Sunday, March 4, 2018

Maley: New Growth + low impact fees = infrastructure meltdown?

Same Old Story,
Same Old Song and Dance

Dennis Maley
The Bradenton Times
Sunday, Mar 04, 2018

On Thursday, the Manatee County Commission held a public hearing on the idea of giving developers a multi-million dollar freebie by capping impact fees at a rate lower than what the board had previously passed, based on what had been prescribed in a taxpayer-funded study. As is always the case when this subject comes before the BOCC, I felt like my head was going to explode through much of the meeting.

The most painful part of these engagements is sitting through the litany of tired and misinformed rhetoric about the subject. Impact fees hurt young families, they put people in the industry out of work, they send developers and home buyers elsewhere. None of this is true, of course, but you have to remind yourself that the truth doesn’t matter in such proceedings. The practiced baloney is simply window dressing for a truth that most commissioners find acceptable to practice, if unacceptable to utter: lowering impact fees puts money into the pockets of the developers who get and keep us elected.

Three of the seven commissioners on the board—Baugh, Benac and Jonsson—were installed directly by developers who poured vast sums of money into their campaigns. For their efforts, they have enjoyed votes that reflect the allegiance they’ve expected. Commissioner Whitmore, the longest serving commissioner currently on the board, has gotten the mountains of campaign cash which have kept her in office from a much broader array of interests, but has nonetheless been reliably pro-growth, even if she’s occasionally given to some inconvenient hemming and hawing before casting a vote.

As such, they’re gonna get their four votes, and in most cases five or six, partly because the others know when it’s wise and unwise to go up against them. Nonetheless, such measures require a public hearing, so we had to go through the exercise on Tuesday for the sake of checking the block. In fact, the people showing up to demand that commissioners represent the interests of the taxpayers instead of their campaign sponsors knew more than most that it was just a dog and pony show. On March 20, the board will vote to cap the impact fees at 90 percent of what the consulting firm that conducted the study recommended. They’ll do so because the developers told them to. It's that simple.

Its futility notwithstanding, the hearing was not without entertainment. The commissioners reminded me of an aging rock band on tour without a new album, playing an easily-guessed set list of greatest hits over a painfully predictable 90 minutes. We’re afraid we’ll get sued. That’ll cost us more than the extra 10 percent will yield. We can’t spend it on the things we need. Maybe we should be looking at a "mobility fee” like Hillsborough County has. Maybe we should look at a fee on all real estate transactions not just new homes, blah, blah, blue.

That last one has been the favored complaint of the builders for years. Only one in eight home sales is new construction they tell us. Why shouldn’t the costs be spread out among all people who buy a house here? The people who move to the county and buy existing homes are getting a free ride. Impact fees don’t help the poorest communities where no new development is occurring, because they can’t be spent there.

If you read my column regularly, you’ve heard me debunk all of the arguments used by commissioners and builders ad nauseum. Briefly for those who are new: impact fees are the primary means by which we pay for the infrastructure needed to support new growth. Moving to our county and buying a home that already has the required infrastructure connected to and surrounding it does not create the costs that putting a few thousand homes on a formerly rural parcel without the required infrastructure does. On some levels, we are all forced to pay for the new growth. Impact fees just help make it at least somewhat more equitable.

New growth simply does not pay for itself. It costs about $1.25 in services for every $1 in money it brings in. Impact fees are one of the ways we help to offset that. With somewhere around 10,000 vacant homes in the county, we should be doing everything we can to encourage people who come here to purchase existing property supported by existing infrastructure. Conversely, we should want to discourage our rural hamlets from becoming new development, requiring new infrastructure that must not only be created but maintained. Subsidizing the cost of new construction by waiving and reducing fees is the opposite of that. It doesn’t make sense, but it does make dollars—for developers.

As for discouraging people from moving here or hurting the economy, there's simply no basis in fact whatsoever for such arguments. Indeed, a report issued by Moody Analytics just this week has our area's population as the 10th fasted growing in the entire nation in 2017, with a projection to move up to 9th next year. The same report had us first in job growth. Clearly, we should be much more worried about the long-term effects of our lack of EMS and policing resources (including capital expenses like patrol cars and ambulances), libraries, adequate roadways and other services that impact fees help pay for eventually dissuading current and potential residents than a fee on new construction that would be charged in the sale price anyway, were it not collected.

One of the more interesting aspects of Thursday’s meeting was the public comment, which was perhaps more intellectually organized than usual. Al Horrigan, who spent four decades as a developer out west before retiring to Florida, serves on the Manatee Planning Commission. In his role as the head of an east-county neighborhood association, Horrigan gave commissioners extended comment. 

Horrigan asked if a developer who has established the price point for a house at $350,000 isn’t going to build it because of $1,000 fee, or whether, in the history of development, one has lowered the price of a home from $350,000 to $349,000 because such a fee was reduced. No, they sell their homes for what the market will bear. Reducing such costs, simply increases profits.

Horrigan chastised commissioners for recently asking the public for more money via a half-cent infrastructure sales tax that amounts to more annually from everyone than they would be saving just the purchasers of newly constructed homes when amortized over their mortgages. "Did you suddenly realize you now have too much money for infrastructure and the only way you can get rid of it is to give it away to developers?” he asked, pointedly.

Commissioner Vanessa Baugh went on at length about the perils of impact fees, painting a dark picture in which they could leave the entire county economy in a state of ruin. Baugh said that during the development recession that occured after the mortgage crisis in 2009 people "couldn't live here” and "couldn't work here.” She said, "We were basically running them out of town.”

Baugh said that, sure, now the economy was good and building was booming but that we all know there’s a recession on the horizon, and that "we need to prepare for that day and be ready” .... by, you guessed it, capping impact fees. Baugh echoed the fear of legal challenges and stressed that impact fees were paid for by homeowners, including poor and middle class ones, not developers. She’s never been in favor of them, she added, and said that because the county has now begun mentioning mobility fees, that was somehow more reason to cap fees. 

Matt Bower, who commissioners recently kicked off the planning commission—presumably for making their tribute votes to developers more embarrassing by politely pointing out the obvious—clearly relished his new role as regular citizen, telling the board when he came up to give public comment that getting rid of him was a double edged sword, as he no longer felt compelled to bite his tongue on public policy issues.

Bower brought the whole developers buy your commission seats issue right out into the public forum and then took down Baugh’s defense of her vote point by point. Bower reiterated that houses will continue to be driven by market demand, that we clearly aren’t hurting to attract both developers and buyers, and that lower fees mean little more than reduced ability to provide needed services—for the sake of increased developer profits. He also pointed out the absurdity of using a mythical coming recession to justify keeping fees lower than they should be while times were admittedly booming.

Bower said that since we’ve routinely lowered them when development was down, it was only common sense that you would collect them fully when development was up. As for the threat of a lawsuit, he echoed Horrigan’s advice: let them sue. Bower said that to his knowledge, the firm that did Manatee’s study has never lost a legal challenge when the fees were collected at 100 percent of what they prescribed. As for the mobility fees, Bower said it was irresponsible to use something that hasn’t even begun to be studied or considered as a reason to alter the current prescribed course, especially because commissioners have no idea whatsoever how or when they would be implemented or what impact on need they would provide.

Ernest "Sandy” Marshall, representing the Federation of Manatee Community Associations, has also been a solid provider of common sense every time this issue comes up. Marshall said the Federation strongly supported collecting 100 percent of the prescribed fees and that they very clearly have not slowed growth in Manatee and Sarasota counties where transplants continue to pour in year after year. He also pointed out that even if new homes are slightly more expensive, that lifts the price of existing properties, leading to growth in revenues from ad valorem taxes.

Glen Gibellina, a citizen activist who has long championed a focus on affordable housing while deriding proposed developments that don’t include it (especially when they seek density increases), said that if we want to look at impact fees, let’s only look at the ones on affordable units. Gibellina suggested we collect 100 percent on every new home with a sale price over $100,000, and then waive them completely for houses under that amount. "People buying a $350,000 house can afford those fees,” argued Gibellina. "When you’re collecting $20,000 in fees on an $80,000 house, that’s gonna be a fifth of that person’s mortgage.”

Commissioner Betsy Benac pointed out that by state law they cannot waive impact fees for any class of homes but said that there was a bill in the legislature that sought to give local governments that latitude. She said she agreed they needed to "look at” affordable housing and the 600 sq ft minimum unit size that Gibellina also lampooned. 

However, the point is, the board doesn’t look at those things, because they are of no interest to the developers who put and keep them in office. Developers like minimum square footage, they hate affordable housing requirements, and they hate impact fees. Consider that and then consider the way our meetings are run and which issues are given the most consideration and you’ll see quite clearly who really runs this county. 

Commissioner Robin DiSabatino was the only enthusiastic voice for collecting the fees at 100 percent, reasoning that since it’s only become more expensive to build needed infrastructure since the study was done in 2015, the idea that we needed less than the experts told us we needed then didn’t hold water. "I don’t even understand why we’re here talking about this,” DiSabatino said rhetorically, though some of the commissioners seemed to take it literally.

Not coincidentally, DiSabatino announced this week that she will not be seeking reelection in November. Having tried to fight the good fight for almost eight years, she too feels as though her head might spontaneously combust at any moment and has decided that floating on a sailboat in the Bahamas with a margarita in her hand is a better way to spend her golden years. Who can blame her? Things won’t change until more people wake up and take notice, stop casting uninformed, straight-ticket votes and make commissioners fear voter accountability more than developer disloyalty.

Being a commissioner in Manatee County is a good way to feel important, take home a six-figure compensation package for a part-time job with superb benefits, and pad your retirement for a decade or so. It’s not at the moment, however, a good way to fight corruption, improve the quality of life for regular citizens, and be a responsible steward for future generations. Far too many powerful interests find the latter much too inconvenient to abide. So long as the voters and commissioners allow that to be the case, nothing will change.

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