Housing industry officials question impact-fee plan

Putting financial burden on a few is main concern

March 20, 2005|By Ted Shelsby | Ted Shelsby,SUN STAFF

A county plan to impose an impact fee of up to $8,269 on each new home to pay for school construction will put a financial burden on a small portion of the population and make it more difficult for teachers and law enforcement officers to live in the county, housing industry officials say.

"Under this proposed system, 18 percent of the population will be paying the $60 million cost of the new Patterson Mill school, said Don Sample, a partner in a Harford County land development company and president of the Home Builders Association of Maryland.

"We want good schools in the county, but this is not fair," he said. "The burden should be shared by the rest of the population."

Sample was referring to legislation submitted by the County Executive James M. Harkins that would impose a fee of $8,269 on each new single-family detached home. Buyers of a townhouse or duplex would pay $5,720, and the fee for all other residential units, including mobile homes, would be $1,637.

All revenue raised from the housing fees would be used to pay for school construction and renovation.

The fee would be paid when building permits were obtained. County Council President Robert S. Wagner pointed out recently that the developer or homebuilder would pass on the cost to the consumer.

The council held a hearing on the bill Tuesday but put off action on the proposed legislation until its next meeting on April 5. Wagner said it might not be taken up again until the April 12 session of the council.

Tim Hopkins, a Churchville real estate broker and president of the Harford County Association of Realtors, said the charge would "have a negative impact on our seniors, law enforcement officers and other service providers' ability to buy a home in Harford County."

"This will not only increase the cost of new homes, but it will drive up the cost of existing homes," he said. "This will have the unintended negative impact upon all future buyers' ability to purchase new and existing homes in Harford County."

Hopkins also questioned the need for additional revenue to pay for schools.

He said the dollar value of all homes sold in the county through the Multiple Listing Service has jumped 88 percent since 2001.

"This means there has been an 88 percent gain in the transfer tax," he said. "It makes us wonder, where is this money going?"

The county imposes a 1 percent tax on housing transfers. Half of the money goes to agricultural land preservation, and the other half is designated for school projects.

Hopkins said the county's assessable tax base has increased 27 percent since 2001, partly because of a 25 percent rise in property tax assessments.

"We feel like a lot of money is coming into the county, but we don't know where it is going," he said.

"We think that the numbers make it obvious that new construction and sales of existing homes over the last four years have not created the problems in the schools but have contributed millions of dollars to the county that somehow are not being used properly. This is an existing problem and should not be the sole burden of new homebuyers."

Some council members agree that it is unfair for buyers of new homes to pay the total cost of school construction.

Wagner said that is why the council requested last year that the county's General Assembly delegation "give us a menu of revenue sources" to address the issue.

In addition to the impact fee, the council asked the General Assembly for the authority to boost the transfer tax on homes from 1 percent to 1.5 percent; an excise tax on purchases of new and previously homes; and an increase in the recordation tax.

The county delegation limited the council to the impact fee.

"We want them to implement this first before we grant any other revenue sources, said Republican Del. Barry Glassman, chairman of the delegation.

Councilman Dion F. Guthrie, a Democrat who represents the Joppa and Edgewood areas, said the impact fee bill "has the council caught between a rock and a hard place. We don't like it. It's not fair, but it is the only thing we have to work with. We asked for a number of funding streams, but this is all they gave us."

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