Why Should Delaware Care?
As Delawareans confront a housing shortage, impact fees are collected by the county to support funding services like fire departments, law enforcement, emergency medical services and other county services. The increased costs could be passed on to consumers, however, potentially increasing the cost of new housing.
The New Castle County Council is considering an ordinance that would raise fees on developers to build houses or other developments, and then direct the bulk of the revenue to fire departments, police, and other emergency services.
The council will vote on the measure tonight – eight months after former-County Executive Matt Meyer vetoed a similar proposal.
The so-called impact fees are assessed by the county on new developments to offset their impact on community services. With an ongoing strain on the state’s volunteer fire departments, county officials hope the new money would help aid those services.
The revenue from the fees would flow to the areas where they are generally derived. Fees collected for developments above the C&D Canal would go to emergency services above the canal. The same goes for those south of the canal.
The impact fee ordinance calls for developers to pay $1,736 for each single-family detached home built — a 50% increase over the current $1,157 fee assessed.
In the council’s Land Use Committee meeting last week, Matthew Rogers, a representative from the county’s land use department, said the new fees will be adjusted for inflation.
He also said these fees will assist the county in paying for a myriad of new firefighting equipment, including new hoses, new trucks and computers.
While a comprehensive increase in developer fees has not occurred since 1999, the impact fee ordinance is likely to raise concerns for some developers. But Larry Tarabicos, partner at Tarabicos Grosso, a law firm that specializes in development projects, asserted that the impact fees are negligible, saying they may not need to be passed on to the consumer.
“Something like $1,700 gets lost in the wash, the buyer eats some, the seller eats some and some of it just goes out of profit,” Tarabicos said.“I mean, there are more important things impacting housing costs than these fees.”
Those “more important” things for Tarabicos are school impact fees, sewer fees and capital fees. School impact fees are normally one-time fees levied on developers during the time period between building permit issuance and or occupancy.
Still, the likely success of the impact fee ordinance may indicate the relationship between county government and land developers has shifted since Meyer moved from county executive to Delaware governor. When vetoing the impact fee ordinance late last year, Meyer said it was “not the time to increase the cost of housing in New Castle County.”
The governor’s office declined to comment on the new impact fee ordinance.
Meanwhile, Henry has supported an increase in impact fees from the start of his administration and announced his support for the proposal under consideration.
When asked about his philosophy on land use in an interview last month, Henry said that he is focusing on “smart, sustainable growth that is planned correctly, that recognizes the market, and recognizes local needs of a population like Southern New Castle County.”
Councilman Kevin Caneco said there is a changing political environment between developers and council today – with developers having less of a sway in land-use decisions and especially with the new county executive.
He also said the update in impact fees leaves future decisions about land-use regulation open to discuss with developers and the public.
Get Involved
The New Castle County Council will meet at the Louis Redding City/County Building in Wilmington at 6:30 p.m. Tuesday to vote on the new impact fee plan, among other ordinances. For those wishing to participate virtually, the meeting will also be broadcast on Zoom here.