Impact Fee: The Tax That Dares Not Speak Its Name 
By Martin Harris

If there were (subjunctive contrary to all observable fact) a fully rational political environment, impact fees would be popular. The Left would like them because they’re yet another tax; what’s not to love? The Right would like them because they’re a form of user fee, which conservatives typically prefer over a broad-based tax-everybody-to-benefit-a-few formula wherein government collects a lot of money, keeps some to reward itself, and disburses the remainder to those it views favorably. The Center would like them, not for any consistent philosophical position, but just because, as long as they personally aren’t building a house, they won’t be affected. And yet, impact fees (IF’s) aren’t popular with the political class; unless cornered, they won’t even speak the two words. Whether IF’s are popular with their long-suffering taxpaying subjects, we don’t know; they almost never get a chance to vote on one. We do know, in exhaustive detail, what the construction industry, specifically the residential construction industry thinks of IF’s: not much. 

Case in point: a recent four-page diatribe against IF’s in the February '08 pages of Professional Builder. Here’s a pull-quote which appears on page 2: "To arms, home builders of America! The time has come to cut residential impact fees and free new-home buyers from the tyranny of double-taxation without representation. The time is now because the time is ripe…" How author Bill Lurz knows the time is "ripe" he doesn’t say. 

Guessing his maleness from his given name, it would be physiologically incorrect to accuse him of hysteria in his histrionic-language call for builders to man the political barricades against IF"s, but it would be reasonable to parse some of his high-shrillness-index comments. Take "double-taxation without representation", for example. 

The Lurz complaint is that "young buyers" (ah, yes, the most compassion-deserving subset, unlike those smarmy balding empty-nesters/retirees who don’t send a new-space-demanding student to school) "pay twice", first with the cost of IF’s, then again with ongoing property taxes. How much fairer it would be, in the ideal Lurz universe, for neighbors to subsidize the new-infra-structure costs of those winsome young buyers. And "without representation", of course: it’s not as if the established home-owners get to vote on who and how many they’ll let in. but in the non-parallel Lurz universe it’s the newcomers who are disenfranchised because they can’t vote for their own admission-to-town.

He’s treading into a statistical pit when he quotes one Perry Bigelow, Illinois house-builder, who argues that it’s "unfair" for a lower-priced house to be assessed higher school-impact fees than a higher-priced one, a claim which defies a massive body of statistics showing that the school-age-children-per-house number declines as the house list price climbs, for the obvious reason that those who can afford pricier digs are more likely to be past their main child-raising years and well into empty-nester status, whose McMansion will predictably generate less new-school square-footage than the younger and poorer couples who typically post higher SAC/HH ratios. 

Lurz is on more solid ground when he selects and describes some of the highest per-dwelling-unit impact fees in the nation, close to $50,000 in some Florida counties and $100,000 in some California counties, levied on, of course, exactly the pricier housing which is least likely to send lots of kids to school. Could it be that the County Commissioners are aiming their IF arrows not at the actual biggest new-infra-structure demanders but at the biggest houses built for the easiest deep-pocketed targets? Naah. Rational politicians would never do such a thing. 
 

Martin Harris is a former Chairman of Citizens for Property Rights