Soter Calls for Review of Impact Fees

Photo | Submitted Denise Jacoby, FCBIA executive officer, talks to Eric Soter, principal and director of Research & Analytics with Rodgers Consulting, Inc., after Soter’s March 12 “Frederick Pipeline: FULL OR FAUX” presentation to the Frederick County Building Industry Association.

Photo | Submitted
Denise Jacoby, FCBIA executive officer, talks to Eric Soter, principal and director of Research & Analytics with Rodgers Consulting, Inc., after Soter’s March 12 “Frederick Pipeline: FULL OR FAUX”
presentation to the Frederick County Building Industry Association.

Eric Soter, former Frederick County planning director who is principal, director of Research & Analytics with Rodgers Consulting, Inc., gave a presentation March 12 to the Frederick County Building Industry Association (FCBIA). He called for Frederick County to gather and utilize data to revise how they are currently assessing impact fees on new home construction. Impact fees, in part, have been added to state and local funds generated from the general fund by Frederick County to increase funds for new school construction.

Soter, who also is president of the Land Use Council of the FCBIA, said, “Not all enrollment increases are a result of new homes and their residents.”

He noted, “Other jurisdictions have been able to look at their data to get a sense of what amount of student enrollment is from new versus resale homes. The county has the data and ability to do this. This is important as the impacts on enrollment at any given school are a result of multiple issues (resales, out-of-district student transfers, programmatic decisions)—so, too, should be the revenue that the county seeks, and not just continue to raise fees on new homes.”

Frederick County Executive Jan Gardner said, “The County Council is considering increasing impact fees and school construction or mitigation fees. The primary purpose of the Soter presentation, in my opinion, was to point to a conclusion that impact and school mitigation fees do not need to be increased on new development and to rather suggest that revenue instead be raised from the resale of existing housing stock.”

Gardner added, “There has long been advocacy from the builders association and its leadership for a transfer tax to be paid on resale transactions. Meanwhile, the realtors have actively opposed a transfer tax for a number of reasons including that it hurts first-time homebuyers.”

Frederick County Councilmember Steve McKay (R-District 2) said, “I do not favor a tax on resale of homes.”

When asked whether he supports a transfer tax on the resale of homes, Soter said, “What I would like to see is more research by the county on data used to come up with the impact fee.”

On the county’s ability to calculate the impact of resale of homes on school enrollment, Gardner said, “A study has not been done in Frederick County that shows that the resale market (or existing housing) is generating as many students as new  housing. While the resale of existing housing may generate some additional school-age students, the data is anecdotal. This may be an area where there is merit to actually do an independent study to identify the real data so this discussion is based on factual, verifiable data rather than anecdotal evidence.”

Meanwhile, Gardner said, “The County Council is currently considering an increase in impact fees based on an independent study completed by a TischlerBise, Inc. who has done over 900 of these studies across the county and is well recognized for their expertise and accuracy. TishchlerBise, Inc. has provided the basis for our impact fees since 1991 and their work products are widely recognized as reliable. This is the data the county is using as the basis for the amount of impact fees which Frederick County had done consistently for 25 years.”

Frederick County Councilmember Kai Hagen (D-at-large) said he was willing to have future discussions on how impact fees are derived, pointing out different models exist in the state. Hagen said Montgomery County has a tiered system with a different fee assessed based on location and size of development while PG County has a fee structure based on the square footage of the home.

Frederick County Councilmember Phil Dacey (R-at-large) said he felt Frederick County needed to look at how student enrollments were totaled when setting impact and mitigation fees, pointing out that only one high school, Urbana, is over capacity while Governor Thomas Johnson has 400 empty seats. He was also concerned increases to impact fees will have a negative impact on affordable housing.

Soter concluded his presentation with a series of points, including Frederick County needs to look at residential growth as a driver for overall economic growth, new home sales don’t have any more effect on student enrollment than an existing resale, Frederick County can’t afford to suppress the housing pipeline further and limit new growth as many other market drivers already contribute enough. He urged a deeper dive into the data when undertaking public policy initiatives.

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