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Decatur impact fee program may harm affordable housing effort, leaders warn

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Decatur impact fee program may harm affordable housing effort, leaders warn

The Arcadia Decatur apartment complex at the corner of N. Arcadia Avenue and Winn Way in Decatur. Future new housing and commercial developments would be subject to new impact fees under a proposal being considered by the city. Photo by Cathi Harris

By Cathi Harris, contributor 

Decatur,GA — As the city of Decatur considers implementing impact fees for new development, some leaders fear the program could have unintended consequences.

“When clients come to me, when they consider a location for development, if we can’t make that pencil out, then the local government never hears about it,” Harold Buckley, Jr., chair of the Decatur Planning Commission said Tuesday night. “You can’t just go by what you see happening. It is the lost opportunities that we are trying to avoid.”

At its regular meeting on Tuesday, the commission heard an update from Bill Ross, a consultant who is working with city staff to develop an impact fee program.

Impact fees are charged to developers to help fund the additional city services, like police and fire protection, that new housing or commercial buildings will require. The state of Georgia regulates which cities can charge impact fees, how fees are calculated, and sets the maximum fee that a city could charge.

“It will be up to the City Commission to decide what, if any, impact fees it wants to collect,” Ross said. “They can charge a lower amount. They just cannot charge more than the maximum.”

Ross has worked with cities across Georgia to develop impact fee programs and said his experience is that they do not negatively affect development.

“The amount is typically less than one percent of the cost of construction for a single-family home,” Ross said. Builders pass the fees on when they sell the property.

But Decatur is in the unusual position of having recently adopted an inclusionary zoning ordinance requiring a portion of all new residential developments to be reserved for affordable housing, said Buckley, who is an urban planner and attorney specializing in land use and development.

That requirement limits what a residential developer can sell the property for. Affordable housing units are already difficult to finance because the cost of land in the city is so high as are construction costs. 

The city of Atlanta has also adopted inclusionary zoning requirements without any additional incentives or encouragement to builders to offset the additional costs, Buckley said.

“People have told me that once what is in the [Atlanta] pipeline now is finished, they are done,” he said. “They are going back outside the perimeter.”

As much as developers want to build here, they can easily move just a bit farther north, south or east and find a jurisdiction that won’t require impact fees, other commission members noted.

“I can jog to downtown Atlanta from here right now,” noted Planning Commission member Rachel Cogburn. “There are opportunities all around the city of Decatur [that don’t charge impact fees] where they can go and build.”

The impact fee program is designed to offer a number of tools to help offset the costs for certain kinds of development that the city wants to see, Ross said.

The city can offer exemptions to all or part of the impact fees for construction of affordable housing, for example. However, state law requires that the city make up the cost of any exemptions given from another revenue source.

“That seems like a serious disincentive to [offering] exemptions,” said Planning Commission member Lori Leland-Kirk.

The city can also offer credits to offset impact fees for things the developer might build that the city needs.

For example, a new recreational path or a new road might be beneficial to the new development and the city. The city would give the developer a credit equal to the cost of building that infrastructure to offset the impact fees for recreation or roads.

Lastly, developers can always apply to the city for a special exception to the fees, arguing that their project would not have the same impact (on roads, recreation, police or fire services) that other developments of its type would.

“An example would be, say, a pizza place that no one could drive to, so it would not impact roads,” Ross said. “They could argue that they should not have to pay the impact fee for roads because their development would not have the same impact.”

Those exceptions would be decided on a case-by-case basis. 

Decatur is still in the process of finalizing amendments to its Capital Improvements Element (CIE), a component of its comprehensive plan. The amendments detail the methodology of the proposed impact fee program. The amended CIE must be approved by both the Atlanta Regional Commission (ARC) and the Georgia Department of Community Affairs (DCA). 

They hope to submit it in June and then the ARC and DCA both have 60 days to review and approve or deny. Once Decatur receives those approvals, it can proceed with the consideration of a draft impact fee ordinance, Ross said.

State law requires any impact fee ordinance to have two public hearings at least 30 days apart before it could be adopted by the City Commission.

More information about the proposed impact fee program is available on the city’s website here.

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