Local News

Raleigh Homebuilders Hope To Halt Impact Fee Hike

Posted February 19, 2006 12:14 p.m. EST

— Homebuilders are fighting back against Raleigh's proposed hike to developer fees.

The Home Builders Association of Raleigh-Wake County has launched a radio ad campaign that takes aim at the proposal, calling impact fees -- what the city charges developers to cover costs of development, such as roads and parks -- a hidden tax.

Right now, those fees are about $700 a home. A study done for the city suggests raising the fees to about $3,400, which would generate $25 million every year.

"Cary and Apex have fees that are three or four times what Raleigh's fees are," said Mayor Charles Meeker. "Ours have not been updated since the 1980's. During that time period, housing costs have doubled. So our fees are way behind."

But homebuilders insist higher fees will hit homebuyers, too.

"(The) fact is, our children won't be able to afford higher priced homes," said Tim Minton, of the Raleigh-Wake County Home Builders Association. "Any increase in fees you look at, means someone is not going to be able to buy a house."

"That simply doesn't make sense," Meeker said. "The fees, even if adjusted, will be less than 1 percent of the total cost of the house."

Minton, who helped create the radio ads, said it's one of an increasing number of costs to build a house.

"There's the tree fee, the nutrient fee, the stormwater fee, permit fees, inspection fees," he said. "It gets to the point, builders get feed to death."

Right now, business is booming. About 17 percent of all of Raleigh's homes were built between 2000 and 2004 -- the highest percentage anywhere in the country.

The city wants to tap into that growth, but homebuilders said increased fees will just slow it down.

Expect to see more ads, and perhaps even a legal challenge from the Home Builders Association.

Every two years, Raleigh is supposed to show how its spending those impact fees. That hasn't happened since 2000.