It’s All About FairnessIt’s All About FairnessNational Impact Fee RoundtableNational Impact Fee Roundtable

Denver – October 2005Denver – October 2005

Dr. Arthur C. Nelson, FAICPDr. Arthur C. Nelson, FAICPProfessor & DirectorProfessor & Director

Urban Affairs & PlanningUrban Affairs & PlanningVirginia Tech – Alexandria CenterVirginia Tech – Alexandria Center

One Fee Does Not Fit AllOne Fee Does Not Fit All

Florida County “A”Florida County “A” School impact fee per unit = $5,443School impact fee per unit = $5,443 Assumes 0.31 students per unitAssumes 0.31 students per unit Actual apartment rate is 0.12 per unitActual apartment rate is 0.12 per unit Proportionate share should be = $2,057Proportionate share should be = $2,057 Apartments charged in excess of their Apartments charged in excess of their

proportionate shareproportionate share Public safety & parks Public safety & parks same problem same problem

fees based on 2.38 persons per unit but fees based on 2.38 persons per unit but apartments average 1.81apartments average 1.81

Proportionate ShareProportionate Share

Equal protectionEqual protection Similarly situated people must be considered Similarly situated people must be considered

similarlysimilarly Some argue that each residential unit is Some argue that each residential unit is

similar to similar to the other, hence equal impact fees the other, hence equal impact fees acceptableacceptable

Constitution addresses people not residential Constitution addresses people not residential unitsunits

If the average person is charged 3 times their If the average person is charged 3 times their school impact, equal protection may be school impact, equal protection may be

violated violated

`̀

<500500-999

1,000-1,4991,500-1,999

2,000-24992,500+

Square Feet

2.12.22.32.42.52.62.72.82.9

33.1

Pers

on

sHouse Size

0.22 0.25 0.33 0.37 0.43 0.52

Acres

2.1

2.2

2.3

2.4

2.5

2.6

2.7

2.82.9

3

3.1

Per

sons

Lot Size

1 2 3 4 5+

Persons

0

0.5

1

1.5

Trip

s SF Trips

MF Trips

Persons in Household

SF 4 RoomsSF 5 Rooms

SF 6 RoomsSF 7 Rooms

SF 8+ Rooms0

0.2

0.4

0.6

0.8

1

1.2

Pea

k Tr

ips

Per

Uni

tSingle Family Rooms

MF O BedsMF 1 Bed

MF 2 BedMF 3 Bed

MF 4 Bed0

0.2

0.4

0.6

0.8

1

1.2

Pea

k Tr

ips

Per

Uni

tMulti-Family Bedrooms

Density MattersDensity Matters

Impacts fall when density rises for:Impacts fall when density rises for: Public safetyPublic safety UtilitiesUtilities TransportationTransportation

Persons Per UnitPersons Per Unit

151-700701-2,000

2,001-4,0004,001-6,000

6,000+

Units Per Square Mile

0

5

10

15

20

25

30

35

Dai

ly V

MT

Per

Per

son

Units Per Square Mile

<750751-2000

2001-40004001-6000

6,000+

Units Per Square Mile

0

5

10

15

20

25

30

35

Per

cent

of

all T

rips

Transit

Walk-Bike

Nonvehicle Trips by Density

Insert ABQ waterInsert ABQ waterMean Water Consumption by Lot Size (Grouped in .05 acre increments)

5 Year Average for June Water Consumption

0.05 0.10 0.15 0.20 0.25 0.30 0.35 0.40 0.45 0.50

Lot Size Increments (acres)

10.00

20.00

30.00

40.00

50.00

Me

an W

ater

Co

ns

um

pti

on

Location MattersLocation Matters

Distance to public transitDistance to public transit Distance to schoolsDistance to schools Location in “fully served” versus Location in “fully served” versus

“partially “partially served” areasserved” areas Atlanta reduces road fees by 25% if Atlanta reduces road fees by 25% if

within within 1,000 feet of rail station1,000 feet of rail station DeKalb County, GA to reduce road DeKalb County, GA to reduce road

feesfees based on rail and bus accessbased on rail and bus access

Configuration MattersConfiguration Matters

Integrated office, retail and Integrated office, retail and residential residential reduces road impacts reduces road impacts by 30%+by 30%+

Connected to multi-modal can reduce Connected to multi-modal can reduce road road impacts by 50%+impacts by 50%+

Few impact fee programs recognize Few impact fee programs recognize these these reductions on fee schedules reductions on fee schedules

Assessment Base MattersAssessment Base Matters

Fees usually assessed on only Fees usually assessed on only residential:residential: Parks & recreationParks & recreation LibrariesLibraries schoolsschools

What is the source of impact?What is the source of impact? New jobs = new householdsNew jobs = new households Jobs = impactJobs = impact

FairnessFairness Broaden the base to include all Broaden the base to include all

developmentdevelopment

Credits MatterCredits Matter

External revenue creditsExternal revenue credits Account for non-local government Account for non-local government

revenuesrevenues ““Double-Tax” revenue creditsDouble-Tax” revenue credits

Several Florida counties give dedicated Several Florida counties give dedicated school school construction property tax construction property tax credits based only credits based only on residential share, on residential share, not all developmentnot all development

At least two counties give no such creditAt least two counties give no such credit Residential pays once for impact fees and Residential pays once for impact fees and

again for paying off bonds for schools used by again for paying off bonds for schools used by existing residentsexisting residents

Parks and RecreationParks and Recreation

Questionable PracticesQuestionable Practices 2 Georgia counties assess the same fee on all 2 Georgia counties assess the same fee on all

residential units.residential units. Fees on apartments 36% to 51% higher than Fees on apartments 36% to 51% higher than

proportionate-shareproportionate-share Best PracticesBest Practices

Manatee County, FLManatee County, FL Fees vary by type of unit and by size of unit Fees vary by type of unit and by size of unit

based based on bedroomson bedrooms

Fire & EMSFire & EMS Questionable PracticesQuestionable Practices

1 California city and 1 Georgia county assesses 1 California city and 1 Georgia county assesses the the same fee on all residential units.same fee on all residential units.

Fees on apartments 33% to 45% higher than Fees on apartments 33% to 45% higher than proportionate-shareproportionate-share

Best PracticesBest Practices West Valley City, UT uses Functional PopulationWest Valley City, UT uses Functional Population Fees based on four residential categoriesFees based on four residential categories

AlmostAlmost Missoula, MT has density-distance- Missoula, MT has density-distance-based fees that vary from $91 to $1,354 per based fees that vary from $91 to $1,354 per unitunit

RoadsRoads Questionable PracticesQuestionable Practices

2 California cities use same trip rate and 2 California cities use same trip rate and length to length to charge fees in all residential units. charge fees in all residential units.

1 California city gives no credit.1 California city gives no credit. Best PracticesBest Practices

Manatee County, FLManatee County, FL 4 residential categories with 3 sizes in each, and 4 residential categories with 3 sizes in each, and

different impact figures for eachdifferent impact figures for each Albuquerque, NMAlbuquerque, NM

Fees based on 7 service areas, type and size of Fees based on 7 service areas, type and size of unit unit and is $0 in several service areas and is $0 in several service areas

Water & WastewaterWater & Wastewater Questionable PracticesQuestionable Practices

Common to assess based on meter size and Common to assess based on meter size and equivalent units.equivalent units.

Emerging evidence suggests apartments Emerging evidence suggests apartments overcharge overcharge by 2 to 5 timesby 2 to 5 times

Best PracticesBest Practices Scottsdale, AZScottsdale, AZ

1 du/2.5 ac = $5,4921 du/2.5 ac = $5,492 1 du/ac = 1 du/ac =$3,382$3,382

2-4 uncluster = $2,2032-4 uncluster = $2,203 2-4 cluster = 2-4 cluster = $1,802$1,802

4-8 du/ac =4-8 du/ac = $1,585 $1,585 9+ du/ac 9+ du/ac $1,337$1,337

Next StepsNext Steps Need to vary impact fees by type and size of Need to vary impact fees by type and size of

residential unitresidential unit Refine definitions of “proportionate share”, Refine definitions of “proportionate share”,

““pro rata” and “reasonable relationship”pro rata” and “reasonable relationship” Base size on bedrooms (census) or square Base size on bedrooms (census) or square

feet feet Encourage fee schedules to use automatic Encourage fee schedules to use automatic

impact reductions for location, configuration impact reductions for location, configuration benefitsbenefits

Adopt legislative finding that all Adopt legislative finding that all development development creates impacts on and creates impacts on and benefits from benefits from facilities facilities all all development needs to be development needs to be assessed.assessed.