Fayetteville’s Impact Fee Election Results Somewhat Uncertain

When I posted my blog entry April 1 about the upcoming special election on impact fees, I fully expected to post a follow up the day after the April 10 election to state the results. Well, as some of you already know, results are somewhat murky.

The morning after the election the unofficial count was tight, to say the least. Supporters of the fees had a one-vote lead. (Once again, I say, “Don’t ever think your one vote doesn’t matter.)

The major holdup at that point was 15 outstanding absentee ballots. The ballots would be counted if they were received by April 20, the day the election was to be certified.

When the absentee ballots were added to the earlier results, the election was a tie, 2015 votes for and 2015 votes against. Elections have to be won by a majority so the tie means the impact fee increase failed.

As if an election that close isn’t interesting in itself, here’s the really unusual part.

One of the absentee ballots may ultimately be thrown out on technicalities. It seems the overseas voter did not use the same exact address on the application for the ballot as he did on the statement accompanying the ballot.

That particular ballot was a No vote. It was the vote that created the tie. It was included in the final certification.

If that ballot is challenged and subsequently removed from the official count, the election will have been approved by one vote.

Washington County Attorney George Butler is researching the situation but said he expects to find little precedent to resolve the matter.

Because the law is generally against disenfranchising voters, Butler encouraged the Washington County Election Commission to count the ballot in question. Butler stated further that the commission may file an amended certification reversing the election if that becomes necessary.

For more information:

http://www.nwaonline.net/articles/2007/04/21/news/042107fzroadfees.txt
http://www.nwanews.com/nwat/News/52331/
http://www.nwanews.com/nwat/News/52304/

Impact Fees – How Much is Too Much?

Less than one year ago Fayetteville voters approved a ¼ of 1% sales tax increase to pay for $65.9 million in bonds for street improvement projects.

Now Fayetteville residents are being asked to vote at a special election April 10th on the question of whether to impose an impact fee on builders to provide additional funds to improve roads.

If the impact fee passes, the additional amounts charged builders will vary from $2,363 for a single family detached home, to $1,319 per room for a hotel/motel, and on up to $2,701 per 1,000 square feet of commercial or office space.

As usual, there is more than one point of view when looking at this problem.

Does it make sense that the builder should be charged for the infrastructure that his project would necessitate? It’s easy to say “Yes, that sounds logical.” But look a little deeper into the problem and you’ll see it is the buyer or renter that will ultimately pay the fee. Homes will cost more and rents will rise.

I’ve written previously about the lack of affordable housing in NW Arkansas as a whole and Fayetteville in particular. Adding another $2,363 to the cost of each home only makes homes less affordable.

Another issue is whether increasing the impact fees already in effect will deter businesses from locating in Fayetteville. That issue, too, can be argued two ways. Some say that businesses seeking to expand or move to Fayetteville will look at other areas where fees are lower or nonexistent, and this has already happened.

If businesses locate elsewhere, Fayetteville’s sales tax receipts will decrease accordingly. Keep in mind that sales tax is a principal source of revenue for city capital improvement and schools. There has already been a decrease in sales tax revenues in the last quarter of 2006.

Others say look at Bentonville. The impact fee for a single home in that city is $4,750 and the city is growing at a major pace.

The new impact fee will make Fayetteville’s the highest in NW Arkansas at $4,897. Springdale has no impact fees and has completed major improvements on their artery streets, as well as neighborhood streets, by sales taxes voted by residents and by bond issues. Rogers charges a $2600 “sewer and water hook-up” fee, which some call a disguised impact fee and which has been challenged in court.

However, the bottom line here is that developers in Fayetteville already pay impact fees for new-construction, which are passed on to the consumers of these homes. Developers also are required to install (at their own expense) new roads and other infrastructure items, such as water lines, sewer lines, etc. An additional road impact fee will basically be another tax, not just on developers and builders of new areas but on everyone who lives in Fayetteville. It’s a case of double taxation, despite what those in favor of the measure say. And it puts the burden of street improvements for older areas of Fayetteville on the developers of new areas. Is that fair?

Ultimately, money for additional (and much needed) street improvements will have to come from somewhere. If taxes need to be increased, so be it—let the voters decide as they have in the past. But let’s be honest.

I have a great concern that Election Day is just around the corner, and I don’t believe the majority of voters have taken an interest in the matter at hand. I encourage everyone to become informed and vote his or her conscience. I personally am going to vote NO.

Here are some links for further information:

http://www.nwanews.com/nwat/News/51665/

http://www.nwaonline.net/articles/2007/03/25/news/032607fzroadfees.txt

http://www.nwanews.com/nwat/News/51598/

http://www.nwanews.com/adg/News/186156/

http://www.nwanews.com/nwat/News/51075

http://www.nwanews.com/adg/Special/182334

http://www.nwanews.com/nwat/News/51559

http://www.citizens4fayetteville.org/

http://voteforfayetteville.org/

IS HOUSING AFFORDABLE AND ATTAINABLE IN NW ARKANSAS?

I am becoming increasingly concerned about the difficulties many working people are encountering in their quest for the American dream – home ownership.

Probably the most important factor is, as I have mentioned previously, wages have not kept up with land and construction costs. But there are additional factors that enter the picture – zoning regulations, density requirements, impact fees, and lack of incentives for developers to build smaller, more affordable homes. Several weeks ago, there was a feature article in the NW Arkansas times about this issue in Fayetteville, but the problem stretches across NW Arkansas.

In Fayetteville, a contributing factor is tree canopy regulations. I agree that an essential part of Fayetteville's flavor is the trees. On the one hand, the rules that developers must follow make sense to me. But conversely, following those rules costs a lot of money that gets added to the sales price of the home.

Impact fees provide the funding for roads, water and sewers, police and fire protection, public parks, etc. No one argues the necessity for this infrastructure but the impact fees add several thousand dollars to the cost of each and every new home built, regardless of the value of the home. Essentially this is a regressive tax. Why not have a sliding scale for impact fees? Lower the fees for an affordable home and increase the fees as the value of home increases.

If NW Arkansas is to continue growing and prospering, we must find a way for the average worker to own an average home. Lack of attainable housing for workers puts serious constraints on growth. Employers cannot fill jobs if the workers cannot afford to live within a reasonable distance of their workplace.

I frequently hear complaints from residents who don’t want lower-cost higher-density neighborhoods built next to their more affluent neighborhood. But let’s face facts, folks, not everyone has a high-paying job. We need people who are willing and able to work at ALL of the available jobs. We need truck drivers to bring food to stores, we need factory workers to build products, we need hospital and restaurant workers, janitors, daycare workers, construction workers, store clerks and thousands of other workers. Without these people, very few of us would want to live here. Let’s be realistic – the average worker needs and wants a home just as much as a more affluent person.

It is imperative that cities establish criteria and develop policies that will encourage and enable builders to build more modest homes. This situation deserves serious consideration and action now. Let’s not waste several more years while we just talk about the problem.

There are many ways to make housing more attainable for working people. Perhaps it’s time to consider neighborhoods with row houses. Or, consider detached homes with less space between each one. Duplexes or quadplexes would be another idea. Built more as permanent homes instead of basic rental units, these multi-unit homes would be affordable because the owners could live in one unit while rental income would provide funds for the mortgage payment.

Condos can be another affordable way to own a home. Developers, especially in Fayetteville, are building condos at a record pace, but I can’t think of any that will be for the average working person. In many other parts of the country condos are affordable and desirable. Building costs are less per square foot, outside maintenance is usually taken care of by the homeowner’s association, and many condo communities share amenities such as a swimming pool that the average person could not otherwise afford.

However, after all this is said, housing is available in NW Arkansas if you know how to find it. Currently, there are some 150 homes available for less than $150,000. This includes lovely, desirable resale homes and even some brand new homes. You can get more information about them by going to my home search websites at http://www.findfayettevillehomes.com/ or http://www.nwarkansashomesearch.com/.

To find out how much home you can afford based on your annual salary, go to http://www.findfayettevillehomes.com/ and click on "Home Buying Calculator" in the Info Center at the right of the home page. Take a look at some of the other information and calculators while you’re there.

I can help you find a home – this is exactly what I do. It’s my full-time career. I am a Accredited Buyer Representative® (ABR®) and I represent buyers at no extra cost (commissions for homes listed by a Realtor® are included in the selling price of the home.)

Contact me at judy@judyluna.com. Helping people find a home they want and can afford is the most satisfying part of my job. I would be happy to help you do the same.

For more information:

http://www.nwanews.com/story.php?paper=nwat§ion=News&storyid=43758

http://www.nwanews.com/story.php?paper=nwat§ion=News&storyid=43754

http://www.nwanews.com/story.php?paper=nwat§ion=News&storyid=43753

Affordable Housing

Recent studies indicate that the term “affordable housing” is becoming an oxymoron.

The National Association of Realtors® surveyed 1000 people in June 2006. By a 2-1 ratio, respondents believed that high monthly payments were the biggest obstacle to buying a home.

The perception used to be that the down payment and closing costs were the biggest obstacles to home ownership. Now people are worried that monthly income cannot be stretched to meet monthly bills.

In addition to the mortgage payment itself, people worry about the cost of putting gasoline in their car, the ever-increasing price of utilities, rising property taxes, escalating healthcare costs, and higher insurance premiums.

If they have an adjustable rate mortgage, they know that soon that payment will also be higher.

For Middle Americans, home ownership is not only their dream but also the surest way to build wealth. Many feel that dream is no longer reachable.

The hurdles to home ownership are complex. However, Los Angeles Mayor Antonio Villaraigosa succinctly summed up a large part of the problem, “…the fact that wages haven't kept up with the cost of real estate." While average hourly wages have risen about 20% since 2000, the national median home price has soared 55%.

Another large part of the problem is escalating land prices in most of the country, and NW Arkansas is no exception. Even as recently as 3-4 years ago, a few local builders were still building so-called "starter" homes. These were somewhat basic, but usually had about 1000-1200 square feet, 3 bedrooms, 2 baths, and ceramic tile in the wet areas. These were usually available in outlying areas like Elkins and other smaller towns. Even in some of the major towns, there were homes for under $100,000. I can remember some new homes costing even significantly less than that.

Builders are no longer able to build “starter homes.” Because land is so expensive, builders are forced to build a larger home on a smaller lot and charge more for it. The new "affordable" homes start at about $150K to $160K in the major towns of NW Arkansas, although it is possible to purchase a less expensive, smaller home in some of the outlying areas, such as Siloam Springs, Lincoln, and Gravette, etc.

Another reason for higher home prices is the impact fees many communities charge to help pay for everything from roads and sewers to police and fire protection to parks and other municipal facilities. The fees, which amount to several thousands of dollars, are passed on to the homebuyer.

Thus, for people of modest means, increasingly this means they must choose whether to live in their own home farther from their work or pay rent and live closer. But with gas prices so high, living farther away means extra transportation costs and that increases monthly expenses. People who would have purchased a home in the past no longer qualify for these more expensive homes.

In the meantime, the glut of high-end homes continues.

For more information:

http://realtytimes.com/rtmcrcond/Arkansas~Springdale~judyluna
http://www.realtor.org/housopp.nsf/pages/pulsesurvey2006
http://www.realtor.org/PublicAffairsWeb.nsf/Pages/NatlHsgOpPulseSurvey
http://www.usatoday.com/money/economy/housing/2006-06-26-affordable-homes-usat_x.htm