New Castle County on Monday was given a draft plan by consultants to expand — and increase — the impact fees charged for development.
The county adopted such fees in 1999 to “finance new or expanded infrastructure and service needs for development.” And they have not changed much since.
The county’s consultants recommended adding fees to encourage low-income housing and open space; differentiating more types of housing and businesses in assessing the fees; and raising the fees.
If what was recommended is approved, most developers would pay a lot more and would most likely just pass along those costs to the people and businesses that buy and rent those houses and commercial properties.
New Castle County breaks down impact fees into parks and special facilities; libraries; county facilities; EMS; fire and rescue; and law enforcement. Current impact fees, for example, total $1,157 for a single-family house.
One slide in the consultants’ presentation concluded that that $1,157 fee should go up — just to account for inflation since they were last adjusted in 2006 — to $2,036. The slide provided five scenarios for adjusting fees, including no increase and various timetables and methods of increasing them.
Four of the five scenarios call for indexing the fees to inflation.
One push to increase the impact fees is that County Council this fall voted to spend $7.5 million over three years to preserve open space and agricultural land. Establishing a separate fee for open space will help finance part of that plan.
Doing the math on average current growth — 2,000 homes and 4 million square feet of commercial space annually — the consultants pegged the open-space fee at $377 for a single-family detached house.
Raising impact fees to keep up with inflation and adding a fee for open space would mean the $1,157 fee for a single-family home would hit $2,036 — if all of the consultants’ recommendations are adopted.
Fees for commercial property are charged by 1,000 square feet, in 10 categories. The consultants recommended increasing those categories as well, adding institutional use, lodging use (based on the number of hotel rooms) and restaurant use (“based on anticipated turnover”). For housing, they recommended assessing multifamily dwellings separately.
Impact fees might be higher in some areas of the county.
They also suggested a surcharge in fees for areas that are now remote from infrastructure — Levels 3 and 4 areas in Delaware’s State Strategies, which are yellow and white on the map here.
Those areas are mostly north and south of the Chesapeake & Delaware Canal, but there are large stretches near Hockessin and west of Glasgow. (The red and gold areas of the map are where development is and will be encouraged. The white areas are committed open space and agricultural land.)
The consultants suggested reducing — maybe eliminating — impact fees for moderately priced dwelling units.
Why impact fees are on the agenda
The workshop was organized by the county’s land use department with input from the finance and public works departments. The county hired the Rossi Group and Century Engineering as consultants. A video of the meeting is promised on a land use department page.
A 2020 audit report recommended reviewing the fees, and the six-month review is expected to end in January with a presentation to New Castle County Council’s finance committee and then its full council membership.
Kent County has similar charges under an adequate public facilities ordinance. Sussex County imposes impact fees to preserve open space and covers other facilities with property taxes. The consultants also researched fees nearby and across the country to make their recommendations.
Those interested in commenting about New Castle County’s fees should email [email protected].
