Housing Dip Puts Bump In Road

We’ve said it before but Ada County is becoming not only victim of growth, but driven by GROWTH.

Under current financing schemes, growth is costly, but without the growth government comes up short on cash to pay for the growth. A recent press release from the Ada County Highway District really puts it in perspective.

With the slowdown in the housing market, the ACHD is coming up about $4 million short in predicted revenues from impact fees. Without that cash in their coffer they have decided to add NO NEW PROJECTs for the next year or two.

Furthermore, projects like the East Park Center bridge are being put off for at least a year and costs are projected to increase nearly 20% per year. It is not a pretty picture.

The GUARDIAN simplistically boils it down this way as an example: Boise City created a problem by approving Harris Ranch subdivision and growth to the east. Impact fees on new construction goes into the kitty to fund construction aimed at dealing with existing problems, but the new construction creates increased load which is fixed by impact fees on new construction which creates….you get the idea.

Of course there is probably some provision about impact fees going to the area of the new construction, but from a practical standpoint the ACHD depends on fees to run their budget.

Fire Department white shirts–with help from a consultant of course–have figured it out and they are about to seek impact fees based on new construction square footage. Look for the council to grapple with a figure of somewhere around $700 impact fee per new residence as the cost to build new stations, staff them and buy apparatus.

Comments & Discussion

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  1. Lets put it in even simpler terms that even I can understand. When I make a household improvement,
    I first look at my wallet, then look for the best prices and then BUY. I know ACHD has got to deal with multi-faceted finances that everybody can effect including inflation but to simplify for them-” Don’t try to build or improve it if you don’t already have the money to pay for it. This type of hedge financing slows run away development with it’s inflation and builds solvent government bank accounts.

    EDITOR NOTE–Good point Joe, but it can lead to situations like Team Dave having $10 million in Christmas excess. ACHD is announcing just what you espouse, they don’t have the money, so they are not building things.

  2. I am glad the Fire Dept has figured out the age old problem of paying for growth. Collect ahead via impact fees rather than waiting for the tax base to build up. Now we just need the rest of the government agencies and utilities to follow along. Local improvement districts for developers will also help the cause.

    Idaho Power announced recently they need a rate increase to upgrade infrastructure to meet new demands. Idaho Power’s connection fees should account for these upgrades so the ratepayers as whole are not paying.

    Add all these Growth Impact fees on each new lot and require them to be paid via escrow when the house sells. That way we take the developer out of the finance equation and collect directly from those purchasing the house.

    EDITOR NOTE–We did research in the past which showed one California jurisdiction had impact fees of about “$50,000 per dwelling unit.” An folks, THAT is why the developers (and buyers) came to Idaho.

  3. I think the Guardian needs to look up the state law on impact fees and how they can be collected and what they can be used for.

    It is illegal, for example, for the fire department to collect impact fees because people are already being taxed for their fire district. This causes double taxation.

    Also impact fees have to be used within a certain time period and area in which they must go to improvements. The schools districts tried to attach impact fees to their cause in other parts of the country, but studies have shown that when they associate impact fees with schools that school bonds never pass after that. People believe that impact fees are already paying for schools so why should they.

    ACHD has a formula in which they have the county broken up into districts, five I believe, and all the new road money collected go towards the areas in the district with the higher density, which is why the Eagle mayor is always up in arms. She believes that Eagle should have new roads but without the higher density, no money is being set aside for them. The services follow growth. They build schools, roads, services where the growth is.

    It is also not fair for a family from out of state with twelve kids that moves into an existing home to not pay any impact fees and another family with no kids builds a house two houses down from their current one and does pay an impact fee.

    EDITOR NOTE–Snoop, no need to take a shot at the GUARDIAN. We’re just the messenger. Fire wants council to do something (legislation?) and ACHD announced the cutback in a press release.

  4. Hey, Snoop: So, are you implying that impact fees should be based on the number of kids the family has? (Hmmm ….)

    Guardian said: EDITOR NOTE–We did research in the past which showed one California jurisdiction had impact fees of about “$50,000 per dwelling unit.” An folks, THAT is why the developers (and buyers) came to Idaho.

    Wow! That’s a bunch of bucks. But, hey, if it worked — drove them out of California and to us, let’s top ’em and put a $100,000 impact fee on houses here, and see whether they remigrate.

  5. Blazing Saddle
    Feb 24, 2007, 1:10 pm

    Perhaps the most interesting thing about the $50K is that they had the courage to charge it. And, it may be a reasonable number for some of the projects around Boise.

    At one point during The Cliffs debate ITD estimated the cost of the grade separated intersection necessary to facilitate the entry road at about $26 Million. For 1300 residences, that works out to about $20K per house just to get from Warm Springs to the front door! Add in the cost of water, sewer, fire, electricity, down-road highway impacts, river pollution, etc., and that project may well have impacts north of $40K per house.

    The same sort of thing is happening on the west end. Avimor et al are already looking at $130 Million to fix Highway 55 as far as the intersection with Highway 44. The cost of widening 44, or other solutions, the rest of the way into Boise and other towns could exceed the Highway 55 cost. It would take more than 10,000 houses to keep the per residence impact fee of the north Eagle projects below $26K per house. And that does not account for other issues like water, EMS, etc.

    Gordon, I like your style. I’ll see your $100K per house, and raise you $20K.

  6. The problem that the ACHD is having is bad management and bad choices. We recently moved from the area due to traffic and road ragers and I have dealt with the ACHD many time thru my business. I lived in Boise for 10 years.
    Whe the ACHD approves a sub, they need to accually have the developer pay for the infrastructure.

    The developers are using our tax revenue to finance the new arrivals’ streets and sidewalks. In most states, the developer foots the entire bill and street lights, HC ramps, curbs and sidewalks and any other improvement needed for the impact on a certain area. The includes improvments to other surface streets that might be impacted.

    Example: Ustick Rd. is two lanes, yet there are 15 subs at least, that are new and the street isn’t improved. The ACHD collected impact fees and didn’t do their job. That is why the developer that built on Ustick are rich. The ACHD just adds it onto your property taxes. Those supplemental and urban renewal taxes that suck off your wallet.
    I am glad to read some of the posts on here.

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