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Pinal County is considering a change to impact fees in hopes that it will encourage a larger variety of building.
A proposed revamping of how Pinal County levies developmental impact fees on new construction will have to wait until early 2016 while the county’s Board of Supervisors wrestles with making the fees fairer for senior citizen housing.
Such fees are levied to finance road and infrastructure (including parks) improvements necessary to accommodate increased populations and traffic resulting from the building of new residential homes, and industrial, institutional and commercial construction projects. These fees are paid at the time the building permit is issued.
Under Resolution 120915-DF considered at the December 9 Board meeting, most impact fees would be lowered in Pinal County, while the fee structure for residential housing would be increased from two to four categories. Instead of separate fees for new homes under and over 1,500 sq. ft., the new categories would be under 1,000 sq. ft., 1,001 to 1,500 sq. ft., 1,501 to 2,100 sq. ft., and over 2,100 sq. ft.
In the four Pinal County Developmental districts, impact fees would rise only in the North Central District (which includes Apache Junction, San Tan Valley and Queen Creek), and not in all construction categories. For instance, in the less than 1,000 sq. ft. residential category, the fee would drop from $4,462 to $3,940 but rise in the 1,001/1,500 sq. ft. category from $4,462 to $6,532. Fees also would rise in the over 2,100-sq.-ft. residential, Institutional, Commercial and Other Services categories.
In the South Central, East (including Superior, Kearny, San Manuel, Oracle and Mammoth) and West districts would see all impact lowered from current levels, with non-residential construction fees in the West District dropping by more than $7,200. An additional fee was levied on construction in the extreme northern part of the East District (including Superior) where there are no arterial roads.
The Resolution was drafted based on a 19-month study conducted by the Tischler-Bise consulting firm. An earlier draft had fees rising more than in the current proposal, especially in the North Central District, where much of the projected population and economic growth in Pinal County during the next 10 years. But the fee structure was recomputed in the interim following criticism by Supervisor Stephen Miller (R-Casa Grande) that the higher fees would scare off some future construction.
Carson Bise, a managing partner in Tischler-Bise, described the proposed changes in the county impact fee structure during the meeting. Among other tweaks in the fees, Bise noted that the fees designated for road improvements were capped at current levels for single-family homes but boosted for apartment complexes. Fees designated for public safety improvements were decreased 54% for residential construct while increased over 100% for non-residential construction.
The portion of the impact fee going to support the San Tan Substation will increase by $6 ($150 to $156) on residential construction; $244 on nonresidential construction.
In response to Bise, Supervisor Anthony Smith (R- Maricopa) said he was pleased with what the study proposed, but added, “I have one caveat. There is no proposal for a special exemption process for special projects such as senior citizen housing.”
Smith criticized the fee structure for assuming that in all cases, the size of a home determines how many people will live there and how many cars they will own and use on county roads. But in retirement communities, homes larger than 2,100 sq. ft. are occupied by only one or two elderly people who stay on community property to use the amenities and travel outside less often than a typical family.
This opinion was backed by Peter Gerstmann with Robson Communities, a subdivision development firm.
“In the SaddleBrooke and SaddleBrooke Ranch communities in southeastern Pinal County, home generally larger than 2,100 sq. ft. are occupied by retired people. Average per-home occupancy in these two communities is 1.7 people, not the 5.2 people the study said for a home that size. Impact fees should reflect a home’s intended use, not some hypothetical average,” said Gerstmann, whose firm is responsible for the Robson Ranch and Quail Trail projects.
Supervisor Pete Rios (D-Dudleyville) wasn’t totally buying the argument.
“When you retire, shouldn’t you be downsizing instead of upsizing?” he argued, adding that providing a break for large retirement homes will move the cost of the impact fee to smaller homes.
Supervisor Todd House (R-Apache Junction) said he wasn’t pleased with the doubling of impact fee categories for residential housing
“By charging progressively higher fees for larger homes, aren’t you encouraging builders to build smaller homes? We already have enough small housing. We need more variety in Pinal County,” House said.
House also argued that the trend in levying development impact fees is moving away from tying the fees to square footage. But Bice replied that the study found no evidence of that, adding that if House knew of any counties dropping square footage as a criteria for impact fees he should tell him where.
Spencer Kamps, legislative affairs vice president with the Arizona Home Builders Association (AHBA), also told the Board his group didn’t like the impact fee structure proposed in the Resolution.
“AHBA opposes the ordinance as proposed, not because we want lower fees, but because we want fairer fees,” Kamps testified. “When you base fees on square footage, you create disparity in housing choice. Likewise when you base road upgrade fees on trip counts. You should let consumers determine the types of housing they want.”
Kamps added that infrastructure and safety improvements shouldn’t all fall on new construction. Existing residents in the area benefit as well and should share in the cost.
Gerstmann echoed Kamps that existing residents who benefit from improvements should pay for part of them.
After nearly an hour of debate, Smith proposed that the Board put off consideration of Resolution 120915-DF until it be reworked to consider special exemptions for retirees who want to build large retirement homes. But Rios countered with his own proposal that the Resolution be adopted right away and that tweaks be considered later.
“We’ve been working on this Resolution for more than 1.5 years. Let’s not waste that work. Enact it now because we need it now. We can consider exemptions later,” Rios said.
But the Board went along with Smith’s proposal and consideration of the Resolution will resume on January 6, 2016.
As the Resolution called for the new impact fee structure to become effective on March 14, 2016; it is assumed that under the 90 day requirement in Pinal County statutes, the effective date will be moved back.
James J. Hodl is a career journalist who has worked for newspapers, magazines and trade journals. A graduate of Southern Illinois University with a Bachelor of Science degree in Journalism, Hodl began his career as a reporter with the Palatine (IL) Herald and the Morton Grove (IL) Review before becoming editor of the trade publication Appliance Service News. In recent years, Hodl has had articles published in Consumers Digest, Good Housekeeping, Home Remodeling, Kitchens & Baths and Salute; and has contributed to trade publications serving the home furnishings, restaurant and casino markets. A native of Chicago, Hodl relocated to San Tan Valley in 2013.
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