Wendell News Outlet
Informational News of interest for the citizens in and around Wendell, North Carolina. Postings on this site are the property of Glenn Harris and cannot be copied without express written permission. Archives are listed at the bottom of the home page.Sunday, December 2, 2007
Impact Fees for Wendell?
In a recent article in the N&O, the Mayor of Raleigh called for doubling the impact tax on new housing so as to curb runaway growth. “Under the mayor’s proposal the impact fees leveled on a house of 2500 to 2700 square feet would increase from $1200 to $2500.” He also said “that it’s time developers paid more to offset the costs of Raleigh’s growth”. This increase in the impact fees “is meant to lessen the (financial) burden on existing homeowners, not slow the cities growth”. Now, granted, there are pro’s and con’s to this suggestion that are debatable, but the mayor’s proposal may have some application for the town of Wendell.
What if Wendell enacted an impact fee for developers just the reverse of the Raleigh mayor’s proposal?
Here’s the basis for this concept:
Housing growth in Wendell is inevitable, but the right kind of growth is imperative! For Wendell that means that the new housing being built must pay a greater share of the tax burden they create than the houses currently being built. Houses being built in the price range of $125,000 pay about $672 a year in property tax to the town. Houses that we need to be built in this town are in the $225,000 range; they would pay about $1209 a year in property taxes. The rational behind this need is: four people living in a $125,000 house, and four people living in a $225,000 house, both use about the same amount of town services. At the present time Wendell has an oversupply of lower priced homes; it now needs more expensive housing to create a greater housing diversification in the town. This in turn will generate more property tax revenues to pay for those town services.
Here’s the suggestion:
Wendell enacts an impact tax, on new construction, just the reverse of what Raleigh wants to do: less expensive, and probably smaller, houses would be charged a $2500 impact fee. More expensive, and probably larger, houses would be charged less based on a reverse sliding scale. For example, developers would be charged an impact fee based on the following scale:
Houses selling for $225,000, or more, would pay a $500 impact fee.
Houses selling for $200,000, the fee would be $1000.
Houses selling for $175,000, the fee would be $1500.
Houses selling for $150,000, the fee would be $2000.
Houses selling for $125,000, or less, would pay a $2500 impact fee.
This reverse sliding scale is based on probable selling price rather than the square footage of the house being built. The reason for this is that some smaller houses will sell for much more than some larger houses due to the superior quality, (brick siding, granite countertops, etc.) or property size/location.
Rather than elaborating on what we feel the potential benefits this type of impact fee could generate, we request the readers of this article to chime in with their thoughts. Is this concept feasible? Does it have any merit? Could it be fine-tuned so as to make it workable? Pro or con, tell us what you think! We need your input!
Remember, nothing ventured, nothing gained!
What if Wendell enacted an impact fee for developers just the reverse of the Raleigh mayor’s proposal?
Here’s the basis for this concept:
Housing growth in Wendell is inevitable, but the right kind of growth is imperative! For Wendell that means that the new housing being built must pay a greater share of the tax burden they create than the houses currently being built. Houses being built in the price range of $125,000 pay about $672 a year in property tax to the town. Houses that we need to be built in this town are in the $225,000 range; they would pay about $1209 a year in property taxes. The rational behind this need is: four people living in a $125,000 house, and four people living in a $225,000 house, both use about the same amount of town services. At the present time Wendell has an oversupply of lower priced homes; it now needs more expensive housing to create a greater housing diversification in the town. This in turn will generate more property tax revenues to pay for those town services.
Here’s the suggestion:
Wendell enacts an impact tax, on new construction, just the reverse of what Raleigh wants to do: less expensive, and probably smaller, houses would be charged a $2500 impact fee. More expensive, and probably larger, houses would be charged less based on a reverse sliding scale. For example, developers would be charged an impact fee based on the following scale:
Houses selling for $225,000, or more, would pay a $500 impact fee.
Houses selling for $200,000, the fee would be $1000.
Houses selling for $175,000, the fee would be $1500.
Houses selling for $150,000, the fee would be $2000.
Houses selling for $125,000, or less, would pay a $2500 impact fee.
This reverse sliding scale is based on probable selling price rather than the square footage of the house being built. The reason for this is that some smaller houses will sell for much more than some larger houses due to the superior quality, (brick siding, granite countertops, etc.) or property size/location.
Rather than elaborating on what we feel the potential benefits this type of impact fee could generate, we request the readers of this article to chime in with their thoughts. Is this concept feasible? Does it have any merit? Could it be fine-tuned so as to make it workable? Pro or con, tell us what you think! We need your input!
Remember, nothing ventured, nothing gained!
Comments:
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I kinda like this idea.
What if the scale was such that new houses that generate more than enough tax revenue to pay for the cost of city services rendered would have no impact fee added to it's price / cost.
That scale could be adjusted year to year according to the per household cost of city services.
Just a thought.
What if the scale was such that new houses that generate more than enough tax revenue to pay for the cost of city services rendered would have no impact fee added to it's price / cost.
That scale could be adjusted year to year according to the per household cost of city services.
Just a thought.
I don't like this idea. Impact fees will just be added to the cost of the house. Young families are not able to even rent in this town because housing is so expensive. The taxes on my little 1000 sq ft home were over $1000 last year. The water cost in this town is more expensive than anywhere else in Wake Co. There is nothing wrong with smaller homes. They can be more efficient than large, empty spaces.
More discussion is definitely needed on this one.
Anne Dowling
More discussion is definitely needed on this one.
Anne Dowling
The idea of impact fees is to force developers/builders to provide revenue to offset costs for added infrastructure, parks, playgrounds, sidewalks, etc. The intent of taxes is to cover the cost in providing its citizens services, fire/rescue, police, education, etc.
Anne is right that there is nothing wrong with smaller homes, until you have too many. Diversity is important and to maintain a lower tax on her home, there needs to be homes of higher value that pay a higher tax which will ultimately level the playing field. The of cost of services rendered vs. tax revenue to pay for services. Currently Wendell is upside down in the equation. It is costing more per residence to provide services than the revenue per house pays in taxes. This means that supplemental taxes to the town are being forced to offset the loss, when these are revenues that should be used to improve our sidewalks, and improve our overall services to the citizens of Wendell such as added policemen. Where is the money going to come from to support all of the new construction already approved? We have serious problems facing us and we need serious discussions to solve them. This blog from the WCC is just the beginning to finding workable solutions without polarizing the community. I for one believe the recent election spoke volumes as to the feelings of the tax payers, now we need a strong enough board of commissioners and mayor to see it through.
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Anne is right that there is nothing wrong with smaller homes, until you have too many. Diversity is important and to maintain a lower tax on her home, there needs to be homes of higher value that pay a higher tax which will ultimately level the playing field. The of cost of services rendered vs. tax revenue to pay for services. Currently Wendell is upside down in the equation. It is costing more per residence to provide services than the revenue per house pays in taxes. This means that supplemental taxes to the town are being forced to offset the loss, when these are revenues that should be used to improve our sidewalks, and improve our overall services to the citizens of Wendell such as added policemen. Where is the money going to come from to support all of the new construction already approved? We have serious problems facing us and we need serious discussions to solve them. This blog from the WCC is just the beginning to finding workable solutions without polarizing the community. I for one believe the recent election spoke volumes as to the feelings of the tax payers, now we need a strong enough board of commissioners and mayor to see it through.
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