Who pays impact fees?

Oct 14, 2020

Impact fees have been a contentious topic in Lubbock lately. During Tuesday’s city council meeting, the group voted 6 to 1 in favor of impact fees. There is a bit of confusion about whose pockets will be affected.

Impact fees are a one-time fee on new developments that will help pay for the infrastructure they impact—in this case, roads.

During Tuesday night's City Council meeting, council member Shelia Patterson-Harris objected to the ordinance for the fees as it currently stands. She stated that she would like to see maximum impact fees placed on the south and southwest areas of the city—where most new development is happening—and to zero out impact fees in older areas of the city.

Some say that tacking this fee onto development will trickle down to Lubbock residents. While others say it’s not that simple.

“It is not paid for by builders and developers. It’s not paid for by us. It’s paid by Lubbock citizens,” said Jordan Wheatley, speaking on behalf of four housing associations. “Where you own, rent, lease, or you’re buying retail goods you’re going to be paying somehow for impact fees.”

Texas Tech University economics professor, Michael Noel says that statement is a little misleading. “It is going to increase the cost of new construction,” he said, “but here’s the thing because the new construction is paying for the costs that they are creating, it means that you don’t have to raise property taxes on the people who are in the old construction.”

The old construction he’s referring to are the older parts of Lubbock. Right now, roads are paid for through a gateway fund—which the entire city contributes to, regardless of where the development is happening. Impact fees would force areas to pay for their own development.

It’s not a done deal yet though. City Council has to pass a second round of voting when they meet again on October 27.

Have a news tip? Email Kaysie Ellingson at kaysie.ellingson@ttu.edu. Follow her reporting on Twitter @KaysieEllingson.

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