San Marcos Mercury | Local News from San Marcos and Hays County, Texas

Update

11:15 a.m. DEC. 18: The council voted 4-3 to adopt a new maximum utility impact fee for new development. Here is video of the council’s discussion and final vote at their Dec. 17 meeting:

Earlier

1:43 p.m. DEC. 17: Unless someone changes their position, the San Marcos City Council will vote tonight to implement a 25 percent increase in the maximum “impact fee” developers and homeowners pay for each new home they connect to the city’s water and wastewater systems.

Impact fees are intended to “cover the cost of impact on city infrastructure caused by new development. They work to help growth pay for itself,” Kristy Stark, the city’s Development Services assistant director, told council members earlier this month. “If growth does not pay for itself, then the burden is on our current ratepayers and taxpayers.”

Under an updated rate schedule, developers would pay up to $5,791 per living unit — $2,285 for water and $3,506 for wastewater — to connect to municipal utilities, a 24.5 percent increase over the current maximum per-unit impact fee of $4,651.

On Dec. 3, the council voted 4-3 to implement the new fee schedule with a majority comprised of Mayor Daniel Guerrero and council members John Thomaides, Jude Prather and Lisa Prewitt. Council members Ryan Thomason, Shane Scott and Wayne Becak voted against the fee increases. Under the city charter, the ordinance must be approved on “second reading,” a vote scheduled to take place during the council’s regular meeting tonight.

The council approved the fee increases over the objection of developers and homebuilders who say the hike will discourage new single-family home construction in a community that has identified nurturing family neighborhoods as a major priority. San Marcos’ new maximum fees are higher than those in New Braunfels (by 33 percent), Kyle (by 25 percent), Buda (by 18.5 percent) and even Austin (11 percent).

Due in part to university students and their peers — but also to depressed household income — only 27.8 percent of the city’s residents own their home, compared to 64.5 percent of Texans, according to the 2010 U.S. Census. More than three-quarters of San Marcos’ housing units are in multi-family apartment complexes, compared to a statewide average of less than a quarter

“This is quite simply an affordability issue. Every time you add $1,000 to the median price of a home in your community, 1,531 families — not people, but families — no longer qualify for a home mortgage,” said Kathy Comer, executive vice president of the Home Builders Association of Greater Austin. “You are penalizing the fabric of your community — your teachers, your law enforcement officers, your health care professionals.”

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3 thoughts on “Council nears final vote on development impact fee hike

  1. I was at the last meeting. One local developer pointed out that, due to a change a few years ago in how the city measures flow rates and meter size, apartments pay a much lower impact fee per unit than anyone else; i.e. single family homes have been subsidizing all these new apartments for years.

    Hopefully we’ll see them go back after this vote and ditch that unintentional apartment subsidy.

  2. Where did Kathy Comer take economics? Supply and demand set house prices, as well as location, not the costs of building the house. , that’s why you can get the same house in San Marcos for about half the equivalent in Austin and about 1/10th the price in San Francisco. What is the actual impact cost of a new house on water, sewers, roads and schools? I bet it’s less than $5,791. I remember a TML report when the legislature first allowed cities to charge impact fees that it took 10-15 years of property tax payments for the average new house to cover the infrastructure required to put it in.

  3. In the MercuryPro version of this article, I go into a little more detail about how single-family homes pay a disproportionate share of the impact fees because fees are assessed based on the meter size of a new connection, not then number of living units the connection will serve. If data bears this out, it is indeed a subsidy for apartments and student housing at the expense single-family homeowners, both current and future ones. Since the last update to San Marcos’ development impact fee ordinance was made in 2002, it makes sense that the San Marcos City Council look at closing this apartment-encouraging loophole before adopting the changes as they are currently presented.

:)