 years ago. Found a new home in just North of Hermiston, Oregon. Part of the city requirements for the developer of residential area was to pay for impact fees for extended (utility tie in costs) for underground gas, storm water, water and electricity utilities as well as exit and entry roads leading into the residential area. One of the other expenses was to pay for the installation of a new traffic control equipment [lights and electronic controls] into the city main street. The developer recovered these costs through home sales. Meaning the the families moving into the development paid their fair share of these costs.

Other impact fees might have included costs for upgrading local police, fire and schools until the local tax base kicked in to cover these costs.

After 3 years, we sold the property [means we transfered all costs on to new owner] and we returned to Fort Worth in 1999.

[David Love]

So how much would the new Cowboy's Stadium be responsible for?

[360texas]

Don't know. Depends on the contract agreements that have with the city.

[JulieM]

I hope that you all can come to this. This is a very important issue Fort Worth is undertaking.

Please pass the word.

[Keller Pirate]

Developers not in favor of impact fees. From Monday's S-T.

http://www.star-tele...ory/507055.html

[Dismuke]

Unfortunately, I only now have come across this thread and the Star-Telegram link about the developers' point of view has expired.

I don't quite understand the logic of these fees.

Don't the people who buy the property in the new developments end up paying property and sales taxes? Don't the property and sales taxes that result from such development constitute a source of additional revenue to the city which it currently does not have? Why not pay for the necessary infrastructure upgrades with those additional revenues? I understand that there is an issue of timing - some of the infrastructure needs to be put in place before the additional tax revenue can be collected in order to pay it off. But isn't that the purpose of cities selling bonds - to obtain up-front capital for projects that will be paid off over the long term?

How are such infrastructure improvements currently being funded? If the cost is to now be passed on to special fees (a.k.a. taxes) levied against developers are the taxpayers who have up 'til now been paying for such improvements going to be let off the hook and see a concomitant reduction in the taxes they are required to pay? Or will the city simply keep the taxes that were previously allocated to such improvements and spend them on something else? If so, then this is nothing more than a sneaky way of implementing a tax increase.

Observe that handling the needs of growth is a "problem" ONLY for services such as roads, sewers, schools, fire stations, etc. which operate outside of the free marketplace. But those are certainly not the only services that are impacted by growth. If 100,000 new people were to move to the outer areas of Fort Worth over the next so many years, those people are also going to need to be provided with services such as grocery stores, restaurants, gas stations and such. But you will never see the people who provide those kinds of services regarding this as a problem. You will not hear them say "gee, our existing locations are already near peak capacity in terms of the number of customers it can serve at certain times of the week. If all these new people move here, there is no way we are going to be able to serve them - we will have an angry queue outside the door. " Instead, the people who provide such serves enthusiastically embrace such growth as an opportunity. Before the new houses are finished, you will see shopping centers, stores and restaurants popping up all over the place.

Services provided by the free market certainly face challenges when it comes to financing growth. If you are Kroger, Wal-mart or Chevron, having a presence in new parts of town is crucial if you wish to maintain your market share. But it will take time - perhaps years - for new locations to recoup their initial investment. And such locations may also operate with marginal profits or even at a loss during the period before all of the projected new developments are completed. Nevertheless, those new stores get built anyway - and the companies are excited to be building them. If a chain is well run and viable, it is not going to have a problem obtaining the capital needed for expansion. Investors are eager to provide it because they expect a nice return in the long run. If a chain is struggling to survive at its existing locations - well, it may not be able to obtain such funding and will end up being stuck with older stores in older neighborhoods and lose market share. That was what happened to Montgomery Ward and will probably happen to Sears. So yes, there is a certain amount of stress and pressure on private enterprises when it comes to accommodating growth - but it is never regarded as a "problem" and you certainly do not see such enterprises trying to force developers to pay for some of their costs and risks. Such expansion is not regarded as a "problem" because of the expectation of potential profits down the road from the new business that will result from it.

On the other hand, if you are in charge of a governmental entity that does not operate at a profit and operates outside of the marketplace - well, such growth is a problem. As with a private enterprise, the growth is going to require capital. But unlike a private enterprise, there is no market mechanism by which that capital is obtained. Nor do one's revenues necessarily come from those individuals who actually use the service - a great many government services are funded by taxpayers who have no use for them at all. I don't have kids and I have zero interest in football - but I am nevertheless forced to pay for public schools and Jerry Jone's new stadium. So, yes, as a taxpayer, any new growth in the schools or in corporate welfare schemes that I don't use is going to be viewed by me as a burden. Why should I be happy to pay for the road improvements and schools for people who move into Edwards Ranch - especially if I am unable to see how the existence of that development is going to benefit me personally or if I happened to be one of those people who would prefer that it not happen at all?

Of course, some of these "services" such as garbage collection and schools can and should be handled by private enterprise which would do a far better job than the horrifically substandard results the government is turning out in these areas. And if those services were provided by the private sector, growth for them would be handled in the exact same way that Wal-mart, Kroger and Chevron handle it. But I will be the first to concede that some services such as police protection MUST be provided by the government and I am unable to conceive of any viable way the private sector can operate roads besides expressways. So I agree, that the issue of financing new roads is necessarily going to be a "problem" in that there is no market method of attracting the capital necessary to finance it. I will also agree that a huge housing or office development built in an area which is only served by two lane blacktop former country roads is a "problem" for cities that are forced to make upgrades. Ultimately the cost does need to be passed on to those who benefit from it and NOT long term residents/taxpayers who may not benefit from it or may even regard the growth as a disvalue.

I don't have a problem with passing the cost on to the new taxpayers in the impacted areas if it reduces the burden of existing taxpayers. But why not just tax them directly rather than charge the developers who, of course, will pass the cost on to their customers? Why should the developers be forced to provide that necessary capital up front when the city is able to obtain it long term through bonds on much more favorable terms? Passing the cost on to developers is going to make it that much more expensive to purchase a house in one of those developments - and the buyers will end up being forced to pay mortgage interest on that extra cost. It would be cheaper for the home owner to pay the extra cost through higher property taxes. I don't have a problem with requiring developers to pay for the roads and pipelines that are placed on the developer's land - that makes perfect sense. But when it comes to the roads that feed into and server the area - well, isn't the increase in new taxes already enough to offset this? If not, why not just have a higher property tax rate for new subdivisions which will drop down to that of the rest of the city after X number of years?

One of the reasons our region is still growing despite tough conditions nationally is the fact that we have a comparatively free market in housing compared with other cities. In New York City, the cost of housing is ridiculous - a friend of mine who did a law internship there last summer spent $1,500 per month for a tiny one room apartment with a window air-conditioner. There is a housing shortage in New York City because nobody bothers to build anything other than luxury housing due to rent control laws. The cost of housing in California is outrageous as well. A typical working class blue collar "starter home" of the sort that was built here 30 - 40 years ago was going in some parts of California for over a half million dollars - and not for the purposes of being bulldozed for McMansions. Much of the reason for the high price is the fact that it has become so difficult to build houses in California - the minute someone sticks a shovel into the dirt they are subject to lawsuits from all sorts of anti-growth, anti-capitalism environmental groups. The result in both areas is a vastly reduced standard of living for all but the extremely wealthy. For the monthly rent of a run down dump in California or New York City, one can have a mortgage on a very nice and spacious house or condo here in the Metroplex - and that is one of the reasons why this is considered to be such a desirable place to live and why so many middle to upper middle class people are fleeing states such as California and New York. It is no mystery why any of this is the case - it is a matter of cause and effect. And it is not an accident that we don't have similar problems here - anyone here who pays a mortgage or rent payment enjoys the benefits of our comparatively free housing market. Do we wish for the same thing that is happening in New York and California to happen here? We are not special in some way that exempts us from it. The same cause here will produce the same effect. This notion of impact fees brings up huge red flags for me - my fear is our politicians are about to take a step down the same statist road that has been such a disaster for other states.

[ghughes]

The past method was ruled unconstitutional by the Texas Supreme Court. On May 7, 2004, in Town of Flower Mound, Texas v. Stafford Estates Limited Partnership (case 02-0369), the court ruled that cities must allocate transportation impact fees based on calculated impacts, not on mere proximity to roadways. In fact, the only reason Fort Worth and other cities are proposing a new impact fee structure is to respond to the court’s ruling.

The city staff has followed the law in determining a rational calculation method to determine the transportation impact of any development (not just housing). The issue for the City Council is to determine the percentage of the impact of new development to be paid by those benefiting from it. For example, they might choose to have existing residents pay 80% of the cost of new transportation infrastructure. In which case it will not be built because our ability to take on debt is horribly constrained. Or we could require developers (yes, and their customers) to pay for all of it, and then it will be built.

So developers can either build unsustainable projects that result in traffic misery, or they can charge more and build along with expanded transportation to make the projects reasonably accommodated. I have full faith in our elected leaders to carefully weigh the options and then cast their lot with the developers.

[Bernd]

I have full faith in our elected leaders to carefully weigh the options and then cast their lot with the developers.

Well, it looks like the mayor will certainly cast his lot with the developers... but I was surprised to see councilmember Burdette, upon hearing of the proposed compromise, propose an even higher set of fees than the city staff suggested.

The council has delayed the decision pending a workshop May 13. I hope the workshop isn't just designed to convince 4 more councilmembers to vote w/ the mayor. I really think the city staff's original proposal would go a long way to encourage a healthier pattern of development in this city.

[ghughes]

We do need to shape our growth from a smarter perspective. Here's the fundamental question: If growth is so good then why are we going broke from it?

[ghughes]

Indeed, City Council caved to the developers, but not as bad as as it could have been. I mean, the original position was no impact fees. Then it went to revenue neutral (i.e. continuing to fail miserably to provide for growth). The action ended up with a flat rate at a level that should produce a modest increase in funds for arterials. So we came out ahead of where we were, but still terribly short of adequate. The impact fees will provide (overall) roughly 30% of the transportation needs. And since the city is essentially tapped out on its ability to borrow that means we will only build 30% of the arterials needed to support future growth.

The worst part is the fees are flat: $2,000 per house. Yet in some areas the transportation impact is over $6,000 while in others it's $2,000 or less. So developers building in the $6k areas get a $4k free ride. Of course, the buyers in those areas actually suffer: they will not see their arterials built for a VERY long time because the pittance collected won't pay for what they need.

"Stupidity got us into this mess, and stupidity will get us out" - H. Simpson

[FoUTASportscaster]

Don't feel bad GHughes, there are still large parts of the country where the developers run completely rampant, instead of just running the show. As long as our "representative democracy" has huge "contributions" from the corporate sector, particularly the sprawl industry, then this will always be the case.