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New Raleigh Council Could Mean Higher Impact Fees

Posted November 26, 2007

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— Mayor Charles Meeker said Raleigh's new City Council could help him double the fees that developers pay to build homes, which would generate money the city could use to deal with growth.

The city raised its impact fees in April 2006 to about $1,200 for each new home. The 72 percent increase was the first change to Raleigh's impact fees since 1988, but it didn't satisfy Meeker.

The mayor said he would like to see the city charge about $2,500 per house, similar to what Cary and Apex charge. A tiered rate structure would charge more for larger houses and less for smaller ones, he said.

"What the new council will look at is trying to have a reasonable fee that spreads the cost of roads and parks to builders as well as to homeowners," Meeker said. "(Existing) fees aren't anywhere near the costs that have been incurred because of new development."

He is banking on the new make-up of the City Council to support his push for higher fees.

Incumbent council members Tommy Craven and Jessie Taliaferro lost their re-election bids in October, and Councilwoman Joyce Kekas didn't run for a new term. They have been replaced by Nancy McFarlane, Rodger Koopman and Mary-Ann Baldwin, respectively.

"Each candidate who talked about raising fees (during the campaign) was successful. It really is time to address this issue," Meeker said.

The impact fee discussion will begin at the next council meeting, and Meeker said he hopes to have a decision before the 2008 budget is set next July.

Even opponents acknowledged that the question is now when and how much impact fees will increase, not whether they will.

"The mayor has enough votes to accomplish his agenda that he sets out to accomplish," Councilman Philip Isley said.

Isley said he thinks people don't want additional costs associated with home-buying, citing the recent rejection of property-transfer tax proposals in 16 counties across the state.

"There's a fine line of what the citizens want," he said. "The last thing we want to do is put these at a level of that will decrease people wanting to build homes for various reasons."

Permits for new construction in Raleigh have dropped with the national housing slump, according to Tim Minton, executive vice president of the Home Builders Association of Raleigh-Wake County. About 2,700 permits have been issued this year, down from more than 3,000 permits last year, he said.

"Any additional fees added to the cost of the homes clearly will have less people out there building homes," Minton said. "It could have a severe impact. Clearly, the housing market is not running at the same pace it was running before."

The homebuilders association also wants some accountability in the city to ensure that the extra money is going into new roads and amenities that benefit new developments, he said.

Elsewhere, Chatham County recently increased impact fees by $600 per single-family home and $150 per multiple-family unit. The move followed the defeat of a property-transfer tax proposal on the Nov. 6 ballot.


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  • whatelseisnew Nov 27, 2007


    Ah we just got bored with the whole impact fee thing. At least give us credit for having a civil discussion.

  • flashlight Nov 27, 2007

    According some posters, increasing these fees will slow the housing market in Raleigh. Can someone out there show that Apex and Cary's housing market has slumped as a result of their fees being as high as what Raleigh is aiming for? ...and FYI wikipedia isn't that reliable.

    Sorry if someone has brought this up earlier, but I got lost in the argument between the Bush Economy v. the Clinton Economy, which is totally relevant to impact fees. Six degrees of tangent conversation?

  • pleshy Nov 27, 2007

    Yes, let's do everything we can as a government to kill the only industry that has kept RDU from feeling the full effect of the current pull back in the economy. Good thinking.

  • wildervb Nov 27, 2007

    I'm all for controlling government waste. Just pointing out that its a myth to assume that tax cuts always creates sustainable economic growth. If that were true we could cut taxes every year forever which would create extra revenue forever. Common sense tells us that at some point taxes cannot be cut anymore.

    When JFK cut the taxes, the upper rates were in the 70% range, he cut it to 50% (Not sure of the exact figures) but obviously rates were much higher then, than they are now.

    Keep in mind that when people are taxed that the money doesn't just disappear, it's spent right back into the economy. Of course we should always demand that our government spend that money wisely with little waste.

  • whatelseisnew Nov 27, 2007


    9/11 of course was a huge economic hit to New York City. Also remember the huge fallout in the travel and hospitality industry, both here and overseas. Also remember the billions congress flushed down the drain for the airlines. (remember Midway Airlines). In addition to the direct industries, you have all the supporting business for the travel and hospitality industries: travel agencies, foodservice groups, rental cars, on and on. All of that fallout stemmed directly from 9/11. Yes the low interest rates did spur the housing bubble, that is now bursting as all such bubbles do. I sometimes wonder if we are able to learn from these events, or if simple greed will always override common sense. As to tax policies, I fall on the side of wanting to keep more of my money and giving government less, if for no other reason than that it is the best way to control government growth and waste.

  • rayzer Nov 27, 2007

    JFK showed that tax cuts spur economic growth. Beyond that, it's common sense. Allow wage earners to keep more of what they have earned and they will either spend more, invest it, or save it - all of which help the economy.

    Arthur Laffer, the Nobel laureate economist, showed that, beyond that, lowering marginal tax rates have the counterintuitive effect of actually increasing tax revenues collected by the treasury. This can be empirically shown by looking at the results of the Kennedy, Reagan, and Bush tax cuts.

  • chfdcpt Nov 27, 2007

    Developer owns a large lot of land. He has to pay the city/county for all the inspection fees for construction.

    Developer then has to follow the plan approved by the city/county planning. Developer has to build water/sewer system for development according to city guidelines. Developer then has to pay a fee to the city for each house in the system. Developer has to then turn over water/sewer/road system over to the city after final inspectioni. Developer then has to pay for each house the city hooks to the water system.

    Additionally, there are the coutless inspections that are done at every step of the construction, which the developer has to pay for.

    Cost to city/county for this development? None. It is all passed on to us that buy the homes, etc. And in some cases, developers will turn some of the land over for future park/school use.

    And they still want an impact fee to "cover the additional" expenses?

    Go figure!!!

  • wildervb Nov 27, 2007


    I was pointing out that yes Clinton's economy may look somewhat better than it was thanks to the dot.net bubble and even Y2K work. Though even after the downturn in 2000/2001, the Clinton years still had impressive growth.

    The Bush economy doesn't look as good as Clinton's years, job growth was slower, overall GDP growth was less. Bush's economy would look even worse had it not been for the housing bubble and the 1% interest rates.

    So my initial point was there is no solid evidence that the Bush tax cuts did anything positive for the economy. Though Right Wing pundits will tell you that those tax cuts created unprecidented economic growth.

    I do agree with you that the President doesn't control everything in the economy and they can be victim of circumstances. I don't see why 9/11 in and of itself should have had a major economic impact. It was more the reaction to the attack and the cost of the war with Iraq. (Which had nothing to do with 9/11)

  • whatelseisnew Nov 27, 2007


    I don't follow your logic. President Clinton was also the beneficiary of the Year 2000 work. At my 1 company several thousand people were temporarily hired solely to handle the Software work that was needed. On top of that my company realized hundreds of millions of dollars in contracts from other companies. The economic impact of that was extraordinary. One of the things that I actually wonder about is, what if 9/11 had not happened? That economic hit that followed would not have occurred and we also would never have gone to Afghanistan or Iraq. We will never know, but at the very least I thing instead of adding to our already staggering National debt, we would have been paying it down. For most if not all Presidents, things far beyond their control are what drives our economy up or down. By the way next year, hang on to your hat, we are headed down.

  • Adelinthe Nov 27, 2007

    "Bottom line - the folks who have already been here are tired of paying more to finance the infrastructure needed by new people moving into the area. Let the growth pay for itself!"


    It's natural to expect to pay for the upkeep or improvement of the things one uses, to pay and pay for those things one never really needed until the neighbors moved in is simply not right or just.

    God bless.

    Rev. RB