New Castle County raises impact fees for new construction

The impact fees New Castle County charges developers to partly pay for the resulting increased costs of public services are going up significantly for the first time since 1999.

A bill just passed by New Castle County Council will index the fees, by 2028, to the annual Engineering News Record Construction Cost Index.

“As numerous developments have come online over that quarter century, much of the cost of new infrastructure improvements to serve these new residents and commercial has been unfairly borne by existing property owners,” said County Council member Dee Durham, a prime sponsor of the bill with David Carter and Brandon Toole.

How impact fees can be used

“New Castle County impact fees cannot be used to cover operating costs but are used toward the cost of increased demand for parks, libraries, emergency management services, fire and rescue, law enforcement, and county facilities,” she said.

Fire and rescue fees have been adjusted in the interim, the bill notes.

The bill exempts new affordable housing, including moderately priced dwelling units, dwellings built by nonprofits as low- or moderate-priced housing and units built using the IRS low-income housing tax credit or participating in the Delaware State Housing Authority/Cinnaire’s Catalyst Fund.

Long debate over years on impact fee increases

The issue has been debated for years. A 2022 consultancy report concluded that the $1,157 fee for a single-family house should go up to $2,036, just to account for inflation since they were last adjusted in 2006.

One key issue involves using the fees to funding the county’s goal of preserving a minimum of 30% of the county land as protected open space by 2030. The bill calls for an open-space impact fee to take effect by Feb. 1, 2026.

The bill, when introduced in January, had three primary sponsors and three co-sponsors: John Cartier, George Smiley and Kevin Caneco. In the final vote, it only picked up support from Dave Tackett, just enough to become law. Penrose Hollins and Jea Street voted no, while Janet Kilpatrick, Timothy Sheldon and Monique Williams-Johns abstained.

The Home Builders Association of Delaware did not respond to requests for comment on the new law.