Local News

Cary Seeing More Development After Lowering Impact Fees

Posted September 13, 2006 9:47 a.m. EDT

— The number of housing permits has boomed in a Wake County town that reduced its impact fees, though it still has the highest charges in the region.

The town of Cary cut by 33 percent the impact fee that developers must pay on new houses to cover costs associated with growth. Those costs are typically passed on to the homebuyer.

Last year, Cary issued 1,500 building permits, twice as many as in 2004.

"We are very gratified to see it's beginning to grow again in a reasonable manner and in line with what our projections were," Cary Mayor Ernie McAlister said.

McAlister won the office of mayor in 2003, in a large part because he promised to restore growth. When he replaced Glen Lang, builders were paying about $9,000 for a 3,000-square-foot house. As a result, the town only issued 500 housing permits that year.

In 2004, Cary dropped impact fees. A year later, housing permits doubled. Now, fees on the same 3,000-square-foot house are about $5,500.

"While we're still the highest in the region, we're more reasonable now, and folks feel they can make a good investment in Cary," McAlister said.

Lang could not be reached for comment on Wednesday. Before the election, however, he had said Cary was on the right track with higher impact fees.

"You don't try to buy them down. You don't try to subsidize them," Lang told WRAL on Sept. 30, 2003. "What you do is build the most outstanding, high-quality town in the U.S. They come all on their own."

McAlister, however, argued that builders were not coming fast enough to keep down taxes per house. Now, he said, they are.

When Lang's administration raised impact fees, Cary growth had been at 12 to 14 percent. By the time Lang left office, growth had slowed to less than 2 percent. The current target is about 4 percent.