AUSTIN, Texas (AP) — Austin municipal leaders were on Thursday mulling two proposals to increase developers' "impact fees," reducing discounts once meant to encourage dense development locally.
The Austin American-Statesman reported (http://bit.ly/19ORHby ) that developers downtown often pay only one-fifth of costs for services including connecting water and wastewater systems. The rest of the cost goes to existing businesses and homes.
That's because of a policy adopted in the late 1990s that was meant to encourage growth in areas other than environmentally sensitive portions of South and Southwest Austin. But critics note that the discounts had little effect on development patterns while forcing Austin's residents to pay for future growth.
The city council is debating two plans on how to achieve a better balance. Both would raise city impact fees by either canceling developer discounts altogether or rolling them back to include only areas where the city still wants to focus growth, like downtown, around the Domain shopping center and residential development in North Austin, East Riverside Drive in Southeast Austin and East Austin's Mueller.
For a typical homeowner, the two options boil down to whether to pay about an additional $17 per year by 2023 in utility fees in hopes it will spur more environmentally friendly clusters of homes and businesses.
The state limits what cities can charge developers to offset the costs of things like new roads and schools to serve new development. In the case of water and wastewater fees, municipalities can charge a developer only for costs that can be attributed to a new subdivision, office building or other development, as determined by a state formula.
Some cities charge less than the formula allows while others, including Dallas, charge nothing.
Since deciding to try and guide the city's booming population away from environmentally sensitive areas, Austin has adopted a range of developer discounts based on geographic area. Outside the "Drinking Water Protection Zone" in West Austin, the standard discount is 50 percent — while it's 80 percent downtown.
Many of the communities surrounding Austin, including Dripping Springs, Round Rock and Leander, charge more for impact fees.
State law requires cities to review fees every five years. As part of that process, a volunteer committee has already recommended that Austin scrap all developer impact fee discounts.
Some business associations, however, counter that continued discounts will help spark building in areas where the city would like to add population. They also argue that reduced impact fees are part of larger municipal efforts to combat urban sprawl.
Information from: Austin American-Statesman, http://www.statesman.com