Impact fee increase in offing

Owens to propose 50 percent rise in levy on builders

$4,069 for 1-family home

Anne Arundel

November 07, 2001|By Lynn Anderson | Lynn Anderson,SUN STAFF

The basic cost of a new home in Anne Arundel County could increase if County Council members vote to bump up fees paid by homebuilders.

After a year of study and intense debate, County Executive Janet S. Owens said yesterday that she would introduce legislation to increase development impact fees by 50 percent at a council meeting Nov. 19.

The proposed increase in impact fees, recommended to Owens by a panel of builders, residents and business owners, would mark the first restructuring since the fees were introduced in 1987 as a way to cover costs for new roads and schools arising from fast-paced home construction.

For a detached single-family home, the panel suggested an increase from $2,629 per house to $4,069 beginning July. After that, fees would be adjusted annually to keep pace with inflation. These costs probably would be passed along to homebuyers.

The panel's recommended jump is far smaller than the quadrupling urged by a consultant hired by the county to examine the fees. Consultant James C. Nicholas recommended a fee of $11,394 per single-family house to recover more of the county's costs.

Owens convened the panel last year to continue exploring the difficult question: Who should pay for costly public improvements - developers or consumers?

So far, reaction to Owens' proposal has been positive but cautious.

Representatives of homebuilding and business groups say they are pleased with the panel's recommendation, but leery of the timing of the legislation.

Business leaders recently asked the Owens administration to hold off on the bill in light of a skittish economy, but that request has been ignored so far.

"Given the current economic situation and all that has happened in the past six weeks, the chamber asked the county executive to wait [until after] the first of the year," said Bob Burdon, president and chief executive officer of the Annapolis and Anne Arundel County Chamber of Commerce. "Nonetheless, the chamber supports the recommendations."

Owens said yesterday that the last thing she wants to do is "destabilize" local businesses. She faces potentially harsh criticism in an election year if residents and business leaders misread her intentions. She said she wants to be sure developers shoulder their share of road and school improvements.

Even before the terrorist acts of Sept. 11, county officials knew they were in for a tense year economically. Recently, a county official announced that revenue from hotel taxes was down 7 to 11 percent and that the piggyback tax derived from state income taxes could also drop due to unemployment.

Securing revenue to pay for public services looks to be a priority in the twilight months of Owens' four-year term. She's also considering a property tax increase.

County Councilman Daniel E. Klosterman Jr., a Millersville Democrat, said he worries that a drastic increase in impact fees, such as the one suggested by the consultant, would make affordable housing more scarce.

"The thing that bothers me the most is, who is paying the freight of this - the homebuyer," he said. "Whatever we do, the builder is going to add it to the price of the house."

Debate on the legislation is sure to be intense. "Builders and citizens will weigh in," Klosterman said.

While Councilwoman Barbara D. Samorajczyk, a proponent of supervised and controlled development, said she hasn't made up her mind about the legislation, homebuilders worry that she may try to push fees even higher - which they argue could have negative effects on local businesses.

"We want to make sure this doesn't turn into a huge disincentive," said Susan Davies, of the Homebuilders Association of Maryland.

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