Commentary and Opinion

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Monday, October 24, 2011

Impact Fees Fact and Fiction (continued)

It is in connection with the new impact fees for roads that we encounter the ultimate irony of the positions of Mr. Lennes and Dr. Hays, because under the new system of impact fees the City will bear the responsibility of building major arterial roadways. As a result, this policy does not mark a shift of the cost of major road projects to developers from the City (as many have argued), but rather from developers to the City. Here is a concrete example. In the new Metro Verde Planned Unit Development there are three major arterial roads (Engler Road, Sonoma Ranch Blvd., and Arroyo Road) measuring a total of 6 miles, with a projected cost of approximately $10 million. Prior to the passage of the new impact fees for major roads, the developer was responsible for building these roads; now, the City will be responsible.
So why, you might ask, were developers not among the biggest supporters of the impact fees for major roads? Speaking just for myself, there are two reasons. First, these fees (combined with the other new ones), since they will be borne by new homeowners and businesses, will put homeownership out of the reach of many Las Crucens and will stifle business expansion. Can anyone doubt that adding thousands of dollars to the price of a starter home will make that home less affordable? Can anyone doubt that adding tens of thousands of dollars to the cost of an apartment complex, a medical office building, or a retail center will reduce those kinds of job-generating developments? Second, the City is ill-prepared to accept the responsibility of building major roads on a schedule that developers would find acceptable. Consequently, developers will be building projects in which the City will be able to impose new fees, but developers will still have to construct the major roads when the City fails to do so on a reasonable, reliable schedule. Does anyone truly believe that when a developer approaches the City with construction drawings for $10 million of major roads needed for development of a large, new project on which the City has the right to impose impact fees, the City will say, “Okay, we’ll get right to it”?