Impact Fees vs. Proffers
The Winchester Star has a nice little piece on what a locality can do in terms of imposing impact fees or proffers.
Frederick County, it seems, is interested in using impact fees for transportation improvements instead of proffers for new developments.
The article points out that, “According to state law, counties can impose transportation impact fees on new development instead of proffers, but not both. The county can still receive proffers for parks and recreation, fire and rescue, and other uses.”
Furthermore, “The fees cannot be used to fix existing conditions and can only be used on secondary roads, which are those designated as Route 600 or higher.”
Frederick County had an opportunity to get the low-down on impact fees by officials from Stafford County.
Stafford County had to do several things in order to start collecting the fees including, “data collection, analysis, choose projects, set up an advisory committee, work out a fee schedule, set up a designated area where the fees would be applicable, hold a public hearing, adopt an ordinance, establish a collection process, and establish an appeal process.”
Finally, “According to state law, all projects must begin construction within 10 years or the money is returned to those who had to pay the impact fee.”
One thing the article missed, and something I would like to know is why one is better than the other. Does anyone know? Can a locality get more money via impact fees as opposed to proffers?
posted by RBV @ 4:05 PM
2 comments
2 Comments:
The rules require that there be a dirict connection etween the moneys obtained for proffers and how they are spent. this is why you frequently see new turn lanes and traffic signals, that sort of thing.
But the real difference is thatimpact fees are spelled out up front,while proffers are negotiated. The difference is one of transparency and predictability.
With proffers it is possible for the community to negotiate in bad faith: if they don't want a particular development they just negotiate it to death, at great expense to the developer. These costs get passed on to buyers in he NEXT development.
However, the negotiation process also allows the proffers to more closely deal with the impacts in special situations. With impact fees it is a one size fits all rule.
The complicated process involved with proffers makes development a game only the large builders can play. One result of this process is that development becomes an all or nothing game. Someone who wants to build one house may find that he has to build all the houses available just to spread out the costs of the process. That's why we see farm one day, and gross, ugly, and sterile development the next: developers have to follow the rules.
With an impact fee, someone with a lot who wishes to self-build and more or less pay the fee and move ahead, provided he can meet the drainage requirements, setbacks, etc.
Whether it is impact fees or proffers the cost go through to buyers, and the higher prices are then reflected in assessments and rents. We know that it is hard for governments to resist the apparent free money that comes with higher assessments, so the result is that we all pay more.
What the proffers and impact fees do is put another player in the game. Developers will argue for improvements that are related to and improve the sales prospects and attractiveness of their development. But if we simply raise the taxes enough to accomodate (needed, and not rampant) growth then we can spend the money as we please to achive benefits that reach the most number of people. This is obviously an unpopular position, but the alterative winds up costing money, too.
It isn't something that we can esily compare.
Another difference to keep in mind is that proffers can only be negotiated where a change in zoning is required. By-right development is exempt from proffers. Impact fees, in contrast, are assessed on all new development at time of building permit issuance.
Post a Comment
<< Home