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Communities eye impact fees to spur residential growth

Some ditch revenue stream to spur residential growth

Published: Monday, April 7, 2014 11:09 p.m. CST • Updated: Tuesday, April 8, 2014 4:00 p.m. CST

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Maple Park Village President Kathy Curtis is hopeful that reducing impact fees will jump-start residential growth in her community.

Village board members voted in March to suspend most impact fees for the coming year, a move Curtis said is good for the village’s future. Maple Park hasn’t issued any permits to build new homes in the past three years, or so far this year.

“We’ve seen no activity yet, but are hoping the suspension will spur development on the 100 vacant lots we have,” Curtis said.

Impact fees were instituted by many communities during the housing boom to bridge the gap between when new residents start using local services and when they begin paying property taxes. Since the 2008 economic downturn, a lack of new construction, coupled with falling property values have left taxing bodies looking for new revenue streams.

Genoa has been suspending impact fees for the first 20 homes built there each year in recent years; while DeKalb, Sycamore and Cortland haven’t made any recent changes in their impact fee structure.

Before Maple Park leaders suspended the impact fees, they charged a total impact fee of more than $8,300 for the park district, library district, fire protection district, roads, police, facilities and community development. The village board also suspended water and sewer connection fees for new homes, and modified permit fees to what is charged by an outside inspection company.

Curtis said the other taxing bodies for which the village collects fees were on board with the decision to suspend fees for the year. The only exception was Kaneland School District 302. Curtis said the district provides a table with fees based on the size and value of the dwelling units.

In Genoa, the city’s planning and development consultant Joe Misurelli said the city started impact-fee discussions with the local school and park districts when the housing market collapsed in 2008-09.

“It was more important to get new assessed valuation to provide additional operating income,” Misurelli said. “Our concern was, what if the economy takes off? We don’t want huge numbers of homes not paying impact fees.”

Misurelli said that about four or five years ago, the council enacted an ordinance to suspend impact fees on the first 20 building permits issued each calendar year. Fees are collected for the school district, ranging from $23 to $5,300, depending on the size of the home; and for the park district, ranging from $2,300 to $5,000.

“This is done annually,” Misurelli said. “The ordinance expires unless the council acts on it.”

He said the ordinance has been renewed again for 2014, and the city has not reached 20 permits a year since it was enacted. The city has seen about three permits a year for the past couple of years, while Genoa has between 700 and 800 buildable lots available, Misurelli said.

Meanwhile, Sycamore officials have been approached about reducing or suspending impact fees and decided against it, Sycamore Mayor Ken Mundy said.

“Anything is possible,” Mundy said. “But the people that favor lower impact fees are forgetting about the cost of infrastructure, which is what impact fees are all about.”

Mundy said the city issued about 30 permits for new homes in 2013, and about six have been issued so far this year. Sycamore collects fees for School District 427, ranging from $790 to $4,300; Sycamore Park District, from $749 to $2,900; and Sycamore Library District at $47 a unit.

Cortland’s fees include $45 a dwelling unit for the library, $300 a unit for the fire district and $350 a unit for town services. The ordinance also provides specifics for land donations for the park and school districts.

No permits were issued in the town limits in 2013 or yet in 2014.

Hinckley Village President Jim Roderick said his board is considering reviewing the connection fees charged in that community. Hinckley doesn’t collect impact fees. No permits to build new homes were issued last year or so far this year.

“We haven’t had anybody banging down our doors,” Roderick said.

Realtor Nancy Edwards of Elm Street Realtors is marketing new homes in North Grove Crossings in Sycamore and Nature’s Crossing in Cortland. She believes the market is starting to improve.

“The market is definitely turning around,” Edwards said. “People are tightening budgets and building smarter. In this new wave of construction, with new floor plans and new ideas, they are building more sensible homes.”

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