Deferred payment of impact fees

Recently the local builders Association (NABA) has been addressing such issues with the city as the proposed new ordinances (UDO) and the building impact fees (or development investment fees). I'll be talking about the latter.

The impact fees have been a real source of contention in Kingman since they have been introduced. The common price tag that has been thrown of an impact fee to a builder at the time of permit issuance is $8,000. Now I don't know what the actual fees are, the number I just posted is the number that keeps coming up when I talk to builders.

Here is the resolution that NABA has managed to put on the next city council agenda.

d. Resolution No. 4453 – Development Investment Fees

The Arizona Legislature passed Senate Bill 1423 which authorizes municipalities to enter into development agreements with the developers of residential properties to pay development fees at a time rather than at building permit issuance. The net effect of this legislation is that the purchaser of the property will pay the City’s development investment fee rather than the contractor who builds the house. Staff recommends approval.

No emphasis, it is as it appears on the agenda.

Simply put, this is a deferral of payment of the impact fees to the time of closing.

What I don't like is the "net effect of this legislation is that the purchaser of the property will pay the City's development investment fee rather than the contractor who builds the house."

Before I go off on some sort of rant here, let me just say for a moment that the ultimate goal is that the impact fees either go away or become much less punitive to home builders and buyers. I know the builders Association is working in that direction and I want to offer any help I can in doing so. Impact fees need to be addressed for commercial property as well because they too are too stiff and are causing more drag on the local economy.

Now back to the rest of the story... I've talked to builders who currently add the impact fee to the price tag of the home (which is typical) meaning that really the buyer is paying for the fees anyway (an artificial cost created by the government). I've even had a builder tell me that they put their profit margin on top of the impact fee.

What I want to be clear on before I can support this resolution in any way is the buyer going to negotiate the price of his or her new home with a builder and head to the closing table to find out that THEY have to pay the impact fee before closing?? Say they negotiate a home purchase for $200,000... does the buyer find out later that they basically pay $208,000??

I'm against impact fees, don't get me wrong, but if anyone has to be responsible for paying the fees I believe it must be the developer/builder and those fees must be included during the negotiation of the home purchase.

Bottom line, the impact fees need to go. There aren't impact fees in the county areas that are outside the small confines of the Kingman city boundaries. Builders have shifted focus to build and develop outside of Kingman. In fact I've heard someone say that of all the growth in Mohave County only 4% of it is actually within the city limits of Kingman. I'd say the impact fees are having a negative 'impact' on Kingman.