Frozen impact

North Carolinians deserve a fair hearing on development impact fees. For too long, state lawmakers have let them down

Durham County's elected leaders should be able to ask developers to share the cost of public services required by new subdivisions. Yet when the county imposed impact fees on new homes in 2003, builders sued and last week they prevailed in the N.C. Court of Appeals.

It's a crying shame. The court ruled that Durham first must get the approval of a state legislature that hasn't ceded impact-fee authority to any county in nearly two decades. That's the same legislature whose members accepted around $300,000 in campaign contributions from the N.C. Home Builders Association during the 2004 election cycle.

As The N&O's Eric Ferreri reports, the home builders fear counties will abuse the authority to prescribe impact fees. The association's general counsel, J. Michael Carpenter, cited Orange County as rationale for that fear.

After receiving legislative approval, the county's two school systems started in 1994 with a $750 fee for each new home. The very next year the impact fee was doubled for the Chapel Hill-Carrboro school district. Now, both Chapel Hill-Carrboro and Orange County schools receive $3,000 per single-family home.

Yet it's perfectly reasonable for Orange to increase impact fees to help prevent school overcrowding. Because of children in all the new homes being built, the Chapel Hill-Carrboro system is operating six more schools since 1994 and expects to add three more within the next few years. It's only fair that builders who have profited from growth share the cost of accommodating it.

As for the effect of impact fees on housing prices, the home builders cry crocodile tears. Prices are rising all right, but far beyond the effect of a $3,000 impact fee. In Orange and five other Triangle counties last year, 130 new homes sold for more than $1 million each. And if builders absorbed some of the impact fees on more competitively priced homes, it's hard to imagine profits would suffer noticeably.

Protecting profits is a prime reason that the Home Builders Association sends a cadre of lobbyists to the General Assembly. Those lobbyists receive a warm reception from representatives who benefit from the builders' campaign contributions -- and the record is replete with legislation favorable to home builders.

An example of such a law is the one prohibiting county governments from imposing impact fees on new construction without state lawmakers' approval. The builders' hold on the legislature frustrated Durham County into testing that law. Rapidly growing counties under constant pressure to raise property taxes were rooting for Durham to win. Instead, the public was the loser.

Naturally, Durham's leaders plan to appeal the ruling to the state Supreme Court, but they shouldn't have to. The law doesn't prohibit legislators from hearing all the arguments for and against impact fees on new homes built in Durham County. Durham's legislative delegation, joined by lawmakers from North Carolina's other urban areas, ought to prod the General Assembly's leadership to give the impact-fee option to all counties that want to use it.