SALISBURY – Actions are underway to repeal development impact fees after Wicomico County Executive Bob Culver, armed with support from elected officials and a real estate membership organization, sent a proposal to the County Council.
The County Council will most likely introduce the repeal for a vote at its next meeting, according to Council President At-Large John Cannon.
“I’ve always been in favor of eliminating impact fees,” Cannon says. “It is a burden to new home buyers.”
The County Council opened the proposal for discussion at the Sept. 6 meeting and heard arguments for and against the repeal.
Culver has championed the repeal since his election, but the County Council has agreed to postpone discussions on the matter through 2016. Members are now starting to consider alternatives before the moratorium ends Dec. 31.
Culver’s proposal came after Gov. Larry Hogan repealed mandates last month requiring homeowners to install Best Available Technology (BAT) on all new or replaced septic systems.
Culver says repealing BAT regulations, along with impact fees, will stimulate new housing construction.
“Let’s build on this momentum from the state and send a strong message to home buyers that Wicomico County welcomes you.” Culver said in a press release.
At Tuesday’s meeting, council members and supporters of the repeal said eliminating impact fees will reduce the county’s annual revenue budget one-third of a percent and will reduce the cost of building new homes.
Impact fees in Wicomico County make up more than 3 percent of the median home price, which costs approximately $155,000.
Culver says impact fees are not a fiscal issue as much as a barrier for new home construction.
In a support letter from the Coastal Association of Realtors (CAR), its members argue homeowners are already paying for public services in its taxes. The impact fees are therefore a form of double taxation.
“The reason is that, in addition to incurring impact fees as a cost of their new housing, these residents also pay regular taxes at sufficient levels to pay for the same or other facilities used by existing residents that are financed through general revenues,” the letter read.
At Tuesday’s meeting, council members said school enrollment has not increased in Wicomico County until this year and questioned if impact fees were needed to support the school system.
The association furthered its support for the repeal by stating that impact fees increase the cost of new development and reduce construction and affordability.
“Increased costs resulting from impact fees make it harder for low- and moderate-income households to afford to purchase residential units in new developments,” the letter states. “Impact fees can also result in higher prices for existing homes, thus making all homes less affordable. … There is most definitely demand for homes in Wicomico County, but we need inventory. New home construction has been weighed down by state-mandated costs associated with BAT septic systems and more recently sprinkler system regulations.”
Wicomico County Director of Administration Wayne Strausburg says the county had no control over repealing BAT regulations, but they will have control over impact fees.
“We want to make [Wicomico County] more affordable, not less,” Culver said in a press release.
The next County Council meeting is set for Sept. 20.
