ST. GEORGE — While the Washington City Council faces a decision over what to do about impact fees funding future park and recreation facilities, local home builders have been quick to decry any potential increase in those fees, saying it will only add to an increasing roadblock to affordable housing in the city.
During a regular meeting Wednesday, members of the City Council and staff discussed the pending adoption of the latest version of the city’s Parks and Recreation Capital Facilities Master Plan, which included a related impact fee facility plan and impact fee study.
Impact fees are attached to new construction and are a collection of various fees covering the cost of future city infrastructure to accommodate growth, such as future fire stations and sewer systems. In the case of parks and recreation, those fees are applied to future parks, trails and other recreational pursuits.
Washington City’s parks and recreation impact fees are $3,700, which representatives from the Southern Utah Home Builders Association said are among the highest in the county – 58% higher than St. George’s own parks and rec impact fees.
Mari Krashowetz, SUHBA executive officer, told the City Council on Wednesday that the group opposes any possible increase in impact fees, as it negatively impacts overall housing affordability.
Housing prices have jumped nearly 11% over the last year in Utah, Krashowetz said, adding that the average price for a home in Washington City and the surrounding area is around $395,000. Because of those and other factors, SUHBA believes less that 38% of the county’s residents can afford to buy a home here.
“Now may not be the best time to implement a parks impact fee increase,” Krashowetz said.
Combined with the various other impact fees the city currently imposes on new construction, plus those added by the Washington County Water Conservancy District, impact fees in Washington City are over $20,000, she said.
Various other home builders and contractors from the SUBHA also spoke to the City Council.
“I haven’t felt a need to raise our cost,” Councilman Daniel Cluff said, and noted as the meeting progressed that the City Council members had previously discussed what to do about affordable housing in the city.
Councilwoman Kolene Granger said there definitely is a “complicated” affordable housing issue in the county, adding that impact fees are “such a small part of it.”
“We feel it’s a larger part of it,” she said.
Besides impact fees, when it comes to the overall price of building a home or any other structure, other factors include the cost of land, labor and material.
City Manager Roger Carter echoed Granger’s sentiments, saying that he sees impact fees as one of the smaller players in the game of housing cost, but added that Wednesday’s discussion of the parks and recreation impact fees was not meant to be tied to affordable housing but rather to determine if the council members understand they may not be able to fund future projects if they keep the fees at their current level.
“We’re not asking for it to be raised,” Carter said. “We just want there to be a clearer picture that if you only have this amount, this is all you can order on the menu. You can’t order everything. … Ultimately you’re going to have to decide what gets built and what doesn’t.”
Under state law, the city has a maximum rate of around $6,200 it cannot surpass if it raises impact fees. However, Carter said the city has never gone that high.
As for the request from builders for the city to freeze its impact fees, Carter said the city should ask the builders to freeze their own rates in return in order to help keep costs down. It is an unreasonable prospect either way, he said.
Krashowetz said any hike in impact fees, no matter how seemingly minor, could add up fast and result in a slow “death by a thousand cuts”-style rise in overall fees that would continue to price out would-be home buyers.
Ultimately, the City Council did not vote to adopt the Parks and Recreation Capital Facilities Master Plan. Council members will take the next two weeks to research the issue before voting on it.
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