Home builders and other developers in St. Tammany Parish likely will be getting a belated Christmas gift next month in the form of lower impact fees that they must pay the parish government to offset the effects of growth. The St. Tammany Parish Council, on behalf of the administration, has introduced an ordinance to reduce nearly all of the fees developers pay to mitigate the impact of new homes and businesses on road and drainage infrastructure.
Fees on each single family home, for instance, would go from $3,077 to $2,191, a reduction of about 29 percent, under the proposal. Fees on multifamily dwellings would drop from $1,487 to $1,039 per unit, a 30 percent decrease.
In 2005, St. Tammany became the first parish in the state to begin collecting impact fees on projects in the unincorporated areas. The fees were put into separate road and drainage accounts and used to build new roads, improve highways and make drainage improvements, such as large retention ponds. The fees have generated about $7.5 million per year for roads and $7.3 million for drainage.
The impact fee law calls for periodic review of the charges, and the proposed reduction is based on a complicated formula taking into account such things as road and drainage needs, the number of vehicles and miles traveled on major roads, and the amount of development in the parish, Chief Administrative Officer Bill Oiler said. Duncan Associates of Austin, Texas, came up with size of the fees when they were put into place in 2005 and is proposing the lower fees, which would take effect next month if approved by the Parish Council.
“We had no idea what would happen with the fees” this time around, parish Planning Director Sidney Fontenot said, noting that raising the fees could have been a tough sell to the Parish Council. “It’s a formula-based fee, not a political figure pulled out of the air.”
On the commercial side, the ordinance creates some new classifications, but nearly all call for reduced charges.
Retail projects, for example, would go from $3,003 to $2,401 per 1,000 square feet.
Office space would move from $3,343 to $2,798 per 1,000 square feet.
Institutional developments would drop from $3,343 to $1,265 per 1,000 square feet.
Only developers of mobile home parks would see an increase. Their fees would rise from $573 to $983 per pad.
Developers will continue to receive credits toward the fees for certain drainage and road improvements they make in connection with their projects.
Susan Meyer, president of the St. Tammany/Washington Parishes Home Builders Association, said her group was aware of the proposal and is pleased the fees, which get passed on to home buyers, will apparently be lowered.
“I think it’s really important that they do this,” Meyer said. “Anytime you have impact fees, it’s detrimental to development.”
Meyer said her company, Conbeth Development of Covington, and others have lost some business to neighboring Tangipahoa Parish over the years due to impact fees in St. Tammany.
“We’re happy about it,” she said of the proposed reduction. “It’s good for business and for people who are building homes.”
St. Tammany officials had considered an impact fee ordinance for more than 10 years before finally adopting the law in late 2004.
Home builders were vocal in their opposition to the initial draft of the law, saying the fees could hurt the industry by raising house prices. They later gave their approval to an amended version of the ordinance.
Oiler said he did not know how much money the reduced fees would generate, as it would depend on the amount of residential and commercial building the parish sees.
Parish officials said the lower fees proposed by Duncan Associates result from numerous factors, including the many major road and drainage projects the parish has completed in recent years, fewer vehicles and miles traveled on major roads because of high gasoline costs, the lower cost of construction due to the economy, as well as a general slowdown in home and commercial development.
“The combination of these factors caused the price to go down,” Fontenot said.
When the fees were enacted in 2005, they applied to all unincorporated areas of the parish. Under the amended ordinance to be considered by the council next month, the fees would apply to all unincorporated areas south of the urban growth boundary line, which runs east-west across the parish just north of Pearl River, Abita Springs and Covington. Above that line, the fees would still apply to commercial developments and residential projects of such size that they must go through the Planning and Zoning Commission.