Atlanta may ask developers to pay higher fees

By Ernie Suggs

The Atlanta Journal-Constitution

Looking to increase revenue and keep up with regional and national trends, Atlanta is considering increasing the fees that developers pay to build houses and commercial properties.

The so-called impact fees, which are used to offset the cost of building new roads, parks and public safety needs created by growth, have remained the same in Atlanta since they were adopted in 1994.

But an independent study, presented to several members of the City Council last week, suggested more than doubling the fees by 2012.

“The impact fees we haven’t updated in years,” said Councilwoman Joyce Sheperd, who chairs the community development committee. “And when they did the comparisons, we are kind of behind. So, the recommendations are being made to increase the cost of our impact fees.”

Sheperd and Felicia Moore were the only council members to hear the recommendations. Any change would still have to go through a committee and full council before it is voted on.

"These are clearly recommendations by the consultant," said James Shelby, commissioner of the Department of Planning and Community Development. "They have not been vetted by the council yet."

In Atlanta, to build a single-family home, the one-time impact fee is $1,544. Of that fee, $987 goes to roads in that area, $410 to parks, $114 to fire and $33 to police.

On the higher end, a single-family home in San Diego costs $17,598. The national average, minus California, is $5,895.

The study suggests raising Atlanta's single-family fee to $3,652.

"Compared to other cities, we are below them when it comes to assessing these fees," Shelby said.

David Ellis, executive vice president for the Greater Atlanta Home Builders Association, said developers understand the need to help fund infrastructure, but wonder about the timing.

“Those of us who work in housing and development want to make sure we pay our fair share, but any time you add costs to something, particularly part of the economy that is so fragile, it certainly raises questions,” Ellis said. “In this economy and time, that approach seems shortsighted, especially with the impact it could have on an already stifled economy.”

In 1990, Georgia began allowing local governments to charge impact fees.

The idea was that new construction creates the need for new schools, roads and sewers, and developers -- rather than taxpayers -- should have to absorb at least part of the cost.

Shelby said the city has $26 million worth of impact fees in the bank, which are currently tied up in projects or will eventually be spent by the various departments.

Some municipalities in metro Atlanta, such as Gwinnett and DeKalb, have no impact fees, while others such as Acworth and Sandy Springs do. For a while, Cherokee County lowered fees to encourage growth and development, before restoring them.