Local News

Court Ruling On Durham's Impact Fees May Affect Other Areas

Posted June 8, 2006 8:40 a.m. EDT

— When people build a new home or business in the area, they can count on a shovel full of fees, ranging from water and sewer to inspection and permits.

Now, an appeals court ruling could have a statewide impact on impact fees. An appeals court decided Tuesday that Durham's construction fee slated for schools is illegal because the county didn't get legislative approval.

Tim Minton heads the Home Builders Association of Raleigh and Wake County. He said he believes the Durham fee ruling raises the bar.

"This means that every local government in North Carolina has to look at how they charge any type of fee," said Minton.

Currently, no Wake County communities charge impact fees that go to schools, which was the focus of the Durham lawsuit. But homebuilders maintain there's a larger question at stake -- whether other impact fees require legislative approval.

In the 1980s, Raleigh won state approval to impose building fees that go to roads, open space, and parks. Cary also got legislative clearance for road fees. Apex charges builders for transportation needs, but the town never received specific state approval.

A bill filed in 1997 sought to pave the way for the road fees in several Wake County towns, including Apex, but the legislation didn't pass. However, Apex Town Manager Bruce Radford said General Statute 160-A gives officials authority to levy fees.

However, Minton disagreed, saying, "I think they need to sit down and determine what they're going to do, since the courts have ruled this way."

The appeals court ruled that Durham must refund more than $7 million in fees. The case is now headed to the state Supreme Court. Also, Granville County's impact fee for schools was ruled illegal.