The News about Impact Fees Just Gets Better!

I made a mistake in my February 24th post on impact fees. I didn't do my arithmetic. It turns out that the increase is much less than I reported. This means the increase will be only a tiny portion of a monthly mortgage payment. Tiny!

It also means that the El Paso Times can't be trusted when it comes to reporting the seriousness of something. You will see below why this tiny increase hardly deserves the headline: "Sharp increase is possible if City Council approves ordinance". Take the Times with a grain of salt. They also love using the verbs "would" and "could" in their major headlines. Anxieties not realities are their forte.

Here's a chart that will make it clear that the current brouhaha over an impact fee increase is a tempest in a teapot:

You can enlarge the image of the chart by clicking on it. You can also hit Ctrl along with the key with the plus sign and enlarge this entire page.

First, remember that the developers (and in the end the homeowner) pays just 75% of the impact fee. Even though you and I don't use or require the additional capital improvements at the Bustamante and the Jonathan Rogers Treatment Plants, etc., we still pay 25% of those fees. (I'm going on a shopping spree at Union Fashion. I'll pay 75% but you need to kick in the remaining 25%. That's how it works with impact fees.)

So the total amount that the developer paid for 2009 impact fees for east side development was $1,617 or 75% of $2,156. (See chart.) 

The 2014 Impact Fee Calculation for the east side is $3,835. That's the total that I mentioned yesterday as did the El Paso Times. The real increase is this: 75% of that $3,835 is $2,876.25. Subtract the 2009 total of $1,617 and you come up with the increase on the east side of just $1,259.25! 

The current rate on a 30 year loan is 4.25%. That additional $1,259.25 means an increase of a lowly $6.20/month on a 30 year loan. 

$6.20!

Hardly worth the words "Sharp increase is possible if City Council approves ordinance".

It is worth all of the thousands of dollars of ad revenue from home builders in the El Paso Times every month. 

Please plan to be at the next City Council meeting on March 4. City Hall is located at 300 N. Campbell. (Map)

The issue is about fairness. The increase is just a modest $6.20/month on a house payment for a new home built on the east side. Less elsewhere. (Actually it will be much more because you can be sure that the builders will jack up the price of a home to make some more money above and beyond the impact fee.) The increase pays for the capital improvements necessary to support new development. Nobody is arguing here against development - just who should pay. 

Fairness - that's what it is all about. If not, then please pay for my new swimming pool and wardrobe. Thanks.