Not Impact Fees but More Land is Goal of Developers

Damn the people's will by petition. Sprawlers want City to jettison NW Master Plan and Smart Growth so they can plow up more natural land.

elpasonaturally is going to be saying a lot about impact fees. As reported here, City Council last Tuesday decided to have a one-year moratorium on those fees and see if there was some other way to pay for water utility capital improvements - perhaps Prop 6 money from the State of Texas. I suggested to Council that they also have an objective study done about growth and prosperity - i.e., whether growth pays for itself.

Prior to last week's Council, the Newspaper Tree did an informative piece about the issue.

In it they report on the arguments by the builders against impact fees.

In response to their arguments, Charlie Wakeem wrote a letter to Anthony Halpern of the NPT. Here is his letter with my editing:


"This letter is a response to your February 27 article about impact fees in the NPT.  I served on the Capital Improvement Advisory Committee or CIAC for the first six years after it was created by City Council.  I was term limited off the committee at the end of last year.  This is the committee that reviews impact fees and makes recommendations to the City Plan Commission and City Council.  When the committee was first formed, there were five members from the development community and four members from the public at large, including myself.  Now seven of the nine members are from the development community.  That's why CIAC is "vehemently opposed to increasing the charges" as you state in your article.

"The proposed fee increases are not the real issue.  It's a side show.  The development community is using them as misdirection to get what they really want and they know they have City Council's political support.  They want more urban sprawl as cheaply as possible, both in the three impact fee service or growth areas and in the city-owned PSB land on both sides of the mountain.  The latter is the most egregious.  They are being supported by the Greater El Paso Chamber of Commerce.

"Here are some of their arguments.

Housing affordability

"They say they will have to pass the fee increase on to the new home owners, which could price them out of a home.  That's a poor argument.  The highest fee increase is in the East Service Area.  I'll use those fees to illustrate the facts.  The current East maximum is $2,156.00.  The city currently charges 75% of that amount, which comes to $1,617.00.  The proposed maximum increase is $3,835.00.  The difference from $2,156.00 is $1,679.00.  If City Council keeps the 75%, the fee would only be $1,259.25.  Amortized over a 30 year mortgage at the highest current rate of 4.25% the increase in a home buyer's monthly payment is only $6.20 a month.  Less in the Northwest and Northeast Service Areas.  Hardly unaffordable.

Leap Frog Development

"With the increase in impact fees the development community would build homes outside the city limits in order to avoid them.  According to city planners, the developers would have to get water to those subdivisions somehow. There are two ways to provide water to those subdivisions: Negotiate with El Paso Water Utilities to extend the water infrastructure outside of the city limits or create a MUD (Municipality Utility District).  

"Extending services does not guarantee that it will cost less than the impact fees.  In addition, home owners would pay higher water rates to EPWU than city residents. 

"Creating a MUD has several risks. Water quality may be poorer; building the infrastructure could be more costly than the fees; and it's not sustainable. It's up to the homeowners in a MUD to fund and maintain the MUD.

"With or without impact fees, developers go outside the city already to avoid other fees and regulations, such as development application fees, hook up fees, building permits, parks, street lights, sidewalks, paved streets and etc., etc. etc. 

WORST OF ALL!!   

"Here is the real issue and it's not impact fees.  Builders want the city to sell its PSB land to developers lifting the city's restrictions on the land, (viz., the Northwest and Northeast Master Plans), and sell the land piecemeal for conventional sprawl development.  Unfortunately, after hearing the debate at the February 25 council meeting, this is something City Council seems amenable to doing.  It would betray the public trust after the Northeast and Northwest Master Plans were fully vetted in public meetings.  

"The excuses the development community uses to justify these land sales is twofold: revenue to the PSB through sale of the land, and ad valorem taxes to the city with the new housing.  The revenue from sales to the PSB is minimal and unsustainable.  Revenue from ad valorem taxes in new growth has never paid for itself.  A study was done several years ago by John Neal, the city manager's special projects person, that bears that out.  With these revenues, the development community justifies not having to increase or even eliminate impact fees.  

"Of course, another risk to selling the PSB land is water.  The main purpose for the PSB holding the land is for aquifer recharge to the Hueco and Mesilla Bolsons.  There is more land than locally available water to serve development on all of it."